[Senate Hearing 109-318]
[From the U.S. Government Publishing Office]
S. Hrg. 109-318
NOMINATIONS OF J. THOMAS ROSCH AND
WILLIAM E. KOVACIC TO BE COMMISSIONERS OF THE FEDERAL TRADE COMMISSION
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
__________
NOVEMBER 14, 2005
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED NINTH CONGRESS
FIRST SESSION
TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana Chairman
TRENT LOTT, Mississippi JOHN D. ROCKEFELLER IV, West
KAY BAILEY HUTCHISON, Texas Virginia
OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada BARBARA BOXER, California
GEORGE ALLEN, Virginia BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington
JIM DeMint, South Carolina FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana E. BENJAMIN NELSON, Nebraska
MARK PRYOR, Arkansas
Lisa J. Sutherland, Republican Staff Director
Christine Drager Kurth, Republican Deputy Staff Director
David Russell, Republican Chief Counsel
Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Samuel E. Whitehorn, Democratic Deputy Staff Director and General
Counsel
Lila Harper Helms, Democratic Policy Director
C O N T E N T S
----------
Page
Hearing held on November 14, 2005................................ 1
Statement of Senator Inouye...................................... 2
Statement of Senator Stevens..................................... 1
Witnesses
Kovacic, William E., Nominee to be Commissioner of the Federal
Trade
Commission..................................................... 8
Prepared statement........................................... 9
Biographical information..................................... 10
Rosch, J. Thomas, Nominee to be Commissioner of the Federal Trade
Commission..................................................... 2
Prepared statement........................................... 3
Biographical information..................................... 4
NOMINATIONS OF J. THOMAS ROSCH
AND WILLIAM E. KOVACIC TO BE
COMMISSIONERS OF THE FEDERAL TRADE COMMISSION
----------
MONDAY, NOVEMBER 14, 2005
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:30 p.m. in room
SD-562, Dirksen Senate Office Building, Hon. Ted Stevens,
Chairman of the Committee, presiding.
OPENING STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Well thank you very much. I'm sorry to be slightly late. We
have two nominees for the Federal Trade Commission here today.
J. Thomas Rosch is a noted antitrust lawyer who currently
practices law in San Francisco. He has chaired the antitrust
sections of both the American Bar Association and the
California Bar Association.
And earlier in your career you were the Director of the
FTC's Bureau of Consumer Protection?
Mr. Rosch. That is correct Mr. Chairman.
The Chairman. It's a long way around to get a promotion
isn't it? Go to San Francisco and come back.
Our other nominee is William, correct me if I'm wrong,
Kovacic.
Mr. Kovacic. That's right sir.
The Chairman. Professor of law at George Washington
University. He also served in the FTC I'm told, he was General
Counsel from 2001 through 2004.
Mr. Kovacic. Yes.
The Chairman. And along with a distinguished academic
career, I'm told you served as attorney-advisor to FTC
Commissioner Douglas, and as an attorney in the FTC's Bureau of
Competition.
Mr. Kovacic. Yes sir.
The Chairman. Well that's very much of a compliment to both
of you that you would come back to be part of the agency that
you've worked for in the past. And we will be pleased to
continue this hearing as soon as my friend has made a
statement, Senator Inouye.
STATEMENT OF THE HON. DANIEL K. INOUYE,
U.S. SENATOR FROM HAWAII
Senator Inouye. Well I'd just like to thank both of them
for giving their service to this country. Oftentimes I wonder
why men and women do that. That's a lot of sacrifice. And I
commend you for that. Both you have great experiences in
antitrust work, but as you know your responsibilities will be
much broader than that. And so I'll wait until question time.
The Chairman. Yes sir. Let me call on you first Mr. Rosch,
if you have a statement. Would you introduce for the record, so
the record will show who is with you today. Hold that mike a
little bit closer to you perhaps.
STATEMENT OF J. THOMAS ROSCH, NOMINEE TO BE COMMISSIONER OF THE
FEDERAL TRADE COMMISSION
Mr. Rosch. Thank you Mr. Chairman, I'd be very pleased to
do exactly that. They've come from both California and Illinois
to be with me today and I would like to introduce them. First,
my wife Kitty, my wife of 44 years, actually 44 plus now, she
will remind me. Our son, Tom, and his wife, Debbie; our
daughter, Laura Gillette, and her husband, Ed; and my four
granddaughters who are about to get the civics lesson of their
lives, and I'm going to do it in order of age if you don't mind
because I'll get in trouble if I don't. Starting with Amy who
is 6 minutes older than Catherine, then Catherine, Carolyn and
finally Julia. Thank you Mr. Chairman.
The Chairman. Thank you very much. Please proceed with your
statement.
Mr. Rosch. Mr. Chairman, at the outset, let me express my
gratitude to you and to the Committee for permitting us to
appear before you today. We know you have a lot of things on
your plate, and it is very good of you to fit us in.
I've had the privilege over the last month to meet with a
number of members, I met with Senator Inouye, among others, and
I've also met their staffs and I met with the staff of this
Committee. And I'd like to share with you briefly a couple of
frequently asked questions, as well as my answers to those
questions.
First, I've often been asked what I consider to be the
central priorities of the Commission over the next several
years and why. Those priorities it seems to me are three fold:
They are energy, health care and high tech including biotech.
That is so for two reasons. First, those sectors
collectively account for a huge share of this Nation's economy.
And second, there are unique challenges to effective law
enforcement in those sectors. That said, I think there's a
unifying principle, and that principle is Visible Presence. I
am a great admirer of the way the highway patrol goes about its
business. When they're on my tail, I tend to be very cautious
in the way that I drive. I think it's equally critical to
effective law enforcement for the Commission to have a visible
presence in these as well as other sectors.
With respect to consumer protection specifically, I've had
occasion to review the chart in the office that adjoins this
hearing room listing the Top Ten unfair acts or practices
today. And I'm struck by the extent to which they are the same
or similar acts or practices with which the Commission's Bureau
of Consumer Protection was concerned when I had the privilege
of serving as its Director 30 years ago. But I'm also struck by
the differences. Thirty years ago, those acts or practices
occurred primarily in the bricks and mortar context. Today,
they occur primarily in the Internet context.
Additionally, the Internet has spawned some new problems:
spam; spyware; identity theft; privacy invasion among others,
which I know the Commission has been working on closely with
this Committee. So I believe that both the Commission and this
Committee simply have to focus on the Internet. And to do that,
we need the U.S. Safe Web Act to facilitate cross border
cooperation because Internet wrongdoing impacting the United
States can occur just as easily overseas as it can here at
home. So I thank this Committee for its support for this
legislation and express the hope that it is soon enacted.
Finally, Mr. Chairman, I've been frequently asked why I am
interested in this position, Co-Chairman Inouye asked me
specifically about that. And I'll be brief because it's a
pretty easy question for me to answer. Kitty and I were a
couple of Nebraska kids. Over the past 65 plus years, this
country has been absolutely wonderful to us. It's time for us
to give back. We've concluded that the best way to do that is
to share with the Commission the background and experience in
antitrust and consumer protection that I've had over the past
40 years. That's what I plan to do.
And I'd be remiss if I didn't mention the attraction of
working at an agency with a staff like the Commission's. They
were superb 30 years ago, they are superb today. We'll have our
differences because our roles are different. But those
differences will be discussed civilly, respectfully and
professionally. So, if confirmed, I look forward to returning
to the FTC again. Thank you.
[The prepared statement and biographical information of Mr.
Rosch follow:]
Prepared Statement of J. Thomas Rosch, Nominee to be Commissioner of
the Federal Trade Commission
Mr. Chairman, Co-Chairman Inouye, distinguished Members of this
distinguished Committee. At the outset, let me express my gratitude to
you for permitting us to appear before you today. I know you have a lot
of things on your plate, and it is very good of you to fit us in.
I would also like to take a minute to introduce the members of my
family who have come from California and Illinois to be with me this
afternoon: my wife of 44 years, Kitty; our son, Tom, and his wife,
Debbie; our daughter, Laura Gillette, and her husband, Ed; and my four
granddaughters who are about to get the civics lesson of their life, in
order of age--Amy (who is six minutes older than Catherine), Catherine,
Carolyn and Julia.
Mr. Chairman, I've had the privilege of meeting with a number of
you--or your staffs--including the staff of this Committee--during the
past month. I'd like to share with you briefly a couple of frequently
asked questions, as well as my answers to those questions.
First, I've frequently been asked what I consider to be the
Commission's likely priorities over the next few years. They are three
fold: energy, health care and high tech (including biotech). That is so
for two reasons. To begin with, those three sectors collectively
account for a huge share of this Nation's economy. Second, there are
unique challenges to effective law enforcement in those sectors. That
said, there is a unifying principle, and that principle is visible
presence. I am a great admirer of the way the highway patrol does its
job. When they're on my tail, I tend to drive very cautiously. I think
it's equally critical to effective law enforcement for the Commission
to have a visible presence in these (as well as other) sectors.
With respect to consumer protection specifically, I've had occasion
to review the chart in the office that adjoins this hearing room: the
Top Ten list of unfair or deceptive acts or practices. I'm struck by
the extent to which they are the same or similar acts or practices with
which the Commission's Bureau of Consumer Protection was concerned when
I had the privilege of serving as its Director 30 years ago. But I'm
also struck by the differences. Thirty years ago, those acts or
practices occurred primarily in a bricks or mortar context. Today, they
occur primarily in the Internet milieu.
Additionally, the Internet has spawned some new problems--spam;
spyware; identity theft; privacy invasion--which I know the Commission
has been working on closely with this Committee. I believe that both
the Commission and this Committee must focus on the Internet. To do
that, we need the U.S. Safe Web Act to facilitate cross border
cooperation because Internet wrongdoing impacting the U.S. can occur
just as easily overseas as it can here at home. So I thank this
Committee for its support for this legislation and express the hope
that it is soon enacted.
Finally, Mr. Chairman, I've been frequently asked why I am
interested in this position. That's the easiest question. Kitty and I
were a couple of Nebraska kids. Over the past 65 plus years of our
lives, this country has been extraordinarily good to us. It's time for
us to give back. And we've concluded that the best way to do that is to
share with the Commission the background and experience in antitrust
and consumer protection that I've had over the past 40 years. That's
what I plan to do.
And I'd be remiss if I didn't mention the attraction of working at
an agency with a staff like the Commission's. They were superb 30 years
ago, they are superb today. We'll have our differences because our
roles are different. But those differences will be discussed civilly,
respectfully and professionally. So, if confirmed, I look forward to
returning to the FTC again. Thank you.
______
A. BIOGRAPHICAL INFORMATION
1. Name (Include any former names or nicknames used): John Thomas
Rosch (J. Thomas Rosch; Tom Rosch).
2. Position to which nominated: Commissioner, Federal Trade
Commission.
3. Date of Nomination: September 29, 2005.
4. Address (List current place of residence and office addresses):
Residence: information not released to the public.
Office: 505 Montgomery Street San Francisco, CA 94111.
5. Date and Place of Birth: Council Bluffs, Iowa 10/4/39.
6. Provide the name, position, and place of employment for your
spouse (if married) and the names and ages of your children (including
stepchildren and children by a previous marriage).
Carolyn Lee Rosch, Housewife.
Thomas Lee Rosch--43.
Laura Lee Rosch--39.
7. List all college and graduate degrees. Provide year and school
attended.
Harvard College, Cambridge, Massachusetts 1957-1961 B.A. Magna
Cum Laude 1961.
Jesus College, Cambridge University Cambridge, England 1961-
1962 Knox Fellow (no degree).
Harvard Law School, Cambridge, Massachusetts 1962-1965 L.L.B.
Cum Laude 1965.
8. List all management-level jobs held and any non-managerial jobs
that relate to the position for which you are nominated.
McCutchen, Doyle, Brown & Enersen, Attorney, San Francisco, CA
Associate attorney 1965-1972; Partner 1972-1973; 1975-1993.
Federal Trade Commission Washington, D.C. Director of Bureau of
Consumer Protection 1973-1975.
Latham & Watkins LLP, Attorney, San Francisco, CA Partner 1994-
present.
9. List any advisory, consultative, honorary or other part-time
service or positions with Federal, State, or local governments, other
than those listed above, within the last five years: Instructor, Haas
School of Business. University of California, Berkeley, CA 2005.
10. List all positions held as an officer, director, trustee,
partner, proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, or other business, enterprise,
educational or other institution within the last five years.
Partner, Latham & Watkins LLP (see #8 above).
Instructor, Haas School of Business. University of California
(see #9 above).
11. Please list each membership you have had during the past ten
years or currently hold with any civic, social, charitable,
educational, political, professional, fraternal, benevolent or
religious organization, private club, or other membership organization.
Include dates of membership and any positions you have held with any
organization. Please note whether any such club or organization
restricts membership on the basis of sex, race, color, religion,
national origin, age or handicap:
a. Chair, American Bar Association, Antitrust Section (1991:
member 1975-present).
b. Chair, California State Bar Antitrust & Trade Regulation
Section (1993: member 1990-present).
c. Board of Directors, The Eisenhower Institute Washington,
D.C., 1992-present.
d. Board of Directors and Advisory Board, California Supreme
Court Historical Society, 1995-present San Francisco, CA.
e. Board of Directors and Advisory Board, Northern District of
California, U.S. District Court Historical Society 1998-
present, San Francisco, CA.
f. Advisory Board, Bureau of National Affairs Antitrust & Trade
Regulation Reporter, 1974-present.
g. Advisory Board, Practising Law Institute, 1995-present.
h. The Bohemian Club, San Francisco, CA, 1989-October 2005. *
i. The Pacific Union Club, San Francisco, CA, 1985-October,
2005. *
* These clubs restrict membership on the basis of sex. I have
submitted my resignation to both of them.
12. Have you ever been a candidate for public office? If so,
indicate whether any campaign has any outstanding debt, the amount, and
whether you are personally liable for that debt. No.
13. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past 10 years.
$3,000--Elizabeth Dole 2000.
$2,000--Bush/Simon Fund Raiser 2001.
14. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals and any other special recognition
for outstanding service or achievements.
a. Ames Award, Harvard College 1961 (award to outstanding
senior for scholarship, leadership and character).
b. Knox Fellow, Cambridge University 1961-1962 (Harvard College
scholarship awarded to senior based on scholarship).
c. Fellow, American College of Trial Lawyers (1986-present).
d. California Antitrust Lawyer of the Year 2003 (California Bar
Association Award).
e. California Lawyer Magazine ``Best In The West'' Antitrust
Lawyer (2004).
f. Ranked as Leading Antitrust Attorney by Chambers USA:
America's Business Lawyers; The Best Lawyers In America; Legal
Media Group's Expert Guide to Competition and Antitrust
Lawyers: and Global Competition Review's GCR 100.
15. Please list each book, article, column. or publication you have
authored, individually or with others, and any speeches that you have
given on topics relevant to the position for which you have been
nominated. Do not attach copies of these publications unless otherwise
instructed.
Publications
a. ``The George Court and Economic Welfare: A Business
Perspective,'' Competition Magazine (California State Bar
2003).
b. ``Developments In The Law of Vertical Restraints''
(Practising Law Institute annually 1990-present).
c. ``Manual of FTC Practice and Procedure'' (Bureau of National
Affairs, 1990) (with periodic updates).
d. Messages From the Chairman, Competition Magazine (American
Bar Association Antitrust Section, 1990).
e. Chairman's Keynote Speech, Antitrust Law Journal (American
Bar Association Antitrust Section, 1990).
f. ``Traps In Judicial Deference to Business Judgment'' (The
Conference Board, 1987).
Speeches (Except Speeches as FTC Bureau Director)
a. Chair, and Speeches on Development In Vertical Restraint and
Consumer Protection Law at Practicing Law Institute Annual
Antitrust Institutes 1980-present.
b. Chair, and Speeches on Joint Venture, Monopolization
Vertical Restraint and Class Action Law at Conference Board
Symposia 1978, 1980, 1984-2003.
c. Speeches on Consumer Protection, Monopolization and Vertical
Restraint Law at ABA Antitrust Section Spring and Annual
Meeting Programs 1977-80, 1983-1990, 1992, 1997, 2000.
d. Speeches on Developments In Ethics In Government
Investigations, Price Discrimination at Golden State Institutes
1990-1992, 2003.
e. Speeches on Magnuson-Moss Act and Vertical Restraints at
Northwestern Law School Antitrust Institutes 1975, 1998.
16. Please identify each instance in which you have testified
orally or in writing before Congress in a nongovernmental capacity and
specify the subject matter of each testimony: None.
B. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers.
I will continue to receive retirement benefits from Latham &
Watkins as described in my Ethics Commitment letter to Christian S.
White, dated September 8, 2005 (copy attached). Under the Latham &
Watkins partnership agreement, on the day I retire from the firm I will
receive a prorated final partnership payment for my work performed in
2005, which will not be based on any firm services performed after my
departure. I also will be reimbursed the value of my Latham & Watkins
LLP capital account upon the day of my retirement. Also, under the
Latham & Watkins partnership agreement, as amended, I will be entitled
to receive a retirement payment for ten years after leaving the firm.
During the time that I am in government service, these payments will be
a fixed amount. I understand that so long as I am a government employee
and am receiving fixed retirement payments from the firm. I will not
participate personally and substantially as a Commissioner in any
particular matter that would have a direct and predictable effect on
Latham & Watkins' ability or willingness to meet this financial
obligation unless I first obtain a written waiver under 18 U.S.C.
208(b)(1). After I leave government service, pursuant to the amended
partnership agreement, the share of partnership income for each of the
remaining years will be based on my five highest earning years in the
10 years prior to retirement. Lastly, I will continue to hold interests
in four Limited Liability Companies held by certain partners of Latham
& Watkins LLP (VP Fund Investments 2004, LLC; Mutual Partners, LLC:
P.E. Partners II, LLC and P.E. Partners III, LLC) which cannot be
divested at this time.
Upon confirmation, I will resign from my unpaid positions as
instructor at the Haas School of Business of the University of
California and as a board member of the Eisenhower Institute. Pursuant
to 5 CFR Sec. 2635.502, I will not participate in any particular matter
involving specific parties which one of the parties is, or is
represented by, either of these entities for one year from the last
date I provided services to these entities unless I am authorized to
participate.
2. Do you have any commitments or agreements, formal or informal,
to maintain employment, affiliation or practice with any business,
association or other organization during your appointment? No.
3. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
All such investments, obligations and liabilities are described in
detail in the above-referenced Ethics Commitment letter to Christian S.
White and my Executive Branch Public Financial Disclosure Report, both
of which are attached hereto. My financial disclosure report identifies
several stock holdings as well as several stock mutual funds. I
understand that under 5 CFR Sec. 2640.201(a), consistent with 18
U.S.C.Sec. 208(b)(2), I may participate in any particular matter
affecting one or more holdings of a diversified mutual fund where the
otherwise disqualifying financial interest in the matter arises because
of my ownership of an interest in the fund. Consistent with the
prohibitions of 18 U.S.C. Sec. 208(a), unless I obtain a waiver under
section 208(b)(1) or I qualify for a regulatory exemption under section
208(b)(2), I will not participate personally and substantially in any
particular matter in which I have, or any person or organization whose
interests are imputed to me has, a financial interest, if the
particular matter will have a direct and predictable effect on that
financial interest. Also, I will seek a conflict of interest waiver
concerning my holdings held in four Limited Liability Companies held
through by certain partners of Latham & Watkins, LLP (VP Fund
Investments 2004, LLC: Mutual Partners, LLC: P.E, Partners/II, LLC and
P.E., Partners III, LLC), which cannot be divested at this time. Until
I receive such a waiver, I will not participate personally and
substantially in any particular matter that will have a direct and
predictable effect on the financial interests of these LLCs. No other
assets have been identified as presenting a conflict at this time,
however, should any asset become a conflict, I will divest conflicting
financial interests. I may seek certificates of divestiture from the
U.S. Office of Government Ethics for any assets divested, where
permissible. I will not participate personally and substantially in any
particular matter that will have a direct and predicable effect on any
of these interests until divestiture has been accomplished or until a
waiver has been obtained.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last 15 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
The attached letter to Christian S. White and the attached
Financial Disclosures describe the financial investments that I have
made. A list of the firm clients with matters for which I have been the
principal responsible attorney is attached as Schedule A. I have marked
with an asterisk those clients with matters involving the Federal
Government. Of these clients I believe the only one with a matter
currently before the Commission is McKesson Corporation.
5. Describe any activity during the past 5 years in which you have
been engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy: None.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
As discussed in my Ethics Commitment letter (copy attached),
consistent with the prohibitions of 18 U.S.C. Sec. 208(a), unless I
obtain a waiver under section 208(b)(1) or I qualify for a regulatory
exemption under section 208(b)(2), I will not participate personally
and substantially in any particular matter in which I have, or any
person or organization whose interests are imputed to me has, a
financial interest, if the particular matter will have a direct and
predictable effect on that financial interest. Further, I will not
participate in any particular matter involving specific parties in
which one of the parties is, or is represented by, any client for whom
I personally performed legal services, for one year from the last date
I provided services to the client unless I am authorized to
participate. I understand that I will have a continuing obligation to
comply with ethics laws and regulations that will require vigilance
regarding any changes in my financial interests, the financial
interests of persons and organizations imputed to me under the ethics
laws and regulations, and other outside interests. I will keep the
Agency's ethics officials informed about any new or changing interests
and will take all appropriate steps to avoid or remedy potential
conflicts.
C. LEGAL MATTERS
1. Have you ever been disciplined or cited for a breach of ethics
by, or been the subject of a complaint to any court, administrative
agency, professional association, disciplinary committee, or other
professional group? No.
2. Have you ever been investigated. arrested, charged, or held by
any Federal, State, or other law enforcement authority of any Federal,
State, county, or municipal entity, other than for a minor traffic
offense? No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in an administrative agency proceeding or
civil litigation? No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination: None.
6. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion or any
other basis? No.
D. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines for information set by congressional committees? Yes.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes.
3. Will you cooperate in providing the Committee with requested
witnesses, including technical experts and career employees. with
firsthand knowledge of matters of interest to the Committee? Yes.
4. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
The Chairman. Mr. Kovacic.
STATEMENT OF WILLIAM E. KOVACIC, NOMINEE TO BE COMMISSIONER OF
THE FEDERAL TRADE COMMISSION
Mr. Kovacic. Mr. Chairman, Mr. Co-Chairman, I'd like to
introduce my wife Kathryn Fenton, and to thank her for her
encouragement and indispensable support to me in this endeavor.
The Chairman. We welcome your wife.
Mr. Kovacic. I am deeply honored that President Bush has
nominated me to be a member of the Federal Trade Commission,
and I am most grateful to this Committee for considering my
appointment. I also thank the staff of the Committee which was
enormously generous with its attention and assistance in the
process. And let me also recognize my considerable debt to FTC
Chairman Majoras, Commissioners Leary, Harbour, and Leibowitz,
and to the FTC's Office of Congressional Relations for being my
shepherds in the process leading to the hearing. And I should
add that no person has been more helpful to me than Orson
Swindle, whose seat I would occupy if I am fortunate to be
confirmed.
I began my acquaintance with the FTC about the time that
Tom Rosch did--thirty years ago exactly, when I served as a
legislative assistant on the majority staff of Senator Philip
Hart's Judiciary Subcommittee on Antitrust and Monopoly. In my
year with Senator Hart's subcommittee staff, I studied the
agency while working on the measure that Congress enacted in
1976 as the Hart-Scott-Rodino Antitrust Improvements Act. The
FTC became, and has remained to this day, the principal focus
of my professional life. Twice before, as Chairman Stevens
mentioned, I worked at the Commission from 1979 to 1983, as a
staff attorney and an attorney advisor and then as the agency's
General Counsel from 2001 through 2004. More the any other
subject, the FTC has occupied my attention as an academic and a
researcher.
My aim in seeking your approval is not simply to return,
once again, to a wonderful institution that is dear to me.
There is a vast difference between simply having a job and
doing something useful with the job. If I am fortunate to be
confirmed, I will apply my knowledge and experience to the
challenges that now command the careful attention of the
Commission's members and its exceptional staff. Three
priorities stand out to me, and they very much resemble Tom
Rosch's list.
The first is to participate in devising effective
litigation and non-litigation strategies to address the
competition and consumer protection issues of greatest concern
to consumers. The most pressing matters include energy--a
subject whose importance was underscored in this Committee's
hearings last week--health care, and information security and
privacy.
My second aim is to contribute to the Commission's existing
efforts to enhance the infrastructure of cooperation and
coordination with government institutions at home and abroad to
strengthen the implementation of competition and consumer
protection policy.
The third is to help ensure that the Commission sustains
and enhances the deep base of knowledge that is indispensable
to success in formulating competition and consumer protection
programs. Key means to this end include investments in research
and analysis and the maintenance and continuing enhancement of
the FTC's already superb staff of attorneys, economists, and
administrative professionals.
My larger ambition mirrors the goal that Chairman Majoras
set for the agency's leadership when she celebrated the FTC's
90th anniversary in September last year. Academic and popular
commentators often exhort government officials to ``pick the
low hanging fruit.'' Wouldn't you like a dollar for every time
you've heard that aphorism? These observers rarely urge
policymakers on the other hand to plant trees that will bear
fruit long after they have left office. I would measure my own
contributions not simply by the current output of matters, but
also by investments that make the FTC successful for the longer
term.
If I am fortunate enough serve on the agency again, I will
do my best to work with the Members of the Commission, with the
agency's staff, and indeed with the Members of this Committee
to fulfill the destiny that Senator Albert Cummins foresaw for
the FTC in the year of its creation: to make the Federal Trade
Commission ``the most efficient protection to the people of the
United States that Congress has ever given by way of a
regulation of commerce.''
Thank you.
[The prepared statement and biographical information of Mr.
Kovacic follow:]
Prepared Statement of William E. Kovacic, Nominee to be Commissioner of
the Federal Trade Commission
Chairman Stevens, Co-Chairman Inouye, and Members of the Commerce
Committee. I am deeply honored that President Bush has nominated me to
be a member of the Federal Trade Commission, and I am most grateful to
this Committee for considering my appointment. I also thank the staff
of this Committee and the staffs of the Committee's members for their
generous, thoughtful assistance. Let me also recognize my considerable
debt to FTC Chairman Majoras, Commissioners Leary, Harbour, and
Leibowitz, and to the FTC's Office of Congressional Relations for
guiding me in this process. And no person has been more helpful to me
than Orson Swindle, whose seat I would occupy if I am fortunate to be
confirmed.
I began my acquaintance with the Federal Trade Commission thirty
years ago in serving as a legislative assistant on the majority staff
of Senator Philip Hart's Judiciary Subcommittee on Antitrust and
Monopoly. In my year with Senator Hart's subcommittee staff, I studied
the agency while working on the measure that Congress enacted in 1976
as the Hart-Scott-Rodino Antitrust Improvements Act. The FTC became,
and has remained, the principal focus of my professional life. Twice
before I have worked at the Commission, first as a staff attorney and
an attorney advisor from 1979 to 1983, and then as the agency's General
Counsel from 2001 through 2004. More the any other subject, the FTC has
occupied my attention as an academic and a researcher.
My aim in seeking your approval is not simply to return, once
again, to a wonderful institution that is dear to me. There is a vast
difference between simply having a job and doing something useful with
the job. If I am fortunate to be confirmed, I will apply my knowledge
and experience to the challenges that now command the careful attention
of the Commission's members and its exceptional staff. Three priorities
stand out.
The first is to participate in devising effective litigation and
non-litigation strategies to address the competition and consumer
protection issues of greatest concern to consumers. The most pressing
matters include energy--a subject whose importance was underscored in
this Committee's hearings last week--health care, and information
security and privacy.
The second is to contribute to the Commission's existing efforts to
enhance the infrastructure of cooperation and coordination with
government institutions at home and abroad to strengthen the
implementation of competition and consumer protection policy.
The third is to help ensure that the Commission sustains and
enhances the deep base of knowledge that is indispensable to success in
formulating competition and consumer protection programs. Key means to
this end include investments in research and analysis and the
maintenance and continuing enhancement of the FTC's already superb
staff of attorneys, economists, and administrative professionals.
My larger ambition mirrors the goal that Chairman Majoras set for
the agency's leadership when she celebrated the FTC's 90th anniversary
in September last year. Academic and popular commentators often exhort
government officials to ``pick the low hanging fruit.'' These observers
rarely urge policy makers to plant trees that will bear fruit long
after they have left office. I would measure my own contributions not
simply by the output of current policy initiatives, but also by
investments that make the FTC successful for the longer term.
If I am fortunate to be confirmed, I will do my best to work with
the members of the Commission, the agency's staff, and the Members of
this Committee to fulfill the destiny that Senator Albert Cummins
foresaw for the FTC in the year of its creation--to make the Federal
Trade Commission ``the most efficient protection to the people of the
United States that Congress has ever given . . . by way of a regulation
of commerce.''
I look forward to your questions.
______
A. BIOGRAPHICAL INFORMATION
1. Name (Include any former names or nicknames used): William Evan
Kovacic.
2. Position to which nominated: Commissioner, Federal Trade
Commission.
3. Date of Nomination: July 28, 2005.
4. Address (List current place of residence and office addresses):
Residence: information not released to the public.
Office: George Washington University Law School, 2000 H Street,
NW., Washington, DC 20052.
5. Date and Place of Birth: Poughkeepsie, New York, October 1,
1952.
6. Provide the name, position, and place of employment for your
spouse (if married) and the names and ages of your children (including
stepchildren and children by a previous marriage).
Spouse: Kathryn Marie Fenton,
Partner,
Jones Day,
51 Louisiana Avenue. N.W.,
Washington, DC 20001.
No children.
7. List all college and graduate degrees. Provide year and school
attended.
A.B., Public and International Affairs, Princeton University,
1974.
J.D., Columbia University, 1978.
8. List all management-level jobs held and any nonmanagerial jobs
that relate to the position for which you are nominated.
General Counsel,
Federal Trade Commission,
June 2001 through December 2004.
Professor,
George Washington University Law School,
June 1999 to present (on leave: June 2001 through July 2004).
Visiting Professor,
George Washington University Law School,
August 1998 through June 1999.
Visiting Professor,
Washington College of Law,
American University,
August 1994 through June 1995.
Professor,
George Mason University School of Law,
June 1986 to June 1999.
Associate,
Bryan Cave,
September 1983 to June 1986.
Attorney Advisor,
Commissioner George W. Douglas,
Federal Trade Commission,
January 1983 to September 1983.
Attorney,
Planning Office,
Bureau of Competition,
Federal Trade Commission,
September 1979 to January 1983.
Law Clerk to the Honorable Roszel C. Thomsen, Senior United
States District Judge,
U.S. District Court for the District of Maryland,
September 1978 to September 1979.
Legislative Assistant, Majority Staff,
Subcommittee on Antitrust and Monopoly,
U.S. Senate Committee on the Judiciary,
June 1975 to July 1976.
9. List any advisory, consultative, honorary or other part-time
service or positions with Federal, State, or local governments, other
than those listed above, within the last five years.
Advisor,
Antitrust Modernization Commission,
May 2005 to the present.
10. List all positions held as an officer, director, trustee,
partner, proprietor, agent, representative, or consultant of any
corporation, company, firm, partnership, or other business, enterprise,
educational or other institution within the last five years.
Consultant,
Bates & White,
April 2005 to present.
Consultant,
BearingPoint,
May 2005 to present.
Consultant,
International Law Institute,
August 2005 to present.
Member,
International Board of Advisors,
Concurrences [published by Thomson Transactive],
January 2005 to present.
Contributing Editor,
Antitrust Law Journal [published by the ABA Section of
Antitrust Law],
August 1997 to present.
Member,
Board of Advisors,
Center for Research in Regulated Industries,
Rutgers University,
September 1998 to June 2001, January 2005 to present.
Member,
Editorial Board,
Journal of Regulatory Economics [published by Kluwer Academic
Publishers],
January 2005 to present.
Member,
Advisory Board,
The Government Contractor [published by Thomson West],
June 1999 to present.
Member,
Board of the Glencairn Governance [homeowners' association,
Clifton, Virginia],
May 1998 to present.
Member,
Advisory Board,
University of Detroit Jesuit High School & Academy,
July 2003 to present.
11. Please list each membership you have had during the past ten
years or currently hold with any civic, social, charitable,
educational, political, professional, fraternal, benevolent or
religious organization, private club, or other membership organization.
Include dates of membership and any positions you have held with any
organization. Please note whether any such club or organization
restricts membership on the basis of sex, race, color, religion,
national origin, age or handicap.
American Bar Association
Member,
September 1980 to present.
Vice-Chair,
Antitrust, Competition, and Trade Regulation Committee,
Section of Administrative Law and Regulatory Practice,
July 1990 to August 1992.
Co-Chair,
Amicus Committee,
Section of Antitrust Law,
August 1998 to June 2001.
Contributing Editor,
Antitrust Law Journal,
Section of Antitrust Law,
August 1997 to present.
Chair,
Sherman Act Section 1 Committee,
Section of Antitrust Law,
August 1994-August 1997.
Vice-Chair,
Public Contract Law Educators Committee,
Section of Public Contract Law,
August 1996 to August 1998.
Chair,
Public Contract Law Educators Committee,
Section of Public Contract Law,
August 1989 to August 1996.
Federal Bar Association
Member,
September 1986 to present.
Chair,
Antitrust and Trade Regulation Section,
October 1990 to September 1993.
Republican National Committee
Charter Member,
June 2000 to present.
Computer Law Association
Member,
Board of Directors,
April 2001 to June 2001.
St. Claire of Assisi Roman Catholic Church
Parish member,
January 1995 to present.
Western Economic Association International
Member,
January 1990 to present.
American Political Science Association
Member,
January 2000 to present.
International Bar Association
Member,
January 2004 to present.
American Society of International Law
Member,
January 2001 to present.
Association of American Law Schools
Council Member,
Antitrust and Economic Regulation Section,
January 1994 to January 1996.
Chair,
Antitrust and Economic Regulation Section,
January 1997 to January 1998.
RAND Corporation Alumni Association
Member,
January 2004 to present.
University of Detroit Jesuit High School and Academy
Member,
Board of Advisors,
July 2003 to present.
United States Naval Institute
Sustaining Member,
October 1995 to present.
Note: None of these organizations restricts membership on the
basis of sex, race, color, religion, national origin, age, or
handicap.
12. Have you ever been a candidate for public office? No.
13. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past 10 years.
Bush-Cheney 2004 (March 2004): $2000.
Republican National Committee (April 2005): $500.
14. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals and any other special recognition
for outstanding service or achievements.
George Washington University Law School
Chair Appointment to the E.K. Gubin Professorship of Government
Contracts Law: 2004.
Recipient, Distinguished Faculty Service Award: 2001.
George Mason University School of Law
Chair Appointment to the George Mason University Foundation
Professorship: 1998.
Recipient, Richard S. Murphy Teaching Award: 1998.
Recipient; George Mason University Alumni Association Teaching
Award: 1998 Recipient, Phi Delta Phi Teaching Award: 1992-93.
Recipient. George Mason University Distinguished Faculty Award:
1990.
Elected, Faculty Speaker at the Commencement Exercises for the
School of Law (chosen by a vote of graduating students): 1989,
1990, 1991, 1992, 1993, 1995, 1996, and 1998.
Washington College of Law, American University
Recipient: First-Year Class Teaching Award: 1994-1995.
Federal Trade Commission
Recipient, Award for Distinguished Service: 2005.
American Bar Association, Section of Antitrust Law
Recipient, Chair's Award for Distinguished Service for 2003-
2004.
Recipient, Chair's Award for Special Service for 2000-2001.
University of Detroit Jesuit High School and Academy
Recipient, Alumnus of the Year Award: 2000.
Federal Bar Association
Recipient, Award for Distinguished Service: 1993.
15. Please list each book, article, column, or publication you have
authored, individually or with others, and any speeches that you have
given on topics relevant to the position for which you have been
nominated. Do not attach copies of these publications unless otherwise
instructed.
Books
Antitrust Law in Perspective: Cases, Concepts and Problems in
Competition Policy (Thomson West 2002) (with Andrew I. Gavil
and Jonathan B. Baker).
Teacher's Manual to Accompany Antitrust Law in Perspective:
Cases, Concepts and Problems in Competition Policy (Thomson
West 2002) (with Andrew I. Gavil and Jonathan B. Baker).
Antitrust Law and Economics in a Nutshell (5th edition, Thomson
West 2004) (with Stephen Calkins and Ernest Gellhorn).
Chapters in Books and Other Published Collections of Papers
Achieving Better Practices in the Design of Competition Policy
Institutions, in On the Merits--Current Issues in Competition
Law and Policy 195 (Paul Lugard & Leigh Hancher eds.,
Intersentia, 2005).
Competition Policy Cooperation and the Pursuit of Better
Practices, in The Future of Transatlantic Economic Relations:
Continuity Amid Discord 65 (David M. Andrews, Mark A. Pollock,
Gregory C. Shaffer & Helen Wallace eds., Robert Schuman Centre,
European University Institute, 2005).
Toward a Domestic Competition Network, in Competition Laws in
Conflict 316 (Richard Epstein & Michael Greve eds., American
Enterprise Institute, 2004).
Private Participation in the Enforcement of Public Competition
Laws, in Competition Law Yearbook 2003 (British Institute of
International Comparative Law, 2004).
The Significance of the Microsoft Antitrust Litigation for
Postal Services Operators, in Future Directions in Postal
Reform 18 (Michael A. Crew & Paul R. Kleindorfer eds.: Kluwer,
2001).
Antitrust and Competition Policy in Transition Economies: A
Preliminary Assessment, in 1999 Fordham Corporate Law Institute
513 (Barry E. Hawk, ed. 2000).
The U.S. Government Sues Microsoft, in The American Annual
1999, at 167 (Grolier 1999).
Comments on a Paper by Robert Cooter, in Economic Dimensions in
International Law 317 (Jagdeep S. Bhandari & Alan O. Sykes,
eds.: Cambridge: Cambridge University Press, 1997).
Overview: Public Utility Policymaking in Transition, in XIX
Public Utilities Law Anthology, Pt. I, Jan.-June 1996 (1997).
Competition Policy Analysis of Joint Ventures and Teaming
Arrangements by Government Agencies and the Courts, in
Subcontracting, Teaming and Partnering in the Age of
Consolidation and Cooperation (American Bar Association,
Section of Public Contract Law: November 1997).
Predatory Pricing Standards and Competition in Postal Areas, in
Diffusion of New Regulatory Approaches in Postal Services 67
(Ulrich Stumpf & Monika Plum, eds.: Wissenschaftliches Institut
fur Kommunikationsdienste GmbH Bad Honnef, Germany, April
1997).
Commissions, Courts, and the Access Pricing Problem, in Pricing
and Regulatory Innovations Under Increasing Competition 53
(Michael A. Crew, ed.: Kluwer, 1996).
Antitrust and the Evolution of a Market Economy in Mongolia, in
De-monopolization and Competition Policy in the Post-Communist
Countries 89 (Ben Slay, ed.: Westview, 1996) (with Robert S.
Thorpe).
Public Choice and the Origins of Antitrust Policy, in The
Causes and Consequences of Antitrust: A Public Choice
Perspective 243 (Fred S. McChesney & William F. Shughart III
eds.: University of Chicago, 1995).
The Law and Economics of Privacy: Applications to Regulated
Industries, in Incentive Regulation for Public Utilities 113
(Michael A. Crew, ed.: Kluwer, 1994).
The Application of Legal Safeguards Against Predation to the
Postal Services Industry, in Commercialization of Postal and
Delivery Services: National and International Perspectives 45
(Michael A. Crew & Paul R. Kleindorfer. eds.: Kluwer, 1994).
Post-Appointment Preference Shaping and Its Influence on
Judicial Analysis of Economic Regulation Issues, in
Commercialization of Postal and Delivery Services: National and
International Perspectives 93 (Michael A. Crew & Paul R.
Kleindorfer, eds.: Kluwer, 1994).
Determining Constraints on Pricing, in The Strategy and Tactics
of Pricing 360 (Thomas T. Nagle & Reed K. Holden, eds.:
Prentice Hall, 1994) (with Neil E. Graham).
The Changing Equilibrium of Antitrust Policy, in II The
Antitrust Impulse: An Economic, Historical, and Legal Analysis
575 (Theodore P. Kovaleff, ed.: M.E. Sharpe Publishers, 1994).
Comment: Perennial Gales and the International Mail, in
Regulation and the Evolving Nature of Postal and Delivery
Services 217 (Michael A. Crew & Paul R. Kleindorfer, eds.:
Kluwer, 1993).
The Effect of Government Involvement, in American Bar
Association, Section of Antitrust Law, Antitrust Law
Developments 963-1016 (3d edition: American Bar Association
1992).
The Antitrust Law and Economics of Essential Facilities in
Public Utility Regulation, in Economic Innovations in Public
Utility Regulation 1 (Michael A. Crew, ed.: Kluwer, 1992).
Antitrust and Competitiveness: Is Legislation to Exempt
Production Joint Ventures Necessary? in Proceedings of the N.Y.
State Bar Association Antitrust Law Symposium 66 (Jan. 1990).
Government Support for Research and Development, in The
Shrinking Industrial Base: Restructuring the Defense Industry
and Ensuring American Competitiveness for the 1990s (Annual
Meeting Program Volume, American Bar Association, Section of
Public Contract Law: August 1990).
The Sorcerer's Apprentice: Public Regulation of the Weapons
Acquisition Process, in Arms, Politics, and the Economy:
Historical and Contemporary Perspectives 104 (Robert Higgs,
ed.: Holmes & Meier and The Independent Institute, 1990).
Blue Ribbon Defense Commissions: The Acquisition of Major
Weapons Systems, in Arms, Politics, and the Economy: Historical
and Contemporary Perspectives 61 (Robert Higgs, ed.: Holmes &
Meier and The Independent Institute, 1990).
Illegal Agreements With Competitors, in Tales from Toronto
(Annual Meeting Program Volume, American Bar Association,
Section of Public Contract Law, August 7-9, 1988).
Federal Regulation of Business: Antitrust and Environmental
Law, in Henry M. Butler, William Fischel & William E. Kovacic,
Significant Business Decisions of the Supreme Court, 1986-1987
Term 57 (Washington Legal Foundation: 1988).
The Federal Trade Commission and Congressional Oversight of
Antitrust Enforcement: A Historical Perspective, in Public
Choice and Regulation: A View from Inside the Federal Trade
Commission 63 (Robert Mackay, James C. Miller III & Bruce
Yandle, eds.: Hoover Press, 1987).
Antitrust, in The Business Government Relationship 173 (William
M. Wolff, Jr., ed.: Open University, University of Maryland,
1983).
Current Legal Standards of Predation, in Strategy, Predation,
and Antitrust Analysis 101 (Steven Salop ed.: Federal Trade
Commission, 1981) (with James D. Hurwitz, Thomas Sheehan &
Robert H. Lande).
Journal Articles
The Impact of Leniency and Whistleblowing Programs on Cartels,
International Journal of Industrial Organization (Forthcoming
2005) (with Cecile Aubert and Patrick Rey).
An Interdisciplinary Approach to Improving Competition Policy
and Intellectual Property Policy, Fordham International Law
Review (Forthcoming 2005) (with Andreas Reindl).
Measuring What Matters: The Federal Trade Commission and
Investments in Competition Policy Research and Development, 72
Antitrust Law Journal 861 (2005).
The Modern Evolution of U.S. Competition Policy Enforcement
Norms, 71 Antitrust Law Journal 377 (2003).
Extraterritoriality, Institutions, and Convergence in
International Competition Policy, 97 American Society of
International Law Proceedings 309 (2003).
Economic Regulation and the Courts 1982 to 2001: Ten Cases That
Made a Difference, 21 Journal of Regulatory Economics 23
(2002).
Institutional Foundations for Economic Law Reform in Transition
Economies: The Case of Competition Policy and Antitrust
Enforcement, 77 Chicago-Kent Law Review 265 (2001).
Private Monitoring and Antitrust Enforcement: Paying Informants
to Reveal Cartels, 69 George Washington Law Review 766 (2001).
Evaluating Antitrust Experiments: Using Ex Post Assessments of
Government Enforcement Decisions to Inform Competition Policy,
9 George Mason Law Review 843 (2001).
Transatlantic Turbulence: The Boeing-McDonnell Douglas Merger
and International Competition Policy, 68 Antitrust Law Journal
805 (2001).
Antitrust After Microsoft: Upgrading Public Competition Policy
Institutions for the New Economy, 32 West Los Angeles Law
Review 51 (2001).
Lessons of Competition Policy Reform in Transition Economies
for U.S. Antitrust Policy, 74 St. John's Law Review 361 (2000).
Antitrust Policy: A Century of Economic and Legal Thinking,
Journal of Economic Perspectives 43 (2000) (with Carl Shapiro).
Designing Antitrust Remedies for Dominant Firm Misconduct, 31
Connecticut Law Review 1285 (1999).
Competition Policy in the Postconsolidation Defense Industry,
44 Antitrust Bulletin 421 (1999).
The Civil False Claims Act as a Deterrent to Participation in
Government Procurement Markets, 6 Supreme Court Economic Review
201 (1998).
Merger Enforcement in Transition: Antitrust Controls on
Acquisitions in Emerging Economies, 66 University of Cincinnati
Law Review 1075 (1998).
Perilous Beginnings: The Establishment of Antimonopoly and
Consumer Protection Programs in the Republic of Georgia, 43
Antitrust Bulletin 15 (1998) (with Ben Slay).
Law, Economics, and the Reinvention of Public Administration:
Using Relational Agreements to Reduce the Cost of Procurement
Regulation and Other Forms of Government Intervention in the
Economy, 50 Administrative Law Review 141 (1998).
The Quality of Appointments and the Capability of the Federal
Trade Commission, 49 Administrative Law Review 915 (1997).
Antitrust Policy in Ukraine, 31 George Washington Journal of
International Law & Economics 1 (1997) (with Roger A. Boner).
Creating Competition Policy: Betty Bock and the Development of
Antitrust Institutions, 66 Antitrust Law Journal 231 (1997).
Getting Started: Creating New Competition Policy Institutions
in Transition Economies, 23 Brooklyn Journal of International
Law 403 (1997).
Antitrust Policy and Horizontal Collusion in the 21st Century,
9 Loyola Consumer Law Reporter 97 (1997).
Administrative Adjudication and the Use of New Economic
Approaches in Antitrust Analysis, 5 George Mason Law Review 313
(1997).
Antitrust Decisionmaking and the Supreme Court: Perspectives
from the Thurgood Marshall Papers, 42 Antitrust Bulletin 93
(1997).
Downsizing Antitrust: Is It Time to End Dual Federal
Enforcement?, 41 Antitrust Bulletin 505 (1996).
Whistleblower Bounty Lawsuits as Monitoring Devices in
Government Contracting, 29 Loyola of Los Angeles Law Review
1799 (1996).
The Competition Policy Entrepreneur and Law Reform in Formerly
Communist and Socialist Countries, 11 American University
Journal of International Law & Policy 437 (1996).
Procurement Reform and the Choice of Forum in Bid Protest
Disputes, 9 Administrative Law Journal of the American
University 461 (1995).
Designing and Implementing Competition and Consumer Protection
Reforms in Transitional Economies: Perspectives from Mongolia,
Nepal, Ukraine, and Zimbabwe, 44 DePaul Law Review 1197 (1995).
Accounting for Regulation in Determining the Application of
Antitrust Rules to Firms Subject to Public Utility Oversight,
40 Antitrust Bulletin 483 (1995).
Competition Policy, Rivalries, and Defense Industry
Consolidation, 8 Journal of Economic Perspectives 91 (1994)
(with Dennis Smallwood).
Competitive Access Issues and Telecommunications Regulatory
Policy, 20 Journal of Contemporary Law 419 (1994) (with Alex
Larson and Douglas Mudd).
The Identification and Proof of Horizontal Agreements Under the
Antitrust Laws, 38 Antitrust Bulletin 5 (1993).
Competition Policy, Economic Development, and the Transition to
Free Markets in the Third World: The Case of Zimbabwe, 61
Antitrust Law Journal 253 (1992).
The Influence of Economics on Antitrust Law, 30 Economic
Inquiry 294 (1992).
Regulatory Controls as Barriers to Entry in Government
Procurement, 25 Policy Sciences 29 (1992).
Commitment in Regulation: Defense Contracting and Extension to
Price Caps, 3 Journal of Regulatory Economics 219 (1991).
Matsushita: Its Construction and Application by the Lower
Courts, 59 Antitrust Law Journal 609 (1991) (with Susan S.
DeSanti).
Reagan's Judicial Appointees and Antitrust in the 1990s, 60
Fordham Law Review 49 (1991).
Merger Policy in a Declining Defense Industry, 36 Antitrust
Bulletin 543 (1991).
The Reagan Judiciary and Environmental Policy: The Impact of
Appointments to the Federal Courts of Appeals, 18 Boston
College Environmental Law Review 669 (1991).
Predatory Pricing Safeguards in Telecommunications Regulation:
Removing Impediments to Competition, 35 St. Louis University
Law Journal 1 (1990) (with Alex Larson).
The Antitrust Paradox Revisited: Robert Bork and the
Transformation of Modern Antitrust Policy, 36 Wayne Law Review
1413 (1990).
Comments and Observations on the Sherman Act: The First
Century, 59 Antitrust Law Journal 119 (1990).
Antitrust Analysis of Joint Ventures and Teaming Arrangements
Involving Government Contractors, 58 Antitrust Law Journal 1059
(1990).
Failed Expectations: The Troubled Past and Uncertain Future of
the Sherman Act as a Tool for Deconcentration, 74 Iowa Law
Review 1105 (1989).
Congress and the Federal Trade Commission, 57 Antitrust Law
Journal 869 (1989).
Federal Antitrust Enforcement in the Reagan Administration: Two
Cheers for the Disappearance of the Large Firm Defendant in
Nonmerger Cases, 12 Research in Law & Economics 173 (1989).
Reform of United States Weapons Acquisition Policy:
Competition, Teaming Arrangements, and Dual-Sourcing, 6 Yale
Journal on Regulation 249 (1989) (with William B. Burnett).
Illegal Agreements With Competitors, 57 Antitrust Law Journal
517 (1988).
Public Choice and the Public Interest: Federal Trade Commission
Antitrust Enforcement During the Reagan Administration, 33
Antitrust Bulletin 467 (1988).
Built to Last? The Antitrust Legacy of the Reagan
Administration, 35 Federal Bar News & Journal 244 (June 1988).
Industrial Policy: Reindustrialization Through Competition or
Coordinated Action?, 2 Yale Journal on Regulation 1 (1984)
(with James C. Miller III, Thomas F. Walton & Jeremy A.
Rabkin).
The Federal Trade Commission and Congressional Oversight of
Antitrust Enforcement, 17 Tulsa Law Journal 587 (1982).
Judicial Analysis of Predation: The Emerging Trends, 35
Vanderbilt Law Review 63 (1982) (with James D. Hurwitz).
Monographs, Reports, and Working Papers
Competition Policies for Growth: Legal and Regulatory Framework
for Sub-Saharan Countries (U.S. Agency for International
Development, May 2001) (with Cynthia L. Clement, Andrew I.
Gavil, and Georges Korsun).
The State of Federal Antitrust Enforcement--2001: Report of the
Task Force on the Federal Antitrust Agencies (American Bar
Association, Section of Antitrust Law, January 2001) (with Joe
Sims, Mary Cranston, Michael Denger, Richard Steuer, and
Patricia Vaughn).
Advisory Report on the Development of Consumer Protection Law
in Vietnam (Aug. 1997) (Prepared for the Ministry of Justice of
the Government of Vietnam under United Nations Development
Program VIE/94/003).
Advisory Report on Approaches to Competition Policy in Vietnam
(July 1997) (Prepared for the World Bank and the Central
Institute of Economic Management of the Government of Vietnam)
(with William A.W. Nielson).
Recommended Action Plan for Implementing Georgia's Antimonopoly
and Consumer Protection Laws (U.S. Agency for International
Development, Center for Economic Policy and Reform, Analytical
Report No. 9: May 1997).
Recommended Guidelines for Implementing Georgia's Antimonopoly
and Consumer Protection Laws (U.S. Agency for International
Development. Center for Economic Policy and Reform. Analytical
Report No. 8: Apr. 1997) (with Ben Slay).
Analysis of Competition in Mongolia & Three Case Studies
(University of Maryland, Center on Institutional Reform and the
Informal Sector, Country Report No. 14: 1994) (with Karen
Turner Dunn and Robert S. Thorpe).
Antitrust Analysis and Defense Industry Consolidation (American
Bar Association. Section of Public Contract Law: 1994) (with
Richard Feinstein and Patrick Sheller).
Study of Monopolies and Competition Policy in Zimbabwe: Final
Report of the Zimbabwe Monopolies Commission Study (U.S. Agency
for International Development, Project on Implementing Policy
Change, September 1992) (with Anthony Davis, Clive Gray, David
Gordon, and Eugenia West).
The Antitrust Government Contracts Handbook (American Bar
Association, Section of Antitrust Law: 1990).
Nonprice Predation Under Section 2 of the Sherman Act (American
Bar Association, Section of Antitrust Law, Monograph No. 18:
1991) (with E. Thomas Sullivan et al.).
The Reagan Judiciary Examined: A Comparison of Environmental
Law Voting Records of Carter and Reagan Appointees to the
Federal Courts of Appeals (Washington Legal Foundation, Working
Paper Series No. 36: October 1989).
The Reagan Judiciary Examined: A Comparison of Antitrust Voting
Records of Carter and Reagan Appointees to the Federal Courts
of Appeals (Washington Legal Foundation, Working Paper Series
No. 34: April 1989).
The Antitrust Paradox Revisited: Robert Bork and the
Transformation of Modern Antitrust Policy (Washington Legal
Foundation, Working Paper No. 32: February 1989).
Permanence and Regulatory Change: The Longevity of Reagan
Antitrust and Consumer Protection Policy at the Federal Trade
Commission (Washington Legal Foundation, Working Paper No. 29:
December 1988).
Reliance on FTC Consumer Protection Law Precedents in Other
Legal Forums (American Bar Association, Section of Antitrust
Law, Working Paper No. 1: July 1, 1988) (with Lawrence
Fullerton et al.).
A Basic Antitrust Compliance Manual for the Moving and Storage
Industry (National Moving & Storage Association and The
National Institute of Certified Moving Consultants: 1987).
Coping with a Mature Product in a Changing Industry: White
Paper of the National Task Force on the Yellow Pages Industry
(Aug. 6, 1987) (with Steven Heckmyer, et al.).
Horizontal Mergers: Law and Policy (American Bar Association,
Section of Antitrust Law, Monograph No. 12: 1986) (with William
Blumenthal et al.).
Magazine, Newsletter, and Newspaper Articles
Developing Competition Policy in Transition Economies:
Milestones in 2000, 4 International Antitrust Bulletin 40
(American Bar Association, Section of Antitrust Law, Spring
2001).
The Competition Conundrum. The American Lawyer 77 (January
2001).
Competition Policy in the Caribbean: First Steps Toward a
Regional Solution, 3 International Antitrust Bulletin 46
(American Bar Association, Section of Antitrust Law, Fall/
Winter 2000).
United States v. Microsoft Corp.: Turn-of-the-Century Turning
Point, George Washington Law School Magazine 26 (August 2000).
The New Indonesian Competition Law, 2 International Antitrust
Bulletin 35 (American Bar Association, Section of Antitrust
Law, Summer 1999).
Capitalism, Socialism, and Competition Policy in Vietnam, 13
Antitrust 57 (Summer 1999).
The Crusade Against Monopolists, Corporate Counsel Magazine 44
(June 1999).
The Big, The Bad and The Merged, Washington Post Outlook
Section, December 6, 1998, at C1.
The Guns of September, Corporate Counsel Magazine 89 (August
1998).
Institutional Innovations in Competition Policy in Peru:
Indecopi After Five Years, 1 International Antitrust Bulletin
34 (American Bar Association, Section of Antitrust Law, Summer
1998).
Evaluating the Effects of Procurement Reform, The Procurement
Lawyer 1 (American Bar Association, Section of Public Contract
Law, Vol. 33, No. 2: Winter 1998).
Expanded Antitrust Scrutiny Requires Greater Caution, The
Procurement Lawyer 23 (American Bar Association, Section of
Public Contract Law, Vol. 30, No. 3: Spring 1995).
Breyer, Like Ginsburg, Is Pro-Business, San Diego Union-
Tribune, May 22, 1994, at G-1.
Antitrust Law for a Transition Economy, Legal Times, August 2,
1993, at 41 (with Robert Thorpe).
Anti-Competitive Forces May Stir Anew, National Law Journal,
May 24, 1993, at 19 (with Ernest Gellhorn).
Judicial Appointments and the Future of Antitrust Policy, 7
Antitrust 8 (Spring 1993).
Bibliography of Recent Academic Scholarship, Public Contract
Newsletter, American Bar Association, Section of Public
Contract Law (Quarterly: 1990 to 1995).
Illegal Agreements with Competitors, 76 American Dahlia Society
Bulletin 6 (Dec. 1989).
Investigating Private University Price-Fixing, Collegiate Times
(1989).
Steady Reliever at Antitrust, Wall Street Journal, October 10,
1989, at A18.
Legal Ledger--Antitrust Compliance, Direction Magazine
(National Moving & Storage Association) (January-April 1988).
Teaming Arrangements and the Acquisition Process, Defense News,
November 27, 1987, at 24 (with William Burnett).
The Emerging Role of Competition in the Weapons Acquisition
Process, Antitrust and Trade Regulation Section Report (Federal
Bar Association: Vol. 1, No. 2, Summer 1987).
Armed Services Using Competition Strategy to Reduce Expenses,
Legal Times, July 13, 1987, at 14 (with William Burnett).
The Analysis of Mergers in Industries Subject to Rapid
Technological Change, in Manual on the Economics of Antitrust
Law 7-1 (American Bar Association, Section on Antitrust Law,
Economics Committee: March 1987).
Rule of Reason: D.C. Circuit Adopts Judge Bork's Analysis,
Legal Times, Oct. 6, 1986, at 20.
``The Consequences of Multiplicity in Competition Policy
Reviews of Mergers in the Telecommunications Sector''--
Testimony at the Federal Communications Commission En Banc
Session on Telecommunications Mergers, Washington, D.C. (Dec.
14, 1998).
``Analytical Approaches and Institutional Processes for
Implementing Competition Policy Reforms by the Federal Trade
Commission'' (Testimony Before the Federal Trade Commission
Hearings on Changing Nature of Competition in a Global &
Innovation Driven Age: Dec. 12, 1995) (with Ernest Gellhorn).
Interviews, Speeches and Transcribed Remarks Not Otherwise
Contained in the Materials Listed Above
Interview with William E. Kovacic, General Counsel, Federal
Trade Commission, The Antitrust Source 1 (American Bar
Association, Section of Antitrust Law, January 2004), available
at http://www.antitrustsource.com.
An Interview with William Kovacic, 6 Global Competition Review
14 (July/August 2003).
Panel Discussion: Antitrust on the Pacific Rim, in 2002 Fordham
Corporate Law Institute 521 (Barry E. Hawk, ed. 2003).
Panel Discussion: Administrative Antitrust Authorities--
Adjudicative and Administrative Functions, in 2002 Fordham
Corporate Law Institute 411 (Barry E. Hawk, ed. 2003).
Panel Discussion: Mergers and Acquisitions, 2001 Fordham
Corporate Law Institute 219 (Barry E. Hawk, ed. 2002).
Holding Legislators Accountable for Their Regulatory Promises,
2000 Law Review of Michigan State University--Detroit College
of Law 9 (2000).
Panel Discussion: Antitrust in Transition Economies, in 1999
Fordham Corporate Law Institute 563 (Barry E. Hawk, ed. 2000).
16. Please identify each instance in which you have testified
orally or in writing before Congress in a non-governmental capacity and
specify the subject matter of each testimony.
William E. Kovacic & Steven Schooner, Proposed Changes to Part 9 of
the Federal Acquisition Regulation Relating to Contractor
Responsibility -Testimony Before the Committee on Small Business, House
of Representatives, U.S. Congress (Oct. 21, 1999).
B. POTENTIAL CONFLICTS OF INTEREST
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers: None.
2. Do you have any commitments or agreements, formal or informal,
to maintain employment, affiliation or practice with any business,
association or other organization during your appointment? If so,
please explain.
If I am fortunate to be confirmed to be a member of the Federal
Trade Commission, I will request that my current employer (George
Washington University) grant me an unpaid leave of absence from my
position on the faculty of the George Washington University Law School.
If George Washington University grants me the leave of absence, I will
be abide by the restrictions described in my letter of July 22, 2005 to
Christian S. White, the Designated Agency Ethics Official of the
Federal Trade Commission. A copy of my letter to Mr. White is attached
to my answers to the Committee's Questionnaire. If George Washington
University does not grant me a leave of absence, I will resign from the
George Washington Law School faculty upon my confirmation as a member
of the Federal Trade Commission.
3. Indicate any investments, obligations, liabilities, or other
relationships which could involve potential conflicts of interest in
the position to which you have been nominated.
My letter of July 22, 2005 to Christian S. White, mentioned in my
answer to Question B.2. above, describes all investments, obligations,
liabilities or other relationships which could involve potential
conflicts of interest in the position to which I have been nominated.
For the Committee's reference, I have attached a copy of the July 22,
2005 letter to my answers to the Committee's Questionnaire.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last 5 years, whether for
yourself, on behalf of a client, or acting as an agent, that could in
any way constitute or result in a possible conflict of interest in the
position to which you have been nominated.
My letter of July 22, 2005 to Christian S. White, mentioned in my
answer to Question B.2. above, describes all business relationships,
dealings, or financial transactions I have had since September 15,
2000--for myself, on behalf of any client, or acting as an agent--that
could in any way constitute a possible conflict of interest in the
position to which I have been nominated. For the Committee's reference,
I have attached a copy of the July 22, 2005 letter to my answers to the
Committee's Questionnaire.
5. Describe any activity during the past 5 years in which you have
been engaged for the purpose of directly or indirectly influencing the
passage, defeat, or modification of any legislation or affecting the
administration and execution of law or public policy: None.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
My letter of July 22, 2005 to Christian S. White, mentioned above,
states the steps I will take to resolve any potential conflict of
interest, including all matters raised in my responses above. I will
abide by the commitments presented in my letter to Mr. White.
C. LEGAL MATTERS
1. Have you ever been disciplined or cited for a breach of ethics
by, or been the subject of a complaint to any court, administrative
agency, professional association, disciplinary committee, or other
professional group? No.
2. Have you ever been investigated, arrested, charged, or held by
any Federal. State, or other law enforcement authority of any Federal.
State. county, or municipal entity, other than for a minor traffic
offense? No.
3. Have you or any business of which you are or were an officer
ever been involved as a party in an administrative agency proceeding or
civil litigation? No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere ) of any criminal violation other than a minor traffic
offense? No.
5. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination.
If I am fortunate to be confirmed, my service as a member of the
Federal Trade Commission would draw heavily upon my past experience at
the Commission--as an attorney in the Bureau of Competition, as an
attorney advisor to a commissioner, and as General Counsel--and upon my
experience from June 1975 to July 1976 as a legislative assistant on
the majority staff of the Senate Judiciary Subcommittee on Antitrust
and Monopoly. During my year with the Senate Antitrust Subcommittee, I
worked extensively on assignments concerning the statute Congress
eventually passed as the Hart-Scott-Rodino Antitrust Improvements Act
of 1976. These experiences have given me a special affection for the
Federal Trade Commission and an intense personal and professional
interest in the responsibilities that Congress has entrusted to the
agency.
6. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion or any
other basis? No.
D. RELATIONSHIP WITH COMMITTEE
1. Will you ensure that your department/agency complies with
deadlines for information set by congressional committees? Yes.
2. Will you ensure that your department/agency does whatever it can
to protect congressional witnesses and whistle blowers from reprisal
for their testimony and disclosures? Yes.
3. Will you cooperate in providing the Committee with requested
witnesses, including technical experts and career employees, with
firsthand knowledge of matters of interest to the Committee? Yes.
4. Are you willing to appear and testify before any duly
constituted committee of the Congress on such occasions as you may be
reasonably requested to do so? Yes.
The Chairman. Thank you very much. I'm struck by the fact
that the two of you have a background in this agency and as you
both said, have a dedication to it. At no time has that been
required more than it is now. I do hope that you can work
together in terms of dealing with the issues that face us. And
I'm one who shares your opinion about the importance of the FTC
in terms of overall structure in protecting the whole concept
of interstate commerce. Now, we've had a lot of issues that are
before us recently. We've had some involving mergers and other
you know, the issues that you read about in the editorials all
the time.
But let me ask you this, I'm hearing more, and more about a
staff driven agency. Now you both were members of the staff, do
you think this Commission ought to be a staff driven entity, or
should the priorities be set by the Commission itself, rather
than by the staff. Mr. Rosch?
Mr. Rosch. I think Mr. Chairman that the priorities ought
to be set by the Commission. I think we're well advised to get
input from the staff. That was the way it was when I was there
before, I would expect that it would be that way in the future.
Let me add one thing to what Mr. Kovacic has said, and it's in
answer to your question as well. I think that the staff is
particularly important when it comes to trying cases. At that
juncture they're up against some of the finest lawyers in the
United States. And it's critically important that the
Commission have not only the lead counsel, but the bench
strength in order to go face to face with them. And I would
hope that over the period of time that Bill and I are there, if
we are so lucky as to be confirmed, that we're going to be able
to develop that kind of bench and lead counsel experience.
The Chairman. Mr. Kovacic.
Mr. Kovacic. There's no more important responsibility for
the Commissioners than to set priorities and to provide
guidance to the staff about what the agency's use of resources
should be. I think that requires a continuing collaboration
with the staff to understand what those who are closest to the
development of specific cases know. But in the first instance
and continually, the functions of setting priorities,
determining directions, specifying how the agency will act,
deciding what specific initiatives will be chosen are perhaps
the most important functions that the Commissioners themselves
can perform. It is their responsibility.
The Chairman. Well I ask that question, because I heard the
other day, I can't believe I heard that the staff, that the
Commission actually appealed a decision of the Commission. I
can't believe that, but isn't that what we heard? That they
really sought a further review after the Commission made a
decision. Now I firmly believe in having a very strong staff,
but I also believe this Commission absolutely needs to have a
bipartisan--your our bipartisan router in the whole area of
interstate commerce as we continue down this long river of
global enterprise and I think that unless you really have the
cooperation and the understanding of who's in charge, there's
going to be a difficult time.
We had a hearing as you both mentioned, that one of you
mentioned, last week about the oil industry coming in to
explain the pricing system and what led to these very high
prices. We've been asked to deal with the legislation to give
the FTC authority to have direct involvement in the concept of
price gouging when it involves interstate commerce. Have either
of you expressed an opinion about that, whether Congress should
enact that law?
Mr. Rosch. I've not expressed an opinion, but I do have
some opinions, Your Honor. Not Your Honor, sorry that's a slip
of the tongue. Mr. Chairman.
The Chairman. I wouldn't have made a very good judge. But
let me ask your opinion then. As you know the Chairman said
that she believed that the FTC should not have that authority,
and we had a split in the attorney generals from the states on
that issue. Do you believe Congress should extend that
authority to FTC?
Mr. Rosch. Well let me say first Mr. Chairman, and Mr. Co-
Chairman, that I believe that the FTC has an arsenal of tools
with which to deal with virtually any sector of the American
economy and I don't think energy is any exception. It has the
authority to challenge mergers. It has the authority to conduct
investigations into collusion and when there's reason to
believe that there is collusion I do believe that the American
public is entitled to know whether there is.
It has the authority to challenge unfair acts or practices
that are deceptive. And it also has authority, though more
limited to challenge unfair methods of competition. Now all of
that said, the next question is, does it need any more
authority, and my own view is that that's debatable. It's
debatable because despite the fact that the Supreme Court has
held that Section 5 of the FTC Act is broader than the Sherman
Act, lower courts have expressed a view that it is in fact co-
extensive with the Sherman Act. If and to the extent that this
Committee and the Senate and the Congress, believe that the FTC
should go beyond the Sherman Act in Section 5, then I believe
that that power must come from the Congress.
The Chairman. Mr. Kovacic.
Mr. Kovacic. One thing that I think the Committee
appreciates and I want to make clear is that certainly should
the Congress decide to enact legislation, let there be no
question in your minds that I would faithfully enforce it. I
look at the collective experience that we've had at the state
level with price gouging legislation. One of my fields at
George Washington has been teaching contracts. And I've had
some occasion to look at that experience, and the theme that I
think some of the witnesses raised in the hearing last week is
some of the difficulty associated with defining and applying a
prohibition on price gouging.
I think that there is a real possibility in the studies
that the Congress has requested the Commission to make and it
is now undertaking, and perhaps in a more extensive and
collaborative relationship with the state attorneys general (an
area where perhaps more effort could be devoted) to get a more
careful sense of precisely how the state laws have worked in
practice.
The impression I get from looking at the literature, is
that the experience on the whole has been relatively limited,
and somewhat ambiguous. But I think there is the possibility
there for the Congress to learn a great deal more, for the
Commission to learn a great deal more before suggesting
specific adjustments in legislation that go beyond the
considerable authority that the agency already has.
The Chairman. Thank you. Senator Inouye.
Senator Inouye. Well if I may followup, I'm certain that
you are well aware that GAO issued the report in May of 2004
suggesting that the FTC mergers of these oil companies resulted
in high prices. Knowing that, would you favor the Congress as
suggested, or alluded to by the Chair consider amending the
laws so that you would have authority to enforce--take
enforcement action. Not just investigate in the case of price
gouging, because you did have price gouging, $6 a gallon for no
reason whatsoever.
Mr. Kovacic. It would be a significant change in our
general approach to competition policy and consumer protection
to give the agency the authority to cap prices in specific
instances. This would be, I think, a significant expansion of
the authority the Commission previously has exercised, though I
agree with Ton Rosch that it would be possible to interpret
elements of our existing authority to give us the capacity at
the intersection of competition and consumer protection
doctrine to do that.
I think the great challenge for us would be to define--and
I think this has remained the problem that is not well resolved
in the commentary or discussions--specifically what the
excessive price would be. I do think that the GAO study was
useful in that in contributed to our knowledge of the effects
of the mergers. As I pointed out, in my time as General Counsel
while I had the opportunity to appear before several
Congressional bodies, I have great concern about the soundness
of some of the methodologies they used to reach their results,
and I think the GAO is entirely well-founded in pressing the
Commission to justify and explain the effects of what it's
done. To the extent that further efforts to evaluate the
consequences of our past acts are to be a greater element of
what we do, I think that is a very sensible way to go ahead.
The matter that troubles me the most in deciding what the
operational standard would be, would be to decide precisely
what the formula for setting the ceiling would be, even in
times of emergency.
Mr. Rosch. Mr. Co-Chairman, can I take a swing at that
myself. My own view is that there is a difference between
challenging or at least investigating and possibly challenging
acts or practices that lead to higher prices on the one hand.
And directly trying to cap prices on the other hand. As I've
indicated, I think that if and to the extent high prices are
the result of collusion the American public has every right to
have the FTC investigate and challenge those acts or practices.
Very clearly the Commission has that authority.
The Commission also has the authority to challenge acts or
practices that lead to higher prices, insofar as those involve
deception and that's true of deceptive manipulation as well.
Where I think the Commission can make a tremendous
contribution is in connection with the sort of thing that 33.83
contemplates. And that is conducting an investigation and
throwing sunlight on the results of that investigation. If it
is correct that the oil companies are making what appear to
some to be excessive profits, then it seems to me that the
proper thing to do is to throw sunlight on the reasons for
that, and for the profits in the first instance at least,
before one goes to the extreme step of trying to impose price
caps. I guess the reason that I have this reaction on price
caps is that I was here in 1973, and 1975, when President Nixon
imposed price caps and I recall gas station lines stretching
for two miles or so if you could get gas at all.
And I also recall that when they took the caps off, that we
suffered a period of inflation that sent interest rates into
the teens. And so I must say, that I am very reluctant to
endorse the Commission's imposing any such caps. Should as a
policy matter that is thought be the right thing to do, I
believe frankly that that is something that the Congress,
rather than an agency should do.
Senator Inouye. Is there any other agency with the
authority to enforce price gouging, anti-price gouging laws,
short of collusion?
Mr. Kovacic. Senator, I don't think at the federal level
that there is. The main efforts to date are those that the
Committee heard testimony on last week, and those have been
state-by-state efforts that have principally been focused on
the activities, the operations of retailers and wholesalers.
Most of our experience has come indirectly from looking at what
public utility commissions and federal regulators such as the
Federal Communications Commission have done in the past in
setting ceilings for prices. For gasoline and other refined
products in this country the answer to this date has only been
in the states.
The Chairman. What about Justice, what about the Department
of Justice?
Mr. Kovacic. Mr. Chairman, in using it's antitrust
authority under the Sherman Act, the Department would face the
same limits imposed by doctrine that the FTC does. It's been
fairly clear, standard competition law from the 1940s onward
that a decision by a firm to raise its prices, so long as the
price raising isn't the result of improper behavior, is
unbounded, that the high price is not forbidden.
The Chairman. The Senator's question as I understood it
covered the industry itself, collusion between entities in the
industry certainly would fall under the Justice Department
wouldn't it?
Mr. Kovacic. It would, and the Federal Trade Commission as
well could unmistakably challenge collusion involving
participants in the industry. I was referring before to what
might be considered to be purely unilateral behavior.
Senator Inouye. I have one more question. We're now in the
process of considering amendments to the 1996
Telecommunications Act, and we find for example that words are
now in our vocabulary that never appeared in those days such as
spyware. Does the FTC need additional authority or power to
cope with spyware problems?
Mr. Kovacic. Senator, I think for myself that the
suggestions that have been made in several legislative
proposals to make the existing penalties more powerful both on
the civil side and on the criminal side would be useful
enhancements of the authority that the Commission has--
certainly on the civil side--and for public authorities with
criminal enforcement power to use greater criminal sanctions.
I also think that a useful supplement to the existing
legislative scheme is a measure that this Committee in
different forms has endorsed and that Tom mentioned a moment
before, and that's the US SAFE WEB Act, I think the US SAFE WEB
Act would give the Commission far better capacity to work with
other competition and consumer protection authorities worldwide
to deal in particular with problems caused by spyware. Because
the wrongdoers today are geographically highly mobile and they
are technologically adroit, I fear that in some ways we are
running a half step behind them to the extent that our
framework for cooperating with other public authorities that
have the capacity to work with us to deal with these problems
is weak.
So I would say that's an area in which I would simply add
my own endorsement for views that this body has accepted
already, and that is that improving the foundation for sharing
information will give us a decided advantage in dealing with
spyware as well.
Senator Inouye. Well thank you very much. And Mr. Chairman,
if I may I would like to submit a few questions.
The Chairman. Yes. I have a couple of other questions.
Gentlemen, we hear too much I think about the global economy on
the news media and other places. But as a matter of fact the
Commission's practices have been to look at our own economy in
determining what is fair competition, what is necessary in
terms of acquisitions, mergers. To what extent should the
policies of the FTC change because of the advent of the
participants in the global economy? We have global giants now,
the German post office, really indirectly owns one of the air
carriers in the United States now. We have so many different
entities coming in from China that are really--they're
purchasing part of our infrastructure, but they're competing
literally through one of our own corporate shells with our
existing economy. Have you looked at this in terms of whether
the Chairman should broaden our scope as far as determining
what is competition and who we're competing with as far as the
FTC is concerned? Is it strictly interstate commerce that we
should be dealing with, or are we going to be in your terms
looking at global commerce?
Mr. Rosch. Well Mr. Chairman, I think in the antitrust
area, the seeds have been planted that Bill was talking about
earlier. There is close cooperation among many nations in terms
of antitrust enforcement and to some extent I think that has
been spearheaded by the Justice Department initially. But the
FTC has participated in that effort and I think it is bearing
fruit. In the consumer protection area I sense that it's not as
well developed and it should be for the very reasons Bill
mentioned.
These practices can occur in the Far East, in Europe, and
yet they can impact the United States and they can impact the
world for that matter. And I think it's important as I said in
my opening statement that there be a degree of international
cooperation which cannot exist at the present time without
legislation from this Committee and this Congress.
Mr. Kovacic. Mr. Chairman, I think one of the most
encouraging trends in antitrust analysis within the U.S.
agencies and within the larger community of competition
authorities worldwide is a greater recognition over time that
markets--the so-called relevant markets in which mergers or
other behavior are analyzed--increasingly has to take place in
a global context. In evaluating the significance of individual
U.S. firms, or the significance of transitions involving U.S.
firms, the competitive arena in which to assess their behavior
more and more is not simply the United States or North America,
or the Western Hemisphere, it's truly global.
An encouraging tendency--and I observed this frequently in
my time as FTC General Counsel--is that in the deliberations in
which markets are defined and the significance of behavior or
individual transactions are evaluated, the FTC and its staff
increasingly are pressed in the direction of asking ``Do we
have the right frame of reference? '' More and more, the answer
to the question of who competes and who's competitively
important involves an examination of global players and not
simply U.S. firms operating in the U.S. Because this is
becoming a norm that competing agencies feel they should follow
internationally, I have a significant degree of confidence that
the trend toward acknowledging the significance of
international players will continue.
The Chairman. Well Senator Inouye, in terms of this
Committee, we had that function with regard to communications
all too often as to whether an entity is too large. But when
you look at the entity in terms of its competition with other
entities from foreign countries the size of the competitors
here at home become irrelevant in terms of the competition in
the world market from one of our entities. I wonder if we've
got the proper frame of reference to really succeed in the
global market if our standard is, is the size of the relative
competitors within our own economy as compared to the global
market. I'm not sure that this has crept enough into the FTC
standard to really look at what our American companies are
competing with. And whether the size of those companies is
relevant now to other companies here at home, or the total
competition out in the global scene. And I can't ask a question
about matters that I think might come before you, but I've been
told about several that do exist now where because of the
competition from foreign companies coming in to do business in
the United States, the size of the existing largest competitor
in our own economy is such, that it's very hard to compete with
the coalitions and the mergers that have already been put
together abroad. This is going to be particularly true I think
in the communications field before this decade is out. It's
going to be one of the No. 1 questions, the question won't be
size, are these entities too large, and if we look at just the
United States, they will seem large. But if you look at the
global market, which is really the market for this industry in
the telecommunications industry in the future, they will be
small. I'm just urging that you make sure that in terms of your
service at the FTC that you look at the field of competition
and not the size of the competitors here at home. I think that
is going to be a very difficult problem for you in your term.
I want to thank you. Any further questions Senator?
Senator Inouye. I just want to emphasize the point that you
brought up that it is a problem for us, not just on the
Commerce Committee, but also on the Defense Committee and right
now we're coping with a major decision, should we open up
purchases to the world when we know that the manufacturers in
certain countries are being subsidized by their governments and
not paying taxes that our manufacturers would have to pay, but
they happen to be our allies. If this continues we could put
ourselves out of business. It is a serious problem. Thank you
very much.
The Chairman. Thank you. And we look forward to reporting
your nominations. I think you're exceptionally qualified, each
one of you and we congratulate you and as a matter of fact envy
you, as lawyers with an opportunity to serve at the FTC during
this critical period of our history. Thank you very much
Gentlemen.
Mr. Kovacic. Thank you.
Mr. Rosch. Thank you.
[Whereupon, at 3:15 p.m., the hearing was adjourned.]