- NOMINATIONS TO THE U.S. DEPARTMENT OF COMMERCE AND THE FEDERAL TRADE COMMISSION

[Senate Hearing 112-469]
[From the U.S. Government Publishing Office]

S. Hrg. 112-469

NOMINATIONS TO THE
U.S. DEPARTMENT OF COMMERCE
AND THE FEDERAL TRADE COMMISSION

=======================================================================

HEARING

before the

COMMITTEE ON COMMERCE,

SCIENCE, AND TRANSPORTATION

UNITED STATES SENATE

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

__________

NOVEMBER 15, 2011

__________

Printed for the use of the Committee on Commerce, Science, and
Transportation

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

ONE HUNDRED TWELFTH CONGRESS

FIRST SESSION

U.S. GOVERNMENT PRINTING OFFICE
74-999 WASHINGTON : 2012
-----------------------------------------------------------------------
For sale by the Superintendent of Documents, U.S. Government Printing
Office Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; DC
area (202) 512-1800 Fax: (202) 512-2104 Mail: Stop IDCC, Washington, DC
20402-0001

JOHN D. ROCKEFELLER IV, West Virginia, Chairman
DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas,
JOHN F. KERRY, Massachusetts Ranking
BARBARA BOXER, California OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida JIM DeMINT, South Carolina
MARIA CANTWELL, Washington JOHN THUNE, South Dakota
FRANK R. LAUTENBERG, New Jersey ROGER F. WICKER, Mississippi
MARK PRYOR, Arkansas JOHNNY ISAKSON, Georgia
CLAIRE McCASKILL, Missouri ROY BLUNT, Missouri
AMY KLOBUCHAR, Minnesota JOHN BOOZMAN, Arkansas
TOM UDALL, New Mexico PATRICK J. TOOMEY, Pennsylvania
MARK WARNER, Virginia MARCO RUBIO, Florida
MARK BEGICH, Alaska KELLY AYOTTE, New Hampshire
DEAN HELLER, Nevada
Ellen L. Doneski, Staff Director
James Reid, Deputy Staff Director
Todd Bertoson, Republican Staff Director
Jarrod Thompson, Republican Deputy Staff Director
Rebecca Seidel, Republican General Counsel and Chief Investigator

C O N T E N T S

----------
Page
Hearing held on November 15, 2011................................ 1
Statement of Senator Rockefeller................................. 1
Statement of Senator Lautenberg.................................. 2
Statement of Senator Hutchison................................... 4
Statement of Senator Boxer....................................... 5
Statement of Senator Pryor....................................... 62
Statement of Senator McCaskill................................... 64
Statement of Senator Klobuchar................................... 66
Statement of Senator Ayotte...................................... 68
Statement of Senator Boozman..................................... 71

Witnesses

Hon. Herb Kohl, U.S. Senator from Wisconsin...................... 3
Hon. Jon D. Leibowitz, Nomination to be Commissioner and
Chairman, Federal Trade Commission............................. 6
Prepared statement........................................... 8
Biographical information..................................... 9
Dr. Rebecca M. Blank, Nomination to be Deputy Secretary, U.S.
Department of Commerce......................................... 25
Prepared statement........................................... 26
Biographical information..................................... 28
Maureen K. Ohlhausen, Nomination to be Commissioner, Federal
Trade Commission............................................... 47
Prepared statement........................................... 49
Biographical information..................................... 50

Appendix

Response to written questions submitted to Hon. Jon D. Leibowitz
by:
Hon. John D. Rockefeller IV.................................. 79
Hon. Barbara Boxer........................................... 81
Hon. Maria Cantwell.......................................... 82
Hon. Frank R. Lautenberg..................................... 87
Hon. Mark Pryor.............................................. 87
Hon. Claire McCaskill........................................ 88
Hon. Tom Udall............................................... 90
Hon. Mark Warner............................................. 91
Hon. Mark Begich............................................. 94
Hon. John Thune.............................................. 94
Hon. Roger F. Wicker......................................... 95
Hon. John Boozman............................................ 97
Hon. Patrick J. Toomey....................................... 98
Hon. Kelly Ayotte............................................ 107
Response to written questions submitted to Dr. Rebecca M. Blank
by:
Hon. John D. Rockefeller IV.................................. 109
Hon. Maria Cantwell.......................................... 110
Hon. Mark Pryor.............................................. 111
Hon. Mark Warner............................................. 112
Hon. Mark Begich............................................. 115
Hon. Olympia J. Snowe........................................ 117
Response to written questions submitted to Maureen K. Ohlhausen
by:
Hon. John D Rockefeller IV................................... 119
Hon. Bill Nelson............................................. 120
Hon. Maria Cantwell.......................................... 121
Hon. Mark Warner............................................. 123
Hon. Mark Begich............................................. 124
Hon. Roger F. Wicker......................................... 125
Hon. John Boozman............................................ 127

NOMINATIONS TO THE

U.S. DEPARTMENT OF COMMERCE

AND THE FEDERAL TRADE COMMISSION

----------

TUESDAY, NOVEMBER 15, 2011

U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 2:29 p.m. in room
SR-253, Russell Senate Office Building, Hon. John D.
Rockefeller IV, Chairman of the Committee, presiding.

OPENING STATEMENT OF HON. JOHN D. ROCKEFELLER IV,
U.S. SENATOR FROM WEST VIRGINIA

The Chairman. The hearing will come to order, please.
I want to welcome and to congratulate the three nominees
who are appearing before the Commerce Committee today.
And you, too, Senator Kohl. You're already in the Senate,
so I assume we don't have to approve you, but you're here and
we welcome you. I value your commitment to public service, and
I always say this because I mean it, given what people think
about public service these days and politics these days doesn't
in any way detract from the majesty of the experience of
following public service and drilling down and keeping drilling
down and expanding your knowledge.
We can't seem to make bills pass well enough to satisfy the
needs of the country, but that does not take away from the
courage and the steadfast, and I believe the awesomeness of
those who volunteer to come and do this. So thank you for that
attitude.
I'm going to start today with Jon Leibowitz, who's been
nominated to have a second term as Commissioner and Chairman of
the Federal Trade Commission.
I'm a fan. During his seven-year term as a Commissioner and
during the past three years as Chairman, Mr. Leibowitz has
shown that he understands the vital role of the FTC as the
Nation's premier consumer-protection body.
You may remember during the Wall Street--the Dodd----
Senator Boxer. Frank.
The Chairman.--Frank, that they wanted to eliminate the
Federal Trade Commission and give everything to the Federal
Reserve Commission and have them set up a consumer--and, I
think, there's somebody running for Senate in Massachusetts
that can tell you that didn't work out very well. We kept the
Federal Trade Commission and we kept its powers, and it's an
awesome body, which has been around for a long time doing
incredible work.
Under Jon Leibowitz's leadership, the FTC has used its
enforcement and rulemaking authorities to improve financial
protection for consumers who are at risk with scams and frauds,
developed important proposals to modify FTC rules on child-
privacy protection and lead the way in contemplating new
privacy and data-security frameworks, all very complicated and
controversial stuff in an ever-evolving online and mobile
world.
I appreciate Chairman Leibowitz's hard work and I look
forward to your continued service at the FTC.
Also welcome, Ms. Maureen Ohlhausen who has been nominated
to serve as Commissioner at the FTC. She comes to the position
with many years of experience in privacy, data security and
cybersecurity law, which we need.
She also comes with strong understanding and appreciation
of the institution, having served on the staff of the FTC for
many years. I'm confident that she will continue the long
bipartisan tradition that is one of the hallmarks of the
Commission.
Ms. Rebecca Blank has been nominated to serve as Deputy
Secretary of Commerce. It's nice to get somebody passed in
Congress, you know? Takes a long time around here. Hopefully,
we'll get this done.
We just confirmed the Secretary of Commerce late last
month. I'm embarrassed at how long that took. I'm pleased that,
with his nomination and this nomination, the leadership of the
department will be well set.
Ms. Blank has had a distinguished career in economics. Over
the past 3 years, she served in a variety of positions in the
department, including serving as Acting Deputy Secretary and
Acting Secretary of the department. She has performed these
duties admirably and I believe she is a very strong pick for
Deputy Secretary.
So these two agencies that these nominees seek to lead and
to serve on are vital to our country and our economy, and we
need highly qualified professionals to take on these positions,
and we're lucky that they have agreed to put themselves up for
public scrutiny and, hopefully, nomination.
The Ranking Member is not here. Senator Lautenberg.

STATEMENT OF HON. FRANK R. LAUTENBERG,
U.S. SENATOR FROM NEW JERSEY

Senator Lautenberg. I'll be brief. I want to thank Dr.
Rebecca Blank, Jon Leibowitz, Maureen Ohlhausen for agreeing to
serve.
Dr. Blank has done an admirable job keeping the Commerce
Department running smoothly. In addition to her role as Under
Secretary for Economic Affairs, she has served as Acting
Secretary and Acting Deputy Secretary, and I thank her for her
service and want to hear her plans for moving the department
and our economy forward.
I also extend a special welcome to Federal Trade Commission
Chairman Leibowitz, who has roots in my home state of New
Jersey, and no wonder he's wise.
Chairman Leibowitz attended high school in Englewood, New
Jersey. Since being sworn in as Chairman in 2009, he's made
consumer protection a priority, and I look forward to his
testimony.
Ms. Ohlhausen is nominated to join Mr. Leibowitz as an FTC
Commissioner. This is her first nomination, but she knows the
FTC well, having worked with the agency for more than decade.
And I'm eager to hear from each of these nominees, Mr.
Chairman, particularly about how we can protect consumers and
strengthen our economic recovery.
Thank you.
The Chairman. If there are not others, I would call on
Senator Herb Kohl from the State of Wisconsin to introduce our
first witness.

STATEMENT OF HON. HERB KOHL,
U.S. SENATOR FROM WISCONSIN

Senator Kohl. Mr. Chairman and members of this Committee, I
appear here today to introduce Chairman Jon Leibowitz and to
strongly support his confirmation to another full term as a
Commissioner of the Federal Trade Commission. Jon has served as
a Commissioner since 2004 and as its Chairman since March of
2009.
As many of you know, this nomination is a matter of
particular pride for me because Jon served as my Chief Counsel
on my Judiciary Committee staff for 12 years until 2001. Jon
proved to be extraordinarily able in this position. I know him
to be highly dedicated, an excellent lawyer with a sharp mind
and deeply committed to public service.
Since joining the FTC, Jon has become known as a strong
protector of full and robust competition in the economy and as
a passionate champion for consumers.
His many achievements as FTC Chairman include the FTC
settlement last year with Countrywide, where consumers received
repayment of a total of $108 million for the excessive fees
they were charged by Countrywide in connection with their home
mortgages, his actions to combat pay-for-delay settlements,
which deny consumers the benefits of low-cost generic drugs,
his initiatives to protect consumer privacy on the Internet and
his vigorous enforcement of antitrust laws to protect consumers
in many key industries, from healthcare to computer hardware.
A hallmark of Jon's chairmanship of the FTC is his
encouragement of collaboration among his colleagues on the
Commission working hard to ensure that his agency strives to
the fullest extent possible to reach decisions that reflect
consensus across party and ideological lines.
Since he joined the Commission in 2004, Jon has shown our
entire nation those leadership qualities that I recognized
years ago. His outstanding performance at the FTC fully
warrants his renomination for a second term as a Commissioner.
I urge my colleagues to join me in supporting his renomination
to another full term.
I thank you, Mr. Chairman, for giving me the opportunity to
appear before you today.
The Chairman. Senator Kohl, you are a distinguished
visitor. We're grateful for your presence here today. I thank
you for the service that you have done on this day and all
days.
I'd like to give the Ranking Member, Senator Hutchison, a
chance to make a remark, and then I think Senator Boxer wants
to make a remark also.

STATEMENT OF HON. KAY BAILEY HUTCHISON,
U.S. SENATOR FROM TEXAS

Senator Hutchison. Mr. Chairman, I'm happy to yield to
anyone who has another commitment, because I'm going to stay.
OK.
Thank you, Mr. Chairman, for, of course, holding this
hearing, and I am pleased that Dr. Blank is coming back before
the Committee for the position of Deputy Secretary at the
Department of Commerce. We just confirmed Secretary Bryson, and
it is important that we get his Deputy in place as soon as
possible, so they can have the full leadership team.
Dr. Blank is in a unique position, having served for almost
a year as Acting Deputy Secretary and Acting Secretary for the
2 months while the confirmation of Secretary Bryson was
pending.
I'm also pleased to see our two nominees for the Federal
Trade Commission, Maureen Ohlhausen and Chairman Leibowitz. The
FTC's mission is a critical one, we all know, and its expansive
jurisdiction covers both consumer protection and antitrust
issues in a broad range of industries.
Because the FTC covers such a broad umbrella of issues,
I'll be interested to hear the nominees' views on industry
regulation through agency rulemaking.
While there is a place for carefully considered regulation,
we must be careful not to regulate for the sake of regulating,
and before any new directives are issued, they should be
carefully considered against all alternatives to ensure a
balanced and fair approach that will not stifle innovation or
competition nor impede job growth.
This is particularly important in the online world. As
pervasive as the Internet now is, online business models and
services and self-regulatory programs are still fairly new.
They are evolving every day. Any rules in this space, whether
regulatory or legislative, would have to be informed by this
dynamic environment, so regulating before the markets develop
could be harmful.
I do have some other concerns regarding recent and upcoming
action by the Committee that I hope we can clarify and that
would include the Interagency Working Group on Food Marketing,
which is finalizing its recommendations and will soon send them
to Congress. I'm unclear on the way in which the working group
arrived at its recommendations and I would like to talk to
Chairman Leibowitz about that.
And Mr. Leibowitz also has been a staunch supporter for
prohibiting so-called reverse-payment settlements for
pharmaceuticals, which would be on my agenda to ask of him as
well as Ms. Ohlhausen.
So I do think we need to proceed with the hearing, and I
appreciate very much your calling it.
The Chairman. Thank you, Ranking Member Hutchison.
Senator Boxer.

STATEMENT OF HON. BARBARA BOXER,
U.S. SENATOR FROM CALIFORNIA

Senator Boxer. Thank you, Chairman Rockefeller and Ranking
Member Hutchison.
I want to say to all the nominees I'm supporting all of
you, so never fear about that, but due to my schedule, I can't
stay to hear the testimony.
I would love to engage Chairman Leibowitz, not that he
would answer me, but just by a nod of the head, so I know he's
working on a couple of issues. And if he can't do the nod of
the head, I'll call him later.
But there are two things that I think are really important,
and I don't know if my colleagues have heard about this, but
the first issue involves the processing of gift receipts at
national retail stores.
Thanks to the work of the CBS-TV station in Sacramento,
California, we learned earlier this year that Walmart stores
were shortchanging customers returning items using gift
receipts.
For example, in one instance, the station's producers
purchased various items from Walmart totaling $51, but when
they later returned the items using their gift receipt, which
blanks out the price, they got back $27, and it was shocking,
and it was done over and over again. In other cities, the same
thing happened.
So, Mr. Chairman, it would be as if I went out and bought
you a Christmas gift or a birthday gift and spent $35 and then
you had a duplicate. You bring it back and you get back $15,
and you say, ``What a chincy colleague I had there. She could
have at least spent 35 bucks on me.''
The point is that's out and out theft. And when they
answered the question, the store said, oh, this was just a
staff problem. But what was happening is because it was
reiterated in other places--yes, Walmart blamed the staff for
the errors. Producers in Dallas did the same thing, and they
had the same exact problem, and in other national retail
chains. So what's happening here? It sounds like it's some type
of a scam going on.
And so anyway, I wrote to you, Mr. Chairman Leibowitz, and
I just want to know that this has been brought to your
attention, because I wrote--I've written you a couple of times.
I know it's hard for you to say too much, but I would hope
that in the near future we would see a response from you on
this. It's very disturbing. It's just like somebody's going and
picking somebody's pocket. It's just the same deal, and then
there's, you know, deniability.
And then the second issue has to do with voice-mail
security. In September, I wrote wireless phone carriers T-
Mobile and Sprint to bring to their attention a vulnerability
with their security systems, because private voice-mail
information is at risk of hacking.
T-Mobile and Sprint do not require customers to input a
number when they call their voice-mail from their own cell
phone, and this is a major problem, because it leaves customers
at risk of hacking through simple free and easy-to-use software
called ``Spoofing Software.''
Verizon and AT&T have changed their security systems to
require customers to input their voice-mail pin whenever they
access their voice-mail which prevents Spoofing Software from
working.
I asked T-Mobile and Sprint to update their security, but
they're saying no, and they're arguing that they have no
vulnerability.
In July, the National Journal reported that you supported
the FTC having jurisdiction over wireless carriers in order to
deal with voice-mail security issues, and, by a nod of the
head, do you still hold that opinion?
OK. It's not quite a nod. So I will follow up on that issue
with you.
But, Mr. Chairman, I so appreciate this time, and I so
appreciate your leadership, and if I could say that the two of
you are really a great model. Senator Inhofe and I are learning
from you, and we've just reported out a bill that we did
working together, and it's just a pleasure to be with you.
Thank you.
The Chairman. Thank you, Senator Boxer.
And Chairman Leibowitz.
Chairman Leibowitz. Mr. Chairman, would you like me to
start or----
The Chairman. Yes, and you and Maureen Ohlhausen and Dr.
Blank are all seated. Why don't you begin?

STATEMENT OF HON. JON D. LEIBOWITZ, NOMINATION

TO BE COMMISSIONER AND CHAIRMAN,

FEDERAL TRADE COMMISSION

Chairman Leibowitz. Chairman Rockefeller, Ranking Member
Hutchison, Senator Lautenberg, Senator Pryor, Senator Udall,
I'm pleased to appear before you with Maureen Ohlhausen, a
former FTC official who we hope will soon be back at the agency
in a new role as Commissioner.
And I'm delighted to be here with my colleagues on the
Commission, Tom Rosch, Edith Ramirez and Julie Brill.
I'm also joined by my wife, Ruth Marcus, by far my better
half--some of you know her, so you know that's true--our
daughters, Emma and Julia, and my in-laws, Arnold and Judy
Marcus, who are somewhere back there.
It's been a wonderful opportunity to serve on the FTC for
the past 7 years, including the last two-and-a-half as
Chairman.
Just 3 years shy of our centennial, as you mentioned,
Senator Rockefeller, we are the nation's premier consumer
protection agency. We play a critical role in freeing the
marketplace from predatory, fraudulent and anticompetitive
conduct that tilts the playing field against consumers and
honest business people, and we focus on a wide range of goods
and services from high-tech computer chips to children's mobile
apps to one-way truck rentals.
The Commission's great strength is that we are bipartisan.
We are collegial and we work hard to reach decisions by
consensus. We are inspired by a staff that is widely recognized
as one of the most professional, dedicated and highly qualified
in the Federal Government.
As you know, we are a small agency with a big mission. Let
me highlight just a few of the issues we're going to continue
to focus on.
Pursuing unfair or deceptive practices aimed at financially
distressed consumers will remain a priority at the FTC. The
exponential growth of the Internet, combined with the current
economic downturn has fueled a resurgence in what we call last-
dollar frauds. These are targeted at the most vulnerable
Americans, and they include foreclosure-rescue scams, sham debt
relief and bogus job opportunities.
Since 2009, the FTC alone has brought more than 90 cases
against these predators, and thanks to you and the Ranking
Member for protecting our jurisdiction here during Dodd-Frank.
Leveraging our resources and working cooperatively with the
state attorneys general and other Federal and state agencies,
we have partnered in more than 400 such cases.
As just one example, this past summer, the FTC concluded a
case against Countrywide for mishandling consumer loans in
bankruptcy and charging excessive fees for mortgage servicing.
We mailed, as Senator Kohl mentioned, $108 million in redress
checks to more than 450,000 homeowners.
Consumer privacy will continue to be a major focus from
both the enforcement and the policy perspectives. Ever-evolving
technologies, such as mobile devices, open up the riches of the
Internet, but they also pose new threats. The FTC has responded
by bringing nearly 100 spam and spyware cases, more than 30
data-security cases and almost 80 cases for violations of Do-
Not-Call in the past decade.
Last December, we also released a preliminary staff report
highlighting self-regulatory principles that seek to protect
consumer privacy, while, at the same time, making certain that
industry can continue to innovate on the Internet.
Of course, protecting privacy in the face of new
technologies will remain a challenge. We're aware of this
Committee's concerns about the privacy implications of mobile
apps, geolocation devices and facial recognition, the value of
industry-wide codes of conduct and the difficulty of
safeguarding consumer privacy when users of electronic devices
every year seem to grow younger as well as more tech savvy than
their parents. We look forward to working with you to address
these issues.
Healthcare competition will remain very high on the FTC's
agenda. Families struggling to make it in tough economic times
are particularly vulnerable to rising healthcare costs. We push
back against this trend, challenging proposed hospital mergers
likely to raise prices and fighting various anticompetitive
restrictions on healthcare goods and services.
An especially egregious practice, we believe, that we work
to restrict and not to ban is the pay-for-delay pharmaceutical
settlement. These sweetheart deals between brand-name and
generic drugmakers delay the entry of lower-priced generics on
the market and cost Americans billions of dollars annually in
higher prescription prices.
Equally troubling, these agreements add to the Federal
deficit, because taxpayers fund about one-third of the nation's
prescription drugs through Medicare, veterans' programs and the
like.
The FTC will continue to monitor petroleum markets closely.
We are keenly aware of the impact of gasoline prices on
American families. Households have only limited ability to
reduce their gasoline consumption, and increased prices
severely cut into their ability to buy other necessary goods.
And, finally, given the agency's jurisdiction over broad
sectors of the economy, we will continue to produce various
industry studies, many of which have been requested by Congress
and virtually all of which emphasize self regulation. These
include periodic reports on the marketing of violent
entertainment to children. We examine movies, music and video
games, and, next year, we'll look at content-based applications
or apps, which all too often don't give adequate guidance to
parents.
One recent study concerns as Senator Hutchinson mentioned--
the marketing of healthy foods to kids. The feedback from
stakeholders has helped us make significant improvements to the
report's recommendations. I know this committee will have
questions about the part of the report written by the FTC on
marketing, and I will be happy to try to answer your questions.
To conclude, if I'm fortunate enough to be confirmed, I
will continue to tackle this broad portfolio of issues with the
same energy, focus and bipartisanship that our agency has
applied in the past and to work with this Committee and with my
wonderful colleagues at the Commission for the benefit of
American consumers. Thank you.
[The prepared statement and biographical information of
Chairman Leibowitz follow:]

Prepared Statement of Hon. Jon D. Leibowitz, Nomination to be
Commissioner and Chairman, Federal Trade Commission
I am pleased to appear before you with Maureen Ohlhausen, a former
FTC official, who we hope will soon be back at the agency in a new role
as a Commissioner. And I am delighted to be here with my colleagues on
the Commission: Tom Rosch, Edith Ramirez, and Julie Brill. I am also
joined by my wife, Ruth Marcus, and our daughters, Emma and Julia.
It has been a wonderful opportunity to serve on the FTC for the
past seven years, including the past two-and-a-half as Chairman. Just
three years shy of our centennial, the FTC is the Nation's premier
consumer protection agency. We play a critical role in freeing the
marketplace from predatory, fraudulent, and anticompetitive conduct
that tilts the playing field against consumers and honest
businesspeople. And we focus on a wide range of goods and services-from
high-tech computer chips to children's mobile apps to one-way truck
rentals.
The Commission's great strength is that we are bipartisan,
collegial, and work hard to reach decisions by consensus. We are
inspired by a staff that is widely recognized as one of the most
professional, diligent, and highly qualified in the Federal Government.
As you know, we are a small agency with a big mission. Let me
highlight just a few of the issues on which we will continue to focus:
Pursuing unfair or deceptive practices aimed at financially
distressed consumers will remain a priority for the FTC. The
exponential growth of the Internet, combined with the current economic
downturn, has fueled a resurgence of what we call ``last dollar
frauds.'' These are targeted at the most vulnerable consumers and
include foreclosure rescue scams, sham debt relief, and bogus job
opportunities. Since 2009, the FTC alone has brought 90 cases against
these predators. Leveraging our resources, we partnered with State
Attorneys General and other Federal and state agencies on more than 400
such cases.
As just one example, this past summer, the FTC concluded a case
against Countrywide for, we alleged, mishandling consumer loans in
bankruptcy and charging excessive fees for mortgage servicing. We
mailed more than $108 million in redress checks to 450,000 homeowners.
Consumer privacy will continue to be a major focus from both
enforcement and policy perspectives. Ever-evolving technologies, such
as mobile devices, open up the riches of the Internet but also pose new
threats. The FTC has responded by bringing almost 100 spam and spyware
cases, more than 30 data security cases, and nearly 80 cases for
violations of Do Not Call in the past decade. Last December, we also
released a preliminary staff report highlighting critical self-
regulatory principles that seek to protect consumers' privacy while
allowing industry to continue to innovate on the Internet.
Of course, protecting privacy in the face of new technologies will
remain a challenge. We are aware of this Committee's concerns about the
privacy implications of mobile apps, flash cookies, geo-location, and
facial recognition; the value of industry-wide codes of conduct; and
the difficulty of safeguarding privacy when users of electronic devices
every year seem to grow younger as well as more tech-savvy than their
parents. We look forward to working with you to address these issues.
Healthcare competition will remain very high on the FTC's agenda.
Families struggling to make it in tough economic times are particularly
vulnerable to rising health care costs. We push back against this
trend, challenging proposed hospital mergers likely to raise prices and
fighting various anticompetitive restrictions on health care goods and
services.
An especially egregious practice that we work to restrict is the
``pay-for-delay'' pharmaceutical settlement. These sweetheart deals
between brand-name and generic drug makers delay entry of lower-priced
generics on the market and cost Americans billions of dollars annually
in higher prescription prices. Equally troubling, these agreements add
to the Federal deficit because taxpayers fund about one third of the
Nation's prescription drugs through Medicare, veterans' programs, and
the like.
The FTC will continue to monitor petroleum markets closely. We are
keenly aware of the impact of gasoline prices on American families-
households have only limited ability to reduce their gasoline
consumption, so increased prices severely cut into their ability to buy
other necessary goods. This past summer, FTC staff issued a study that
examined the various factors that increase the price of gasoline, such
as OPEC's inherently anticompetitive behavior and rising demand in
China and India. We also opened an investigation when we learned of
anomalous behavior among oil refineries--profit margins were going up
at the same time utilization rates were going down. Let me assure you,
if we find violations of the law, we will aggressively pursue them.
Finally, given the agency's jurisdiction over broad sectors of the
economy, we will continue to produce various industry studies-many of
which Congress requested and emphasize self-regulation. These include
periodic reports on the marketing of violent entertainment to
children--we examine movies, music, and video games, and next year, we
will look at apps, which all too often don't give parents guidance. The
most recent study concerns the marketing of healthy food to kids. The
feedback from stakeholders has helped us make dramatic improvements to
the report's recommendations. I know this Committee will have questions
about the marketing part of that report, written by the FTC, and I will
be happy to answer them.
To conclude, if I am fortunate enough to be confirmed, I will
continue to tackle this broad portfolio of issues with the same energy,
focus, and bipartisanship that our agency has applied in the past, and
to work with this Committee for the benefit of American consumers.
Thank you.
______

a. biographical information
1 . Name (Include any former names or nicknames used): Jonathan D.
Leibowitz.
2. Position to which nominated: Commissioner, Federal Trade
Commission.
3. Date of Nomination: March 4, 2011.
4. Address (List current place of residence and office addresses):

Residence: Information not released to the public.

Office: Federal Trade Commission, 600 Pennsylvania Ave NW,
Washington DC 20580.

5. Date and Place of Birth: Born June 17, 1958 in New York City,
NY.
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).

Married to Ruth Allyn Marcus, Journalist, Washington Post;
children: Emma Rose Leibowitz--age 15; Julia Rachel Leibowitz--
age 13.

7. List all college and graduate degrees. Provide year and school
attended.

University of Wisconsin (1976-1980), BA 1980.
New York University School of Law (1981-1984), JD 1984.

8. List all post-undergraduate employment, and highlight all
management-level jobs held and any non-managerial jobs that relate to
the position for which you are nominated.

Chairman, Federal Trade Commission, Washington, D.C. (2009 to
present)

Commissioner, Federal Trade Commission, Washington, D.C. (2004-
2009)

Vice President, Congressional Relations, Motion Picture
Association of America, Washington, D.C. (2000-2004)

Chief Counsel, United States Senator Herb Kohl, Senate
Judiciary Committee, Washington, D.C. (1989-2000)

Democratic Chief Counsel and Staff Director:

Senate Judiciary Committee Subcommittee on Antitrust,
Business Rights and Competition (1997-2000);

Senate Judiciary Committee Subcommittee on Terrorism
and Technology (1995-1996);

Senate Judiciary Committee Subcommittee on Juvenile
Justice (1991-1994)

Counsel, United States Representative Edward Feighan (1987-
1988)

Counsel, United States Senator Paul Simon, Senate Judiciary
Committee (1986-1987)

Attorney, Lane and Edson, Washington, D.C. (1985-1986)

Attorney, Cole, Raywid and Braverman, Washington, D.C. (1984-
1985)

Summer Associate, Katten Muchin Zavis Pearl & Geller (Summer
1983)

Employee, Sib's-by-the-Sea, St. Thomas, U.S. Virgin Islands
(1981)

Employee, Vantage Publishing, New York, N.Y. (1980-1981)

9. Attach a copy of your resume. A copy is attached.
10. 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: None.
11. 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: None.
12. 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.

Member, D.C. Bar, 1986& present

Member, New York State Bar Association, Admitted 1986; Retired
1987 to present

Member, Sports Club LA, 1170 22nd St. NW, Washington, D.C.

Chairman, Federal Trade Commission, 2009 to present.

Commissioner, Federal Trade Commission, 2004-2009.

14. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past ten years. Also list all offices
you have held with, and services rendered to, a state or national
political party or election committee during the same period.
I have made no contributions of $500 or more for the past 10 years.
15. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals, and any other special recognition
for outstanding service or achievements.

Phi Beta Kappa, University of Wisconsin, 1980
Knapp Fellowship (for Undergraduate Honors Thesis)

16. Please list each book, article, column, or publication you have
authored, individually or with others. Also list 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.
Speeches and Remarks
2011

Remarks to the Association of Magazine Media (Magazine
Publishers of America)
Washington, D.C.
April 12, 2011

Remarks at ``Enforcers' Roundtable'' at ABA Antitrust Section
Spring Meeting
Washington, D.C.
April 1, 2011

Remarks at American Antitrust Institute Luncheon Honoring Art
Amolsch
Washington, D.C.
March 31, 2011

Welcome Remarks at the International Competition Network (ICN)
Cooperation Roundtable
Washington, D.C.
March 29, 2011

Remarks to the Newspaper Association of America Board of
Directors
Dallas, Texas
March 25, 2011

Remarks at Boston College Law School
Newton, Massachusetts
March 17, 2011

Remarks at the International Association of Privacy
Professionals (IAPP) Global Summit
Washington, D.C.
March 10, 2011

Remarks at the National Association of Attorneys General (NAAG)
Spring Meeting
Washington, D.C.
March 7, 2011

``Public Sector Lawyering: A Conversation with FTC Chair Jon
Leibowitz''
Remarks at the Indiana University Maurer School of Law
Bloomington, Indiana
March 3, 2011

Remarks at the Asia-Pacific Economic Cooperation (APEC) Privacy
Workshop
Washington, D.C.
March 1, 2011

Remarks at the Giles Sutherland Rich American Inn at Court
Washington, D.C.
February 16, 2011

``Helping Business Bear the New Financial Consumer Protection
Regime''
Remarks at the United States Chamber of Commerce
Center for Capital Markets Competitiveness
Washington, D.C.
January 20, 2011

2010

Remarks at the American Antitrust Institute (AAI) Conference on
the Future of Private Antitrust Enforcement
Washington, D.C.
December 7, 2010

Remarks on the Release of the Preliminary FTC Staff Report on
Privacy
Washington, D.C.
December 1, 2010

``Fighting for the Middle Class: The FTC Tackles Mortgage
Rescue Fraud''
Remarks at a Middle Class Task Force Event with Vice President
Biden
Washington, D.C.
November 19, 2010

Remarks at the ABA Antitrust Section Fall Council Meeting
Washington, D.C.
November 17, 2010

Keynote Address at the Global Forum 2010
Washington, D.C.
November 8, 2010

Lewis Bernstein Memorial Lecture
St. John's School of Law
Queens, New York
October 12, 2010

Remarks at Common Sense Media Press Conference for the Net
Cetera Community Toolkit
Washington, D.C.
October 8, 2010

Opening Statement
FTV/CMS Workshop on Accountable Care Organizations
Washington, D.C.
October 5, 2010

Remarks at ``Toward Healthy Informed Communities: The Knight
Commission Report One Year Later''
Washington, D.C.
September 29, 2010

Remarks at the Fordham Competition Law Institute Annual
Conference
New York, New York
September 24, 2010

``Making the Grade? A Year at the FTC''
Remarks at the Fourth Annual Global Antitrust Enforcement
Symposium
Georgetown Law Center
Washington, D.C.
September 21, 2010

Remarks at FTC Press Conference on Intel Corporation
Washington, D.C.
August 4, 2010

Remarks announcing FTC Debt Settlement Rule at a Middle Class
Task Force Event with Vice President Biden)
Washington, D.C.
July 29, 2010

Remarks at FTC/OECD Roundtable on the OECD Consumer Policy
Toolkit
Washington, D.C.
July 21, 2010

Introductory Remarks at the Third FTC News Media Workshop
Washington, D.C.
June 15, 2010

Remarks at FTC Press Conference Regarding Settlement with
Countrywide
Washington, D.C.
June 7, 2010

``A Doctor and a Lawyer Walk Into a Bar: Moving Beyond
Stereotypes''
Remarks to the American Medical Association House of Delegates
Chicago, Illinois
June 14, 2010

``Where's the Remote? Maintaining Consumer Control in the Age
of Behavioral Advertising''
Remarks at the National Cable & Telecommunications Association
The Cable Show 2010
Los Angeles, California
May 12, 2010

Opening Remarks at the International Consumer Protection
Enforcement Network
(ICPEN) Conference
Washington, D.C.
May 6, 2010

Remarks at the Roundtable Conference with Enforcement Officials
58th ABA Section of Antitrust Law Spring Meeting
Washington, D.C.
April 23, 2010
Remarks at the Association of National Advertisers Advertising
Law and Public Policy Conference
Washington, D.C.
March 18, 2010

Remarks to the Consumer Federation of America's Consumer
Assembly Conference
Washington, D.C.
March 11, 2010

Introductory Remarks at the Second FTC News Media Workshop
Washington, D.C.
March 10, 2010

Remarks at FTC Press Conference Regarding Settlement With
LifeLock (with Illinois AG Lisa Madigan)
Chicago, Illinois
March 9, 2010

Remarks at FCC Workshop: Consumers, Transparency and the Open
Internet
Washington, D.C.
January 19, 2010

Remarks at the 36th Annual ABA Mid-Winter Meeting
Miami, Florida
January 16-18, 2010

Remarks at Pay for Delay Press Conference with Subcommittee
Chairman Bobby Rush
Washington, D.C.
January 13, 2010

2009

Remarks on the Release of Net Cetera with Education Secretary
Duncan and FCC Chairman Genachowski
Washington, D.C.
December 16, 2009

Introductory Remarks for Sizing Up: Food Marketing and
Childhood Obesity Workshop
Washington, D.C.
December 15, 2009

Introductory Remarks for OECD's Empowering E-Consumers Workshop
Washington, D.C.
December 8-9, 2009

Introductory Remarks for the FTC Privacy Roundtable
Washington, D.C.
December 7, 2009

Introductory Remarks for FTC/DOJ Horizontal Merger Guidelines
Workshop
Washington, D.C.
December 3, 2009

``Creative Destruction'' or Just ``Destruction'': How Will
Journalism Survive the Internet Age?
Opening Remarks at the FTC News Media Workshop
Washington, D.C.
December 1--2, 2009

Remarks at ``Operation Stolen Hope'' Mortgage Fraud Event with
Senator Harry Reid
Las Vegas, Nevada
November 24, 2009

Remarks at National Archives Panel Discussion Regarding Supreme
Court Justice Louis Brandeis
Washington, D.C.
November 17, 2009

Remarks at the Commission Nationale de l'Informatique et des
Libertes (CNIL)
Paris, France
October 20, 2009

Remarks at FTC/DOJ/NAAG Antitrust Program
Columbia University School of Law
New York, New York
October 7, 2009

Federal Trade Commission Enforcement of the Antitrust Laws
Remarks at the 36th Annual Conference on International
Antitrust Law & Policy of the Fordham Competition Law Institute
at Fordham Law School
New York, New York
September 24, 2009

Introduction of Philip Lowe and Announcement of Joint FTC/DOJ
Project to Modernize the Horizontal Merger Guidelines
Remarks at the Third Annual Georgetown Law Global Antitrust
Enforcement Symposium
Washington, D.C.
September 22, 2009

Remarks at FTC/Treasury/DOJ/HUD/State Attorney General Mortgage
Modification Roundtable
Washington, D.C.
September 17, 2009

Remarks at ``Operation Loan Lies'' Press Conference Involving
Law Enforcement Action Against Companies Involved in Alleged
Foreclosure Rescue Scams (with California AG Jeny Brown)
Los Angeles, California
July 15, 2009

Remarks at the ABA Antitrust Section General Counsel Dinner
Washington, D.C.
June 29, 2009

``Pay-for-Delay'' Settlements in the Pharmaceutical Industry:
How Congress Can Stop Anticompetitive Conduct, Protect
Consumers' Wallets, and Help Pay for Health Care Reform (The
$35 Billion Solution)
Remarks at the Center for American Progress' Event, ``Low Cost
Solutions to Health Care Through Generic Competition''
Washington, D.C.
June 23, 2009

Remarks to the National Community Pharmacy Association
Washington, D.C.
May 13,2009

Remarks to the Computer & Communications Industry Association
(CCIA) at the Newseum
Washington, D.C.
May 6, 2009

Welcome Remarks at the ICN/Unilateral Conduct Workshop
Washington, D.C.
March 23, 2009

Remarks at the FTC Data Security Workshop
Washington, D.C.
March 17, 2009

Remarks at the 2009 Center for Democracy and Technology Gala
Washington, D.C.
March 10, 2009

2008

``Tales from the Crypt'' Episodes '08 and '09: The Return of
Section 5 (``Unfair Methods of Competition in Commerce are
Hereby Declared Unlawful'')
Remarks at the FTC Workshop: Section 5 of the FTC Act as a
Competition Statute
Washington, D.C.
October 17, 2008

Remarks at the Fourth Annual In-House Counsel's Forum on
Pharmaceutical Antitrust
National Harbor, Maryland
May 21, 2008

``Excuse Me, I Think Your Shoe Is Ringing!'' Getting Smart
About Mobile Marketing Remarks at the FTC Town Hall Meeting on
``Beyond Voice: Mapping the Mobile Marketplace''
Washington, D.C.
May 6, 2008

Social Networking Privacy: An Oxymoron?
Opening Remarks for Panel at State of the Net Conference
Washington, D.C.
January 30, 2008

2007

So Private, So Public: Individuals, The Internet & The Paradox
Of Behavioral Marketing
Remarks at the FTC Town Hall Meeting on ``Behavioral
Advertising: Tracking, Targeting & Technology''
Washington, D.C.
November 1, 2007

Truth or Consequences: The FTC Approach to Advertising
Remarks at the National Advertising Division Annual Conference
New York, New York
September 24, 2007

Childhood Obesity and the Obligations of Food Marketers or
Whether or Not You Are Part of the Problem, You Need to Be Part
of the Solution
Remarks at the FTC/HHS Forum on Childhood Obesity
Washington, D.C.
July 18, 2007

Navigating Between Dystopian Worlds on Network Neutrality: With
Misery and Wretchedness on Each Side, Can We Find a Third Way?
Remarks to the Broadband Connectivity Competition Policy
Workshop
Washington, D.C.
February 13, 2007

Remarks at the ABA Consumer Protection Conference
Washington, D.C.
Tuesday, January 30, 2007

2006

Remarks on ``Information Security Breaches: A View from the
U.S. and EU''
Hunton & Williams
Washington, D.C.
November l7, 2006

The Changing Internet: Hips Don't Lie
Remarks at the ``Protecting Consumers in the Next Tech-ade''
Group Meeting
Washington, D.C.
November 6, 2006

How Settlements Make Strange Bedfellows: Or How the Federal
Trade Commission has Managed to Unite the Entire Pharmaceutical
Industry (But Only in Opposition to the FTC's Position on
Exclusion Payment Settlements)
Remarks at the Generic Pharmaceutical Association's Annual
Policy Conference
Washington, D.C.
September 29, 2006

Remarks at PFF Aspen Summit Working Dinner
Aspen, Colorado
August 21, 2006

Remarks at the Center for American Progress Panel ``The
Internet and the Future of Consumer Protection''
Washington, D.C.
July 24, 2006

Statement Concerning Whois Databases before the Internet
Corporation for Assigned Names and Numbers (``ICANN'') Meeting
Marrakech, Morocco
June 2006

Exclusion Payments to Settle Pharmaceutical Patent Cases:
They're B-a-a-a-ck!
(The Role of the Commission, Congress, and the Courts)
Remarks at the Second Annual In-House Counsel's Forum on
Pharmaceutical Antitrust
Philadelphia, Pennsylvania
April 24, 2006

Remarks at the ABA Spring Meeting 2006
Washington, D.C.
March 30, 2006

Remarks at the Anti-Spyware Coalition Public Workshop
Washington, D.C.
February 9, 2006

Remarks at the Internet Caucus State of the Net Conference
Washington, D.C.
February 8, 2006

2005

Remarks at the American Express Consumer Action Conference
Washington, D.C.
November 16, 2005

Competition in the Information Society: Uncorked and Unplugged
Remarks before the 2005 Global Forum
Brussels, Belgium
November 8, 2005

Following the Yellow Brick Road to a More Competitive Landscape
Remarks before the FTC/DOJ Workshop on Competition Policy in
the Real Estate Industry
Washington, D.C.
October25, 2005

Remarks at the Direct Marketing Association 2005 Conference
Atlanta, Georgia
October 17, 2005

Municipal Broadband: Should Cities Have a Voice?
National Association of Telecommunications Officers and
Advisors (NATOA) 25th Annual Conference
Washington, D.C.
September 22, 2005

Thinking Creatively About Remedies: Building on the Muris and
Pitofsky Years: Evolving Remedies from ``Time-Outs'' to Civil
Penalties (Not the Third Rail of Antitrust)
Remarks at the American Antitrust Institute Symposium
Washington, D.C.
June 21, 2005

Health Care and the FTC: The Agency as Prosecutor and Policy
Wonk
(Health Care as the New Cement; and Actions Against the
Pharmaceutical Industry as a Game of Whack-a-Mole)
Remarks at the Antitrust in HealthCare Conference
American Bar Association/American Health Lawyers Association
Washington, D.C.
May 12, 2005

The Good, the Bad and the Ugly: Trade Associations and
Antitrust
Remarks at the American Bar Association Antitrust Spring
Meeting
Washington, D.C.
March 30, 2005

2004

Spam, Authentication and Ensuring the Promise of the Internet
Welcoming Remarks on Day Two, FTC/NIST E-mail Authentication
Summit
November 10, 2004
Publications
Jon Leibowitz, Opinion, FTC Chairman: `Do Not Track' Rules
Would Help Web Thrive. U.S. News And World Rep., Jan. 3, 2011,
available at http://www.usnews.com/opinion/articles/2011/01/03/
ftc-chairman-do-not-track-rules-would-help-web-thrive-jon-
leibowitz.

Jon Leibowitz, Op-Ed., This Pill Not To Be Taken With
Competition: How Collusion Is Keeping Generic Drugs Off the
Shelves. Wash. Post, Feb. 25, 2008, at A15.

Jon Leibowitz, Thinking Creatively About Remedies: Building on
the Muris and Pitofsky Years: Evolving Remedies from ``Time-
Outs'' to Civil Penalties (Not the Third Rail of Antitrust), 80
Tul. L. Rev. 595 (2005).

Herb Kohl and Jon Leibowitz, Keenen Peck-A Tribute, 1990 Wis.
L. Rev. 291 (1990). Additionally, as Commissioner and Chairman
I have participated in many FTC matters and have helped to
write opinions and have on occasion issued separate statements.
The following are some of these that are available on the FTC
website.

2011

Statement by FTC Chairman Jon Leibowitz Regarding Court Ruling
on Red Flags Rule. March 4, 2011.

2010

Statement by FTC Chairman Jon Leibowitz on Department of
Commerce's Green Paper on Consumer Privacy. December 16, 2010.

Statement by FTC Chairman Jon Leibowitz Regarding House and
Senate Passage of Legislation to Combat Deceptive Online Sales
Tactics. December 15, 2010.

Statement by FTC Chairman Jon Leibowitz Regarding House and
Senate Passage of Legislation Clarifying Red Flags Rule.
December 8, 2010.

Statement on the Release of the 2010 Horizontal Merger
Guidelines, Project No. P092900. August 19, 2010.

Concurring Statement with Commissioner Brill, In the Matter of
Kellogg Company, FTC File No. 082 3145. June 3, 2010.

2009

Statement on ``Marketing Violent Entertainment to Children: A
Sixth Follow-Up Review of Industry Practices in the Motion
Picture, Music Recording & Electronic Game Industries.''
December 2009.

Statement with Commissioner Rosch, In the Matter of Intel
Corporation, Docket No. 9341. December 16, 2009.

Statement on ``Marketing Violent Entertainment to Children: A
Sixth Follow-Up Review of Industry Practices in the Motion
Picture, Music Recording & Electronic Game Industries.''
December 3, 2009.

Statement on passage of H.R. 3126, the Consumer Financial
Protection Act of 2009 by the House Energy and Commerce
Committee. October 29, 2009.

Statement on Senate Judiciary Committee's Passage of the
Preserve Access to Affordable Generics Act (S. 369). October
15, 2009.

Statement Regarding the Announcement that Arthur D. Levinson
Has Resigned from Google's Board. October 12, 2009.

Statement on Letter From Bureau of Consumer Protection Director
David C. Vladeck to Jane Horvath, Google Inc. Concerning the
Google Books Project. September 3, 2009.

Statement on Crude Oil Price Manipulation Rule Making, Project
No. P082900. August 6, 2009.

Statement on Trade Associations' Privacy Principles for
Behavioral Advertising. July 2, 2009.

Joint Statement with Commissioners Harbour and Kovacic, In the
Matter of Endocare, Inc. and Galil Medical, Ltd. File No.
0910026. June 9, 2009.

Statement on ``Authorized Generics: An Interim Report of the
Federal Trade Commission.'' June 2009.

Concurring Statement, In re FTC v. Watson Pharmaceuticals et.
al. February 2, 2009.

Concurring Statement on ``Federal Trade Commission Staff
Report: Self-Regulatory Principles For Online Behavioral
Advertising: Tracking, Targeting, and Technology.'' February
2009.

2008

Concurring Statement, FTC v. Ovation Pharmaceuticals, Inc.,
(United States District Court for the District of Minnesota).
FTC File No. 0810156. December 16, 2008.

Concurring Statement on the ``Rescission of Federal Trade
Commission Guidance Concerning the Cambridge Filter Method For
Testing the Tar and Nicotine Yields of Cigarettes.'' November
26, 2008.

Statement Concurring in Part and Dissenting in Patt, In the
Matter of Carlyle Partners IV, L.P., a limited partnership, PQ
Corporation, INEOS Group Ltd., a corporation, and James
Ratcliffe, an individual. FTC File No. 071 0203. September 19,
2008.

Concurring Statement on ``Marketing Food To Children and
Adolescents: A Review of Industry Expenditures, Activities, and
Self-Regulation: A Federal Trade Commission Report To
Congress.'' July 29, 2008.

Dissenting Statement on ``FTC Staff Comment to the Hon. William
J. Seitz Concerning Ohio Executive Order 2007-23S to Establish
Collective Bargaining for Home Health Care Workers.'' February
2008.

Statement Concurring in Part and Dissenting in Part, FTC v.
Cephalon, Inc. (United States District Court for the District
of Columbia). Civil Action No.: 1:08-cv-00244, FTC File No.:
061-0182. February 13, 2008.

Statement Concurring in Part and Dissenting in Part, United
States of America (for the FTC), Plaintiff, v. Member Source
Media LLC, doing business as ConsumerGain.com,
PremiumPerks.com, FreeRetailRewards.com, and
GreatAmericanGiveaways.com, and Chris Sommer, individually and
as Manager of Member Source Media LLC, Defendants (United
States District Court for the Northern District of California).
Civil Action No.: CV-08 0642; FTC File No.: 072-3042. January
30, 2008.

Statement, with Commissioner Harbour, Concurring in Part on
``Accounting for Laws That Apply Differently to the United
States Postal Service and Its Private Competitors: A Report By
the Federal Trade Commission.'' January 2008.

2007

Concurring Statement, Proposed Acquisition of Hellman &
Friedman Capital Partners V, LP, (Click Holding Company) By
Google Inc., FTC File No. 071 0170. December 20, 2007.

Statement Concurring in Part, Dissenting in Part, In re Member
Source Media, LLC and Chris Sommer. December 12, 2007.

Dissenting Statement on In re Adteractive, Inc. November 28,
2007.

Dissenting Statement on ``Federal Trade Commission Report On
Spring/Summer 2006 Nationwide Gasoline Price Increases.''
August 2007.

Statement with Commissioner Harbour, Concurring in Part and
Dissenting in Part, In the Matter of Kmart Corporation, Kmart
Services Corporation, and Kmart Promotions, LLC, corporations.
FTC File No.: 062 3088. August 15, 2007.

Concurring Opinion, In the Matter of Evanston Northwestern
Healthcare Corp., Docket No. 9315. August 6, 2007.

Concurring Statement on ``Credit-Based Insurance Scores:
Impacts on Consumers of Automobile Insurance: A Report to
Congress By the Federal Trade Commission (July 2007).'' July
2007.

Concurring Statement on ``Broadband Connectivity Competition
Policy.'' June 2007. Dissenting Statement, In re DirectRevenue
LLC. June 29, 2007.

2006

Concurring Statement Regarding the Staff Report: ``Municipal
Provision of Wireless Internet.'' October 10, 2006.

Concurring Opinion, In the Matter of Rambus, Inc., Docket No.
9302. August 2, 2006.

Concurring Statement on ``The Federal Trade Commission
Investigation of Gasoline Price Manipulation and Post-Katrina
Gasoline Price Increases: A Commission Report to Congress.''
May 2006.

Statement with Commissioner Harbour on the Acquisition by
Comcast Corporation and Time Warner Cable Inc. of the Cable
Assets of Adelphia Communications Corporation, and Related
Transactions, File No. 051 0151. January 31, 2006.

2005

Statement Regarding TRUSTe's Trusted Download Beta Program.
November 16, 2005.

Statement Concurring in Part and Dissenting in Part, FTC v. Sun
Spectrum Communications Org. (``Beneficial Client Care''),
Matter No. X04-0015. October 24, 2005.

Concurring Statement on ``Gasoline Price Changes: The Dynamic
of Supply, Demand, and Competition: A Federal Trade Commission
Report (2005).'' July 2005.

Statement Concurring in Part and Dissenting in Part, FTC v.
Creaghan A. Harry, individually and doing business as Hitech
Marketing, Scientific Life Nutrition, and Rejuvenation Health
Corp. (United States District Court, Northern District of
Illinois, Eastern Division), FTC File No: 042-3085, Case No.:
04C-4790, June 15, 2005.

Dissenting Statement on ``Subject Line Labeling as a Weapon
Against Spam: A CAN-SPAM Report to Congress.'' June 2005.

Concurring Statement, In the Matter of Genzyme Corporation and
Ilex Oncology, Inc. February 4, 2005.

17. Please identify each instance in which you have testified
orally or in writing before Congress in a governmental or non-
governmental capacity and specify the date and subject matter of each
testimony.

------------------------------------------------------------------------

------------------------------------------------------------------------
03/16/11 Before the Prepared Statement of the Federal
Committee on Trade Commission on the State of
Commerce, Science, Online Consumer Privacy
and
Transportation,
United States
Senate
------------------------------------------------------------------------
07/27/10 Before the Prepared Statement of the Federal
Committee on Trade Commission on Consumer
Commerce, Science, Privacy
and
Transportation,
United States
Senate
------------------------------------------------------------------------
07/27/10 Before the Prepared Statement of the Federal
Subcommittee on Commission: Oversight of the
Courts and Federal Trade Commission Bureau of
Competition Policy Competition and the Department of
of the Committee Justice Antitrust Division
on the Judiciary,
United States
House of
Representatives
------------------------------------------------------------------------
06/09/10 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission: How the Federal
Antitrust, Trade Commission Works to Promote
Competition Competition and Benefit Consumers
Policy, and in a Dynamic Economy
Consumer Rights of
the Committee on
the Judiciary,
United States
Senate
------------------------------------------------------------------------
05/20/10 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission On the
Financial Services Commission's Fiscal Year 2011
and General Funding Request and Budget
Government of the Justification
Committee on
Appropriations,
United States
Senate
------------------------------------------------------------------------
02/04/10 Before the Prepared Statement of the Federal
Committee on Trade Commission on Financial
Commerce, Science, Services and Products: The Role of
and Transportation the Federal Trade Commission in
of the United Protecting Consumers
States Senate
------------------------------------------------------------------------
09/10/09 Before the Prepared Statement of the Federal
Committee on Trade Commission on Scams Related
Homeland Security to the Economic Stimulus: ``How the
and Governmental FTC Works to Halt Fraudulent
Affairs, United Schemes Exploiting the Economic
States Senate Downturn and the Stimulus Package''
------------------------------------------------------------------------
07/08/09 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission on ``Proposed
Commerce. Trade, Consumer Financial Protection
and Consumer Agency: Implications For Consumers
Protection of the and the Federal Trade Commission''
Committee on
Energy and
Commerce, United
States House of
Representatives
------------------------------------------------------------------------

------------------------------------------------------------------------

------------------------------------------------------------------------
03/31/09 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission On ``Leveraging
Financial Services FTC Resources to Protect Consumers
and General of Financial Services and Promote
Government of the Competition''
Committee on
Appropriations,
United States
House of
Representatives
------------------------------------------------------------------------
03/24/09 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission on ``Consumer
Commerce, Trade, Credit and Debt: The Role of the
and Consumer Federal Trade Commission in
Protection of the Protecting the Public''
Committee on
Energy and
Commerce, United
States House of
Representatives
------------------------------------------------------------------------
09/23/08 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission on Marketing Food
Financial Services to Children and Adolescents: A
and General Review of Industry Expenditures,
Government, and Activities, and Self-Regulation
the Subcommittee
On Labor, Health
and Human
Services,
Education, and
Related Agencies,
of the Committee
on Appropriations,
United States
Senate
------------------------------------------------------------------------
05/14/08 Before the The President's Fiscal Year 2009
Committee on Funding Request and Budget
Appropriations, Justification for the Federal Trade
Subcommittee on Commission
Financial Services
and General
Government of the
United States
Senate
------------------------------------------------------------------------
04/08/08 Before the The Federal Trade Commission
Committee on Reauthorization Act of 2008
Commerce, Science,
and Transportation
of the United
States Senate
------------------------------------------------------------------------
05/2/07 Before the On Protecting Consumer Access to
Subcommittee on Generic Drugs: The Benefits of A
Commerce, Trade, Legislative Solution to
and Consumer Anticompetitive Patent Settlements
Protection of the in the Pharmaceutical Industry
Committee On
Energy and
Commerce, United
States House of
Representatives
------------------------------------------------------------------------
04/10/07 Before the Oversight Hearing on Technology
Commerce, Science, Issues at the Commission
and Transportation
Committee of the
United States
Senate
------------------------------------------------------------------------
01/17/07 Before the On Anticompetitive Patent
Committee on the Settlements in the Pharmaceutical
Judiciary of the Industry
United States
Senate
------------------------------------------------------------------------
09/15/06 Before the Prepared Statement of the Federal
Subcommittee on Trade Commission on Internet
Trade, Tourism and Governance: The Future of ICANN
Economic
Development of the
Committee on
Commerce, Science,
and
Transportation,
United States
Senate
------------------------------------------------------------------------
07/20/06 Before the Special Prepared Statement of the Federal
Committee on Trade Commission on Barriers to
Aging, United Generic Entry
States Senate
------------------------------------------------------------------------
05/11/06 Before the Social Security Numbers in
Subcommittee on Commerce: Reconciling Beneficial
Commerce, Trade, Uses With Threats to Privacy
and Consumer
Protection of the
Committee on
Energy and
Commerce. United
States House of
Representatives
------------------------------------------------------------------------
2/01/06 Before the Prepared Statement of the Federal
Committee on Trade Commission on Phone Records
Energy and for Sale: Why Aren't Phone Records
Commerce, United Safe from Pretexting?
States House of
Representatives
------------------------------------------------------------------------
06/15/05 Before the Data Security and Cross-Border
Committee on Fraud
Commerce, Science,
and Transportation
of the United
States Senate
------------------------------------------------------------------------

(1) To comply with the Federal Managers' Financial Integrity
Act of 1982, the FTC established a separate branch, the
Financial Policy, Evaluation and Control Branch, within its
Financial Management Office. The duties of this branch are to
ensure that the ongoing internal control assessment program
provides assurance that proper accounting and administrative
controls are in place and operating effectively.

(2) To comply with the Federal Information Security Management
Act of 2002, the agency has established a security compliance
program that ensures mission sensitive information is
safeguarded.

(3) To comply with the Government Performance and Results Act
of 1993, the agency develops annual performance plans and
reports on its performance and financial status in its annual
Performance and Accountability Report (PAR) to monitor the
effective use of its resources in meeting its mission goals.

20. What do you believe to be the top three challenges facing the
department/agency, and why?
I believe the top three challenges facing the Commission are (1)
ensuring that the agency continues to stay abreast of and adapt to the
technological changes affecting consumers and the marketplace;
especially involving privacy; (2) stopping financial frauds and
protecting consumers made vulnerable by the economic downturn; and (3)
making the best use of the agency's limited resources.
Technological advances have changed the way people interact, both
socially and commercially. While these advances have produced great
benefits for consumers, they also pose new challenges. The Internet has
enhanced cultural awareness by allowing people to communicate globally
at little cost, but it has also enabled malefactors from around the
world to prey on American consumers. The ease with which technologies
permit personal information to be broadly shared has many benefits,
including facilitating social interactions, making financial credit
quickly available, and assisting in medical diagnosis, but the
collection and use of this personal information has also raised serious
questions about privacy. On the competition front, technological
changes have demanded that the FTC be quick and adaptive in its
analysis of marketplace issues. The Commission's decision in May 2010
not to seek to block Google's acquisition of mobile advertising network
company AdMob, for example, was appropriately influenced by recent
developments in the market, most notably a move by Apple Computer
Inc.--the maker of the iPhone--to launch its own, competing mobile ad
network.
The financial hardships that so many American consumers face today
have caused the FTC to make a priority of targeting the fraud and the
sharp practices that aim to take the last dollar out of their pockets.
In the past year, the FTC has brought more than 40 law enforcement
actions to stop scams that prey on consumers suffering from the
financial downturn. By working closely with state attorneys general,
the Commission has expanded the reach of law enforcement efforts
through hundreds of additional cases. In the past five years, the
agency has filed more than 100 actions against financial service
providers, and in the past ten years has obtained more than $500
million in redress for consumers of these services. The FTC also is
engaged in rulemaking and consumer education efforts related to
financial services, both to define and stop fraudulent practices and to
arm consumers with necessary information to enable them to avoid these
frauds. Despite this activity, more can and should be done. A challenge
facing the agency will be to determine how the Commission can best work
with the new Consumer Financial Protection Bureau to ensure that
consumers of financial products and services are better protected, but
that these protections do not subject businesses to conflicting,
redundant, or overly burdensome directives from the two agencies.
The final principal challenge facing the Commission is to find a
way to leverage limited resources to best serve the FTC's mission. The
FTC is a small agency with a big mission. Our jurisdiction is broad,
and covers both consumer protection and competition. Each year, the
Commission receives hundreds of thousands of complaints. While we don't
have the resources to investigate all of them, we use our expertise and
talented staff to target the areas that harm consumers the most and to
respond quickly and effectively to emergent problems. Working closely
with other Federal agencies, state attorneys general, businesses, trade
associations, consumer advocates, and others, the Commission needs to
continue to be an aggressive defender of consumers.
b. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers. Please include information related to retirement
accounts.
I am partially vested in the Motion Picture Association of America
's (MPAA) 401(k) plan administered by Mass Mutual. No contributions
were made after I resigned from the MPAA in September 2004. From my
years working for Congress and at the FTC, I will be entitled to a
pension after I retire, and I have invested in the Thrift Savings Plan.
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: 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.
In connection with the nomination process, I have consulted with
the Office of Government Ethics and the Federal Trade Commission's
Designated Agency Ethics official to identify potential conflicts of
interest. Any potential conflicts of interest will be resolved in
accordance with the terms of the ethics agreement that I have entered
into with the Commission' s Designated Agency Ethics official and that
has been provided to this Committee. I am not aware of any other
potential conflicts of interest.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last ten 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.
There is none.
5. Describe any activity during the past ten 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.
As Chairman and as a Commissioner of the FTC since 2004, I have
advocated for and against numerous pieces of legislation, and the FTC
has provided guidance and technical assistance to Congressional and
Committee staff on both sides of the aisle. In these capacities I have
also been involved in the execution of laws, deciding when and how to
handle cases involving consumer protection and competition. In my
capacity as a Commissioner and as Chairman of the FTC, I have also
affected public policy, through varied actions including case
selection, advocacy, statements, reports, research, and workshops.
Please see attachments B and C for more information on my speeches,
remarks, statements, and publications.
As Counsel to Senator Kohl and to the Judiciary Committee from 1989
through 2000-and to Senator Simon and Congressman Feighan before that--
I worked on a large number of legislative matters. These ranged from
bankruptcy reform to crime policy to increasing the filing thresholds
for merger reviews to encouraging the deployment of satellite
television. In other words, one of my principal responsibilities was to
influence legislation; during that time, I probably gave
recommendations for literally hundreds of floor and committee votes.
When I left the Hill to work for the MPAA, my principal legislative
focus was more limited: to support measures that would reduce film
piracy, especially on the Internet.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
Since joining the FTC in 2004 I have acted in accordance with all
applicable ethics laws and regulations, particularly the Standards of
Conduct for Employees of the Executive Board, 5 C.F.R. Sec. 2635. I
have worked closely with FTC ethics officials to ensure that my conduct
upholds the agency's reputation for ethical behavior. Any potential
conflicts of interest will be resolved in accordance with the terms of
the ethics agreement that I have entered into with the Commission's
Designated Agency Ethics Official and that has been provided to this
Committee. I am proud that during my tenure as Chairman, the FTC's
ethics program has been recognized for excellence by the Office of
Government Ethics.
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? If so, please explain: 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? If so, please explain: 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? If so, please explain.
During my service as FTC Chairman and Commissioner, the agency has
been involved in a large number of civil and administrative
proceedings. These are detailed on the agency's website, www.ftc.gov.
Additionally, I was named in my official capacity as Chairman of the
FTC in the matter D.R. Horton, Inc. v. Jon Leibowitz, Chairman, et al.,
2010 U.S. Dist. LEXIS 117627 (N.D.Tex. Nov. 3, 2010). Plaintiff D.R.
Horton sought declaratory and injunctive relief related to a civil
investigative demand issued by the Commission in November 2009.
Defendants Chairman Leibowitz and the FTC successfully moved to dismiss
the complaint on the ground that the court lacked subject matter
jurisdiction.
I have not been involved in any MPAA-related litigation or agency
proceeding. The MPAA, however, represented its member companies in
connection with issues of common interest to the motion picture and
television industry, and during the time I was an officer there, the
MPAA was a named party in litigation and regulatory proceedings in this
regard, and in disputes arising in the ordinary course of its business.
The only other civil litigation in which I have been involved was a
1986 landlord-tenant case in which I represented myself.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, please explain: No.
5. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion, or
any other basis? If so, please explain: No.
6. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination.
There is nothing further.
d. relationship with committee
l. Will you ensure that your department/agency complies with
deadlines for information set by Congressional committees?
If confirmed as a Commissioner of the Federal Trade Commission, I
would work diligently with my fellow Commissioners to do so.
2. Will you ensure that your department/agency does whatever it can
to protect Congressional witnesses and whistleblowers from reprisal for
their testimony and disclosures?
If confirmed as Commissioner of the Federal Trade Commission, I
would work diligently with my fellow Commissioners to do so.
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
______

resume of jon leibowitz
Experience
Federal Trade Commission--2004 to Present
Chairman (March 2009 to Present)
Commissioner (September 2004 to March 2009)
Supervise independent agency charged with protecting consumers
and promoting competition. Areas of special interest include:
spearheading law enforcement efforts, rulemaking, and consumer
education to protect consumers in the financial downturn;
spurring law enforcement and policy initiatives to protect
consumer privacy, especially online; supporting efforts to make
Do-Not-Call registrations permanent (enacted in 2008);
prioritizing cases, research, and legislation challenging anti
-competitive pharmaceutical (``pay-for-delay'') settlements;
encouraging the Commission to issue a report on consumer
protect ion and competition concerns with respect to so-called
Net Neutrality and municipal broadband; finalizing update of
merger guidelines; and supporting legislative efforts to ensure
the FTC retained jurisdiction over financial fraud and has the
authority it needs to confront modern challenges. Testified
before Congress on behalf of the Commission twenty times over
the last 5 years.
Motion Picture Association of America
Vice President, Congressional Affairs 2000-2004
Represented interests of film industry before Congress on
intellectual property protection, anti- piracy initiatives, and
First Amendment issues.
Senate Judiciary Committee and Senator Herb Kohl
Democratic Chief Counsel and Staff Director 1980-2000
Subcommittee on Antitrust, Business Rights and Competition (1997-2000)
Subcommittee on Terrorism and Technology (1995-1996)
Subcommittee on Juvenile Justice (1991-1994)
Drafted legislation, formulated strategy, built coalitions,
negotiated agreements, developed hearings, and supervised
subcommittee staff. Had overall staff responsibility for
Senator's policies and positions on Judiciary Committee.
Representative issues included mergers and acquisitions,
competition policy, oversight of the FTC and the DOJ Antitrust
Division, consumer protection, privacy, telecommunications, and
judicial selection, including Supreme Court nominations.
Directed bipartisan initiatives relating to delivery of
broadband technology to consumers, airline pricing, computer
industry business practices, and telephone and cable
competition. Worked on Hart-Scott-Rodino Antitrust Improvements
Act, which increased filing thresholds for merger reviews and
raised fees for large mergers, and the Brady Law, which
required a waiting period and background check for handgun
purchases.
U.S. Representative Edward Feighan
Counsel 1987-1988
Counseled House Judiciary Committee Member on issues related
principally to antitrust, economic competitiveness, crime, and
gun control.
Senate Judiciary Committee and Senator Paul Simon
Counsel 1987-1988
Worked on Senator's Committee staff and handled variety of
issues, including securities regulation, civil rights, and
civil liberties matters.
Private Practice 1984-1986
Represented firm clients on corporate, commercial, and
securities matters.
Education
New York University School of Law, J.D.--May 1984
University of Wisconsin, Phi Beta Kappa, B.A. in American
History June 1980

The Chairman. Thank you, Chairman Leibowitz.
I'd like to go to you, Dr. Blank. I'm not sure of the
protocol of all of this, but if I just mix it up a little bit,
nobody will care. But we care about you.

STATEMENT OF DR. REBECCA M. BLANK, NOMINATION TO BE DEPUTY
SECRETARY, U.S. DEPARTMENT OF COMMERCE

Dr. Blank. Thank you very much, Chairman Rockefeller,
Ranking Member Hutchison and other distinguished members of the
panel. I appreciate the opportunity to be here today, and I'm
honored to be the nominee for Deputy Secretary at the U.S.
Department of Commerce. I'm particularly pleased at the
opportunity to work with the newly confirmed Secretary, John
Bryson.
And I want to introduce my husband who is with me today,
Hanns Kuttner. Unfortunately, our daughter, Emily, is at
school. She's got a major exam this afternoon, so she could not
be here.
After more than 2 years at the Department of Commerce, I
continue to be very excited about the work this organization
does. In today's economy, there is no more important job than
helping American businesses create jobs by being competitive
and innovative.
Each bureau in commerce supports American business, whether
by providing weather forecasts, GDP statistics, trade
assistance or measurement standards. To do that well, the
department has to function well. During the past year, as
Acting Deputy Secretary, I've served as the department's Chief
Operating Officer, responsible for management and budget issues
across the department's 12 bureaus. From August through
September, I was privileged to serve as the Acting Secretary of
Commerce.
In both roles, I have been closely involved in the
execution of commerce's programs. If confirmed, I hope that my
experience will provide important continuity for the
department, particularly as we advance vital national programs,
such as NOAA's satellite program, in a tight fiscal
environment.
Over this past year, I've implemented a department-wide
performance-measurement system. This provides quarterly
information on how well each bureau is serving customers and
managing its work.
For example, we're tracking how long it takes to approve
grants within the Economic Development Administration, and they
have reduced that number from months to approximately 20 days.
The U.S. Patent and Trademark Office is tracking how long
it takes to provide patents, and their patent backlog has been
reduced by 10 percent this last year, even as applications
surged.
In addition, I've worked with an excellent commerce team to
design and implement an ongoing set of administrative cost
savings. We expect to reduce our administrative costs by $143
million in Fiscal Year 2012, with even greater savings in 2013.
Ensuring that this broad department and its bureaus have
appropriate management and accounting controls requires at
least three things.
First, sound judgment to identify what activities and
information needs to be monitored in order to identify problems
early and to track progress on high-risk activities. Second, a
first-rate staff that run the day-to-day work of the bureau.
And, last, a data system that provides accurate information on
performance. Good information is necessary for good management
decisions.
I came to the Acting-Secretary role having already served a
year and a half as Under Secretary for economic affairs. Since
joining the department in 2009, I've been responsible for the
final management and oversight of the Census Bureau and the
Bureau of Economic Analysis.
In that role, I oversaw $6 billion in budget expenditures
in Fiscal Year 2010, much of it appropriated for the Decennial
Census. Ultimately, the census came in on time and $1.8 billion
under budget, at least in part because of close attention to
management and budget issues.
Prior to arriving at Commerce, I had the opportunity to
work in the public, the private and the not-for-profit sectors.
I have served as Dean of the Gerald R. Ford School of Public
Policy at the University of Michigan, gaining important
management experience in that role.
If confirmed as Deputy Secretary of Commerce, I would
dedicate myself to two primary goals. First, pushing forward on
the initiatives designed to support American businesses,
helping them grow and create jobs.
This includes, for instance, working with NTIA on spectrum
allocation or NIST to expand opportunities for faster and more
effective technology transfer. Similarly, developing a strategy
to support American manufacturing and doing more to promote
investment in the U.S. by foreign and domestic firms will also
spur job creation.
Second, I will work to increase the department's efficiency
by reducing our overhead costs, so some portion of budget
reductions are absorbed by a decline in administrative costs.
Major changes in the administrative structure of a
department can only occur as part of a multi-year process with
strong central commitment, communication and leadership. It
should be the responsibility of the deputy secretary to see
that that happens.
As the global economy continues to expand, American
companies must be innovative at home and competitive abroad. A
primary mandate of the Department of Commerce is to provide the
public goods, the data, the scientific information and the
services that allow American businesses to compete effectively.
If confirmed, I pledge to work with you to advance that agenda.
I appreciate the opportunity to be here today and for your
consideration of my nomination, and I look forward to your
questions. Thank you.
[The prepared statement and biographical information of Dr.
Blank follow:]

Prepared Statement of Dr. Rebecca M. Blank, Nomination to be Deputy
Secretary, U.S. Department of Commerce
Chairman Rockefeller, Ranking Member Hutchison, and distinguished
members of the Committee, thank you for the opportunity to appear
before you today as the nominee for Deputy Secretary of the U.S.
Department of Commerce. I am honored President Obama nominated me for
this position. I am particularly pleased at the opportunity to work
closely with our newly-confirmed Secretary, John Bryson. I would also
like to introduce my husband, Hanns Kuttner, who is able to be here
today. Our daughter Emily is in school today.
After more than two years at the Department of Commerce, I continue
to be excited by its breadth and by the issues in which it engages. In
today's economy, I do not believe there is a more important job than
helping to create jobs and improve American competitiveness. At the
Department of Commerce, our primary mission is to provide the critical
public infrastructure that supports private sector growth and
innovation. Each Bureau in Commerce supports American businesses,
whether by providing weather forecasts, GDP statistics, trade
assistance, or measurement standards.
During the past year, as Acting Deputy Secretary, I've served as
the Department's Chief Operating Officer, responsible for all
management and budget issues across the Department's 12 bureaus and
overseeing more than 46,000 employees. During the three months of
August through October, I was privileged to serve as Acting Secretary
of Commerce. In both roles, I have led the budget and management
process and have been closely involved in monitoring the execution of
Commerce's programs. If confirmed my experience will allow me to hit
the ground running as the permanent Deputy Secretary. For instance,
over the past year I have managed a Department-wide performance
measurement system, which provides information on how well each Bureau
is serving customers and managing its work. We are tracking how long it
takes to approve grants in the Economic Development Administration
(EDA), how long it takes to provide patents at the U.S. Patent and
Trademark Office (PTO), measuring customer satisfaction with National
Institute of Standards and Technology (NIST) products, tracking the
timely release of data from the Census, and tracking coastal
restoration by the National Oceanic and Atmospheric Administration
(NOAA). In addition, I have worked with an excellent Commerce team to
design and implement an ongoing set of administrative cost savings. We
expect to reduce our Administrative costs by $143 million in Fiscal
Year 2012, with even greater savings in Fiscal Year 2013.
Ensuring that this broad Department and its Bureaus have
appropriate management and accounting controls requires at least three
things: First, sound judgment to identify what activities and
information need to be monitored in order to identify problems early
and to track progress on high-risk activities; second, a first-rate
staff, both in the Deputy Secretary's office and within the Bureaus,
who oversee the day-to-day work of the Department, from human resource
management, to acquisitions, facilities, and budgets; and lastly, a
data system that provides accurate information on performance. Good
information is necessary for good management decisions. For example, we
have started tracking information on the hiring process within each
Bureau and documenting how much time each step in the process takes.
This has allowed us to identify bottlenecks and reduce the time to
hire, which helps attract stronger candidates. As a result of this
effort, the average time to hire an employee within the Department of
Commerce has gone from 105 days in 2010 to 79 days in the last quarter
of 2011.
I came to the Acting Deputy Secretary role having already served a
year and a half as Under Secretary for Economic Affairs and as the
Secretary's principal economic advisor. Since joining the Department of
Commerce in 2009, I have been responsible for final management and
oversight of the Census Bureau and the Bureau of Economic Analysis. In
the Economics and Statistics Administration, I supervised a staff of
economists and policy analysts who utilize Commerce data to shed light
on current policy issues through reports and internal collaboration. I
also oversaw $6 billion in budget expenditures in Fiscal Year 2010,
much of it appropriated to fund the 2010 Decennial Census, the largest
peacetime operation our government undertakes. I was closely involved
with the final planning, execution, and oversight of the 2010 Census
and worked with Census Director Bob Groves and his senior leadership,
receiving weekly, sometimes daily, reports on key issues. Ultimately,
the Census came in on time and $1.8 billion under budget, in part
because of close attention to management and budget issues.
Prior to arriving at Commerce, I've had the opportunity to work in
the public, private, and not-for-profit sectors. Many years ago, I
worked with a variety of heavy manufacturing industries as a consultant
for an economic forecasting company, a job which taught me a great deal
about the real world of business. I went on to acquire a Ph.D. in
economics. In the years since I've held three types of positions.
First, as an economic researcher, I have always been deeply
interested in the ways in which the U.S. economy interacts with
government policy. My work has focused on labor markets, on the well-
being of American families, on effective measurement of key economic
concepts, and on the impact and evaluation of government policy
efforts.
Second, I have served in a number of management positions. For
eight years, I was the Dean of the Gerald R. Ford School of Public
Policy at the University of Michigan. In this role, I oversaw and
managed a growing educational and research enterprise. While Dean, I
successfully quadrupled the budget of the Ford School, built a new
building, and started both an undergraduate and Ph.D. degree program. I
worked within the budget, human resource, and planning systems of the
University of Michigan, making sure that they were effectively
implemented within my unit and working to improve these systems when
needed. In addition, I have worked on the Boards of Directors of a
number of non-profit organizations, with responsibility for overseeing
their financial and management decision-making. I have run two major
research centers, including the University of Michigan's National
Poverty Center, effectively overseeing their staffing, finances, and
programs.
Third, I have been a public servant and government employee. I
worked as a Senior Staff Economist at the Council of Economic Advisers
during the George H.W. Bush Administration, and I returned as one of
the three CEA members during the second term of President Clinton.
If confirmed as Deputy Secretary of Commerce, I would dedicate my
time to three goals. First, I would push forward on initiatives
designed to support American businesses and help them grow and create
jobs. This includes working with NIST to expand opportunities for
faster and more effective technology transfer from labs to market;
working with the National Telecommunications and Information
Administration (NTIA) on spectrum reallocation; working with the
International Trade Administration (ITA) and Minority Business
Development Agency (MBDA) to promote exports and expand the National
Export Initiative; working with PTO as it effectively implements the
patent reform provisions of the America Invents Act and reduces the
time needed for patent approval; working with EDA on effective economic
development initiatives; and working with MBDA to support America's
minority business entrepreneurs. I would expect to work closely with
NOAA, particularly making sure that its weather satellite program is
adequately funded and well operated and its fisheries management
programs are implemented effectively. Two key areas where I expect to
be involved, with Secretary Bryson's leadership, is to work across the
Bureaus within Commerce to develop a strategy to support and promote
American manufacturing and to promote investment in the U.S. by both
foreign and domestic firms.
Secondly, I would work to increase the Department's efficiency by
reducing our overhead costs so that some portion of budget reductions
are absorbed by a decline in administrative costs rather than imposing
harmful cuts on important programs. I have highlighted some of our
performance excellence initiatives already, but at the Department of
Commerce we have launched a variety of cost-cutting initiatives,
including acquisition reforms to reduce purchase costs, IT reforms, and
facilities consolidation. Within an organization as complex and large
as the Department of Commerce, these sort of administrative changes
often require cultural changes in how work is organized and performed,
changes that are not always welcomed by those who are used to long-time
pre-existing systems. Hence, this type of change can only occur as part
of a multi-year process with strong central commitment, communication,
and leadership. It should be the responsibility of the Deputy Secretary
to see that this process proceeds smoothly and effectively, and it is a
responsibility for which I am well-equipped.
Finally, we must address the challenge at Commerce, and at many
other Departments, of retaining a skilled and motivated workforce. In
the midst of pay freezes and potential benefit cuts, we need to ensure
that government employment is an attractive option for hard-working,
motivated, and skilled young adults. Without a first-rate civil
service, the Department cannot deliver on its core functions for
American businesses and our economy.
As the global economy continues to expand, American companies must
be innovative at home and competitive abroad. A primary mandate of the
Department of Commerce is to provide the public goods--the data, the
scientific information, and the services--that allow American
businesses to compete effectively. If confirmed, I pledge to work with
you to advance that agenda.
I appreciate the opportunity to come before you today and for your
consideration of my nomination. I look forward to your questions. Thank
you.
______

a. biographical information
1. Name (Include any former names or nicknames used):

Rebecca Margaret Blank

Rebecca M. Blank

Becky Blank

2. Position to which nominated: Deputy Secretary, Department of
Commerce.
3. Date of Nomination: November 1, 2011.
4. Address (List current place of residence and office addresses):

Residence: Information not released to the public.

Office: U.S. Department of Commerce, 1401 Constitution Ave, NW
Washington, DC 20230.

5. Date and Place of Birth: September 19, 1955; Columbia, MO.
6. Provide the name, position, and place of employment for your
spouse (if married) and the names and ages of your children.

Spouse: Johannes (Hanns) Charles Kuttner, Visiting Fellow,
Hudson Institute, Washington, D.C.; child: Emily Christa
Kuttner, Age 15.

7. List all college and graduate degrees. Provide year and school
attended.

------------------------------------------------------------------------
Dates Date of
Institution attended Degrees received degree
------------------------------------------------------------------------
University of 9/73-6/76 B.S, Summa Cum Lau1976
Minnesota
Massachusetts 9/79-6/83 Ph.D. (Economics) 1983
Institute of
Technology
------------------------------------------------------------------------

8. List all post-undergraduate employment, and highlight all
management-level jobs held and any non-managerial jobs that relate to
the position for which you are nominated.

U.S. Department of Commerce, Washington, D.C.

Acting Secretary, August 2011-0ctober 2011

Acting Deputy Secretary, November 2010-March 2011 and May 2011-
August 2011; and October 2011& present.

Under Secretary for Economic Affairs, June 2009 to present.

Brookings Institution, Washington, D.C.

Robert S. Kerr Senior Fellow, Economic Studies, 2008-09.
Robert S. Kerr Visiting Fellow, Economic Studies, 2007-08.

University of Michigan, Ann Arbor, MI

Joan and Sanford Weill Dean of Public Policy, Gerald R. Ford
School of Public Policy, 1999-2007.

Henry Carter Adams Collegiate Professor of Public Policy,
Gerald R. Ford School of Public Policy, 1999-2008.

Professor of Economics, Department of Economics, 1999-2008.

Co-Director, National Poverty Center, 2002-2008.

Council of Economic Advisers, Washington, D.C.

Member-nominee, 1997-98; Member, 1998-99.

Senior Staff Economist, 1989-90.

Northwestern University, Evanston, IL

Director, Joint Center for Poverty Research, 1996-97.

Professor of Economics, 1994-1999; Associate Professor of
Economics, 1989-94.

Research Faculty, Center for Urban Affairs and Policy Research.
1989-99.

Associate Professor, School of Education and Social Policy.
1989-93.

Co-Director, Northwestern/University of Chicago
Interdisciplinary Training Program in Poverty, Race, and
Underclass Issues. 1991-96.

Princeton University, Princeton, NJ.

Assistant Professor of Economics and Public Affairs, 1983-89.

Department of Economics and Woodrow Wilson School of Public &
International Affairs.

Massachusetts Institute of Technology, Cambridge, MA.

Visiting Assistant Professor of Economics, 1988-89.

University of Wisconsin-Madison, Madison, WI.

Visiting Fellow, Department of Economics and Institute for
Research on Poverty, Fall 1985.

Data Resources, Inc. Chicago, IL.

Consultant & Educational Coordinator, 1976-79.

9. Attach a copy of your resume. A copy is attached.
10. 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.
Consultant for the State of Connecticut, Commission on Children,
Nov-Dec 2007.
11. 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.

Board of Directors, MDRC (formerly Manpower Demonstration
Research Corporation), 2000-09.

Board of Trustees, Urban Institute, 2007-09.

Board of Directors, Economic Policy Institute, 2008-09.

Board of Directors, Citizens' Research Council of Michigan,
2000-08.

Visiting Committee, Kennedy School of Government, Harvard
University, 2004-09.

Advisory Council, Spotlight on Poverty and Opportunity, 2007-
09.

National Academy of Sciences

Division Committee for the Behavioral and Social Sciences and
Education (DBASSE), National Research Council, 2003-08.

DBASSE Executive Committee member, 2005-08.

Committee on the Fiscal Future of the United States, 2008-09.

DIW (a research/policy think tank). Berlin, Germany

Honorary Advisory Council, DIW-DC, 2008-09.

Association for Public Policy Analysis and Management

President, 2007.

Executive Committee member, 2006-08.

Board Chair, Public Policy and International Affairs Program,
2003-06.

Vice President, American Economic Association, 2007.

Board of Editors, American Economic Journal: Economic Policy,
2007-09.

Co-Editor, Labour Economics, 2004-2007; Associate Editor, 2007-
09.

Advisory Board, Journal of Economic Education, 2002-09.

National Advisory Board and Senior Research Affiliate, National
Poverty Center, University of Michigan, 2008-09.

12. 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.

------------------------------------------------------------------------
Position Restrictive
Social Club/ Dates (Member/ Membership Policies
Organization Officer) (Yes/No)
------------------------------------------------------------------------
Bread for the World, 1976-present Member No
Washington, D.C.
------------------------------------------------------------------------
Amnesty Around 2001- Member No
International, present
New York, NY
------------------------------------------------------------------------
Westmoreland 2008-present Member Co- Expects members to
Congregational chair, generally accept
Church, UCC, Outreach the religious
Bethesda MD Ministries precepts of the
Committee United Church of
(2009-present) Christ
------------------------------------------------------------------------
First Presbyterian 2000-08 Member and Expects members to
Church, Ann Arbor Elder (2004- generally accept
MJ 2008) the religious
precepts of the
Presbyterian
Church
------------------------------------------------------------------------
Economic Dinner 1999-2008 Member None
Club,
Ann Arbor, MI
------------------------------------------------------------------------
American Economic 1981-present Member, Exec None
Association Committee
member (1995-
97);
Government
Relations
Committee
member (2009)
and Vice
President
(2007)
------------------------------------------------------------------------
Labor and Employment 1983-present Member None
Relations
Association
------------------------------------------------------------------------
Midwest Economics 1990-2005 Member, None
Association President
(2001-02)
------------------------------------------------------------------------
Committee on the 1981-present Member, Exec None
Status of Women in Comm member
the Economics (1990-94),
Profession Chair (1994-
96)
------------------------------------------------------------------------
National Poverty 2008-09 Senior research None
Center, University affiliate and
of Michigan member,
National
Advisorv Board
------------------------------------------------------------------------
Angell School PTO, 2001-07 Member None
Ann Arbor, MI
------------------------------------------------------------------------
Westland Middle 2007-10 Member None
School PTA,
Bethesda, MD
------------------------------------------------------------------------
Oxbridge 1999-08 Member None
Neighborhood
Association,
Ann Arbor, MI
------------------------------------------------------------------------
Association for 1985-present Member, None
Public Policy President
Analysis and (2007),
Management (APPAM) Executive
Committee
(2006-08),
Policy Council
(2001-04)
------------------------------------------------------------------------
Ann Arbor Art Center 2001-present Member None
------------------------------------------------------------------------
Friends of the 1997-99; Member None
National Zoo 2007-presen
t
------------------------------------------------------------------------
Economists for Peace About 1990- Member None
and Security present
(earlier Economists
Against the Arms
Race)
------------------------------------------------------------------------
Bethesda-Chevy Case 2010-present Member None
High School PTA
------------------------------------------------------------------------
Westmoreland Hills 2009-present Member None
Citizens'
Association,
Bethesda, MD
------------------------------------------------------------------------
DIW 2001-04 Member, None
Scientific
Advisory
Committee
------------------------------------------------------------------------

13. Have you ever been a candidate for and/or held a public office
(elected, non elected, or appointed)? If so, indicate whether any
campaign has any outstanding debt, the amount, and whether you are
personally liable for that debt: No.
14. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past ten years. Also list all offices
you have held with, and services rendered to, a state or national
political party or election committee during the same period: None.
15. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals, and any other special recognition
for outstanding service or achievements.

Leila D. Wallace Award, First Place in Extemporaneous Speaking,
National Debate and Speech Contest, 1973

Phi Beta Kappa, 1975

National Science Foundation Graduate Fellowship, 1979-82

Sloan Foundation Graduate Fellowship, 1982-83

National Fellowship for Women in the Sciences, National Science
Foundation, 1988-89

David Kershaw Award, 1993, Association for Public Policy
Analysis and Management (awarded to the young scholar whose
research has had the most impact on the public policy process)

Faculty Research Associate, National Bureau of Economic
Research, 1990-2009

Faculty Affiliate, Institute for Research on Poverty, 1994-2009

Member (an elected honorary position), National Academy of
Social Insurance, 1997 to present

Richard A. Lester Prize for the Outstanding Book in labor
Economics and Industrial Relations, 1997 (for the book It Takes
A Nation: A New Agenda for Fighting Poverty)

Faculty Affiliate, Institute for Research on Poverty, 1994-2009

Senior Research Affiliate, National Poverty Center, 2002-2009

Lifetime National Associate, National Academy of Sciences, 2004
to present

Fellow, Society of Labor Economists, 2006 to present
Fellow, American Academy of Arts and Sciences, 2005 to present

Research Fellow, IZA (Institute for the Study of Labor), 2007
to present

Outstanding Alumni Achievement Award, University of Minnesota,
2008

Eleanor Roosevelt Fellow, American Academy of Political and
Social Science, 2010 to present

Changing Inequality. Berkeley: University of California Press.
2011.

Insufficient Funds: Savings, Assets, Credit and Banking Among
Low-Income Households (with Michael S. Barr). New York: Russell
Sage Foundation. 2009. (Co-editor with Barr and co-author on
one article in the volume.)

Working and Poor: How Economic and Policy Changes are Affecting
Low Wage Workers (with Sheldon Danziger and Robert Schoeni).
New York: Russell Sage Foundation. 2006. (Co-editor with
Danziger and Schoeni and co-author on two articles in the
volume.)

Measuring Racial Discrimination (with Marilyn Dabady and Connie
Citro). Washington, D.C.: National Research Council, National
Academy Press. 2004.

Is the Market Moral? A Dialogue on Religion, Economics, and
Justice (with William McGurn). Washington, D.C.: Brookings
Institution. 2004.

The New World of Welfare (with Ron Haskins). Washington, D.C.:
Brookings Institution. 2001. (Co-editor with Haskins and co-
author of two articles in the volume.)

Finding Jobs: Work and Welfare Reform (with David Card). New
York: Russell Sage Foundation. 2000. (Co-editor with Card and
co-author of two articles in the volume.)

It Takes A Nation: A New Agenda for Fighting Poverty.
Princeton: Princeton University Press. 1997.

Social Protection vs. Economic Flexibility: Is There a
Tradeoff? Chicago: University of Chicago Press. 1994. (Editor
and author of two articles in the volume.)

Do Justice: Linking Christian Faith and Modern Economic Life.
Cleveland, OH: Pilgrim Press. 1992.

Journal Articles and Book Chapters

``How Should We Think About Measuring Innovation and Change?''
Survey of Current Business. Vol 90(2):2-4. February 2010.

``The Role of Economics in the Welfare-to-Work Reforms of the
1990s.'' In Better Living Through Economics. John J. Siegfried,
ed. Cambridge, MA: Harvard University Press. 2010.

``What We Know, What We Don't Know, and What We Need to Know
About Welfare Reform.'' In Welfare Reform and Its Long-term
Consequences for America's Poor. James P. Ziliak, ed.
Cambridge, UK: Cambridge University Press. 2009.

``Economic Change and the Structure of Opportunity for Less-
Skilled Workers.'' In Changing Poverty, Changing Policies,
Maria Cancian and Sheldon H. Danziger, eds. New York: Russell
Sage Press. 2009.

``The New American Model of Work-Conditioned Public Support.''
In United in Diversity? Comparing Social Models in Europe and
America, Jens Alber and Neil Gilbert, eds. Oxford, UK: Oxford
University Press. 2009.

``A Cautionary Tale About the Use of Administrative Data:
Evidence from Age of Marriage Laws'' (with Kerwin Kofi Charles
and James M. Sallee). American Economic Journal: Applied
Economics. Vol 1(2): 128-149. April2009.

``The Growing Problem of Disconnected Single Mothers'' (with
Brian K. Kovak). In Making the Work-Based Safety Net Work
Better, Carolyn J. Heinrich and John Karl Scholz, eds. New
York: Russell Sage Press. 2009.

Improving the Measurement of Poverty (with Mark H. Greenberg).
The Hamilton Project Discussion Paper 2008-17. December 2008.

``A Christian Perspective on the Role of Government in a Market
Economy.'' In Global Neighbors: Christian Faith and Moral
Obligation in Today's Economy, Douglas A. Hicks And Mark
Valeri, eds. Grand Rapids, MI: Eerdmans. 2008.

``The Changing Incidence and Severity of Poverty Spells Among
Single Mothers'' (with David Card). American Economic Review.
Vol 98(2): 387-91. May 2008.

``How to Improve Poverty Measurement in the United States.''
Journal of Public Analysis and Management. Vol 27(2): 233-54.
Spring 2008. Reprinted in Poverty, Welfare, and Public Policy,
Douglas J. Besharov and Douglas M. Call, eds. Wiley-Blackwell.
2010.

``Improving the Safety Net for Single Mothers Who Face Serious
Barriers to Work.'' Future of Children, Vol 17(2): 183-97.
Fall2007.

``Assessing Racial Discrimination: Methods and Measures'' (with
Douglas S. Massey). In Fragile Rights Within Cities:
Government, Housing, and Fairness. John Goering, ed. Lanham,
MD: Rowman and Littlefield. 2007.

``Introduction'' and editor of the special issue, ``Evaluating
Social Policy Changes in EU Countries.'' Journal of Labour
Economics. Vol 13(6):665-6. December 2006.

``Was Welfare Reform Successful?'' The Economists' Voice. Vol
3(4):Article 2. (http://www/bepress.com/ev/vol3/iss4/art2).
March 2006. Reprinted in The Economists' Voice: Top Economists
Take on Today's Problems, Joseph E. Stiglitz, Aaron S. Edlin,
and J. Bradford DeLong, eds. New York: Columbia University
Press. 2008.

``Are Less-Educated Women Crowding Less-Educated Men Out of the
Labor Market?'' (with Jonah Gelbach). In Black Males Left
Behind, Ronald B. Mincy, ed. Washington, D.C., Urban Institute
Press. 2006.

``What Did the 1990s Welfare Reforms Accomplish?'' In Public
Policy and the Income Distribution, Alan J. Auerbach, David
Card, and John M. Quigley, eds. New York: Russell Sage
Foundation. 2006.

``Market Behavior and Christian Behavior.'' In Faithful
Economics: The Moral Worlds of a Neutral Science, James W.
Henderson and John Pisciotta, eds. Waco, TX: Baylor University
Press. 2005.

``Poverty, Policy and Place: How Poverty and Policies to
Alleviate Poverty are Shaped by Local Characteristics.''
International Regional Science Review. Vol 28(4):441-64.
October 2005.

``An Overview of Welfare-to-Work Efforts.'' CESifo DICE Report,
Journal of Institutional Comparisons. Vol 3(2): 3-7. Summer
2005.

``Tracing the Economic Impact of Cumulative Discrimination.''
American Economic Review. Vol 95(2):99-103. May 2005.

Comment on ``Assessing the Impact of Welfare Reform on Single
Mothers.'' Brookings Papers on Economic Activity. 2004(1):.96-
102. 2004.

``Selecting Among Anti-Poverty Policies: Can an Economist be
Both Critical and Caring?'' Review of Social Economy. Vol
61(4):447-69. December 2003.

``Economics, Policy Analysis, and Feminism'' (with Cordelia W.
Reimers). In Feminist Economics Today: Beyond Economic Man,
Marianne Ferber and Julie Nelson, eds. Chicago: University of
Chicago Press. 2003.

``The Less Skilled Labor Market in Michigan.'' In Michigan at
the Millennium, Chapter 18, Charles L. Ballard, Paul N.
Courant, Douglas C. Drake, Ronald C. Fisher, and Elisabeth R.
Gerber, editors. East Lansing, MI: Michigan State University
Press. 2003.

``Changes in the Distribution of Children's Family Income Over
the 1990s'' (with Robert Schoeni). American Economic Review.
Vol 93(2):304-8. May 2003.

``U.S. Welfare Reform: What's Relevant for Europe?'' CESifo
Economic Studies. Vol 49(1):48-74. 2003. Reprinted in Hacienda
Publica Espafiola, Monograffa 2003, pp15-36.

``What Do Economists Have to Contribute to Policy Decision-
Making?'' Quarterly Review of Economics and Finance. Vol
42(5):817-26. Winter 2002.

``Evaluating Welfare Reform in the U.S.'' Journal of Economic
Literature. Vol 40(4): 1105-66. December 2002.

``Can Equity and Efficiency Complement Each Other?'' Labour
Economics. Vol 9(4): 451-68. September 2002.

``Comments on Promoting Economic Literacy.'' American Economic
Review. Vol 92(2): 476-77. May 2002.

``The Clinton Legacy for America's Poor'' (with David T.
Ellwood). In American Economic Policy in the 1990s. Jeffrey A.
Frankel and Peter R. Orszag, eds. Cambridge, MA: MIT Press.
2002.

``The Economics of Welfare Programs.'' In International
Encyclopedia of the Social and Behavioral Sciences, Neil J.
Smelser and Paul B. Baltes, eds. Oxford: Pergamon. 2001.

``Labor and the Sustainability of Output and Productivity
Growth'' (with Matthew Shapiro). In The Roaring Nineties: Can
Full Employment be Sustained? Alan B. Krueger and Robert Solow,
eds. New York: Russell Sage. 2001.

``What Can Other Countries Learn About Fighting Poverty from
U.S. Welfare Reform?'' Zeitschrift fur Sozialreform. Volume
47(4):464-80. July/August 2001.

``Declining Caseloads/Increased Work: What Can We Conclude
About the Effects of Welfare Reform?'' Economic Policy Review.
Vol 7(2):25-36. 2001.

``What Causes Public Assistance Caseloads to Grow?'' Journal of
Human Resources. Vol 36(1):85-118. Winter 2001.

``An Overview of Trends in Social and Economic Well-Being, by
Race.'' In America Becoming: Racial Trends and Their
Consequences, Neil J. Smelser, William J. Wilson and Faith
Mitchell, eds. Washington, D.C.: National Academy Press. 2001.

``Strong Employment, Low Inflation: How Has the U.S. Economy
Done So Well?'' Canadian Public Policy. Vol 26(
Supplement):S175-86, July 2000.

``Enhancing Opportunities, Skills, and Security of American
Workers.'' In A Working Nation: Workers, Work and Government in
the New Economy, with David T. Ellwood, Rebecca M. Blank,
Joseph Blasi, Douglas Kruse, William A. Niskanen, and Karen
Lynn-Dyson. New York: Russell Sage Foundation. 2000.

``Comment: The State of British Economics.'' Economic Journal.
Vol 110(464):350-54. June 2000.

``Fighting Poverty: Lessons from Recent U.S. History.'' Journal
of Economic Perspectives. Vol 14(2):3-19. Spring 2000.
Reprinted in Race, Poverty and Domestic Policy, C. Michael
Hemy, ed. New Haven: Yale University Press. 2004.

``When Can Public Policy Makers Rely on Private Markets? The
Effective Provision of Social Services.'' Economic Journal. Vol
110(462):C34-C49. March 2000.

``Gender and Race in the Labor Market'' (with Joseph Altonji).
In Handbook of Labor Economics, Volume 3C. Orley C. Ashenfelter
and David Card, eds. New York, NY: Elsevier Science Press.
1999.

``What Goes Up Must Come Down? Explaining Recent Changes in
Public Assistance Caseloads'' (with Geoffrey Wallace). In
Economic Conditions and Welfare Reform. Sheldon Danziger, ed.
Kalamazoo, MI: Upjohn Institute. 1999.

``Labor Market Dynamics and Part-time Work.'' In Research in
Labor Economics, Vol 17. Solomon W. Polachek, ed. Greenwich,
CN: JAI Press. 1998.

``Trends in the Welfare System.'' In Welfare, the Family, and
Reproductive Behavior: Research Perspectives. National Research
Council, Robert Moffitt, ed. Washington, D.C.: National Academy
Press. 1998.

``Contingent Work in a Changing Labor Market.'' In Generating
Jobs: How to Increase Demand for Less-Skilled Workers. Richard
B. Freeman and Peter Gottschalk, eds. New York: Russell Sage
Foundation. 1998.

``Why Has Economic Growth Been Such an Ineffective Tool Against
Poverty in Recent Years?'' In Poverty and Inequality: The
Political Economics of Redistribution, Jon Neill, ed.
Kalamazoo, MI: W.E. Upjohn Institute for Employment Research.
1997.

``Research and Policy Reflections on the Structural Changes
Occurring in North American Labour Markets.'' In Transition and
Structural Change in the North American Labour Market, Michael
G. Abbott, Charles M Beach and Richard P. Chaykowski, eds.
Kingston, Ontario: IRC Press at Queen's University. 1997.

``Policy Watch: The 1996 Welfare Reform.'' Journal of Economic
Perspectives. Vol 11(1): 169-77. Winter 1997.

``The Misdiagnosis of Eurosclerosis.'' The American Prospect.
No. 30:81-85. January-February 1997.

``State Abortion Rates: The Impact of Policies, Providers,
Politics, Demographics, and Economic Environment'' (with
Christine C. George and Rebecca A. London). Journal of Health
Economics. Vol 15:513-53. Fall 1996.

``Trends in the Working Poor: The Impact of Economy, Family,
and Policy'' (with Rebecca London). In America's Working Poor.
Thomas R. Swartz and Kathleen Maas Weigert, eds. Notre Dame,
IN: University of Notre Dame Press. 1996.

``When Do Women Use AFDC and Food Stamps? The Dynamics of
Eligibility vs. Participation'' (with Patricia Ruggles).
Journal of Human Resources. Vol 31(1):57-89. Winter 1996.

``Trends in Poverty in the United States.'' In The State of
Humanity, Julian L. Simon, editor. Cambridge, MA: Blackwell.
1995.

``Teen Pregnancy: Government Programs Are Not the Cause.''
Feminist Economics. Vol 1(2):47-58. Summer 1995.

``Poverty and Public Policy in the 1990s.'' In Populations at
Risk in America. George J. Demko and Michael G. Jackson, eds.
Boulder, CO: Westview Press. 1995.

``Changes in Inequality and Unemployment Over the 1980s:
Comparative Cross-National Responses.'' Journal of Population
Economics. Vol 8(1):1-21. February 1995.

``Outlook for the U.S. Labor Market and Prospects for Low-Wage
Entry Jobs.'' In The Work Alternative: Welfare Reform and the
Realities in the Job Market. Demetra S. Nightingale and Robert
H. Haveman, eds. Washington, D.C.: Urban Institute Press. 1995.

``Policy Watch: Proposals for Time-Limited Welfare.'' Journal
of Economic Perspectives. Vol 8(4):183-93. Fall 1994.

``The Employment Strategy: Public Policies to Increase Work and
Earnings.'' In Confronting Poverty: Prescriptions for Change.
Sheldon H. Danziger, Gary D. Sandefur, and Daniel H, Weinberg,
eds. Cambridge, MA: Harvard University Press. 1994.

``Does a Larger Social Safety Net Mean Less Economic
Flexibility?'' In Working Under Different Rules, Richard B.
Freeman, ed. New York: Russell Sage Foundation. 1994.

``Short-term Recidivism Among Public Assistance Recipients.''
American Economic Review. Vol 84(2):49-53. May 1994.

``The Widening Wage Distribution and its Policy Implications.''
In Aspects of Distribution of Wealth and Income. Dimitri B.
Papadimitriou, ed. New York: St. Martin's Press. 1994.

``Poverty, Income Distribution, and Growth: Are They Still
Connected?'' (with David Card). Brookings Papers on Economic
Activity. Vol 1993(2):285-325. 1993.

``Why Were Poverty Rates So High in the 1980s?'' In Poverty and
Prosperity in the Late Twentieth Century, Dimitri B.
Papadimitriou and Edward N. Wolff, eds. London: Macmillan
Press. 1993.

``Responding to Need: A Comparison of Social Safety Nets in the
U.S. and Canada'' (with Maria Hanratty). In Small Differences
that Matter, David Card and Richard Freeman, eds. Chicago:
University of Chicago Press. 1993.

``What Should Mainstream Economists Learn from Feminist
Theory?'' In Beyond Economic Man: Feminist Theory and
Economics,'' Marianne A. Ferber and Julie A. Nelson, eds.
Chicago: University of Chicago Press. 1993.

Multiple Program Use in a Dynamic Context: Data From the SIPP
(with Patricia Ruggles). Report to the U.S. Bureau of the
Census, No 9301. December 1992.

``Using the Survey of Income and Program Participation to
Understand Poverty and Economic Need,'' (with Patricia
Ruggles). Journal of Economic and Social Measurement. Vol
18:155-76. 1992.

``Down and Out in North America: Recent Trends in Poverty in
the U.S. and Canada'' (with Maria Hanratty). Quarterly Journal
of Economics. Vol 107(1):233-54. February 1992.

``A Feminist Perspective on Economic Man?'' In Revolutions in
Knowledge: Feminism in the Social Sciences, Susan R. Zalk and
Janice Gordon-Kelter, eds. Boulder, CO: Westview Press. 1992.

``The Effects of Double-Blind versus Single-blind Reviewing:
Experimental Evidence from the American Economic Review.''
American Economic Review. Vol 81(5):1041-67. December 1991.
Reprinted in Publishing Economics: Analyses of the Academic
Journal Market in Economics, Joshua Gans, ed. Cheltenham, UK:
Edward Elgar. 2000.

``Recent Trends in Insured and Uninsured Unemployment: Is There
an Explanation?'' (with David Card). Quarterly Journal of
Economics. Vol 106(4):1157-89. November 1991.

``Understanding Part-time Work.'' In Research in Labor
Economics, Volume 11, Lauri J. Bassi and David L. Crawford,
eds. Greenwich, CN: JAI Press. 1990.

``Are Part-time Jobs Bad Jobs?'' In A Future of Lousy Jobs? The
Changing Structure of U.S. Wages, Gary Burtless, editor.
Washington, D.C.: The Brookings Institution. 1990.

``Recent Trends in Housing Conditions Among the Urban Poor''
(with Harvey S. Rosen). In Research in Urban Economics, Volume
8, Mark A Hughes and Therese J. McGuire, eds. Greenwich, CN:
JAI Press. 1990.

``Linking Faith and Economics: The UCC Experience'' (with
Audrey R. Chapman). PRISM: A Theological Forum for the United
Church of Christ. Vol 5(1):5-14. Spring 1990.

``Why Are Wages Cyclical in the 1970s?'' Journal of Labor
Economics. Vol 8(1):16-57. January 1990.

``Analyzing the Duration of Welfare Spells.'' Journal of Public
Economics. Vol 39(3):245-73. August 1989.

``Women and the Economics of Military Spending'' (with Lourdes
Beneria). In Rocking the Ship of State: Towards A Feminist
Peace Politics, Adrienne Harris and Ynestra King, eds. Boulder,
CO: Westview Press. 1989.

``Disaggregating the Effect of the Business Cycle on the
Distribution of Income.'' Economica. Vol 56(2):141-63. May
1989.

``The Role of Part-Time Work in Women's Labor Market Choices
Over Time.'' American Economic Review. Vol 79(1):295-99. May
1989.

``The Effect of Medical Need and Medicaid on AFDC
Participation.'' Journal of Human Resources. Vol 24(1):54-87.
Winter 1989.

``Poverty and Policy: The Many Faces of the Poor.'' In
Prophetic Visions and Economic Realities: Protestants, Jews,
and Catholics Confront the Bishops' Letter on the Economy,
Charles R. Strain, editor. Grand Rapids, MI: William B.
Eerdmans Publishing Co, 1989.

``Women's Paid Work, Household Income, and Household Well-
Being.'' In The American Woman 1988-89: A Status Report, Sara
E. Rix, editor. New York, NY: W.W. Norton & Co, 1988. p123-61.

``The Effect of Welfare and Wage Levels on the Location
Decisions of Female-Headed Households.'' Journal of Urban
Economics. Vol 24(2):186-211. September 1988.

``Simultaneously Modeling the Supply of Weeks and Hours of Work
Among Female Household Heads.'' Journal of Labor Economics. Vol
6(2):177-204. April 1988.

``Welfare Payment Levels and the Migration of Female-Headed
Families.'' In Readings, Issues, and Questions in Public
Finance, Eleanor Brown, editor. Homewood, IL: Richard D. Irwin,
Inc, 1988.

``Part-Time Work and Wages Among Adult Women.'' Industrial
Relations Research Association Series, Proceedings of the 39th
Annual Meeting. Madison, WI: Industrial Relations Research
Association, May 1987. p479-86.

``Macroeconomics, Income Distribution and Poverty'' (with Alan
S. Blinder). In Fighting Poverty: What Works and What Doesn't,
Sheldon H. Danziger and Daniel H. Weinberg, eds. Cambridge, MA:
Harvard University Press, 1986.

``The Effect of U.S. Defense Spending on Employment and
Output'' (with Emma Rothschild). International Labour Review.
Vol 124(6):677-97. December 1985.

``The Impact of State Economic Differentials on Household
Welfare and Labor Force Behavior.'' Journal of Public
Economics. Vol 28(1):25-58. October 1985.

``An Analysis of Worker Sectoral Choice: Public vs. Private
Employment.'' Industrial and Labor Relations Review. Vol
38(2):211-24. January 1985.

Book Reviews

``A Review of America Works.'' Industrial and Labor Relations
Review. Vol 62(2):252-253. January 2009.

``A Review of the Labor Market Discussion in the 2006 Economic
Report of the President.'' Journal of Economic Literature. Vol
44(3):669-73. September 2006.

``A Review of The Moral Ecology of Markets.'' International
Journal of Social Economics Vol 33(11-12): 862-63. Fall 2006.

``Worker Needs and Government Response: A Comment on Working in
America: A Blueprint for the New Labor Market.'' Industrial and
Labor Relations Review. Vol 55(4): 733-36. July 2002.

``A Review of The Color of Opportunity: Pathways to Family,
Welfare, and Work.'' Journal of Economic Literature. Vol
40(2):550-51. June 2002.

``A Review of Does Training for the Disadvantaged Work?, What
Employers Want, and Job Creation and Destruction.'' Journal of
Policy Analysis and Management. Vol 16(1): 311-4. Fall 1997.

``A Review of Welfare Realities.'' Journal of Economic
Literature. Vol 33(3):1363-4. September 1995.

``A Review of The Evaluation of the Washington State Family
Independence Program.'' Industrial and Labor Relations Review.
Vol 48(4):860-l. July 1995.

``A Review of Impostors in the Temple,'' Journal of Economic
Education. Vol 24(3): 283-6. Summer 1993.

``A Review of Evaluating Employment and Training Programs,''
Journal of Policy Analysis and Management. Vol 12(3):596-8.
Summer 1993.

``A Review of Understanding the Gender Gap,'' Economica. Vol
59(233):123-4. February 1992.

``A Review of Dollars and Dreams,'' Journal of Economic
Literature. Vol 27(1):92-3. March 1990.

``A Review of Working but Poor,'' Journal of Economic
Literature. Vol 26(4):1795-6. December 1988.

``A Review of Work, Health and Income Among the Elderly,''
Journal of Human Resources. Vol 23(3):397-411. Summer 1988.

``A Review of Gender in the Workplace,'' Journal of Economic
Literature. Vol 26(2): 728-9. June 1988.

Articles For A Broader Public

``Counting the Cost.'' Sojourners. Commentary. Vol 38(4):7.
April 2009.

``Poverty and Economic Stimulus'' (with Mark H. Greenberg.)
Real Clear Politics, On-line opinion piece. February 10, 2009.

``Promoting Banking Services among Low-Income Customers.'' New
England Community Developments. Federal Reserve Bank of Boston.
2008, Issue 3.

``Fighting Poverty in the Land of Opportunity.'' Charlotte
Observer, editorial. Wednesday, December 17, 2008.

``Decreasing Poverty and Increasing Opportunity in America.'' A
memo to President-Elect Obama. The Brookings Institution.
November 24, 2008.

``Remeasuring Poverty.'' Los Angeles Times, editorial. Sunday,
September 25, 2008.

``How to Wage the Next War on Poverty: Advising and Grading the
Candidates.'' Pathways: a magazine on poverty, inequality and
social policy. Issue 1: 17-20. Winter 2008.

``Should Michigan Raise the Minimum Wage?'' Detroit Free Press,
editorial. Sunday, March 5, 2006.

``Living Faithful Lives in a Market Economy,'' Church and
Society, Presbyterian Church (U.S.A.) Vol 96(4): 12-17, March/
April 2006.

``Wege aus der Armutsfalle: Lehren aus der Reform der
Offentlichen Fiirsorge in den USA.'' Neue Zurcher Zeitung,
(Zurich, Switzerland), special section on economic issues.
Sunday, August 31, 2003.

``Welfare Reform Reauthorization'' (with Ron Haskins). Poverty
Research News. Joint Center for Poverty Research. Vol 5(6).
November-December 2001.

``Welfare and the Economy.'' Welfare Reform and Beyond, Policy
Brief No. 7. Washington, D.C., Brookings Institution. September
2001.

``Economy Poses Challenge to State's Welfare System.'' Detroit
Free Press, editorial. Tuesday, September 11, 2001.

``Revisiting Welfare'' (with Ron Haskins). Washington Post,
editorial. February 14, 2001.

``A Helping Hand Isn't Enough.'' Chicago Tribune, editorial.
May 29, 1997.

``Welfare Recipients Aren't the Only Ones with Plenty of Hard
Work Ahead.'' Chicago Tribune, Sunday Perspective. January 12,
1997.

``Uncertain Days Ahead for America's Poor.'' Chicago Tribune,
editorial. November 17, 1995.

``Unwed Mothers Need Role Models, Not Roll Backs.'' Wall Street
Journal, editorial. March 7, 1995.

``Block Grants Ignore Feds' Welfare Role.'' Newsday, editorial.
February 16, 1995.

``The Welfare Pit: The Climb Out Isn't Easy or Cheap.'' Chicago
Tribune, editorial. March 23, 1994.

``The New Model Democrat: Can We Look to Clinton for a New
Model of Economic Activism?'' New Economy. Autumn 1993. p32-5.

``Assisting Low Income Women into the Labor Market.'' Testimony
to the Clinton Administration Task Force on Welfare Reform.
August 11, 1993.

``Social Scientists and the Problem of Poverty,'' The Chronicle
of Higher Education. Vol 38(48):Bl. August 5, 1992.

Growth is Not Enough: Why The Recovery of the 1980s Did So
Little to Reduce Poverty. Report to the Joint Economic
Committee, Congress of the United States. Washington, D.C.:
Joint Economic Committee Reports, September 26, 1991.

``Families Must Be our Priority.'' Chicago Tribune, editorial.
September 30, 1991.

``Poor Kids Might Want to Go North.'' Joint with Maria
Hanratty). Cleveland Plain Dealer, editorial. August 28, 1991.

Current Working Papers

``The Impact of Earnings Disregards on the Behavior of Low
Income Families'' (with Jordan Matsudaira). National Bureau of
Economic Research Working Paper #14038. May 2008.

``Public Policies to Alter the Use of Alternative Financial
Services Among Low-Income Households.'' Paper prepared for the
Federal Reserve Board of Governors. April 2008.

``Labor Markets and Human Capital Investment in Michigan:
Challenges and Strategies'' (with James M. Sallee). Paper
prepared for the conference Where Do We Go From Here? An
Agenda-Setting Conference for the Economic Issues Facing
Michigan. March 2006.

``What Has Welfare Reform Accomplished? Impacts on Welfare
Participation, Employment, Income, Poverty, and Family
Structure,'' (with Robert Schoeni). National Bureau of Economic
Research Working Paper No. 7627. Cambridge, MA: NBER. March
2000.
Speeches:
In my recent roles inside government (Under Secretary, Acting
Deputy Secretary, and Acting Secretary), I have given frequent public
talks on issues related to my work and Administration policy.
Prior to joining government service in 2009, I typically gave
seminars, speeches, served as a panelist, or was in a public discussion
multiple times each month. Many of these talks addressed particular
aspects of the current economic situation.
Among the most visible talks that I gave prior to joining the
Administration in 2009 are the named lectures I was invited to deliver,
which I list here:

Distinguished Public Policy Lecture, Institute for Policy
Research, Northwestern University, April 2009.

Aaron Wildavsky Lecture, Goldman School of Public Policy, UC-
Berkeley, March 2009.

Sulzberger Lecture, Sanford Institute of Public Policy, Duke
University, September 2008.

McMylar Lecture, Department of Economics, Case Western Reserve
University, April 2007.

American Enterprise Lecture, Furman University, March 2007.

Alice Cook Lecture, School of Industrial and Labor Relations,
Cornell University, October 2006.

Kurt W Rothschild Lecture, Department of Economics, Johannes
Kepler University, Linz, Austria, November 2005.

Bazzani Lecture, Institute for Government & Public Affairs,
University of Illinois, October 2004.

Monroe-Paine Lecture, Truman School, University of Missouri,
March 2003.

Wellington-Burnham Lecture, Department of Economics, Tufts
University, October 2002.

Merrick Lecture, Department of Economics, University of
Virginia, April 2002.

Adam Smith Lecture, European Association of Labour Economists,
September 2001.

J Douglas Gibson Lecture, School of Policy Studies, Queen's
University, Canada, March 2000.

Distinguished Lecture on Economics in Government, Society of
Government Economists, January 2000.

Frank Paish Lecture, Royal Economic Society, April 1999.

``Understanding the Impact of the Drilling Moratorium on the
Gulf Coast Economy.'' Testimony to the Small Business
Committee, U.S. Senate. September 16, 2010.

``Understanding the Recently Released Data from the Census
Bureau on Income, Poverty and Health Insurance Coverage for
2008.'' Testimony to the Joint Economic Committee, U.S.
Congress. September 10, 2009.

``What Business Should Do to Prepare for the H1N1 Flu.''
Testimony to the Committee on Small Business, U.S. House of
Representatives. September 9, 2009.

``Nominations Hearing, Under Secretary for Economic Affairs.''
Testimony to the Senate Commerce, Science, and Transportation
Committee. May 19, 2009

``What Do the Recently-Released U.S. Poverty Numbers Tell Us?''
Testimony to the Joint Economic Committee, U.S. Congress.
September 25, 2008.

``Why the United States Needs an Improved Measure of Poverty.''
Testimony to the Subcommittee on Income Security and Family
Support, House Ways and Means Committee, U.S. Congress. July
17, 2008.

``What Does the Unemployment Rate Indicate about the Weak Labor
Market?'' Testimony to the Subcommittee on Income Security and
Family Support, House Ways and Means Committee, U.S. Congress.
April 10, 2008.

``If the Economy's So Bad, Why is the Unemployment Rate So
Low?'' Testimony to the Joint Economic Committee, U.S.
Congress. Hearings on the Release of the February 2008
Unemployment Numbers. March 7 , 2008.

``Employment, Job Opportunities, and Inequality among Workers
in the U.S. Economy,'' Testimony to the House Financial
Services Committee. U.S. House of Representatives, Hearings on
the State of the Economy, the State of the Labor Market and
Monetary Policy. February 16, 2007.

``Nominations Hearing, CEA Member.'' Testimony to the Senate
Committee on Banking, Housing, and Urban Affairs. October 1997.

``The Causes and Consequences of Rising Out-of-Wedlock
Birthrates.'' Testimony to the Subcommittee on Human Resources,
Ways and Means Committee, U.S. House of Representatives,
Hearings on Welfare Reform. January 13, 1995.

``Current Trends in the Poverty and Income Statistics.''
Testimony to the Subcommittee on Human Resources, Ways and
Means Committee, U.S. House of Representatives. September 10,
1992.

18. Given the current mission, major programs, and major
operational objectives of the department/agency to which you have been
nominated, what in your background or employment experience do you
believe affirmatively qualifies you for appointment to the position for
which you have been nominated, and why do you wish to serve in that
position?
I have been closely involved with the programs of the Department of
Commerce since I was sworn in as Under Secretary for Economic Affairs
in June 2009. I became Acting Deputy Secretary in November 2009, served
as the Acting Secretary for almost 3 months while awaiting Secretary
Bryson's confirmation and am now back in the Acting Deputy Secretary
position. As a result, I am well acquainted with the Department and its
activities. I have worked closely with the leadership in all the
Department's twelve Bureaus as well as in the Office of the Secretary.
And I have met with many of the individuals and organizations (both
within and outside the government) who partner with the Department on
issues such as trade and innovation. I am particularly familiar with
the budget and management issues of the Department. During my time as
Acting Deputy Secretary and Acting Secretary, I worked to implement the
FY 2011 budget following an extended Continuing Resolution; to shepherd
the FY 2012 budget as it moved through the Administration and then to
the Congress; and to prepare a proposed FY 2013 budget for the Office
of Management and Budget. I have implemented a Department-wide
performance measurement system, worked closely on reducing
administrative costs, and overseen a wide variety of management issues
across the various Bureaus within the Department of Commerce.
Furthermore, I am highly familiar with the substantive work of the
Department and have worked closely with the Bureaus on issues that
range from the National Export Initiative, to investments in weather
satellites, to patent reform, to Census data improvements, to
supporting innovation and tech transfer, and a host of other topics.
My background as an economist has been particularly helpful in
preparing me for this job in the Department of Commerce. I am familiar
with cost-benefit analysis and program evaluation. I also understand
the economic policy issues that Commerce is deeply involved with,
including trade, competitiveness, innovation, spectrum management, and
economic development. Furthermore, my time as a researcher and
university administrator has helped me understand the parts of Commerce
that support scientific research and its applications. This includes
the work of the National Institute of Standards and Technology (NIST),
as well as much of the research work inside NOAA. As Under Secretary, I
became very familiar with the data available from the Census Bureau and
the Bureau of Economic Analysis.
After more than two years at the Department of Commerce, I continue
to be fascinated by its breadth and by the issues in which it engages.
Each Bureau in Commerce supports American business in one form or
another, whether providing weather forecasts, GDP statistics, trade
assistance, or support to manufacturers. At this particular moment in
time, when America is in need of a strong, stable, and competitive
economy, I do not believe there is any more important job than helping
to support private sector growth and innovation. I would count myself
honored and fortunate to be able to serve as Deputy Secretary of the
Department of Commerce, whose primary mission is to provide the
government services that foster private sector growth and opportunity.
19. What do you believe are your responsibilities, if confirmed, to
ensure that the department/agency has proper management and accounting
controls, and what experience do you have in managing a large
organization?
Upon joining the Department of Commerce in 2009 as Under Secretary
for Economic Affairs, I was responsible for final management oversight
of the Census Bureau and the Bureau of Economic Analysis. In FY2010,
this meant that I was responsible for over $6 billion in budget
expenditures, much of it appropriated to fund the 2010 Decennial
Census. I was closely involved with the final planning, execution, and
oversight the 2010 Census. I worked closely with Census Director Bob
Groves and his senior leadership, receiving weekly (and sometimes
daily) reports on key issues, with particular attention to information
that would provide an early signal of potential problems. This included
ongoing attention to budgets and expenditures. Ultimately, the Census
came in $1.8 billion under budget, in part because of close attention
to management and budget issues.
As Acting Deputy Secretary since November 2009, I have served as
the Chief Operating Officer of the Department with responsibility for
all management and budget issues. Making sure that the Department and
its Bureaus have appropriate management and accounting controls
requires at least three things: (1) Judgment about which data to watch
and what information is needed to adequately monitor high-risk
activities; (2) A first-rate group of staff, both in the Deputy
Secretary's office and within the Bureaus, who oversee the day-to-day
work of the Department, from human resource management, to
acquisitions, to facilities, to budgets; and (3) A data system that
provides information on management and accounting performance. Good
information is necessary to good management decisions. For instance, we
have started tracking information on the hiring process within each
Bureau, documenting how much time each step in the hiring process
takes. This has allowed us to identify bottlenecks and reduce the time
to hire, which helps attract stronger candidates. As a result of this
effort, every Bureau inside Commerce is reporting shorter hiring times.
This is one example of the sort of management controls that need to be
implemented across all areas of activity.
Prior to joining the Department of Commerce, I served as Dean of
the Gerald R. Ford School of Public Policy at the University of
Michigan. In this role, I quadrupled the budget of the Ford School,
built a new building, and started both an undergraduate and Ph.D.
degree program. As Dean, I was part of the leadership team at the
University of Michigan, a large educational and research organization
with 32,000 faculty and staff and over 40,000 students.
I worked within the budget, human resource, and planning systems of
that University, making sure that they were effectively implemented
within my unit and occasionally working to improve these systems when
needed.
In addition, I have worked on the Boards of Directors of a number
of non-profit organizations, with responsibility for overseeing the
financial and management decision-making within these organizations. I
have run two major research centers, effectively overseeing their
staffing, finances, and programs.
20.What do you believe to be the top three challenges facing the
department/agency, and why?
First, the Department has a number of important initiatives that
need to move forward, even in an environment where overall resources
are reduced. Many of these initiatives are designed to more effectively
support American businesses so they can expand and create more jobs in
the current economy. These high-priority activities include: (1)
Implementing a strategy to improve America's competitiveness in a
global economy, by expanding the opportunities for innovation. This
means effective technology transfer (NIST), ensuring our manufacturing
sector has all the tools it needs to compete (NIST, ITA, ESA), economic
development (EDA), support for minority businesses (MBDA), and spectrum
management (NTIA); (2) Supporting the work of NOAA, particularly making
sure that its weather satellite program is adequately funded and well
operated, as well as making sure that its fisheries management programs
are implemented effectively; (3) Strengthening export promotion
activities, as part of President Obama's National Export Initiative.
Exports have been leading economic growth, and expanding the strength
and competitiveness of America's export sector is crucial, as is
ensuring a level playing field for American companies in overseas
markets; and (4) Implementing the America Invents Act, the new law that
will reform the patent office and reduce the time needed for patent
approval.
Second, particularly in the current budget environment, the
Department of Commerce has to run more efficiently. This means reducing
overhead costs, so that budget reductions can be at least partially
absorbed by reduced administrative costs rather than reduced funding
for programs. Within the Department of Commerce, we have launched a
variety of initiatives designed to do this, including acquisition
reforms (intended to reduce purchase costs); IT reforms (designed to
consolidate IT systems and make better use of IT); and facilities
consolidation. Within an organization as complex and large as the
Department of Commerce, these sort of administrative changes often
require cultural changes in how work is organized and performed,
changes that are not always welcomed by those who are used to long-time
pre-existing systems. Hence, this type of change can only occur over a
multi-year process with strong central commitment, communication, and
leadership. It should be the primary job of the Deputy Secretary to see
that this process proceeds smoothly and effectively.
Finally, a challenge for Commerce (as well as other Departments) is
to retain a skilled and motivated workforce. In the midst of pay
freezes and potential benefit cuts, we need to ensure that government
employment is an attractive option for hard-working, motivated, and
skilled young adults. Without a first-rate civil service, the
Department cannot deliver on its core functions. For instance, a large
number of Senior Executive Service (SES) leaders are retirement-
eligible across Commerce's bureaus. Replacing this group with equally
talented new SES hires will be a major and important challenge in the
years ahead.
b. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers. Please include information related to retirement
accounts: 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.
I have no commitments or agreements about maintaining an
affiliation with any organization.
I expect to maintain my membership with several professional
organizations that reinforce my credibility as an economist and policy
expert. This includes:

American Economic Association

Labor and Employment Relations Association

Association for Public Policy Analysis and Management

I maintain membership in several issues/advocacy organizations:

Bread for the World

Amnesty International

Economists for Peace and Security

I am a member of several community organizations:

Westmoreland Hills Citizens Association

Bethesda-Chevy Chase High School PTA

Westmoreland United Church of Christ

Friends of the National Zoo

Ann Arbor Art Center

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.
In connection with the nomination process, I have consulted with
the Office of Government Ethics and the Department of Commerce's
designated agency ethics official to identify any potential conflicts
of interest. Any potential conflicts of interest will be resolved in
accordance with the terms of an ethics agreement that I have entered
into with the Department's designated agency ethics official and that
has been provided to this Committee. I am not aware of any other
potential conflicts of interest.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last ten 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.
In connection with the nomination process, I have consulted with
the Office of Government Ethics and the Department of Commerce's
designated agency ethics official to identify any potential conflicts
of interest. Any potential conflicts of interest will be resolved in
accordance with the terms of an ethics agreement that I have entered
into with the Department's designated agency ethics official and that
has been provided to this Committee. I am not aware of any other
potential conflicts of interest.
5. Describe any activity during the past ten 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.
In the years prior to joining the government in 2009, I signed
several petitions that gathered signatures from economists to support
specific legislative initiatives. To the best of my recollection, this
includes a petition in favor of increasing the minimum wage, a petition
supporting revisions to the official poverty measure, and a petition in
favor of the Employee Free Choice Act. I also signed a statement by a
group of economists urging states to do everything possible to limit
their cuts to human services in the budget crisis of2008-09.
Prior to joining government, I regularly engaged in written and
verbal discussions of the current economy, analyzed policy options and
stated my support for a variety of economic policy approaches. I was
particularly active in a series of conversations with interested
parties about improved ways to measure U.S. poverty. There was
legislation introduced in 2008 in the House and Senate to implement an
improved poverty measure, which I verbally endorsed on a number of
public occasions.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
In connection with the nomination process, I have consulted with
the Office of Government Ethics and the Department of Commerce's
designated agency ethics official to identify potential conflicts of
interest. Any potential conflicts of interest will be resolved in
accordance with the terms of an ethics agreement that I have entered
into with the Department's designated agency ethics official and that
has been provided to this Committee.
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? If so, please explain: 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? If so, please explain: 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? If so, please explain.
I have never been personally involved in any litigation or
administrative agency proceeding.
In their long history, the Universities for which I have worked
have been regularly involved in various litigation and administrative
proceedings.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, please explain: No.
5. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion, or
any other basis? If so, please explain: No.
6. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination: None.
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.
______

resume of rebecca m. blank
Experience
United States Department of Commerce (DOC), Washington, D.C.
Acting Secretary of Commerce--8/1/11 to 10/1/11
Cabinet-level responsibility for the programs and mission of the
Department of Commerce.

Acting Deputy Secretary of Commerce--11/1/10 to 8/1/11 and 10/1/11
to present
Chief Operating Officer for the Department of Commerce (DOC), an
agency with 11 Bureaus, 45,000 employees and a budget of approximately
$9 billion. Key issues:

Dealt with difficult budget and management issues in the
FY2011 budget year; oversaw a process to deal with significant
proposed budget cuts in the FY2012 and FY2013 budgets.

Headed a major effort to reduce administrative costs inside
the Department through reforms in the acquisition and HR
process, changes in IT systems, and restructuring of several
Bureaus.

Implemented a Department-wide performance measurement system
that was used as a model for other departments

Worked with a number of Bureaus inside DOC, to help them
more effectively meet their core mission priorities. This
includes efforts to increase exports, to effectively fund and
operate weather satellites, the restructure the Census Bureau's
regional offices, etc.

Under Secretary for Economic Affairs--6/1/09 to present
Head of the Economics and Statistics Administration (ESA), serving
as principal economic advisor to the Secretary and overseeing the two
premier Federal agencies which produce economic and demographic data,
the Census Bureau and the Bureau of Economic Analysis. Key issues:

Managed a $1.1 billion budget for ESA and its two agencies,
with oversight for another $7 billion in spending during FY2010
related to the 2010 Census.

Oversight of the 2010 Decennial Census, requiring
involvement in a wide range of management and political issues.
The 2010 Census, the largest domestic Federal deployment ever
undertaken, established 500 temporary offices with 650,000
temporary employees. Despite predictions of disaster by outside
observers in the previous year, the Census came in $1.6 billion
under budget and met or exceeded performance standards.

As head of DOC's economic analysis team, tracked key
economic trends and regularly reported on these within and
outside DOC. Collaborated with other agencies in DOC to analyze
the economic effects of innovation, export policy, broadband
expansion, etc.

Solicited and produced a series of policy-oriented reports,
in partnership with agencies across the Administration,
including a report on the status of the middle class (for the
Vice President's Middle Class Task Force); an analysis of the
size of the Green Economy; a study of the role of minority and
women-owned businesses in Federal contracting (for the
Department of Justice); and a report on women's social and
economic well-being, and a study of access to credit among
women-owned businesses (for the White House Council on Women
and Girls.)

Advocated for improved Federal data. Worked across agencies
to generate support for a number of key initiatives including a
new poverty measure and legislation to allow enhanced business
data sharing to improve industry statistics.

Implemented a performance-based management system within ESA
and its two agencies; provided ongoing senior leadership during
extensive management revisions within the Census Bureau,
including major changes to HR systems, creation of a new
research division inside Census, and the implementation of a
program to reduce costs and increase innovation.

Served as the Secretary of Commerce's representative to the
Pension Benefit Guarantee Corporation Board, which regulates
all defined benefit pension plans in the private sector.
Brookings Institution, Washington, D.C.
Robert S. Kerr Senior Fellow--7/1/08-6/1/09
Robert S. Kerr Visiting Fellow--9/1/07-6/1/08
After spending a year at Brookings on sabbatical leave, I accepted
their offer to stay permanently. I was not at Brookings long enough to
initiate the full complement of research and policy projects I had
hoped to establish there.
University of Michigan (UM), Ann Arbor, MI
Dean, Gerald R. Ford School of Public Policy--8/99-8/1/07
Henry Carter Adams Collegiate Professor of Public Policy--8/99-6/1/
08
Professor of Economics--8/99-6/1/08
Co-Director, National Poverty Center--9/02-6/08
Dean of the newly-established Gerald R. Ford School of Public
Policy, overseeing all issues relating to the program and institutional
management of the Ford School.

In the first year, negotiated the arrangements to name the
school for President Gerald R. Ford, a graduate of the
University of Michigan.

Substantially expanded faculty and staff, deepening areas of
historical strength and expanding strength in other areas,
particularly on the international side.

Launched a successful endowment fundraising effort from
private donors. I faced the challenges of fundraising for a new
institution with limited alumni (few of whom were wealthy.) By
the end of2007, I had raised just under $50 million for student
scholarships, program activities, faculty research, and a new
building.

Initiated a series of new programs, including a new Ph.D.
program, an undergraduate degree program, a science policy
certificate, and two international exchange programs.

Successfully persuaded UM to move forward with a new 85,000
square foot building for the Ford School, shepherding this
building through the approval, design, funding, and
construction stages. It was occupied in August 2006.

Substantially expanded research activities and revenues
through outside grant dollars. Established the International
Policy Center, which pulled together faculty from across UM.
Also established the National Poverty Center and the Center for
Local, State, and Urban Policy.

Substantially enhanced staff and administrative services,
building a team of senior staff who oversaw a large expansion
in budgets, staff, students, and organizational complexity.
Council of Economic Advisers, Washington, D.C.
Member (served while member-nominee for 9 of these months)--9/1/97-
7/1/99
Served as one of three Senate-confirmed members on the White House
Council of Economic Advisors in President Clinton's second term. In
this role I was senior economic advisor on a host of internal policy
discussions, including Social Security reform, unemployment insurance
reform, and policies around race and gender. I played both an internal
and external role in helping to interpret the rapidly expanding economy
of the late 1990s.
Northwestern University, Evanston, IL
Professor of Economics--1994-99
Director, Joint Center for Poverty Research--1996-97
Associate Professor of Economics--1989-94
Associate Professor, School of Education & Social Policy--1989-93
Served as senior faculty researcher and teacher, with outside
funding support from a variety of sources. I was the founding director
of the Northwestern University/University of Chicago Joint Center for
Poverty Research, established with a $7 million/5 year grant from HHS.
Council of Economic Advisers, Washington, D.C.
Senior Staff Economist--9/1/89-8/1/90
Princeton University, Princeton, NJ
Assistant Professor of Economics and Public Affairs--9/1/83-8/1/89
Massachusetts Institute of Technology, Cambridge, MA
Visiting Assistant Professor of Economics--1988-89
University of Wisconsin-Madison, Madison, WI
Visiting Fellow--Fall 1985
Data Resources, Inc., Chicago, IL
Consultant and Educational Coordinator--6/76-8/79
Education
Ph.D. in Economics, Massachusetts Institute of Technology, June
1983.
B.S. in Economics, Summa Cum Laude, University of Minnesota, June
1976.
Awards & Honors
American Academy of Political and Social Science, Eleanor Roosevelt
Fellow, Elected 2010.
University of Minnesota, Outstanding Alumni Achievement Award,
2008.
American Academy of Arts of Sciences, Fellow, Elected 2005.
Society of Labor Economists, Fellow, Elected 2006.
National Academies of Science, Lifetime National Associate, Named
in 2004.
National Academy of Social Insurance, Fellow, Elected 1997.
National Bureau of Economic Research, Faculty Research Associate,
1990-09; Faculty Research Fellow, 1985-90.
IZA (a European labor market research organization in Bonn).
Research Fellow, Named in 2007.
Institute for Research on Poverty, Faculty Affiliate, 1994-2009.
Selected Named Lectures
James P. Houck Lecture, Department of Applied Economics, University
of Minnesota. May 2010.
President's Speaker, American Statistical Association, July 2009.
Distinguished Public Policy Lecture, Institute for Policy Research,
Northwestern University, April 2009.
Aaron Wildavsky Lecture, Goldman School of Public Policy, UC-
Berkeley, March 2009.
Sulzberger Lecture, Sanford Institute of Public Policy, Duke
University, September 2008.
McMylar Lecture, Department of Economics, Case Western Reserve
University, April2007.
American Enterprise Lecture, Furman University, March 2007.
Alice Cook Lecture, School of Industrial and Labor Relations,
Cornell University, October 2006.
Kurt W. Rothschild Lecture. Department of Economics, Johannes
Kepler University, Linz, Austria. November 2005.
Bazzani Lecture, Institute for Government & Public Affairs,
University of Illinois. October 2004.
Monroe-Paine Lecture, Truman School, University of Missouri. March
2003.
Wellington-Burnham Lecture. Department of Economics, Tufts
University. October 2002.
Merrick Lecture. Department of Economics, University of Virginia.
April 2002.
Adam Smith Lecture. European Association of Labour Economists.
September 2001.
J. Douglas Gibson Lecture. School of Policy Studies, Queen's
University, Canada. March2000.
Distinguished Lecture on Economics in Government, Society of
Government Economists. January 2000.
Frank Paish Lecture, Royal Economic Society. April 1999.
1997 Richard A. Lester Prize for the Outstanding Book in Labor
Economics and Industrial Relations.
1993 David Kershaw Prize. Awarded biannually by the Association of
Public Policy Analysis and Management to the young scholar (under age
40) whose research has had the most impact on the public policy
process.
Other Professional Activities
MRDC (formerly Manpower Demonstration Research Corp), New York, NY
Board of Directors, 1993-97, 2000-09.

Urban Institute, Washington, D.C.
Board of Trustees, 2007-09.

Economic Policy Institute, Washington, D.C.
Board of Directors, 2008-09.

Kennedy School of Government, Harvard University, Cambridge, MA
Visiting Committee, 2004-09.

DIW (a German research/policy think tank) Berlin, Germany
Scientific Advisory Committee, 2001-2004; Advisory Council, DIW-DC,
2008-09.

Center for Budget and Policy Priorities, Washington, D.C.
Board of Directors, 1994-97.

Citizens' Research Council of Michigan
Board of Directors, 2000-08

National Academies of Science, Washington, D.C.
Member, Division Committee for the Behavioral and Social Sciences
and Education (DBASSE) 2003-08; Served as member or chair of multiple
NAS scientific panels.

Association for Public Policy Analysis and Management
President, 2007; Executive Committee member, 2006-08; Policy
Council member, 2001-04.

Public Policy and International Affairs Program
Board chair, 2003-06; Vice chair, 2001-03.

American Economic Association
Vice President, 2007; Executive Committee, 1995-97; Committee on
the Status of Women in the Economics Profession (a subcommittee of the
AEA) Chair, 1993-96; Executive Board 1990-96.

Midwest Economic Association
President, 2001-02; Vice President, 1994-95.
Editorial appointments
Board of Editors, American Economic Journal: Economic Policy. 2007-
09
Co-Editor, Labour Economics. 2004-07. Associate Editor, 2007-09.
Co-Editor, Journal of Human Resources, 1995-97.
Board of Editors, American Economic Review, 1993-97.
Advisory Board, Journal of Public Economics, 1993-97.
Advisory Board, Journal of Economic Education, 1992-97, 2002-09.
Advisory Board, Feminist Economics, 1994-97.

The Chairman. Thank you very much.
If anybody has not had the chance to read Dr. Blank's bio,
don't, because you'll be so depressed by your own that you'll
probably leave the hearing.
Ms. Ohlhausen, please.

STATEMENT OF MAUREEN K. OHLHAUSEN, NOMINATION TO BE
COMMISSIONER, FEDERAL TRADE COMMISSION

Ms. Ohlhausen. Thank you. Chairman Rockefeller, Ranking
Member Hutchison and members of the Committee, it is a great
honor to have been nominated by the President to serve as a
Commissioner of the Federal Trade Commission.
Thank you for the opportunity to appear before this
Committee and for the time and attention you and your staff
have devoted to this hearing.
I'd like to take the opportunity to introduce my family,
who's sitting behind me, my husband, Peter, my son Kevin----
The Chairman. Yes, well could they stand up? You see, with
Chairman Leibowitz, nobody stood up.
Ms. Ohlhausen. OK.
The Chairman. So everybody was introduced, but there was
just a sea of faces. OK. There we go.
Ms. Ohlhausen. My husband, Peter, my son Neil, my daughter
Katie, my son Brian, my son Kevin. And behind him is Kevin's
fiancee, Suzanne Collier, and my mother-in-law Anita Ohlhausen.
I'm also honored to be appearing with FTC Chairman Jon
Leibowitz, who was a Commissioner during my previous tenure at
the agency and who, as Chairman, has led the agency to many
successes during his tenure. If confirmed, I look forward to
joining him and many other former colleagues at the Commission.
I will be very fortunate, if I am confirmed, to have the
opportunity to return to public service at the FTC, an agency
that has played an important role in American economic life for
almost 100 years.
I've spent much of my legal career at the Commission, first
in the General Counsel's office, then working for an FTC
Commissioner, and, finally, serving as the Director of the
Office of Policy Planning.
In these positions, I gained extensive knowledge about the
FTC's mission, which is to prevent business practices that are
anticompetitive or deceptive or unfair to consumers, to enhance
informed consumer choice and public understanding of the
competitive process and to accomplish these missions without
unduly burdening legitimate business activity.
I also gained in-depth experience of the variety of tools
the Commission may employ to advance this mission, both as an
enforcer and as a policy leader.
My work in private practice with Wilkinson Barker and
Knauer, as well as my academic activities, have also focused on
the FTC and broadened my understanding of the Commission's role
and capabilities.
The American economy and American consumers face many
challenges today, and the FTC can help them meet these
challenges. The FTC has a strong track record of aggressive
enforcement against fraud and deception, and the current
Commission has continued those efforts by attacking last-dollar
frauds, such as bogus job opportunities and fraudulent debt
relief that flourish during hard economic times.
Other challenges are related to the breathtaking
technological progress that American society has experienced in
the last few years with the explosive growth in Internet usage
by consumers and businesses and the growth of smartphones.
These two new technologies have offered consumers great
benefits in terms of convenience, connectedness and access to
content and services, while, at the same time, heightening
concerns about privacy and data security.
The task for the FTC is to help consumers protect their
privacy without diminishing consumer benefits or hampering
competition in industry innovation.
The Commission currently has a reassessment of its privacy
framework underway, and, if confirmed, I look forward to
consulting with my colleagues, the FTC staff, Congress and
consumer and industry groups to strike a balance that best
serves consumers' needs and preferences.
These technological changes have also spurred the creation
of new combinations, business models and practices that can
drive innovation and competition in high tech and other
markets.
Antitrust law plays an important role in ensuring that
markets do not suffer from anticompetitive mergers or harmful
practices, and I believe in strong antitrust enforcement.
Antitrust law is meant to protect consumers, not particular
competitors, and economics is an essential tool for determining
the likely competitive impact of any business combination or
behavior. A freely functioning market, subject to antitrust
oversight, provides the most benefits for consumers.
In addition to the Commission's enforcement work, I value
the FTC's policy research and development activities, including
its expert economic studies, as well as its excellent consumer
and business education efforts.
I also support the FTC's competition advocacy program which
can play a crucial role in highlighting government-imposed
restraints on competition.
I believe the FTC should use its many tools to help ensure
that consumers enjoy the benefits of a well-functioning market.
In conclusion, if I am confirmed, I hope that my knowledge
of the Commission and its many capabilities, combined with my
expertise in consumer protection and competition, will help the
agency fulfill its mission to protect consumers.
Thank you very much.
[The prepared statement and biographical information of Ms.
Ohlhausen follow:]

Prepared Statement of Maureen K. Ohlhausen, Nomination to be
Commissioner, Federal Trade Commission
Chairman Rockefeller, Ranking Member Hutchison, and members of the
Committee, it is a great honor to have been nominated by the President
to serve as a Commissioner of the Federal Trade Commission. Thank you
for the opportunity to appear before this Committee and for the time
and attention you and your staff have devoted to this hearing. I am
also honored to be appearing with FTC Chairman Jon Leibowitz, who was a
Commissioner during my previous time at the agency and who, as
Chairman, has led the agency to many successes during his tenure. If
confirmed, I look forward to joining him and many other former
colleagues at the Commission.
I will be very fortunate, if I am confirmed, to have the
opportunity to return to public service at the FTC, an agency that has
played an important role in American economic life for almost 100
years. I have spent much of my legal career at the Commission, first in
the General Counsel's office, then working for an FTC Commissioner, and
finally serving as the Director of the Office of Policy Planning.
[n these positions I gained extensive knowledge about the FTC's
mission, which is to prevent business practices that are
anticompetitive or deceptive or unfair to consumers; to enhance
informed consumer choice and public understanding of the competitive
process; and to accomplish these missions without unduly burdening
legitimate business activity. I also gained in-depth experience of the
variety of tools the Commission may employ to advance this mission,
both as an enforcer and as a policy leader. My work in private practice
with Wilkinson Barker and Knauer, as well as my academic activities,
have also focused on the FTC and broadened my understanding of the
Commission's role and capabilities.
The American economy and American consumers face many challenges
today and the FTC can help them meet these challenges. The FTC has a
strong track record of aggressive enforcement against fraud and
deception, and the current Commission has continued those efforts by
attacking ``last dollar'' frauds, such as bogus job opportunities and
fraudulent debt relief, that flourish during hard economic times.
Other challenges are related to the breathtaking technological
progress that American society has experienced in the last few years,
with the explosive growth in Internet usage by consumers and businesses
and the growth of smart phones. These new technologies have offered
consumers great benefits in terms of convenience, connectedness, and
access to content and services, while at the same time heightening
concerns about privacy and data security. The task for the FTC is to
help consumers protect their privacy without diminishing consumer
benefits or hampering competition and industry innovation. The
Commission currently has a reassessment of its privacy framework
underway and, if confirmed, l look forward to consulting with my
colleagues, the FTC staff, Congress, and consumer and industry groups
to strike a balance that best serves consumers' needs and preferences.
These technological changes have also spurred the creation of new
combinations, business models, and practices that can drive innovation
and competition in high tech and other markets. Antitrust law plays an
important role in ensuring that markets do not suffer from
anticompetitive mergers or harmful practices, and I believe in strong
antitrust enforcement. Antitrust law is meant to protect consumers, not
particular competitors, and economics is an essential tool for
determining the likely competitive impact of any business combination
or behavior. A freely functioning market, subject to antitrust
oversight, provides the most benefits for consumers.
In addition to the Commission's enforcement work, I value the FTC's
policy research and development activities, including its expert
economic studies, as well as its excellent consumer and business
education efforts. I also support the FTC's competition advocacy
program, which can play a crucial role in highlighting government-
imposed restraints on competition. I believe the FTC should use its
many tools to help ensure that consumers enjoy the benefits of a well
functioning market.
In conclusion, if I am confirmed, I hope that my knowledge of the
Commission and its many capabilities, combined with my expertise in
consumer protection and competition, will help the agency fulfill its
mission to protect consumers.
______

a. biographical information
1. Name (Include any former names or nicknames used):

Maureen Kraemer Ohlhausen (maiden name Maureen Elizabeth
Kraemer).

2. Position to which nominated: Federal Trade Commissioner.
3. Date of Nomination: July 21, 2011.
4. Address (List current place of residence and office addresses):

Residence: Information not released to the public.

Office: 2300 N St., NW, Suite 700, Washington, DC 20037.

5. Date and Place of Birth: April 5, 1962; New York, NY.
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: Peter Ohlhausen, President, Ohlhausen Research, Inc.;
son: Kevin Ohlhausen, age 24; daughter: Katherine Ohlhausen,
age 22; son: Brian Ohlhausen, age 19; son: Neil Ohlhausen, age
17.

7. List all college and graduate degrees. Provide year and school
attended.

University of Virginia, B.A. 1984.
George Mason University School of Law, J.D. 1991.

8. List all post-undergraduate employment, and highlight all
management level jobs held and any non-managerial jobs that relate to
the position for which you are nominated.

Wilkinson Barker Knauer, LLP (2009 to present): law firm partner
and head of FTC practice, counsel clients on consumer protection and
competition matters, such as consumer privacy and data security
requirements, antitrust investigations, advertising and marketing
matters, and issues involving FTC authority and jurisdiction.

Business Software Alliance (2009): technology policy counsel,
analyze issues and develop public policy positions in areas such as
innovation, privacy, and e-commerce and articulate positions through
white papers, reports, and conferences.

Federal Trade Commission (1997-2008):

Director, Office of Policy Planning (2004-2008): member of
agency senior staff, manage staff of five attorneys, head
agency-wide efforts on various competition and consumer
protection issues, particularly in areas of e-commerce and
technology; head agency strategic plan review and agency self
assessment.

Deputy Director, Office of Policy Planning (2003-2004): help
manage staff of 4 attorneys and oversee agency-wide efforts on
various competition and consumer protection issues.

Attorney Advisor, Office of Policy Planning (2001-2003): assist
in agency efforts on various competition and consumer
protection issues.

Attorney Advisor, Office of Commissioner Orson Swindle (1998-
2001): advise Commissioner on antitrust and consumer protection
issues.

Attorney, Office of General Counsel (1997-1998): provide legal
advice on a variety of legal issues, including the scope of FTC
authority.

George Mason University School of Law (2006-2007): Adjunct
professor, taught classes in unfair trade practices and Internet
privacy

U.S. Court of Appeals for the D.C. Circuit (1992-1997):

Special Assistant to Judge Sentelle and panel for appointing
independent counsel (1995-1997): provide legal research and
administrative support.

Law Clerk to Judge Sentelle (1994-1995): performed legal
research and helped draft appellate decisions in all areas of
law.

Staff Attorney (1992-1994): researched and wrote legal
memoranda for three-judge panels on motions, emergency matters,
and matters disposed of without oral argument in all areas of
law.

U.S. Court of Federal Claims (1991-1992): Law Clerk to Judge Yock,
performed legal research and helped draft opinions for government
contracts matters and other claims against the government.

Levan, Schimel, Richman & Belman (1988): Summer associate at law
firm.

CT Corporation (1984-1987): provide assistance to attorneys in
corporate matters, such as drafting articles of incorporation.

9. Attach a copy of your resume. Attached at end of Section A.
10. 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: None.
11. 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.

Wilkinson Barker Knauer, LLP (2009 to present) non-equity
partner.
Business Software Alliance (1/2009 to 11/2009) technology
policy counsel (employee)

American Bar Association, Antitrust Section, member
(approximately 2002 to present): Senior Editor Antitrust Law
Journal (2008 to present), other editorial positions (2005 to
2008); member Competition and Public Policy Task Force (2008 to
2010); Vice-chair Advocacy Committee (2007 to 2008).

Federal Communications Bar Association, member (2010 to
present) Virginia State Bar, member (1992 to present).

D.C. Bar, member (2010 to present).

Girl Scouts of America, Troop Leader (1998 to 2001) (Girl
Scouts of America restricts ``Girl Membership'' to girls in
grades K-12, ``Adult Membership'' is open to women and men 18
years of age or older).

Federalist Society, member (estimated 1992 to 2002).

13. Have you ever been a candidate for and/or held a public office
(elected, non-elected, or appointed)? If so, indicate whether any
campaign has any outstanding debt, the amount, and whether you are
personally liable for that debt: No.
14. Itemize all political contributions to any individual, campaign
organization, political party, political action committee, or similar
entity of $500 or more for the past ten years. Also list all offices
you have held with, and services rendered to, a state or national
political party or election committee during the same period.

------------------------------------------------------------------------

------------------------------------------------------------------------
Bush-Cheney '04 12/03/03 $2,000
John McCain 2008 4/26/07 $250
John McCain 2008 5/1/08 $250
McCain Victory 2008 (John McCain final 7/24/08 $1,000
recipient)
McCain-Palin Victory 2008 (RNC final 9/15/08 $800
recipient)
------------------------------------------------------------------------

15. List all scholarships, fellowships, honorary degrees, honorary
society memberships, military medals, and any other special recognition
for outstanding service or achievements.
J.D. with distinction; American Jurisprudence Award for Excellence
in Business Associations; B.A. with distinction; National Merit
Scholar; Echol's Scholar (top 5 percent of incoming class at University
of Virginia).
16. Please list each book, article, column, or publication you have
authored, individually or with others. Also list 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
The FTC's New Privacy Framework, Antitrust Magazine, Spring
2011

COMPETITION AS PUBLIC POLICY (Am. Bar Ass'n book) (editor with
Bernard Nigro and Charles Compton) (2010)

The FTC Complaint Against Intel: Implications for Consumer
Protection, The CPI Antitrust Journal (Apr. 2010)

Editor's Note to Symposium: The End of the Microsoft Case?
75(3) Antitrust Law Journal691 (2009)

Moving Sideways: Post-Granholm Developments in Wine Direct
Shipping and their Implications for Competition (with Gregory
P. Luib), 75(2) Antitrust Law Journal505 (2008)

Enforcement Perspectives on the Noerr-Pennington Doctrine,
Antitrust Magazine, Spring 2007

Identifying, Challenging, and Assigning Political
Responsibility for State Restrictions on Competition, 2
Competition Policy International 151 (2006)

Issues in Real Estate Brokerage, Antitrust Source, Nov. 2005

Obesity and Advertising Policy (with Todd J. Zywicki and Debra
Holt), 12(4) George Mason Law Review 979 (2005)

Ban on Charitable Solicitations Likely Unconstitutional (with
Thomas Pahl) Free Speech & Election Law Practice Group
Newsletter-Volume 3, Issue 3, Winter 2000
Speeches
Standard Setting and Information Sharing Issues for Trade
Associations (panel discussion)
D.C. Bar Association Antitrust Symposium,
Feb.2011

Rewriting the Telecomm Act: Has the Time Come? (panel
discussion)
2010 Federalist Society National Lawyers Convention
Nov. 2010

FTC Issues for Broadcasters
Representing Your Local Broadcaster Program
Apr. 2010

Supersizing the FTC & What It Means for Media, the Internet,
and Advertising (panel discussion)
Progress and Freedom Foundation Capitol Hill Briefing
Apr. 2010

Keynote speech and panel on the future of the Internet
Telecommunications Policy Research Conference
Sept. 2008

Market Studies: The U.S. FTC Perspective
Office of Fair Trading Conference on Market Studies, London
June 2008

Regulatory Review: Bureau Chiefs & Legal Advisors on Media
Matters (panel discussion)
The Cable Show
May 2008

Non-Litigation Advocacy (panel discussion)
American Bar Association, Antitrust Spring Meeting
Mar. 2008

Competition Policy in Regulated Sectors
Korea Development Institute Conference, Seoul
July 2007

The Pros and Cons of Antitrust in Deregulated Markets
Stockholm, Sweden
Nov. 2004

Antitrust Fundamentals (presentation and discussion)
American Bar Association, Antirust Spring Meeting
Apr. 2000 and 2001

Hearing before the Subcommittee on Housing and Community
Opportunity, U.S. House of Representatives, on Competition in
the Real Estate Brokerage Industry, Testimony on Behalf of the
FTC (July 25, 2006).

Hearing before the Subcommittee on Commerce, Trade, and
Consumer Protection, U.S. House of Representatives, Consumer
Protection and Competition Issues Concerning the Contact Lens
Industry, Testimony on Behalf of the FTC (September 15, 2006).

1. New technologies have heightened concerns about privacy and
data security while also offering consumers great benefits in
terms of convenience, connectedness, and access to free content
and services. The challenge for the FTC will be to address
consumer protection concerns in a targeted way that does not
diminish consumer benefits or industry innovation.

2. New business models combined with new technologies also have
created new competition challenges, such as strong first mover
advantages and the convergence of previously separate
platforms. This evolution will require a careful approach that
preserves competition while avoiding actions that hamper
innovation in business models as well as in technology. Also,
the convergence of common carrier services with non-common
carrier services may raise jurisdictional challenges for the
FTC.

3. Many Federal agencies will likely be facing reduced
resources for the foreseeable future and the FTC, like other
agencies, will need to use its limited resources to the
greatest effect to benefit consumers. Unfortunately, during
times of economic distress, schemes that exploit consumers seem
to proliferate, such as credit counseling or job seeking scams,
so the need for FTC consumer protection activity will likely
increase. Also, there may be an increase in mergers as interest
rates stay low and weakened businesses seek to consolidate.
This would also raise the demands on the FTC competition
resources.
b. potential conflicts of interest
1. Describe all financial arrangements, deferred compensation
agreements, and other continuing dealings with business associates,
clients, or customers. Please include information related to retirement
accounts.
I have a 401(k) account through my current employer, Wilkinson
Barker Knauer, LLP. The 401(k) plan is administered by the American Bar
Association Retirement Funds. If I am still employed there, the firm
will start making contributions to my 401(k) plan on July 1, 2011.
However, the firm's contributions will not vest until December 1, 2011.
If I leave the firm prior to December 1, 2011, I will not receive any
of the firm's contributions to my 401(k) plan. In addition, when I
leave the firm, I will receive a severance payment that is a prorated
share of my 2011 annual bonus based on my billings to the date of my
resignation. My other retirement accounts are with the Federal Thrift
Savings Plan or with excepted investment funds.
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.
I plan to remain a member of the American Bar Association Antitrust
Section but will resign as an editor of the Antitrust Law Journal if
confirmed.
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.
In connection with the nomination process, I have consulted with
the Office of Government Ethics and the Federal Trade Commission's
Designated Agency Ethics Official to identify potential conflicts of
interest. Any potential conflicts of interest will be resolved in
accordance with the terms of the ethics agreement that I have entered
into with the Commission's Designated Agency Ethics Official and that
has been provided to the Committee. I am not aware of any other
conflicts of interest.
4. Describe any business relationship, dealing, or financial
transaction which you have had during the last ten 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.
In connection with the nomination process, I have consulted with
the Office of Government Ethics and the Federal Trade Commission's
Designated Agency Ethics Official to identify potential conflicts of
interest. Any potential conflicts of interest will be resolved in
accordance with the terms of the ethics agreement that I have entered
into with the Commission's Designated Agency Ethics Official and that
has been provided to the Committee. I am not aware of any other
conflicts of interest.
5. Describe any activity during the past ten 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.
During my tenure as technology policy counsel at the Business
Software Alliance, I provided background information on military health
information record systems and attended meetings with Congressional
staff in connection with the Alliance's efforts to remove a requirement
for open source software health information technology contained in an
early version of the American Recovery and Reinvestment Act of 2009.
In 2011, I worked with a client to draft some small wording changes
to an early version of the Commercial Privacy Bill of Rights Act (Kerry
McCain Privacy Bill), which the client then discussed with
Congressional staff. My efforts amounted to approximately 5 hours of
work.
6. Explain how you will resolve any potential conflict of interest,
including any that may be disclosed by your responses to the above
items.
Any potential conflicts of interest will be resolved in accordance
with the terms of the ethics agreement that I have entered into with
the Commission's Designated Agency Ethics Official and that been
provided to this Committee.
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? If so, please explain: 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? If so, please explain: 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? If so, please explain: No.
4. Have you ever been convicted (including pleas of guilty or nolo
contendere) of any criminal violation other than a minor traffic
offense? If so, please explain: No.
5. Have you ever been accused, formally or informally, of sexual
harassment or discrimination on the basis of sex, race, religion, or
any other basis? If so, please explain: No.
6. Please advise the Committee of any additional information,
favorable or unfavorable, which you feel should be disclosed in
connection with your nomination: None.
d. relationship with committee
1. Will you ensure that your department/agency complies with
deadlines for information set by Congressional committees?
If confirmed as a Federal Trade Commissioner, I would work
diligently with the Chairman and my fellow Commissioners to do so.
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?
If confirmed as a Federal Trade Commissioner, I would work
diligently with the Chairman and my fellow Commissioners to do so.
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.
______

attachment to section a--resume of maureen k. ohlhausen
Experience
Wilkinson Barker & Knauer, LLP, December 2009 to present: As the
lead partner for the firm's Federal Trade Commission practice, counsel
clients on consumer protection and competition matters, such as
consumer privacy and data security requirements, antitrust
investigations, advertising and marketing matters, and issues involving
FTC authority and jurisdiction.

Business Software Alliance, Technology Policy Counsel, January 2009
to November 2009: Senior member of the policy staff responsible for
working with major software and hardware member companies to develop
policy positions in areas such as innovation, privacy, and e-commerce,
and articulating these positions through white papers, reports, and
conferences.
Federal Trade Commission
Director, Office of Policy Planning, 2004 to 2008: Member of agency
senior staff responsible for developing and implementing FTC Chairman's
policy agenda on cutting edge competition and consumer protection
topics, with emphasis on identifying emerging issues and evaluating the
competitive impact of regulation through advocacy in state, federal,
and international fora. As head of the Commission's Internet Access
Task Force, directed a wide-ranging inquiry into issues surrounding net
neutrality and oversaw the issuance of the Broadband Connectivity
Competition Policy Report. Represented the agency in testimony before
Congress and the Antitrust Modernization Commission.

Office of Policy Planning, Deputy Director 2003-2004; Attorney
Advisor 2001-2003.

Attorney Advisor, Office of Commissioner Orson Swindle, 1998-2001.
Advised Commissioner on antitrust and consumer protection issues.

Attorney, Office of the General Counsel, 1997-1998. Advised
Commission on a variety of legal issues.
U.S. Court of Appeals for the D.C. Circuit
Law Clerk/Special Assistant, 1994-1997, Chambers of the Honorable
David B. Sentelle.

Staff Attorney, 1992-1994. Researched and wrote memoranda for
three-judge panels on motions, emergency matters, and matters disposed
of without oral argument in all areas of law.
U.S. Court of Federal Claims
Law Clerk, 1991-1992, Chambers of the Honorable Robert J. Yock.
Education
George Mason University School of Law, Arlington, VA.
Juris Doctor with Distinction, May 1991. Class rank: 41168;
American Jurisprudence Award for Excellence in Business Associations.
Research assistant to professor William Kovacic.

University of Virginia, Charlottesville, VA.
Bachelor of Arts with Distinction, May 1984. National Merit
Scholar; Echols Scholar (top 5 percent of incoming class).
Publications
The FTC's New Privacy Framework, Antitrust Magazine, Spring 2011;
Competition as Public Policy (Am. Bar Ass'n 2010) (editor with Bernard
Nigro and Charles Compton); The FTC Complaint Against Intel:
Implications for Consumer Protection, The CPI Antitrust Journal (Apr.
2010); Editor's Note to Symposium: The End of the Microsoft Case? 75(3)
Antitrust Law Joumal691 (2009); Moving Sideways: Post-Granholm
Developments in Wine Direct Shipping and their Implications for
Competition (with Gregory P. Luib), 75(2) Antitrust Law Journal505
(2008); Enforcement Perspectives on the Noerr-Pennington Doctrine,
Antitrust Magazine, Spring 2007; Identifying, Challenging, and
Assigning Political Responsibility for State Restrictions on
Competition, 2 Competition Policy International 151 (2006); Issues in
Real Estate Brokerage, Antitrust Source, Nov. 2005; Obesity and
Advertising Policy (with Todd J. Zywicki and Debra Holt), 12(4) George
Mason Law Review 979 (2005).
Associations and Activities
Member, Virginia State Bar, admitted 1992; District of Columbia
Bar, admitted 2010.

Senior Editor, Antitrust Law Journal 2008 to present; Associate
Editor (2006-2008); Assistant Editor (2005-2006).

Member, ABA Competition and Public Policy Task Force (2008-2010).

Vice Chair, Advocacy Committee, American Bar Association, Section
of Antitrust Law (2007-2008).

George Mason University School of Law, Adjunct faculty: Unfair
Trade Practices (Fall 2006 and Summer 2007), Emerging Law of Internet
Privacy (Summer 2006).

The Chairman. Thank you very much, and thank all of you.
I'm going to start with a Boxer-like question for Chairman
Leibowitz. The press has a lot to say about possible settlement
between the FTC and Facebook. You cannot, under any
circumstances, comment on anything that I'm saying, so that
leaves me more time to say what I feel.
Chairman Leibowitz. OK.
The Chairman. I want to convey to you my personal
perspective that any commission action with regard to Facebook
should contemplate two aspects. One, the requiring of Facebook
to obtain informed consent from their users, so that the
company does not deceive consumers with respect to its privacy
policy.
Number two, a rigorous enforcement regime regarding what
they promise their users.
It has frankly been my experience in watching this company
in its very rapid growth that they have changed privacy
settings on users without notifying them first. I think they
need very strict monitoring, and so I say that to you, and no
comment is required.
Chairman Leibowitz. Just to say we hear you loud and clear
and we appreciate your understanding that we cannot comment on
this matter.
The Chairman. I know that. OK. But you can on the next one.
And that was brought up by Ranking Member Kay Bailey Hutchison.
It's actually one of the more interesting questions about a
committee which used to be not as consumer oriented as this one
now is, consumer protection. We're into that very heavily. It's
a priority for us.
Now, the FTC should be aggressive in taking on businesses,
both large and small, that profit from harming ordinary
Americans with unfair deceptive practices, but there are those
also who say, yes, that sounds good, but the FTC should be
careful not to overburden business and should respect self-
regulation.
And from that you get into the question is this a job-
killer regulation or is that a myth? And I'm going to be very
interested in what your general thoughts are, as well as yours,
Ms. Ohlhausen.
Chairman Leibowitz. Well, with respect to sort of consumer
privacy, in many issues involving consumer protection, we take
a two-pronged approach. One prong is we go after malefactors,
companies that engage in unfair or deceptive acts or practices.
And, as I said, we have brought more than 90 cases against
companies in the last two-and-a-half years that have offered
Americans foreclosure-rescue scams, sham debt relief, and more
than 100 privacy cases. We take those issues very seriously.
And on the policy front, we do believe in self-regulation,
and we have seen companies step up to the plate when they want
to, when they're responsible. Again, I think sometimes the
specter of legislation, particularly in the privacy area, is
very helpful in getting some companies to understand the
benefits of self-regulation, and so we commend this Committee
for all of your efforts in this area.
And then sometimes, of course, in some areas like data
security, we have come to a consensus decision that we do
support legislation because it would benefit consumers.
So it's really a two-pronged approach. One prong is
enforcement. One is policy.
We always start with self-regulation and we like to hope
for the best, and we've seen some progress in some areas. We
need to see more progress in others.
The Chairman. That was a careful answer, and not entirely
satisfactory to me because you say the threat of regulation can
often do the trick. A lot of people have been listening about
threats of self-regulation for a very long time and it never
really arrives. They know that, so they build that into a cost
of doing business and don't conform.
So just clarify for me, again, what deserves regulation?
What deserves a chance at self-regulation?
Chairman Leibowitz. Well, again, if a company makes, for
example, a commitment, ``we will protect your data,'' and they
don't, then that is generally a violation of the FTC Act. It's
an unfair, deceptive act or practice, and we will go after that
company, and we have.
From a policy perspective, again, we have very little
regulatory authority, as you know, Senator, and so we like to
support regulation. We believe in using the bully pulpit, and,
if that doesn't work, at times, we support legislation.
And so, for example, in our privacy report, which we
released last year, which I know you're familiar with, we
called for more privacy by design. We called for more choice
and more transparency.
Very few people read privacy notices online. I asked our
staff to take a look at privacy notices in the mobile space,
because so much commerce is moving to mobile. And we found one
privacy policy that took 109 clicks to get through. So you
should not read that while you're driving. I don't think any
consumers read that at all.
When we see real problems in the marketplace, the first
approach we take, even if it's not a violation, is to try to
get companies to do a better job, and sometimes they do, and
sometimes they don't.
And so, again, we brought more than 100 spam and spyware
cases, more than 30 data-security cases, and 79 Do-Not-Call
cases in the last decade. We brought a major case against
Google involving its Buzz Network, because it took information
that we alleged it had committed to keeping private and used it
to jumpstart its first attempt at a social network.
And we want to work with this committee on legislation, and
we have worked with Members of this Committee on both sides of
the aisle.
I hope that's not too unsatisfactory, but we will continue
this conversation, Senator, I'm sure.
The Chairman. OK. It was much better.
Chairman Leibowitz. Thank you.
Ranking Member Hutchison?
Senator Hutchison. Well, thank you, Mr. Chairman. I am not
clear from your answers really what you are using as
guidelines, and so let me take on the Interagency Food
Marketing Working Group.
The FTC, along with the FDA, the CDC, and the USDA, were
tasked with studying and developing recommendations for
standards for the marketing of food toward children 17 and
younger.
However, there are concerns about what is being said is
going to come out, and it is not going to be recommendations
for Congress, but, rather, guidelines, and, further, that some
of the guidelines are actually going to say that certain things
should not be done that are considered actually healthy by the
Department of Health and Human Services and the U.S. Department
of Agriculture in the 2010 dietary guidelines which they put
out.
So tell me what is myth and what is true and what kind of
standard are you using from the authorization that Congress
gave, juxtaposed against what you're going to actually put out?
Chairman Leibowitz. That's a great question, and it came
from the Appropriations Committee, as you know. Senator Harkin
and then Senator Brownback tasked us with this, with being part
of what we call the Interagency Working Group.
We're responsible for the nutrition part, and what we are
going to do--and we actually had a hearing on this particular
matter in the House about 2-1/2 weeks ago and we put testimony
in and we can make that part of this record.
We're going to make recommendations. They are voluntary.
They are unenforceable. We're going to make it utterly clear
that there's no private right of action that will come out of
these recommendations.
We put out the guidance, initially, as you know, and we did
what we always do. We put out guidance which is we listened to
stakeholders, and all the stakeholders acknowledged that there
is a serious childhood obesity problem.
But we got a lot of comments and we are making
modifications on the marketing side. We're going to carve out
12 to 17 year olds. We are only going to apply the
recommendations to children ages 2 to 11. We are going to carve
out charitable. We are going to carve out sports after school.
We are going to stick to what the CFBAI, which is the self-
regulatory entity of the largest food marketing companies, came
up with, which is marketing in measured media.
And so I think that the guidance, and I hope it comes out
quickly, because there's a lot of hubbub about what the
agencies might do, I think when we do it you will see that, it
will be much more practical. I can assure you it will be on the
marketing side, which we are responsible for. And it will be
more balanced, and I think folks who care about this issue, no
matter what their preconceptions are, will think it is going
forward.
And I want to make two other points on this. One is that we
have no intention of regulating. We have no authority to do it,
even if we did, there would be serious First Amendment issues.
And the other is that, after we released the draft
guidance, which we were taking comments on, the major food-
marketing companies came up with their own self-regulatory
standards, and that was very, very significant. We had been
calling for this as an agency since probably 2006. So we are
aware of the changes in the marketplace and we are making
changes in our guidance.
Senator Hutchison. Let me just ask you if--since you are
going to be putting these guidelines out and some of them are
even in opposition to guidelines from other Federal agencies or
recommendations from other Federal agencies, then could someone
bring a case before the FTC that there is an unfair or
deceptive trade practice based on the voluntary guidelines that
are going to come out from this committee in which the FTC
participated?
Chairman Leibowitz. Absolutely not, Senator. Absolutely
not.
Senator Hutchison. Do you think that you have followed the
authorization from the Committee, from the appropriations----
Chairman Leibowitz. I do think we have followed the
guidance from the appropriations language. We are going to make
recommendations to Congress.
The one area where I would say we've pushed back is if you
look at the appropriations report language. It says children 2
to 17, and we put that out for comment. We actually thought,
based on our work and other studies we had done about food
marketing to children, that children ages 12 to 17 have
different cognitive abilities. Commercials, or advertising, if
they influence children, influence younger children much more
than older ones.
So the one area where I think we will push back as a
Commission, or where we will, is in only applying this guidance
to younger children, ages 2 to 11. That's what the self-
regulatory approach of the CFBAI, the major food marketers, is
as well.
Chairman Hutchinson. Well, thank you. I do have other
questions, if we have a second round, Mr. Chairman, but my time
is up. Thank you.
The Chairman. Thank you, Senator Hutchinson.
Senator Lautenberg.
And, also, I want to say to Senator Pryor, although he made
a late arrival, he is the Chair for this entire discussion, so
you get an extra 2 minutes in your questioning.
Senator Lautenberg. Pryor doesn't mean priority, you know.
Thanks, Mr. Chairman.
Dr. Blank, Federal agencies are expected to ensure that the
benefits of proposed regulations exceed their costs, and yet we
are seeing a broad assault on regulations that protect public
health, the environment, consumers.
Do you believe that we can confirm the fact that Federal
regulation is always a net positive for our economy and our
society?
Dr. Blank. So I think President Obama has been clear that
we need regulations on things like safety and security and
health and that those regulations are often very appropriate
and very necessary.
I spend a lot of time talking to different business groups,
and I rarely hear of people who are against regulations per se.
What they are upset about is when regulations are imposed in a
discretionary manner or when they are changing and it is
uncertain exactly what the rules are and how they can best be
followed.
That said, clearly, all of the administration agencies have
been asked to do cost-benefit analysis of their specific
regulations, and we are doing that at the Department of
Commerce. And to the extent we identify regulations that impose
undue burdens, we will be discussing that and seeing whether we
can make changes.
Senator Lautenberg. Is it thought now that putting
regulations into the system are a more arduous task than it has
been in years past? Is it tougher to get things into place?
Dr. Blank. I don't know that I have a good answer to that.
We do a limited amount of regulation inside the Department of
Commerce and I don't think that's true in the areas that we
regulate, but it could be true in some other places.
Senator Lautenberg. Yes, because you used the word
arbitrary, and I think that therein lies the umbrella that
takes care of those who dissent from having regulation put into
place, even if it does yield a net benefit.
So we discuss these things here at length, and there are
two sides in every story, as you know, and I'm not sure that
it's always meritorious in some way, but it doesn't matter, not
to our ability to get things going here.
Tobacco companies, Mr. Chairman, continue to spend billions
of dollars each year on advertising and promotions that lure
children into smoking, keep smokers hooked.
Now, as FTC Chairman, what actions might be taken to expose
the truth about tobacco marketing and the health risks of these
products?
I remind you that I was the Senate author of the no-smoking
in airplanes.
Chairman Leibowitz. I'm aware of that, Senator, and we have
a very proud history in this area. In 1964, just after the
Surgeon General came out with its cigarette report or report on
cancer, it was the FTC that put the first warnings on labels
with a cigarette-labeling rule. Subsequently, Congress turned
that into legislation.
We will continue to do periodic reports. We did one this
July and we expect to have another one out next year on the
advertising expenses of tobacco companies.
I think what we've seen, as you know, is that for tobacco
involving smoke, the advertising expenses have gone down, but
smokeless tobacco agencies have gone up, and we will continue
to be involved in that.
Some of our jurisdiction over things like testing went over
to the FDA in legislation 2 years ago, and they are the
appropriate entity to look at testing. We are not any more. But
we will continue to stay involved in this issue.
Senator Lautenberg. Thank you.
Dr. Blank, we know that changes in ocean chemistry caused
by carbon dioxide will affect our food supply and the health of
our oceans, yet research on ocean acidification is still in its
infancy.
Now, I wrote a law in 2009 requiring NOAA to lead an
interagency effort to study the effects of ocean acidification.
Are you familiar enough with this to say that you're going to
continue to build on the Administration's commitment to better
understanding in addressing this growing problem? Because it
portends bad things for our ecology, I think.
Dr. Blank. Thank you, senator. I appreciate that law and
the nudging that you have given to us, that authorization to do
more work and research on the ocean-acidification issues. They
are obviously important both for the ecology of coastlines as
well as for the survival of various fish stocks, and both of
those are central to NOAA's mission.
We have certainly tried to move forward as quickly as we
can on implementation of the provisions within your law. I know
there's a lot of interest in pursuing this research on ocean
acidification. There's a strong sense this is a very important
area, and I certainly will pledge to you that I will continue
to make sure that work moves forward.
Senator Lautenberg. Thank you, Mr. Chairman. Thank you to
all the witnesses.
The Chairman. Thank you, Senator Lautenberg.
Senator Pryor.

STATEMENT OF HON. MARK PRYOR,
U.S. SENATOR FROM ARKANSAS

Senator Pryor. Thank you, Mr. Chairman.
And, Dr. Blank, if I could start with you, there's, in some
quarters, a belief, maybe, that the United States cannot
manufacture anymore, and I disagree with that, and I think most
on this committee disagree with that.
But, also, Gary Pisano and Willie Shih from the Harvard
Business School, have just suggested that a country will
eventually lose its competitive edge in R&D design and
engineering unless there's a strong domestic manufacturing
base. Do you agree with that?
Dr. Blank. Yes, I do, sir.
Senator Pryor. And why?
Dr. Blank. I believe that there is a lot of evidence that,
first of all, the presence of manufacturing is closely linked
with the presence of engineering and design, and you cannot
maintain design and engineering in this country if there is not
production occurring nearby.
Second, I do think that particularly advanced
manufacturing, high-value added products are a comparative
advantage in this country and a real driver of a very important
sector of our economy, which has actually been expanding and
leading the economic growth of the last year.
Senator Pryor. I hope that'll be a major focus of you as
you serve in this capacity, is try to make sure that we have
the right kind of manufacturing in this country.
The second question I have for you, Dr. Blank, is that the
National Export Initiative, you know, is setting out to try to
double U.S. exports over 5 years. Senator Tom Udall and I
recently introduced a bill titled, the ``Clean Energy
Technology Manufacturing and Export Assistance Act,'' S. 1586.
How can the Department of Commerce and the International
Trade Administration more effectively promote the export of
U.S. clean-energy services and products?
Dr. Blank. So that's an excellent question, and I'd
certainly welcome a conversation with you and your staff on the
ideas that you have and that are in this bill.
I mean, I don't know that clean-energy products, in terms
of promoting their export, are notably different than other
products. We need to have a real advantage in this country in
producing these and innovating in them and doing the design and
the patenting and the technology transfer that gives our
industry an edge over the rest of the world. And if we don't
have that background of research and design, we're not going to
have the leadership in exported manufacture.
So, I mean, it's similar to other products. We have to
really work on supporting the whole range of this manufacturing
industry, so that it stays in this country.
Senator Pryor. Yes, I think that's part of the idea there
is if the Department of Commerce can help us open those export
markets for U.S.-manufactured products, it just helps our
marketplace here to continue to develop and grow and be the
leader.
Let me turn, if I may, to the other two witnesses, and I
guess, Chairman Leibowitz, I'll start with you. I want to ask a
question that I'm not sure you can comment on, and it has to do
with pharmacy-benefit managers. And there's a merger between
Express Scripts and Medco, supposedly, if I understand what the
news accounts say. They already have somewhere between 50 and
60 percent of the market for prescriptions, and the merger of
these two companies could impact more than 135 million
Americans. That's about a third of the U.S. population.
And I have concerns about the consolidation of the
marketplace with PBMs. And, again, I don't know if you can
comment on that, but I wanted to express my concern, and if you
can comment, I would love to hear your comments.
Chairman Leibowitz. I can comment to say--because the
companies have acknowledged this--that we are reviewing the
merger. We are going to apply the appropriate standard under
the Clayton Act, which is if the merger may substantially
lessen competition, we will challenge it. If it doesn't, we
won't.
I have seen that figure, 50 to 60 percent. I think that may
be within PBMs as opposed to within all prescriptions written
or all medicines consumed.
But because it is a matter under investigation, I will
leave it at that, except to say we hear your comments and we
are working very diligently with two of our bureaus, the Bureau
of Economics and the Bureau of Competition, to review this
proposed deal.
Senator Pryor. Thank you.
Ms. Ohlhausen, did you have any comments on that?
Ms. Ohlhausen. Just that I am aware that the commission has
an investigation and if I'm confirmed I would certainly want to
talk to the bureaus and my colleagues to determine if there's a
competitive problem.
Senator Pryor. Thank you.
This committee continues to look for bipartisan consensus
on data security, and I want to thank the Chair and Ranking
Member for trying to get us to that consensus, but I'd like to
switch gears a little bit and ask the both of you about
privacy.
I read the FTC's proposed update on the Children's Online
Privacy Protection Rule, and it says, let's see, in addition to
children under 13, I believe that teens also face challenges in
the online world, so not just 13 and under, but teens
generally.
And that sort of raises the question of what you two
believe would be the core components of meaningful privacy
legislation, regulation and principles regarding teens, again,
not just 13 and under, but teens generally.
Chairman Leibowitz. So, as you know, we put out guidance on
COPPA. We are taking comments on it, and we have seen a lot of
support from stakeholders, but also comments, and we will be
reviewing those as we go forward with the rulemaking.
For teens, as you know, they are not covered if they are 13
to 17, but we are very, very concerned about privacy and social
media aimed at teens. As you know, teenagers have an incredible
ability to use the Internet, but, sometimes, they act
impulsively--not my children, of course--and their judgment can
be in doubt, and so it's an area we are very, very concerned
about.
I would say that is one of the reasons we are going to do a
deeper study into applications. We have found that some of them
are not rated, even if they are content-based, particularly in
the mobile space. And some of them are rated, but may not be
rated accurately because they are self-rated. And so that is an
area we are going to continue on.
And then if you look at our privacy report, we talk a
little bit about teens, and some of the areas we have looked at
in the draft privacy report, which we hope to finalize by the
end of the year, include geolocation and things like Do-Not-
Track.
So we want to work with you as Subcommittee Chairman and
work with this whole Committee, because I know it is a very
important issue to you and it is an important issue to us.
Ms. Ohlhausen. And I agree that I think teens raise
distinct issues than younger children, where the parent really
controls or should control their interaction and their release
of data, but they are different than adults.
So I do think it's important to take a close look at the
issues and make sure that they have a clear understanding of,
you know, what data is being collected about them, how it's
being used and that they're not just sort of pulled into doing
something they don't really understand what the ramifications
will be.
Senator Pryor. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Pryor.
Senator McCaskill.

STATEMENT OF HON. CLAIRE McCASKILL,
U.S. SENATOR FROM MISSOURI

Senator McCaskill. Thank you, Mr. Chairman.
On the voluntary guidelines on food marketing, let me ask
you this, I noticed over the weekend--and I'm trying to avoid
sugar and starch. I think it's important, but I didn't need
changes in advertising to get me to do that. I mean, I kind of
knew I wasn't healthy and got to work on it.
And so I noticed an advertisement over the weekend, where a
young boy and his father were playing touch football, and Tony
the Tiger was playing with them. And they walked inside after
they played touch football together, and Tony the Tiger kind of
walked with them. And then the father and the son sat down and
had a bowl of frosted flakes. Would that be against the
guidelines?
Chairman Leibowitz. I don't think so. Of course, they are
recommendations. They are voluntary. They are not enforceable.
Senator McCaskill. Well, but----
Chairman Leibowitz. No, no, no----
Senator McCaskill.--people can advertise----
Chairman Leibowitz.--I think I saw that same advertisement
and it was to a general audience.
Now, the industry itself, the CFBAI has made its own
pledges about what should or shouldn't be advertised, and if
frosted flakes are within that group, by a certain period of
time, they will phase out advertisements targeted to audiences
age 2 to 11.
And so we will put out final guidance that will reflect, to
a large extent, the support for self-regulation and for the
guidance that the food-marketing companies have put into place,
and----
Senator McCaskill. I think the food-marketing companies are
doing a good job trying to do some of this on their own, but
let me get back to my question.
Chairman Leibowitz. Sure.
Senator McCaskill. Would that advertisement violate the
voluntary guidelines that are going to be issued by the
interagency group? Yes or no.
Chairman Leibowitz. I think the answer is almost certainly
not.
Senator McCaskill. OK.
Chairman Leibowitz. The caveat is that I would need to see
where it is and where it is placed, but almost----
Senator McCaskill. I would love you to look--have your
folks look at the commercial and look at the guidelines and get
back to me with a specific answer, because the young boy in the
ad is certainly younger than 11, and it is Tony the Tiger, and
I don't think Tony the Tiger--I mean, although--I remember my
mother not buying me frosted flakes, even though I thought Tony
the Tiger was cool. That's how old Tony the Tiger is. He's been
around a long time. I want to make sure we are using some
common sense here.
Let me ask you another question about your jurisdiction,
Mr. Leibowitz.
I'm curious about your entry into labeling of alcohol
products. This is brand new. And you and I have talked before
in this hearing about how much work you have to do that you
can't get to because you don't have enough folks, and,
typically, the alcohol and tobacco agency, the bureau is
somebody who has always taken the jurisdiction on labeling and
marketing of alcohol.
And for you to go there when this has never happened
before, I am curious as to how that happened, since I think
you've got plenty to do without entering into new areas.
Chairman Leibowitz. Well, we certainly do have plenty to
do. Now, we have done, by either statutory obligation from
Congress or through appropriations language, we have done--and
I'll get back to you on this--periodic, almost annual alcohol-
advertising reports--and they are very supported by industry--
about how much industry is spending on advertising.
With respect to the Four Loko case, we worked with the FDA
and we sent them warning letters and they stopped putting
caffeine in these fortified alcohol drinks, which are known
around campuses as Blackout in a Can----
Senator McCaskill. Yes. No--Listen----
Chairman Leibowitz. I know you're not suggesting----
Senator McCaskill. No, I think we need to do something
about this product.
Chairman Leibowitz. Right.
Senator McCaskill. The question is your jurisdiction versus
the Bureau of Alcohol and how this happened that you stepped
into an area that you have never, ever been in before as
opposed to the Bureau of Alcohol--Treasury.
Chairman Leibowitz. I want to get back to you on this. I
believe, at least with the warning letters, we certainly
consulted with BATF or the Bureau of Alcohol. But let me get
back to you and give you a fuller answer.
Senator McCaskill. Yes, that would be perfect.
Chairman Leibowitz. I understand your concern.
And the one thing we also did was because some had raised
concerns about this, we put a draft consent decree on the
record and then we opened it up for comments, and we are
extending the comment period for people who have comments or
entities that do, and we will take those comments into account.
Senator McCaskill. I don't want anyone to misinterpret.
Sometimes I--my sarcasm gets me trouble on this committee
because people take things out of context. I don't want anyone
to interpret my questions that I don't think something needed
to be done about this product.
Chairman Leibowitz. No, I understand.
Senator McCaskill. The question is who should be doing it?
And I'm trying to keep you guys focused on this huge body of
work you have without beginning other areas that typically you
have not gone in.
Chairman Leibowitz. And, Senator, we appreciate that. We
are a small agency with a big mission and we do worry that the
quality of our work is being strained by the quantity of
demands placed on us. And so when we head to the outer area of
our jurisdiction, it is not always a good idea. So I hear what
you're saying. Thank you.
Senator McCaskill. Thank you. Thank you very much. Thank
you, Mr. Chairman.
The Chairman. Sarcasm?
Senator McCaskill. Me?
The Chairman. Impossible.
Senator Klobuchar.

STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA

Senator Klobuchar. Thank you very much, Mr. Chairman. Thank
you to all our witnesses here.
I guess I'd start with you, Dr. Blank, because, you know, I
chair the Subcommittee on export promotion, which includes
tourism, and Senator Blunt and I--he's ranking Republican--have
been working together. We have a bill that we would love to get
done very quickly.
We're having our hearing Thursday to speed up the--help the
State Department to speed up their visa approvals. As you know,
we've lost 16 percent of the international tourism market.
Every point we've lost is 160,000 jobs. It's an immediate way
to bring jobs in our country.
Could you talk about how the Department of Commerce views
the economic impact of getting additional tourists in the U.S.?
Dr. Blank. So one of the things that I think is much
underappreciated is the fact that foreign tourists are a major
export for the United States. It's people from abroad buying
U.S. goods and services. And this is a potentially vastly
expanding market, particularly with the growth in middle
income, families in China and Brazil and some of the other
large countries. So this is a central part to the National
Export Initiative in terms of expanding exports within the
Department of Commerce.
As you know, we play a key role on the Tourism Policy
Counsel working with State Department on the visa issue. My
understanding is there has been some real progress on this
issue.
Senator Klobuchar. There has been.
Dr. Blank. I know that there's more progress that needs to
be made. And we also, obviously, worked on standing up the
Corporation for Travel Promotion, and that's moving forward and
I think recently announced its international advertising
efforts, and work with the Travel and Tourism Advisory Board
from the private sector. So----
Senator Klobuchar. Very good. Yes, there's been some market
improvements in the last few months. We're excited. Tom Knight
over at the State Department has been helping, and I know
you've been doing a good job. So we're looking forward to the
hearing tomorrow and getting some of that out there--or
Thursday.
Mr. Leibowitz, two issues I want to ask you about. The
first is the grey-market issue. I've been working very hard on
this drug-shortage issue. The president did an administrative
order a week ago, endorsed the bill that I, with Senator Casey,
Senator Collins and others, to give the FDA some early warning.
Could you talk about if there's a mechanism for the FTC to
address the vendors who essentially have a monopoly on specific
drugs that are in shortage?
Chairman Leibowitz. Well, we are aware of your legislation,
and, of course, if the drug shortage is due to anticompetitive
behavior, a conspiracy to violate the antitrust laws or some
sort of monopolization, we would have jurisdiction there.
We are also working with the FDA, which has more
information. And HHS, which, as you know, just issued a report
to see whether there is something that we can do that would be
useful in this area, because, obviously, it's a serious
problem.
Senator Klobuchar. OK. And then I wanted to get at the
marketing guidelines. I know a few of my colleagues have asked
those questions, but--So just to get this clear, you considered
these voluntary. Do you have authority to issue industry-wide
regulations or do you think that they are voluntary suggestions
or how do you consider them?
Chairman Leibowitz. These are voluntary recommendations.
They are unenforceable. We do not have regulatory authority
here.
And, as you know, Senator, because we've talked about it, I
believe that the marketing guidance that we are going to come
out with, because, again, we don't do the nutrition side, but
the marketing guidance will be very, very balanced, and I think
people will like it.
And we did listen to stakeholders when we put out the first
draft for comment.
Senator Klobuchar. So you've made some changes, I know,
because I was--been very involved on the AG committee on the--a
lot of the nutrition work we've done and we've seen some market
improvements, my daughter, I see them in the school every day
with what's in the vending machines, things like that.
But so they're voluntary, and you've also worked on some of
the changes. I remember 2-percent milk was included for a
while. And what's happening with low-fat yogurt?
Chairman Leibowitz. Right. So, we don't do the nutrition,
but low-fat yogurt, certain types of cereal, one of my
daughters went through a period where she was eating Special K
with yogurt and fruit for breakfast, and I thought this was a
small triumph for parenting.
Senator Klobuchar. It is, when the other choice might be
waffles or toast, that is----
Chairman Leibowitz. Right. And I found out that in the
draft nutrition guidance, it would not have met the standards
because it had too many grams of sugar. I think the draft cut-
off was at seven. It was at eight and it had seven or it was a
nine and it had 10, and so I was actually very surprised by
that.
But I know that the Department of Agriculture and HHS are
working hard. I like to think when they come up with their
modified or final nutrition guidance--again, it will be
recommendations. It is not a regulation. It will be a more
balanced nutritional meal of sorts.
Senator Klobuchar. OK. Thank you very much. I appreciate
all three of you being here. Thank you.
The Chairman. Thank you, Senator Klobuchar.
Chairman Leibowitz and also Ms. Ohlhausen, the--Oh, I'm--
Kelly, I'm sorry. Senator Ayotte. Ayotte. Got it right?

STATEMENT OF HON. KELLY AYOTTE,
U.S. SENATOR FROM NEW HAMPSHIRE

Senator Ayotte. Yes, you did. Thank you, Mr. Chairman.
The Chairman. You're welcome.
Senator Ayotte. Chairman Leibowitz, Ms. Ohlhausen and Dr.
Blank, I appreciate your being here.
I also wanted to echo what Senator McCaskill said. I share
her concerns to address this jurisdictional issue because I
know the BATF is also looking at this and want to make sure
that it's clear guidance. So I look forward to your answer on
that and appreciate it.
Chairman Leibowitz. Thank you.
Senator Ayotte. Chairman, I've also been concerned about
the open-ended nature of the FTC's statutory authority extended
to it under Section 5. The business community needs certainty,
guidance and predictability when it comes to antitrust laws,
and, frankly, every other type of regulation, so that they can
comply.
In your written testimony, you said that if we find
violations of the law, we will aggressively pursue them, and I
wholeheartedly agree with that.
But the problem is that, in many instances, the business
community is unsure about what your interpretation of the law
is, and, therefore, who may be liable and what they may be
liable for.
And there are some instances where the FTC threatens to
enforce a standard and only the FTC knows what that standard
is. So if the FTC is working to eliminate, for example,
deception and unfairness under Section 5, isn't it absolutely
necessary to start with properly providing notice of which
standard you're going to apply? And, also, can you define for
me your view of what the proper limits are with your authority
under Section 5?
Chairman Leibowitz. Right. So this is a great question, and
you're absolutely right. Businesses want certainty and we ought
to provide guidance to them.
Section 5, unfair methods of competition, was created by
this Committee in 1914, when you created the FTC and drafted
the FTC Act, is a modest penumbra around the antitrust
statutes.
But whenever we have used it--and I have gone back and read
the legislative history of the statute--you wanted to give us
broader jurisdiction, but limited remedies.
So, for example, unlike the Antitrust Division, we don't
put people in jail. We don't fine malefactors. But in the
instances in which we have used Section 5 recently--and, of
course, we have used that statute as a Commission going back to
our early years--the touchstone has always been harm to the
competitive process, harm to competition, harm to consumers.
And we have only used it twice, since I have been Chairman, and
I think most people understand that is a fairly judicious use.
Both times they were unanimous bipartisan votes and we issued
guidance.
So we issued guidance in the U-Haul case, which involved an
invitation to collude. We alleged that U-Haul's executives
reached out to Budget Rent-a-Car and said, ``Let's raise prices
for trucks in Florida.'' And if Budget had said yes, we would
have kicked it over to the antitrust division's criminal
section for criminal prosecution, because that is hardcore
price fixing.
Fortunately, Budget did not, and so the best way to reach
it and perhaps the only way to reach it is as an unfair method
of competition.
The other time we used it was in the Intel case involving
what we believed to be anticompetitive behavior. We also used
the Sherman Act for monopolization. We ended up settling, I
think on good terms for consumers and competition, and on good
terms for Intel. Again, it was a unanimous vote. And we will
continue to look toward ways to give folks guidance.
But I'd also say that the Supreme Court, the last two times
it has looked at this issue, in the Sperry and Hutchinson case
and in Indiana Federation of Dentists, which was written by
your predecessor as attorney general, Justice Souter, has
acknowledged the scope of Section 5. But we want to work with
you on this.
Senator Ayotte. Well, I appreciate it, because I love the
word penumbra, but it's only a word that lawyers could love.
So----
Chairman Leibowitz. I understand.
Senator Ayotte. To the extent you can give guidance, it's
very appreciated, so people can comply and we get better
results for consumers as well.
I wanted to ask Dr. Blank about when you and I met, we
talked about my concerns about overregulation of the fishing
industry, and particularly the catch shares program.
In fact, Senator Brown and I have been so worried about our
fishermen that we introduced a bill, as you're familiar with,
that would actually eliminate that program because of the
detrimental impact on our small fishermen and to commercial and
recreational fishing.
So can you help me--you said you'd work closely with NOAA
to make sure its fisheries management programs are implemented
effectively.
What do you think went wrong in implementing the catch
shares program? And how would you go about improving the
program to make sure that we don't eliminate these fishermen
who get their livelihood in a very important way?
Dr. Blank. So catch shares is one program to manage fish
stocks. It's not the only program, and it has been implemented
in a number of places around the country quite successfully.
There clearly have been some more problems in New England.
I would note that the selection of what type of management
program is used is actually done collaboratively with the local
fish-management councils, so that, in that sense, it's a
voluntary choice amongst a number of different choices.
I think that, you know, there has not been as much
consultation back and forth and, you know, in terms of NOAA's
interactions with some of the fisheries councils inside--you
know, in an open and completely transparent way with some of
the fisheries councils in the New England region. That has been
a problem.
We've obviously, in the past, had some problems with our
law enforcement that I think we have completely cleaned up, but
it was--You know, we need to do this well if we're going to do
it.
And I think we have sometimes not been quite as transparent
as we need to be about the science on which--you know, the
basis on which we set various stocks and, you know, decide sort
of what the catches should be. We have to be quite clear about
what that's based on and why we're saying what we're saying.
And both those issues of transparency and communication and
collaboration, I think, are most important.
Senator Ayotte. Thank you. I appreciate your answer, Dr.
Blank. And my time is up.
I just want to say this is a very important issue to a
noble profession in the Northeast. And I am hopeful that we
will start a relationship where there is that communication
transparency there and that laws are enforced fairly and not to
eliminate these fishermen who have--many of them, this
livelihood has been in their families, and it's something that
we want to preserve in New England, and, obviously, keep those
jobs.
Dr. Blank. Thank you.
The Chairman. Thank you Senator.
Senator Boozman.

STATEMENT OF HON. JOHN BOOZMAN,
U.S. SENATOR FROM ARKANSAS

Senator Boozman. Thank you, Mr. Chairman.
I'd like to follow up on one of Senator Pryor's questions,
Mr. Leibowitz and Ms. Ohlhausen, about the potential merger of
Express Scripts and Medco, and, with that, I'm told that
approximately 135 million people, more than one-third of
Americans, would rely on--a large, kind of a mega PBM.
One of my concerns is community pharmacy, and in much of
rural America, community pharmacy, in many cases, is the
healthcare provider, and with the ability to push entities into
things that are best for the PBM, especially now pushing things
into mail order.
We have all of the closures of the post offices, which,
again, we don't think of, but, if you're having to drive, 10-15
miles to get your prescription and things, that really is a big
deal.
I guess my question is do you all, when you make your
considerations, do you factor in things like that? Is that
something that comes into play?
Chairman Leibowitz. That is a really good question,
Senator. Let me just start on community pharmacists. My mother-
in-law, who is actually in the room, was a pharmacist. My
father-in-law was a professor of pharmacology. I have met with
community pharmacists on a variety of issues, often involving
PBMs, and so I listen to them, and we do at the Commission. So
we are aware of their concerns.
I cannot talk about a particular merger, other than to
acknowledge that we are doing this, that we are reviewing
Express Scripts, Medco. But I can say that we look not only at
price effects, but non-price competition effects as well.
So non-price effects might be, for example, reduction in
service, closing of stores. Those are factors that we will take
into account as we review this proposed acquisition.
Senator Boozman. Thank you.
Ms. Ohlhausen. And, Senator, I agree. Talking about mergers
in general, it's always very important to look at the impact on
the ultimate consumer of any merger. So that's the type of
consideration that you go in.
Senator Boozman. Good. Very good.
One other thing, and, again, this kind of goes with the
senator's question while ago about Section 5. As you know, a
group of attorney generals from 36 states and three have
written you a letter and basically said that they would like to
get more aggressive with stolen IT, those kind of things, and
are willing to work in conjunction with you to really start
policing this.
And I guess what I would like to know is, where do you see
Section 5 entering into that and how can we accomplish that?
That is a huge deal.
Chairman Leibowitz. Well, these are very serious concerns,
I know, for the Attorneys General who wrote us, and their
letter, again, acknowledged the scope of Section 5. And so we
just received it, I think, a week ago Monday. It is circulating
around the Commission. Whenever you get a letter from 36 state
AGs, plus--you're right, three from the territories.
Senator Boozman. Three from the territories.
Chairman Leibowitz. Three from the territories. You take it
really seriously, and we will try to come up with a consensus
response.
But it also points out that we are an agency that is
supposed to stop anticompetitive conduct.
But going back to Senator Ayotte's question, we need to
have limitations on Section 5. Not everything that someone
raises with us is an unfair method of competition. That may not
rise to the level of antitrust violation.
So we need to think that through as a Commission, and with
some luck, we will have Ms. Ohlhausen with us helping us to
think these issues through.
Senator Boozman. Well, again, I think that is almost
unprecedented, having that kind of response, you know, from so
many Attorney Generals.
Chairman Leibowitz. It is.
Senator Boozman. And it is a huge problem, and so perhaps
using Section 5 or with your help figuring out how we can do
something else to eliminate the problem, because it is a huge
problem, that would be very helpful.
Chairman Leibowitz. We hear you and we will factor that
into our consideration. Thank you, Senator.
Senator Boozman. Thank you, sir.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Boozman.
Dr. Blank, had two extraordinary experiences--well, many
more than that, but the question I want to ask you, in West
Virginia, when I was Governor, I spent a lot of time going
overseas trying to market West Virginia products.
And then when I came here, I spent a lot time trying to go
overseas and get Japanese countries and Taiwanese companies to
come here to West Virginia to locate, and it worked. It was
really hard. It was a really hard sell.
And I remember, years ago, trying to get somebody to
increase their obvious capacity through clean-water--you know,
I mean, just that incredible system where they could have
really marketed it overseas, but they had the feeling that they
wouldn't do well overseas. Maybe it's an Appalachian thing, I
don't know, but they just had the feeling that they wouldn't do
well, and so they did not go on that trip in which they could
have scored tens of millions of dollars of business.
Fast forward, we had the U.S. and Foreign Commercial
Service, and then they left at a certain point. They were very
helpful on exports.
Now, I had--the only hearing I've ever had as Chairman, on
exports, in Charleston, West Virginia. We had some folks from
the Commerce Department down there, and a whole lot of people
turned up from West Virginia, which really surprised me. In
other words, it was a packed courthouse, as it turned out.
And exports are on their mind, particularly because the
coal industry is suffering in a variety of ways. Our state
economy is changing. We're going to a higher-tech economy. It's
a very uncomfortable shift because sections of the state have
been in certain patterns for decades and decades and decades,
and so we need some help.
And what I would love to see is to go back to the U.S. and
Foreign Commercial Service--but now you could do it under the
International Trade Administration--a couple of people in West
Virginia, the difference from your department--the difference
that they would make in people being adventuresome and
confident and willing to take a risk. I mean, risk taking is
what we need more than anything in West Virginia, not
necessarily football, but risk taking, and that comes with
encouragement.
And one of your deputy secretaries was down there and he
sort of turned everybody on their head simply by what he said.
And then we turned around and he pointed out to us that our
exports had gone up almost at twice the rate in the State of
West Virginia as was true in the entire country, and nobody
could believe that. Well, why couldn't they believe that?
Because they're, in a sense, trained not to believe that, and
it's wrong. So what we need are some enablers there.
Now, heaven knows what's going to happen to your budget. I
understand; but I really want to make the point that people who
encourage those who are interested in exporting to follow
through on it, and following through on it make a huge
difference in West Virginia.
That hearing was the subject of a lot of talk for several
months after it was completed. I thought it was going to be
somewhat of a routine hearing. It was anything but that. People
were hungry for thinking about exports.
So I want to plant that thought in your head. You can't
possibly answer it now because you're not there yet, but you
know there's a certain virtue to my question.
Dr. Blank. Yes, as you probably know, the vast majority of
companies that export export to only one country, and one of
the things that we are working on is expanding that realm. And
then there's large--you know, only a very small number of
American companies export at all, and, in some sense, this is
the mission of ITA and our domestic and foreign commercial
services to expand that.
One thing that we are working on, which I think is very
important, particularly for rural areas, you know, no matter
what we do, in terms of offices, not everyone is going to be
able to walk through the door of one of our offices. So we are
working very hard on expanding and making much more user-
friendly our online services, so that people can get to us, get
to us more rapidly, get better services on line, know who to
contact if they want to hold conversations, if they want
someone to come out and work with them, and those sorts of
changes to our export.gov website, as well as to a larger web
portal that is going to open up access to all sort of business-
related services across the government, called Business USA, is
very high on my priority list.
The Chairman. Good.
Chairman Leibowitz and Ms. Ohlhausen, I'm very vigorous on
the subject of protecting privacy, particularly online privacy
and particularly children's online privacy. There's so much
talk about the fact that you don't have the power, in fact, to
enforce it. People know that, so you can--it's like me having a
hearing. I can have a hearing and I can embarrass some people,
but I can't do anything about it unless I pass legislation.
That being in mind, to me, the most efficient way of people
being able to protect their privacy is what I would call, and
what you would call, Do Not Track online capability. In other
words, you click once and the message goes out to everybody for
all time that unless you retract it, they cannot do it. There
are no ways around it.
Now, I would be interested in both of your thoughts about
that, because that's a strong action to take. But, you know, as
you look at what's happening in the world of bullying and
sexual predatoring towards younger children, but, really, it's
a world that takes pride in its new frontiership and it's
unregulated, we-can-do-anything-we-want status.
And it was interesting, I listened to Mark Zuckerberg and
Sheryl Sandberg talk on Charlie Rose the other night, and their
conversation, for an hour, was replete with that kind of
thinking. It's, the world is ours. We are the future. And any
sense of restraint or not once was a single consequence,
collateral-damage type thing that was brought up by either of
them. And Charlie Rose was enthralled by both of them, so he
didn't help either.
So my question to each of you would be how--and you have a
report which gets very close to that. I have legislation which
gets exactly to that. And I would be interested in your
thoughts about it, both of you.
Chairman Leibowitz. Well, I guess I would say that I think
there is a way in which a hearing plus legislation does more
than simply admonish someone. I think sometimes it lights a
fire under them. And at least with respect to Do Not Track, we
are seeing lots of support for this in the advertising
industry.
Now, there are different flavors of it or versions of it,
as you know. We have called for Do Not Track through browsers,
which we think would be very, very successful, and Microsoft
and Mozilla and Apple have all endorsed it, as have a number of
advertising networks.
There's also the Digital Advertising Alliance, which has
some ways to go, but has made very meaningful strides toward
giving consumers this kind of choice one click away or two
clicks away.
And I was speaking last week at something called the
ad:tech Conference. It is the largest convention of Internet
advertisers. And I was surprised at how much support there was
for this, and it is in part because when consumers are more
empowered on the Internet, they have more trust in going on the
Internet, and they do more commerce. And most of the Internet
advertisers recognize that the sky won't fall down if they give
consumers choice. And we, of course, think giving consumers
choice is always a good idea.
I would say that if we don't see more progress by industry,
I am sure that your legislation will be moving through the
Committee and we will be working with you. I am happy to work
with you. I would have to go back and talk to the Commissioners
about that, but we will help you with it.
And then, finally, if you violate the law, if you say
something to a consumer in the privacy space, like, ``we will
protect your data,'' or ``we will protect your information,''
and then you do not honor that commitment, we will go after
you, and we have done that on numerous occasions, and, sadly,
we will probably have to do it on numerous occasions going
forward.
So we want to work with you on Do Not Track and we want to
work with companies to help them do this, hopefully
voluntarily.
The Chairman. Ms. Ohlhausen.
Ms. Ohlhausen. Yes. And I also agree that it's very
important that consumers' preferences and choices be respected.
The FTC has brought some good enforcement cases where consumers
thought they were opting out of tracking and they were actually
tracked, and I think that has made some very good progress in
that area. And the FTC's report on privacy from December 2010
talked about a Do Not Track option.
And I would, if I'm confirmed, be very interested to talk
to the FTC staff and see what they think about the feasibility
of having some sort of one-click option, whether it's through
an opt-in system or through a browser, and also get their views
on the self-regulatory process, the Digital Advertising
Alliance and some of the progress that's been made in the
browsers to get an idea.
But I do agree that it's important that consumers have
confidence when using the Internet, confidence about how their
information will be used and how it's collected.
Chairman Leibowitz. And if I could just add one thing,
Senator, my kids can go online and order clothes from, say,
Forever 21. In one click they can figure out what size, what
color, where to deliver it. You know, the people who designed
that should be the people who design Do Not Track, because it
needs to be one click away. It needs to be clear to consumers.
I don't think we are quite one click away yet in the industry.
The Chairman. Not quite yet. Thank you, all three of you,
very much.
Senator Hutchison.
Senator Hutchison. Since you have explored Do Not Track, on
the Do Not Fax, we've all gotten the faxes on our home fax
machines that are advertisements, and you have a little number
that you call and say take my number off your list.
I got one just recently that was a new innovation, and it
was the advertisement and then to get off their list, you had
to go online to a website.
Now, first of all, there are a lot of people who have fax
machines and do not have computers, older people especially.
And it's a hassle. If you're getting a fax, you're right by a
phone, so you can call and you can take care of it, although I
wish that there was one button that you could say--You call
this number and you will be forever barred from getting
unwanted advertising on the fax machine.
So if you can figure out the Do Not Track with one button,
would you also take up Do Not Fax?
And especially do you think that there should be something
that would not allow them to use a website on a computer to get
off a fax line?
Chairman Leibowitz. Yes. Many of us have had the
circumstance of having fax after fax after fax come through our
homes. It might be your only phone line or you might actually
have things you want to do and you do not need these
advertisements.
You know, we have the Do Not Call Registry. There are more
than 200 million phone numbers that are on it. It has been a
fabulous success. Dave Barry called it the most successful
government program since the Elvis stamp.
And on faxes, we still have a ways to go. I think we need
to work with the Federal Communications Commission on that, but
we will absolutely get back to you and see what we can do to
make it clear and easier for consumers, because, yes, it is, at
the very least, a nuisance.
Senator Hutchison. Ms. Ohlhausen, do you have a view on
that?
Ms. Ohlhausen. To be honest, I don't know a lot about the
Do Not Fax rule that exists, but I would be happy to look into
it.
Senator Hutchison. I would like to ask you, Ms. Ohlhausen,
because we have certainly focused on the chairman, who has a
record. That's the hazard of having a record when you come up
here.
But I'd like to know some of your views on regulation.
You've had, certainly, a long background at the FTC and you
know these issues.
Do you think the FTC has the authority that it needs to
assure that we don't allow deceptive trade practices and unfair
trade practices or do you think there is enough? Mr. Leibowitz
has suggested that perhaps the FTC needs more authority. Just
tell us what your general view of regulation is.
Ms. Ohlhausen. Certainly, Senator. So my general view of
regulation is that it, you know, can be appropriate and, you
know, often very necessary to protect consumers.
The FTC in the FTC Act, Section 5, has a very broad
authority, and it's used it quite effectively, I think, over
time.
In some instances, when the FTC has perceived problems,
issues that are harming consumers, but they can't quite reach
it through Section 5, Congress has been able to give them
additional authority to make a rule or if there's a new law to
reach that kind of conduct. So, over time, I think, that's a
process that's worked fairly well, where gaps have been
identified and Congress has given the FTC further direction. I
think it's sort an iterative process where the FTC gets a good
idea through enforcement.
I think data security is a very good example of that right
now, where the FTC has brought over 30 data-security cases and
has found that, you know, it might be beneficial to actually
have some legislation that gives it additional authority.
So I see that as a useful process. Identify the problem
first, determine if there's--you know, can be reached through
current law, and if it can't, then try to get additional
authority to reach those kind of consumer problems.
Chairman Leibowitz. I agree with Ms. Ohlhausen, and we are
an enforcement agency more than we are a regulator, but we
always look at costs and benefits whenever we put anything out
for guidance.
Senator Hutchison. Let me ask Ms. Ohlhausen, Chairman
Leibowitz has advocated outlawing the reverse payments in
pharmaceutical patent litigation settlements, and I'd like to
know your view on this issue.
Ms. Ohlhausen. Yes, I think those kinds of settlements have
the potential to be anticompetitive in certain circumstances.
So I believe that it's important to evaluate them sort of on
their own merits, you know, on a case-by-case basis, to see if
they are being used in an anticompetitive way.
Senator Hutchison. Do you think that the government really
has a role in limiting settlement options between private
litigants?
Ms. Ohlhausen. Well, a settlement between private litigants
is--you know, an agreement is sort of--An agreement can be
between two competitors. Settlements are often a very efficient
way to resolve a private conflict, to resolve an issue between
two private parties.
But, as in any agreement between two private parties, it
can have the potential to be anticompetitive. So I think they
need to be looked at.
Senator Hutchison. Even though a judge is going to approve
that settlement?
Ms. Ohlhausen. A judge, you know, may approve it, and I'm
not confident that a judge would always be applying the
antitrust laws to the settlement to make sure it's not
anticompetitive. So I think that having an antitrust expert
look at it is helpful.
Chairman Leibowitz. And I would like to add that we view
this as a Commission. This has been a priority for us going
back to Tim Muris, the first Republican Chairman under
President Bush, and, really, Bob Pitofsky, the last Democratic
chairman under President Clinton, every single commissioner,
Democrat, Republican and Independent, has called for
restrictions on these agreements.
And the way we look at it is that it distorts the
marketplace, because, of course, there should be settlements.
And 70 percent of the settlements we review, and in the
2003 Medicare Modernization Act, you required us to review
those agreements, do not involve compensation from the brand to
the generic and the generic delaying entry.
Brands have much higher profit margins than generics.
Generics have small profit margins, because there are multiple
competitors, as you both know, on the marketplace 6 months
after the first generic gets in.
So if the brand can put a big bag of compensation on the
table and the generic can earn more by not competing, by
sitting it out--and, again, this doesn't happen always. It
doesn't happen in most settlements, but it happens in a few--
then we think that that is a problem.
And so we have brought cases. The circuits are split, you
know. We have supported certain types of a legislative approach
that would involve burden shifting, not banning.
But it is a complicated issue and, Senator, you're right,
of course--it is intuitive to support settlements. We are too
litigious a society. Courts do not have time to actually
litigate all these cases. So we like to think that we are on
the right side of this issue.
I believe, at some point, a case will get to the Supreme
Court and that will resolve it. Maybe Congress will pass
legislation. Maybe it won't. But I think it will get resolved
in the next few years.
And the only other point I would mention is the legislation
introduced by Senators Kohl and Grassley. It has scoring
effects of several billion dollars--I think $4.8 billion in
reduced cost to government. We estimate that these deals cost
about $3.5 billion each year to consumers in the cost of higher
healthcare and higher co-pays, but it is a complicated issue.
There is no doubt about it.
Senator Hutchison. Thank you.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Hutchison.
And I think it's been a very helpful hearing, and it's
brought up a variety of interesting points.
Actually one of the most interesting, Chairman Leibowitz,
came from you with the statement that you're not seeking
necessarily more powers and everything, but you're seeking more
people, and, you know, that applies just as much to the
Department of Commerce.
None of us know what's going to happen. None of us know
what the Super Committee is going to do or not do, whether
we're going to go into a sequestration. That won't really take
effect until 2013, but everybody's on tenterhooks.
So, in fact, you can't go ahead and make commitments to
things that you really feel strongly about, because you're not
sure that the budget's going to be there or maybe you're sure
the budget isn't going to be there, and so you just don't do
it.
And that's something that the public generally does not
figure into your angst factor. You have to worry about that all
the time, enough money and enough people and more and more
demand as people get more and more savvy, particularly in the
telecommunications field.
So thank you all three very much.
Chairman Leibowitz. Thank you.
The Chairman. And I look forward to all three of you being
in your proper places.
Hearing is adjourned.
[Whereupon, at 4:09 p.m., the hearing was adjourned.]
A P P E N D I X

Response to Written Questions Submitted by Hon. John D. Rockefeller IV
to Hon. Jon D. Leibowitz
Question 1. In May, I wrote a letter to Apple and Google asking
them whether the software applications for their popular smartphones
are in compliance with COPPA. The FTC recently announced its first
COPPA enforcement action against a mobile application developer.
Chairman Leibowitz, can you tell me about the Commission's recent COPPA
enforcement action against a mobile application developer?
Answer. In August 2011, the FTC announced a settlement with W3
Innovations, LLC, a small company that does business as ``Broken Thumbs
Apps.'' The FTC's settlement also named company president and owner
Justin Maples. W3 develops and distributes mobile gaming apps on the
Apple platform. The FTC alleged that several of W3's interactive apps--
including Emily's Girl World, Emily's Dress Up, Emily's Dress Up &
Shop, and Emily's Runway High Fashion--sent and received information
via the Internet and were ``online services directed to children'' as
defined in the FTC's COPPA Rule.
The Emily's apps at issue in the FTC action allowed children to
play virtual versions of classic games such as ``Cootie Catcher'' and
``Truth or Dare,'' and to design outfits and create virtual fashion
models. Each of the apps encouraged children to send comments and
submit blog postings to ``Emily'' via e-mail, and to post messages
online.
The FTC's complaint alleged that W3 failed both to provide direct
notice to parents of their information collection and disclosure
practices and to obtain verifiable consent from parents prior to
collecting, using, or disclosing children's personal information (e.g.,
e-mail addresses, blog postings). The consent decree requires W3 to
comply with COPPA in the future, delete all improperly collected
children's personal information, pay a $50,000 civil penalty, and keep
certain records to demonstrate compliance.

Question 2. I urge the FTC to remain vigilant about children's
privacy issues and to use all the tools at its disposal to protect
children's privacy. Chairman Leibowitz, what can I expect to see the
FTC do in this area during your second term as Chairman?
Answer. The FTC remains committed to protecting children's privacy
as children increasingly engage online. As you are aware, the FTC
recently published proposed changes to the Children's Online Privacy
Protection Rule and will be taking comments on this proposal until
December 23, 2011. Once the comment period is closed, we will move as
expeditiously as possible, but it is very important to give careful
thought and consideration to all the comments and the policy
implications of any change.
In addition, our enforcement of the COPPA Rule continues apace.
Most recently, the FTC announced a settlement with Jones O. Godwin, the
individual operator of the child-directed social networking website
www.skidekids.com. The agency expects to announce additional COPPA
enforcement actions in the months to come. As a complement to our law
enforcement actions, agency staff routinely assists website operators
with Rule compliance, regularly updating business education materials
and responding to inquiries from operators and their counsel.

Question 3. During the debate over the Dodd-Frank Act, I worked
hard to preserve FTC's authorities and prevent the transfer of consumer
protection authority for financial products and services over to the
Consumer Financial Protection Bureau (CFPB.) The result will be that
there are two ``cops on the beat'' in this essential area. How do you
anticipate that the FTC and the CFPB will work together? Once the CFPB
has a director in place and begins to exercise its full authority, what
role do you see for the FTC in consumer financial protection?
Answer. Thank you for your work to preserve the FTC's role in
protecting consumers of financial products and services. In these tough
economic times, consumers need ``cops on the beat,'' and the FTC is
eager to continue serving as one of those cops.
The FTC is primarily a law enforcement agency. We have engaged in
aggressive law enforcement actions to protect consumers of financial
products and services. We have been especially active in our law
enforcement activities targeting fraud and other egregious practices
seeking consumers' last dollars, including loan modification and
foreclosure rescue services, debt relief services, debt collection, and
alternative financial services, such as payday loans. With the Dodd-
Frank Act, the scope of the Commission's law enforcement authority did
not change. The FTC, therefore, will continue to be vigilant in
monitoring the marketplace for violations of the laws we enforce, and
we will continue to act quickly and effectively against those who
violate them.
The FTC will be a willing and able law enforcement partner of the
CFPB. The Dodd-Frank Act requires that the Commission and the CFPB
enter into a Memorandum of Understanding (``MOU'') by January 21, 2012,
setting forth, among other things, how the two agencies will cooperate
and coordinate law enforcement activities. The two agencies currently
are actively engaged in drafting such an agreement.
While the MOU is being drafted, the two agencies have moved forward
with extensive and detailed discussions to promote coordination and
avoid duplication in our law enforcement efforts, and to provide
consistent guidance to industry members seeking to comply with the laws
both agencies enforce. Other senior FTC officials and I have met with
CFPB officials on a number of occasions to discuss generally how the
two agencies can work together effectively. In addition, the FTC and
the CFPB recently entered into an information-sharing agreement that
permits staff investigating targets and prosecuting cases to share non-
public information. The two agencies further have established staff
level enforcement working groups on six topics: (1) credit reporting;
(2) debt collection; (3) debt relief (mortgage assistance relief, debt
relief, and credit repair services); (4) mortgage advertising; (5)
mortgage servicing; and (6) online lending. These groups have met and
will continue to meet on a regular and frequent basis to discuss trends
in industry practices, enforcement targets, investigative techniques,
actions that will be filed, and numerous law enforcement-related
issues.
Given that the FTC is primarily a law enforcement agency,
coordination and cooperation between the FTC and the CFPB related to
law enforcement activities is the main focus of our partnership. But I
would be remiss if I did not mention that we are cooperating and
coordinating with the CFPB on a broad range of non- law enforcement
issues. The FTC staff is providing views and sharing its experience
with the CFPB staff to assist the CFPB in its supervision, examination,
rulemaking, consumer education, research, consumer complaint process,
and numerous other activities and initiatives to implement the Dodd-
Frank Act.

Question 4. There are some who believed that the FTC should step
back and let the CFPB take over all aspects of consumer financial
protection. I am pleased to see that the FTC has not taken that
approach and has continued aggressive enforcement. In your next term, I
urge you to stay vigilant and continue to protect consumers from
financial frauds and scams. Chairman Leibowitz, do you believe the
Commission will remain aggressive with your authority and not take a
back-seat to the CFPB?
Answer. The Commission will continue to be vigilant in monitoring
the marketplace for violations of the laws we enforce, and we will
continue to act quickly and effectively against those who violate them.
In fulfilling our statutory mandate, we will be a willing and able law
enforcement partner of the CFPB. And we will be an equal partner.
In its law enforcement work, the Commission will continue to be ``a
cop on the beat,'' vigorously protecting consumers from financial
frauds and scams. The persistence of the economic downturn has
continued to put financially-strapped consumers at risk of harm, and,
therefore, we have focused our law enforcement efforts on protecting
them from mortgage assistance relief scams, debt relief frauds, and
egregious debt collectors. For example, the FTC issued the Mortgage
Assistance Relief Services Rule in 2010 and has brought 35 law
enforcement actions against providers of such services during the last
3 years. Similarly, the Commission issued debt relief amendments to the
Telemarketing Sales Rule in 2010, and we have filed 18 law enforcement
actions against providers of debt relief services in the last 3 years.
The Commission will continue to be active in protecting consumers from
these and other financial frauds and scams.

Question 5. Since the repeal of Prohibition, states have been the
primary authority when it comes to regulating the distribution and sale
of alcohol. States have enacted varied laws that presumably reflect the
attitudes and beliefs that their citizens have about alcohol sales and
health and safety issues. Chairman Leibowitz, the Office of Policy
Planning has issued reports and other public documents regarding state
regulation of alcohol sales. The FTC has a mission to promote
competitive free markets, but alcohol is a drug highly susceptible to
abuse (particularly by minors) and is not akin to consumer products or
services. Why does the FTC have an interest in using its resources to
weigh in on state laws and regulations regarding alcohol sales and
distribution?
Answer. The FTC's competition advocacy program responds to requests
from state legislators and regulatory authorities for comments on the
likely competitive effects of proposed laws and rules. FTC staff with
competition expertise explains the nature of any likely competitive
effects and why they may occur.
Thus, no advocacy letter is drafted unless there has been a request
for comment from a relevant authority. In addition, FTC staff
recognizes that the consumer's interests in the benefits of healthy
competition--lower prices and greater product variety and convenience,
for example--are not the only public interests that may be at stake in
any particular context, and this may be particularly true where the
distribution and sale of alcohol is concerned. State lawmakers have the
responsibility to weigh all of the relevant factors for themselves. FTC
staff's analysis simply provides information that may assist lawmakers
and regulators in assessing the nature and scope of any tradeoffs
between the benefits of competition and other values.
The FTC's competition advocacy program uses a very small share of
the agency's resources, and the resources devoted to the alcoholic
beverage industry, in particular, are much smaller still. The FTC has
not issued any competition reports involving alcohol since its
congressionally authorized 2003 Wine Report,\1\ which the Supreme Court
cited supportively several times in its 2005 decision in Granholm v.
Heald.\2\
---------------------------------------------------------------------------
\1\ Federal Trade Commission, Possible Anticompetitive Barriers to
E-Commerce: Wine (2003), available at http://www.ftc.gov/os/2003/07/
winereport2.pdf.
\2\ 544 U.S. 460 (2005).
---------------------------------------------------------------------------
The FTC continues to enforce the FTC Act's prohibitions of ``unfair
methods of competition'' and ``unfair or deceptive acts or practices''
in the alcohol industry through law enforcement, promotion of effective
alcohol industry self-regulation, and consumer education. The FTC also
will continue to respond to congressional requests in this area: for
example, our 2003 Report, Alcohol Marketing and Advertising: A Report
to Congress,\3\ was conducted under the direction of the Conferees of
the House and Senate Appropriations Committees. Since that time, the
FTC has issued another report dealing with self-regulation by the
alcohol industry \4\ and is now requesting OMB approval under the
Paperwork Reduction Act for a follow-on study in this area.\5\ These
reports have been designed to monitor and evaluate the effectiveness of
industry self-regulation that seeks to curb the marketing of alcohol to
underage youth, and include recommendations for improving those
industry efforts.
---------------------------------------------------------------------------
\3\ Alcohol Marketing and Advertising: A Report to Congress (2003),
available at http://www.ftc.gov/os/2003/09/alcohol08report.pdf.
\4\ FTC, Self-Regulation in the Alcohol Industry: Report Commission
(2008), available at http://www.ftc.gov/os/2008/06/
080626alcoholreport.pdf.
\5\ See http://www.ftc.gov/opa/2011/11/alcoholstudy.shtm.
---------------------------------------------------------------------------
______

Response to Written Questions Submitted by Hon. Barbara Boxer to
Hon. Jon D. Liebowitz
Question 1. Thanks to the work of a CBS television station in
Sacramento, California, we learned earlier this year that Walmart
stores in California and other states were short-changing customers
returning items using gift receipts. In one instance, the station's
producers purchased various items from Walmart totaling $51.00, but
when they later returned the items using gift receipts, they received
$27.00, only 52 percent of the original purchase price. Walmart blamed
staff for the errors, but similar results occurred at their stores in
Dallas and Philadelphia, and again in Sacramento when producers ``re-
tested'' the stores.
I've written the FTC twice to request an investigation, and I
understand you cannot comment on whether there is an open
investigation--but we're learning that this problem isn't exclusive to
Walmart and it is happening at a number of other national retailers.
Producers at a Dallas CBS station were recently shorted at three
separate national chains when returning items with gift receipts. Can
you tell the Committee whether the FTC believes this is a widespread
problem among national retailers? If consumers somehow discover they
are not receiving the full price when returning items with gift
receipts, what can they do to alert the FTC?
Answer. Thank you for your continuing concern about the gift
receipt practices of Walmart and other national retailers. The FTC is
aware of reports that Walmart stores in California and other states
across the Nation failed to abide by Walmart's own policy by refunding
less than the full purchase price of items returned with a gift
receipt. The FTC is also aware of media reports concerning similar
practices at other national retailers.
As you note in your question, Commission rules prevent me from
revealing specifically whether FTC staff has opened an investigation
into this or any other matter. Nonetheless, I want to emphasize that I
share your concern over retail stores and other businesses that fail to
honor their refund policies or engage in other refund-related deceptive
practices. Such deceptive practices related to gift receipts are
especially troubling because recipients reasonably expect that they
will receive in exchange the full value of the price originally paid,
yet they do not know the original price paid.
For consumers who believe that they have been victimized by a
retailer's gift receipt practice, we strongly encourage them to file a
complaint on the FTC's website at www.ftc.gov or by calling the FTC's
toll-free number at 1-877-FTC-HELP (1-877-382-4357). The FTC enters all
complaints it receives into Consumer Sentinel, a secure online database
that is used by the FTC and thousands of civil and criminal law
enforcement authorities worldwide. Consumer complaints can help law
enforcement authorities detect patterns of wrongdoing and lead to
investigations and prosecutions.

Question 2. I would like to bring to your attention a recent study
conducted by Professor Kay Cooksey of Clemson University involving
concrete vapor barriers. The study tested products that claim to
prevent the diffusion of moisture vapor, contaminants, and soil gases
through buildings' concrete foundations to protect indoor air quality.
The study concluded that several concrete vapor barriers purchased in
retail stores actually performed significantly worse than their
marketed and advertised levels of effectiveness. There are concerns
that this marketing presents consumers with a false sense that the
products they are purchasing for use in their home, office, or school
buildings will effectively keep out harmful contaminants. It is my
understanding that the enforcement division of the FTC's Bureau of
Consumer Protection received a copy of this study in June 2011, and
that the Secretary of the FTC has acknowledged receipt of a formal
complaint arising from the study in response to a recent Congressional
inquiry. Have FTC enforcement officials looked into the findings of the
Clemson study? Can you provide a status update related to the formal
complaint filed with the FTC?
Answer. We are aware of the study by Professor Cooksey involving
the performance of vapor barriers, and the formal complaint based on
the study. In 2009, at the request of the Commission, the United States
Department of Justice filed a complaint and secured an order in Federal
District Court against Insulation Solutions, Inc., one of the vapor
barrier manufacturers identified in the study. The order resolved
allegations that Insulation Solutions and two other defendants violated
Section 5 of the FTC Act and the Commission's R-Value Rule in
connection with their marketing of insulation. Among other things, the
order prohibits the defendants from making false, misleading, or
unsubstantiated energy-related representations about a product or
service. The order, however, does not apply to the permeance
representations regarding vapor barriers at issue here.
In August, staff received additional information from the
complainant. As stated above, Commission rules prevent me from
revealing specifically whether FTC staff has opened an investigation
into this or any other matter. In determining whether to allocate
resources to investigating any particular formal complaint, staff must
consider a number of factors, including the type of violation alleged,
the nature and amount of consumer injury at issue, the number of
consumers affected, and the likelihood of preventing future unlawful
conduct and securing redress or other relief. FTC staff will give
carefully consideration to the information it received to determine
whether Commission action is warranted and in the public interest.
______

Response to Written Questions Submitted by Hon. Maria Cantwell to
Hon. Jon D. Leibowitz
Question 1. Since 2007, oil prices have jumped from $90 per barrel
in December 2007, to $147 per barrel in June 2008, to $31 per barrel in
December 2008, to $115 per barrel in March 2012, to around $100 per
barrel today. During this same period, there has been little change in
the world's oil supply and demand balance. What is your explanation for
this oil price volatility? To what extent do you believe forces beyond
changing global crude prices and supply and demand fundamentals play a
role in this price volatility? To the extent you believe that forced
beyond supply and demand fundamentals play a role in this price
volatility, how will you use the tools and resources of the Commission
to improve the Commission's current protections for consumers and
ensure a wholesale petroleum market free from fraud and manipulation?
Answer. There has actually been a significant long-term change in
the world's oil supply and demand balance in recent years, and crude
oil price volatility since 2004 reflects that change. In September of
this year, the Commission's Bureau of Economics published its most
recent analysis of the factors most responsible for the fluctuation in
gasoline prices.\6\ The staff report notes that crude oil continues to
be the main driver of gasoline prices, and price changes in gasoline
since 2004 largely reflect the volatility of crude prices. Between 2004
and 2007, crude oil prices rose steadily as crude consumption
increased. As the recession led to a decrease in worldwide crude
consumption in 2008 and 2009, crude prices fell significantly. Since
2009, crude consumption has increased again, well above 2007 levels,
and crude prices have returned to those levels. This year there was
also a significant supply disruption due to the loss of most Libyan
crude oil production, which also put upward pressure on crude
prices.\7\ Moreover, although crude oil demand has decreased since 2004
in North America, Europe, Japan, and Korea, it has increased
substantially in developing countries (particularly China), leading to
an overall consumption increase of almost 7 percent between 2004 and
2010. Changes in gasoline prices showed remarkable consistency with
changes in crude oil prices over this same period, falling from $3.50
per gallon in January 2008 to less than $1.50 in January 2009, while
otherwise rising steadily from 2004 to 2011, as demand outpaced
supply.\8\
---------------------------------------------------------------------------
\6\ Federal Trade Commission, Bureau of Economics, Gasoline Price
Changes and the Petroleum Industry: An Update (Sept. 2011), available
at http://www.ftc.gov/os/2011/09/110901gasoline
pricereport.pdf.
\7\ Because consumers do not substantially reduce their demand for
gasoline in response to either short- or long-run price increases, a
relatively small shift in supply can lead to a large change in price.
See Federal Trade Commission, Gasoline Price Changes: The Dynamic of
Supply, Demand, and Competition 8 (2005), available at http://
www.ftc.gov/reports/gasprices05/050705gaspricesrpt.pdf.
\8\ Gasoline Price Changes and the Petroleum Industry, supra note
1, at 5, Figure 1, Comparison of the Monthly National Average Price of
Gasoline (excluding taxes) and the Prices of WTI and Brent Crude,
January 2001-May 2011.
---------------------------------------------------------------------------
Of course, other forces beyond normal market supply and demand have
an impact on crude oil price levels. The main factor is the
Organization of the Petroleum Exporting Countries (OPEC), which
accounts for over 70 percent of the world's proven oil reserves. OPEC
attempts to maintain the price of oil by limiting output and assigning
quotas. These actions by OPEC would be a criminal price fixing
violation of the U.S. antitrust laws if private firms engaged in them.
As a general matter, any agreement by competing producers to
restrict output and increase prices would violate the antitrust laws.
The Commission remains vigilant against any form of potential
anticompetitive conduct--whether merger or non-merger--and is committed
to use all of its tools to attack such conduct when it is found. In
April of this year, the Commission signed a Memorandum of Understanding
with the Commodity Futures Trading Commission, allowing us to share
confidential data when we believe there is the potential for
anticompetitive conduct in futures markets that could impact wholesale
petroleum prices in violation of the Commission's new Market
Manipulation Rule (MMR). In June of this year, the Commission opened a
major investigation (described in fuller detail in the answer to
Question # 2) into whether anticompetitive activity is occurring in
petroleum markets, from exploration to retail gasoline sales. In this
ongoing investigation, the Commission is using its authority under both
the antitrust laws and the MMR.

Question 2. I authored legislation that was included as part of the
Energy Independence and Security Act of 2007 that, for the first time,
charged the Federal Trade Commission with the responsibility of
policing the wholesale petroleum markets for manipulation. I was
pleased the Commission completed a Final Petroleum Market Manipulation
Rule that did not include a safe harbor for futures markets activities.
As the final rule makes clear, oil futures markets are inextricably
linked to wholesale oil markets, and policing the wholesale markets for
manipulation requires a view into the oil futures markets. Over the
last 3 years, oil consumers have ridden a gas-price roller coaster with
fluctuating prices that cannot be explained by supply and demand
fundamentals. For example, December crude oil prices have varied from
$85 per barrel in 2007, to $31 in 2008, to $73 in 2009, to $86 in 2010,
with peaks at $147 in June 2008 and around $100 today.
Like the Commission, the Federal Energy Regulatory Commission
(FERC) was given nearly identical market manipulation authority in the
2005 energy bill, and to date it has aggressively used this authority
to conduct 93 investigations resulting in 45 settlements totaling over
$150 million in penalties. Congress intended that the Commission
enforce its market manipulation rule with the same proactive
aggressiveness that FERC employs, to deter manipulative behavior,
prosecute bad actors, and draw a bright line to distinguish legal from
prohibited behavior.
I wrote to the Commission on March 25, 2011, asking for an
investigation into gas price volatility and asking what specific steps
it was taking to proactively enforce its final Petroleum Market
Manipulation Rule. I was terribly disappointed with the Commission's
response on April 19, 2011, that provided no information on what the
Commission was doing to implement aggressively and proactively the
Final Petroleum Market Manipulation Rule. The response letter confirmed
that the Commission is doing little more than ``monitoring daily
gasoline and diesel prices'' and ``evaluating complaints'' through ``e-
mail and telephone hotlines.''
You stated that when the Petroleum Market Manipulation Rule was
finalized that ``This new Rule will allow us to crack down on fraud and
manipulation that can drive up prices at the pump. We will police the
oil markets--and if we find companies that are manipulating the
markets, we will go after them.''
Do you believe the Commission has done everything it could
have to use the authority of the Petroleum Market Manipulation
Rule aggressively in order to protect consumers from
unnecessarily high and volatile gas and diesel prices?

What is your plan to more aggressively and proactively
implement the Petroleum Market Manipulation Rule in order to
protect consumers from unnecessarily high and volatile gas and
diesel prices?
Answer. The Commission's enforcement of the MMR has been both
proactive and consistent with the authority granted by Congress. By
design, the FTC and FERC have different regulatory obligations and deal
with some different industries, and those unique obligations given to
each agency will automatically lead to different enforcement outcomes.
FERC's mission is substantially regulatory and is designed to ensure
reliable, efficient, and sustainable energy for customers. In
furtherance of that mission, FERC uses its anti-manipulation rule to
promote its goal of providing efficient energy services at a reasonable
cost. Manipulative conduct might involve violations of FERC rules
designed to limit market power or to ensure the efficient operation of
regulated markets. Moreover, FERC's rule fits within an existing
regulatory scheme that regulates individual firm conduct, with ongoing
and extensive data-reporting obligations.
Unlike FERC, which is primarily a sectoral regulator, the FTC is
essentially a law enforcement agency. The FTC does not have broad
regulatory authority over the wholesale petroleum markets that are
covered by the MMR. It has not been authorized to determine prices or
position limits for wholesale petroleum products. Such authority would
be inconsistent with enforcement of the antitrust laws, which are
designed to protect the competitive function of markets, not to
establish what might be a ``fair'' price level. The FTC's authority is
narrowly focused toward identifying and prosecuting fraudulent behavior
that violates the MMR.
Pursuant to its Congressional mandate, the Commission has
aggressively enforced the MMR when we have had some reason to believe a
violation may have occurred. Earlier this year, Commission staff
noticed certain anomalies in petroleum and gasoline prices. After
substantial increases in crude oil and refined petroleum products
prices and profit margins, the Energy Information Administration
reported that U.S. refiners' refining margins had increased
substantially between the beginning of 2011 and early May, while those
refiners were using only 81.7 percent of their capacity in early May (a
7 percent reduction from the same period in 2010). In June, the
Commission announced it had opened an investigation into Petroleum
Industry Practices and Pricing, FTC File No. 111 0183. The Commission
opened the investigation and authorized the use of compulsory process
to determine whether oil producers, refiners, transporters, marketers,
or physical or financial traders (1) have engaged or are engaging in
practices that have lessened or may lessen competition; (2) have
engaged or are engaging in manipulation in the production, refining,
transportation, distribution, or wholesale supply of crude oil or
petroleum products; or (3) have provided false or misleading
information related to the wholesale price of crude oil or petroleum
products to a Federal department or agency.\9\ Of note, this is the
first Commission investigation to combine its antitrust and market
manipulation authority, and will provide a template going forward to
determine whether such combined investigations can efficiently maximize
scarce enforcement resources. That investigation is ongoing.
---------------------------------------------------------------------------
\9\ The Working Group's focus on this last issue stemmed in part
from Attorney General Holder's guidance in a May 6, 2011, memorandum to
the group that ``[i]f wholesale prices continue to decrease, fraud or
manipulation must not be allowed to prevent price decreases from being
passed on to consumers at the pump.''
---------------------------------------------------------------------------
Aside from the current investigation, both in the course of our
regular law enforcement activities and in our role as a member of the
Oil and Gas Price Fraud Working Group, we continue to monitor the
situation, and will take action if we detect any anticompetitive or
fraudulent practices in these markets.

Question 3. In response to increased petroleum market volatility,
Attorney General Eric Holder announced on April 21, 2011, the formation
of a Financial Fraud Enforcement Task Force Working Group to focus
specifically on fraud in the energy markets. Attorney General Holder
announced that the Oil and Gas Price Fraud Working Group was to monitor
oil and gas markets for potential violations of criminal or civil laws
to safeguard against unlawful consumer harm. The Federal Trade
Commission is part of this working group. I was pleased the Working
Group was established, however I'm concerned that this group has done
very little to undertake the necessary investigation into petroleum
markets.

Please describe the specific actions that the Oil and Gas
Price Fraud Working Group has undertaken, including meetings of
the Working Group, meetings with industry participants,
investigations commenced, or any other action specific to the
Working Group.

Please describe the specific actions the Commission has
taken as a member of the Working Group, and specific actions
the Department of Justice asked the Commission to take as a
member of the Working Group.

Is the Working Group still active? If so, please describe
the current and ongoing actions of the Working Group.
Answer. The Oil and Gas Price Fraud Working Group--comprising
representatives of a number of Federal agencies as well as officials
from state attorney general offices--held its initial meeting on May 2,
2011, during last spring's petroleum and gasoline price increases. The
meeting, held largely for the purposes of organization and establishing
priorities, gave each agency an opportunity to share with the others
its experience and expertise in the oil and gas sector. The Working
Group met again on May 13 to discuss each member agency's ability to
share information with other members, to explore ways in which each
agency might inform the others about complaints from the public
concerning oil and gas issues, and to review the relationship between
crude oil price fluctuations and price developments in the retail
market.\10\ Smaller sub-groups of agency officials met in ensuing weeks
to discuss in greater detail the extent to which agencies can share
information and to learn about one another's procedures for handling
complaints from the public. On June 28, the overall Working Group met
again to discuss investigations and enforcement actions by the member
agencies--including the FTC's Petroleum Industry Practices and Pricing
Investigation (discussed above in Answer #2)--and to get updates
concerning information sharing and complaint handling.
---------------------------------------------------------------------------
\10\ The Working Group's focus on this last issue stemmed in part
from Attorney General Holder's guidance in a May 6, 2011, memorandum to
the group that ``[i]f wholesale prices continue to decrease, fraud or
manipulation must not be allowed to prevent price decreases from being
passed on to consumers at the pump.''
---------------------------------------------------------------------------
The Commission has been active in the petroleum sector since the
Working Group was organized and, to the extent possible, has kept other
member agencies apprised of its activities. As discussed above in
Answers #1 and #2, the FTC Bureau of Economics released its report on
Gasoline Price Changes and the Petroleum Industry: An Update in
September 2011, 3 months after the Commission announced the initiation
of the Petroleum Industry Practices and Pricing Investigation. FTC
staff have discussed those developments with Working Group colleagues.
In addition, the Commission is conducting other, nonpublic
investigations in the petroleum sector. Although it is not itself an
investigative body, the Working Group has enhanced the possibilities
for cooperative information-sharing among member agencies, and various
agencies' investigations in the petroleum sector--including those by
the FTC--may well benefit from information gleaned from the Working
Group process.
The Working Group remains active: member agencies are ready to
share relevant information to the extent permitted by laws and
regulations, and there is ongoing discussion of complaint handling
procedures. Following the recent appointment of a new Executive
Director, we expect the Working Group to continue meeting periodically.
Meanwhile, the FTC continues active pursuit of its Petroleum Industry
Practices and Pricing Investigation as well as other discrete
investigations.

Question 4. Federal Communications Chairman Julius Genachowski
recently helped launch a new initiative called jobs4america. The goal
is to create 100,000 new broadband-enabled contact center jobs over the
next 2 years--many of which are coming back from overseas. What do you
see as the FTC's role in helping to advance predictable policies that
enable U.S. based contact centers to grow, thrive, and create more jobs
here in America?
Answer. One core mission of the FTC is to promote competitiveness
in the marketplace across all industries, including contact centers. We
accomplish this goal through targeted law enforcement and balanced
regulation, which are complemented by our consumer and business
education and outreach. Contact centers, which provide in-bound and
out-bound services to consumers using telemarketing, direct and
electronic mail, messaging and other media to facilitate commerce, can
be positively impacted by a range of the agency's work. For example,
law enforcement action by the FTC challenging unfair or deceptive
conduct by bad actors levels the competitive playing field, enabling
legitimate actors to prosper and thrive. At the same time, certain
types of regulatory initiatives, such as the Do Not Call Registry and
other provisions of the Telemarketing Sales Rule, ensure that
legitimate actors know how to abide by the law and do so in a way that
instills consumer confidence and trust in the marketplace.

Question 4a. In order to ensure consumers have the best experience
possible when they pick up the phone to seek answers from a contact
center, the contact center industry has created and developed an
accreditation process for contact centers in cooperation with the FTC.
What do you see as the role of these proactive self-regulatory
accreditation mechanisms as a tool for advancing better consumer
service and remediation?
Answer. We are aware of ongoing efforts by the American
Teleservices Association (``ATA'') through its Self-Regulatory
Organization (``SRO'') to develop an accreditation process for contact
centers to ensure their operations comply with relevant laws and rules.
Indeed, we have discussed this SRO initiative with ATA for several
years.
We have consistently supported serious self-regulatory initiatives
that promote compliance with the law, and we are especially encouraged
by the fact that this particular initiative provides for independent
certified auditing. While we have not reviewed the current
accreditation process in detail, we understand it has been designed to
ensure specific compliance with the requirements of the Telemarketing
Sales Rule, including Do No Call provisions, and that the ATA is
seeking to expand the SRO to reach other legal requirements that affect
contact centers more broadly. We will continue to encourage and support
the ATA as it seeks ways to assist its members in complying with the
law and, in so doing, enhancing consumer welfare.

Question 5. Recently, a group of Attorneys General from 36 states
and 3 U.S. territories recently sent a letter to the Commission urging
you to take action against the unfair competition suffered by U.S.
manufacturers and workers when they are forced to compete against
companies that use stolen information technology to illegally cut their
costs.
The letter included examples of this problem, including a paper
mill in Washington State that must compete with a Mexican paper mill
using over $10 million in stolen software.
U.S. manufacturers and workers are among the most efficient in the
world, and I have no doubt they can compete with anyone that plays by
the rules. But they cannot possibly compete against manufacturers that
gain an unfair cost advantage by stealing millions of dollars in U.S.
technologies. Is there anything, in your view, that the Commission can
do to help protect U.S. manufacturers and workers against this form of
unfair competition? Does existing Federal law give you the authority
you need, or would you need additional tools or authority from
Congress?
Answer. In 1914, the Senate Commerce Committee was instrumental in
the assignment to the FTC of authority under the Federal Trade
Commission Act to challenge unfair methods of competition. As the
Supreme Court has held, Congress intended prohibited ``unfair methods
of competition'' to include conduct that would not violate the
antitrust laws. The FTC has and will continue to use this authority
judiciously, to protect competition and consumers.
The FTC has received the letter from the Attorneys General about
which you speak, and we agree that the theft of intellectual property
by rivals of U.S. manufacturers raises significant concerns. The letter
is being circulated within the Commission, and is under serious
consideration. At the same time, it is important to note that not all
harms caused by unethical businesses--for example harm to a competitor,
but not to competition itself--will be ``unfair methods of
competition.'' We take all complaints of harm to competition seriously
and will certainly do so with this one.
______

Response to Written Question Submitted by Hon. Frank R. Lautenberg to
Hon. Jon D. Liebowitz
Question. Studies show that food marketing has a large effect on
what children are willing to eat. While companies have taken steps to
self-regulate, several studies funded by the New Jersey-based Robert
Wood Johnson Foundation show that companies could use guidance as to
how to further reduce the marketing of unhealthy foods to children.
In 2009, with bipartisan support, Congress directed the FTC to work
with other Federal agencies to develop voluntary food marketing
guidelines. Earlier this year, the Interagency Working Group on Food
Marketed to Children (``IWG'') proposed this guidance.
The marketing guidelines were supposed to be sent to Congress in
July 2010. Now, the Senate Financial Services Appropriations has
proposed giving the FTC until December 15. Will you have the guidelines
to us by then?
Answer. The four member agencies of the IWG are currently
finalizing a report to Congress setting out recommendations for
nutrition principles and marketing definitions to guide voluntary
industry efforts. The Federal Trade Commission has completed the
recommendations with respect to marketing and is making every effort to
obtain final approval from the other agencies responsible for the
nutrition principles in order to submit the report to Congress by
December 15.
______

Response to Written Question Submitted by Hon. Mark Pryor to
Hon. Jon D. Liebowitz
Question. It is my understanding that earlier this year, the FTC
accepted a settlement with Phusion Projects regarding ``Four Loko,'' a
carbonated flavored malt beverage product with a high volume of
alcohol, which requires the company to relabel and repackage the
product. The relabel will compare the alcohol content of ``Four Loko''
to that of a regular beer rather than express the percentage of alcohol
by volume. The government typically has not utilized comparative
strength claims for alcohol. Have any concerns been raised that the
comparative disclosure requirement will have the unintended consequence
of actually encouraging consumption of ``Four Loko'' rather than
discouraging it? Were other labeling methods considered? What was the
rationale behind this particular decision?
Answer. Four Loko is a 12 percent alcohol by volume (``alc/vol.'')
flavored malt beverage, sold in a 23.5 ounce can. It bears, on its
label, the statement ``12 percent alc/vol.'' The FTC complaint alleges
that Phusion's packaging and marketing made an implied representation
that Four Loko has as much alcohol as one or two beers and can be
safely consumed on a single occasion. (Copies of these marketing
materials may be found at http://www.ftc.gov/os/caselist/1123084/
111003phusionexhibits
.pdf). In fact, a 23.5 ounce, 12 percent alcohol by volume Four Loko
has as much alcohol as four or five beers, and drinking just one
constitutes unsafe ``binge drinking.'' See http://www.ftc.gov/opa/2011/
10/fourloko.shtm.
The Commission's proposed order would require that any Phusion
brand flavored malt beverage containing more alcohol than the amount in
2.5 regular beers must: (1) disclose alcohol content in a specified
manner, and (2) be resealable. Under the proposed order, the disclosure
on a 23.5 ounce, 12 percent alcohol by volume flavored malt beverage
would say: This can has as much alcohol as 4\1/2\ regular (12 oz, 5
percent alc/vol) beers.
The goal of the proposed order is to ensure that the Phusion labels
contained a readily understandable statement of alcohol content. It
does not appear that the current ``12 percent alc/vol'' statement on
the label accomplishes this goal. Accordingly, FTC staff worked closely
with staff of the Alcohol and Tobacco Tax and Trade Bureau (``TTB'') to
develop the language, location, and appearance of the disclosure.\11\
During that process, TTB staff advised FTC staff that: (a) TTB would
approve labels containing the disclosure; (b) TTB would permit other
vendors of high alcohol, flavored malt beverages to also use these
disclosures; and (c) the disclosure does not constitute a prohibited
``strength'' claim.
---------------------------------------------------------------------------
\11\ The TTB has jurisdiction over the legal importation,
distribution, and sale of distilled spirits, wine, and malt beverages.
It pre-approves labels before alcohol beverages may be sold.
---------------------------------------------------------------------------
We are not aware of any evidence that properly labeled Four Loko
will be more attractive to young adults than it is right now. In fact,
Four Loko is often referred to as ``Blackout in a Can.'' The FTC has
alleged that the packaging and marketing for the product misrepresented
the amount of alcohol it contained. Therefore, the disclosure is
important to inform parents and other responsible adults to the alcohol
content of the beverage.
The Commission has sought public comment on its proposed complaint
and consent agreement. We recently extended the deadline for submitting
comments to December 2, 2011, to provide interested parties with a
sufficient opportunity to consider the issues and express their views.
After reviewing the comments, the Commission will determine whether to
make the proposed settlement final.
______

Response to Written Questions Submitted by Hon. Claire McCaskill to
Hon. Jon D. Liebowitz
Question 1. I know you have used the term ``voluntary'' to
characterize the principles that the Working Group issued to guide
self-regulatory efforts of food and media companies. I also am fully
aware that you are preparing the guidelines in response to a directive
from Congress.
However, because agencies like the FTC, USDA, FDA and the Centers
for Disease Control put their names on the detailed nutrition standards
contained in the April 28, 2011 report, could the guidelines run the
danger of creating de facto new Federal nutrition standard--a standard
that sharply conflicts with the U.S. Dietary Guidelines that these same
agencies announced last year, and conflicts with foods approved for the
School Lunch program, and for the WIC and SNAP programs?
Answer. The IWG's recommendations will be clearly presented as
recommendations for voluntary principles to guide industry self-
regulatory efforts. The IWG will also make it clear that the principles
do not have the force or effect of law and cannot be used as a basis
for law enforcement action by the agencies. The IWG recommended
principles are intended only guidance for the specific purpose of
marketing food to children and are not intended to displace nutritional
standards for regulatory purposes or to create a legally enforceable
standard of care. The issue of how the recommendations relate to other
Federal nutrition guidelines and programs is outside of the FTC's area
of expertise, so I would defer to the USDA and FDA on that aspect of
your question.

Question 2. I know you are planning to issue final guidelines soon
that may make some changes to the preliminary guidelines. I am
concerned that the preliminary guidelines could restrict marketing of
some foods to the point where Tony the Tiger could not be featured in a
Frosted Flakes commercial. It is my understanding that the FTC believes
that such an ad would not be covered by the suggested principles
because it is an ad directed to parents, not children. However, is the
issue under the proposed guidelines whether this is ``directed'' to an
adult audience or whether the product, Kellogg's Frosted Flakes, could
be advertised to an audience that included 30 percent of age 2-11 or 20
percent age 12-17?
Answer. The FTC has recommended to the IWG that the revised
recommendations address only marketing directed to children ages 2 to
11. We anticipate that our recommendations will not cover children ages
12 to 17, with the narrow exception of certain in-school marketing
activities. The FTC has also recommended revising the proposed audience
share for children's programming from 30 percent to 35 percent audience
ages 2 to 11, the same threshold currently applied by the Children's
Food and Beverage Advertising Initiative (``CFBAI'') self-regulatory
program. In addition, we anticipate that the revised recommendations
will exempt the use of characters such as Tony the Tiger on product
packaging.
With respect to your specific question about a commercial for
Frosted Flakes, the audience composition would be one factor that could
be considered in determining whether the ad was targeted to children
under 12. In addition to considering whether the program during which
the ad ran had 35 percent or more children under 12 in the audience,
other factors could include whether the program was rated TV-Y or TV-Y7
(indicating the intended audience is young children), and company
intent as indicated in its marketing plan.
Moreover, as already noted, the IWG recommendations are intended
only to guide voluntary industry efforts and thus do not restrict
companies from advertising any product in any media.

Question 3. Why has the Working Group come up with sugar and sodium
standards that are much stricter from standards that USDA has recently
deemed healthy and appropriate for school lunches? Should the
guidelines be developed with the collaboration of the companies that
produce these foods, and then taken to OMB for review to assure that
the government is not issuing two separate and conflicting standards
for healthy foods?
Answer. The proposed nutrition and marketing principles that the
IWG put out for public comment in April were only a preliminary draft.
The IWG is making substantial revisions to those principles based on
the input it received from the food industry and other stakeholders
during the comment period.
The issue of how the revised recommendations on nutrition relate to
other Federal nutrition guidelines for school meal programs is outside
of the FTC's expertise, so I would defer to the USDA on that specific
aspect of your question.
The IWG's final report to Congress will not recommend regulations,
but merely set out voluntary principles to guide industry self-
regulatory programs. As such, I do not believe OMB review is necessary,
nor am I aware of any precedent for OMB review of similar FTC reports
to Congress. For example, neither the FTC's 2008 report to Congress on
food marketing to children and adolescents nor its 2009 report to
Congress on marketing violent entertainment to children, both of which
included recommendations for industry self-regulation, were not
submitted for OMB review.\1\
---------------------------------------------------------------------------
\1\ See FTC, Marketing Food to Children and Adolescents: A Review
of Industry Expenditures, Activities, and Self-Regulation: A Report to
Congress (July 2008), available at http://www.ftc.gov/os/2008/07/
P064595foodmarketingreport.pdf; FTC, Marketing Violent Entertainment to
Children: A Sixth Follow-up Review of Industry Practices in the Motion
Picture, Music Recording & Electronic Game Industries: A Report to
Congress (Dec. 2009), available at http://www.ftc.gov/os/2009/12/
P994511violententertainment.pdf.

Question 4. The standards for sodium, fat and sugar content set
forth in your April 28 proposal represents a highly detailed
prescription for manufacturing of food products that your report even
acknowledges that ``. . .If the proposed nutrition principles were
fully implemented by industry as proposed, a large percentage of food
products currently in the marketplace would not meet the principles. .
. .''
(a) If the food industry made all of the changes that you
recommend, what would be the cost to the industry and to consumers?
(b) Have you conducted the study that Senator Harkin called for in
his appropriations report directive to the Working Group and did that
provide you with a strong degree of certainty that if you made all of
these changes it would have a perceptible impact on rates of childhood
obesity in this country? Could you provide us with that evidence?
Answer. (a) The FTC does not have the expertise or data to respond
to your question on what percentage of foods currently in the
marketplace would meet the IWG's revised recommendations on nutrition,
and I would defer to the other IWG agencies on that specific aspect of
your question. I want to emphasize, however, that the recommendations
only apply to the marketing of food directly to children, not to
marketing to a general audience or to the sale of food. Moreover, to
the extent the revised IWG nutrition principles (including those
related to sodium, fat, and sugar) are much closer to the industry's
CFBAI program, they should be achievable for most foods and affordable
for industry.
Even assuming the food industry voluntarily implemented the IWG's
revised recommendations in full, the cost would vary depending on how
the companies chose to implement the recommendations. Companies could
use different approaches to implementation, including reformulating
foods marketed to children, substituting one product in their portfolio
for another in child-directed marketing (for example, advertising
orange juice in place of soda), and/or marketing the product to a
general audience.
(b) Yes, based on briefing sessions with the staff members from the
offices of both Senator Harkin and then-Senator Brownback, we believe
that the IWG has fulfilled the directive to conduct a study. The IWG
completed a deliberate and thorough study of relevant marketing
research, nutrition research, and self-regulatory programs governing
food marketed to children. The sources reviewed are detailed in the
IWG's April 28, 2011 Request for Comments on the preliminary proposed
principles. On marketing issues, key sources included the Institute of
Medicine's (``IOM'') 2006 report on food marketing to children and
youth, the FTC's 2008 study on food marketing expenditures and
activities directed to children, and data compiled by the FTC for a
follow-up study.\2\ On the nutrition side, the IWG relied primarily on
the most current nutrition research supporting the 2010 Dietary
Guidelines for Americans. In addition, the IWG solicited public comment
on its preliminary proposal, including 30 specific questions on
marketing, nutrition, and economic impact (costs and benefits).
Congress did not direct the IWG to conduct a study on the impact of its
recommendations on childhood obesity. As Senator Harkin noted in his
July 13, 2011 letter to the IWG agencies, the IOM panel of experts had
concluded in the 2006 IOM Report that ``food and beverage marketing
influences the diets and health prospects of children and youth'' and
that ``food and beverage marketing practices geared to children and
youth are out of balance with healthful diets and contribute to an
environment that puts their health at risk.'' \3\
---------------------------------------------------------------------------
\2\ Institute of Medicine, Food Marketing to Children and Youth:
Threat or Opportunity? (National Academies Press 2006) (2006 IOM
Report); Federal Trade Commission, Marketing Food to Children and
Adolescents: A Review of Industry Expenditures, Activities, and Self-
Regulation, A Report to Congress (July 2008), available at http://
www.ftc.gov/os/2008/07/P064504food
mktingreport.pdf.
\3\ Letter from Senator Tom Harkin and Representative Rosa L.
DeLauro to FTC Chairman Jon Leibowitz, USDA Secretary Tom Vilsack, CDC
Director Thomas Frieden, and FDA Commissioner Margaret Hamburg (July
13, 2011).

Question 5. Have you prepared an economic analysis of the impact of
your proposed restrictions, if fully adopted, on the price of food?
Have you prepared an economic analysis of the impact of implementing
these guidelines on jobs and sales in the U.S. economy?
Answer. The Congressional mandate for the IWG did not include a
directive to conduct an economic impact analysis of the IWG's
recommendations for voluntary industry self-regulation. The IWG did
solicit information on the impact of its proposal as part of its
request for comments.\4\ Furthermore, the substantial revisions the IWG
is making to its recommendations in response to comments should
alleviate any concerns about the economic impact.
---------------------------------------------------------------------------
\4\ The dire economic reports submitted during the comment period,
however, appear to be founded on implausible assumptions and do not
withstand scrutiny. As an example, one study, issued by IHS Consulting,
predicts a loss of 74,000 jobs, but provides no explanation of
methodology or supporting analysis. The IHS prediction is based on a
particularly implausible assumption that advertising spending would
drop by $1.9 billion in the first year alone. That figure represents an
amount larger than the FTC's own estimates of the entire amount spent
annually on all forms of food marketing to both children and
adolescents. A second report, prepared by Georgetown Economic Services,
predicts dramatic increases in the cost of American diets, but is
premised on the assumption that all Americans (both children and
adults) would switch from their current diet to a diet only of foods
meeting the IWG principles--a highly improbable outcome of voluntary
recommendations that relate only to marketing activities directed to
children.
---------------------------------------------------------------------------
______

Response to Written Questions Submitted by Hon. Tom Udall to
Hon. Jon D. Liebowitz
Question 1. Deceptive advertising that could endanger children's
health Mr. Leibowitz, we hear a lot these days about parents' concerns
about sports concussion. Concussions used to just be dismissed as
``dings or ``bell ringers.'' We now recognize concussions as a form of
traumatic brain injury, and we know that multiple concussions or blows
to the head can lead to lasting brain damage.
So it is natural that young athletes, coaches, and parents are
looking for ways to play sports more safely. Unfortunately, some
companies appear to be taking advantage of these safety concerns by
using deceptive concussion prevention claims to sell children's sports
equipment.
Earlier this year, I wrote you to ask for an investigation of
potential violations of the FTC Act related to selling and
reconditioning football helmets. Last month, this committee examined
``anti concussion'' and ``concussion reduction'' claims in marketing
for soccer headbands, helmets, mouth guards, and even dietary
supplements for children's use.
I know you cannot comment on what the FTC may, or may not, be doing
in regards to my request for an investigation.
However, I would like to ask if you share my view that, in general,
issues involving serious children's health concerns should be a high
priority for the FTC when it considers potential enforcement actions?
Answer. I cannot think of an issue that is more important than
protecting children's health and safety. And I am proud to say that the
Commission has a long history of bringing cases to protect children's
health or safety when those interests are potentially implicated by
unfair or deceptive marketing practices.
In the 1970s, the Commission challenged advertising practices that
portrayed children engaging in dangerous behavior or exposed to
potentially dangerous products. Uncle Bens, Inc., 89 F.T.C. 131 (1977)
(consent) (challenging ads that showed children cooking food on stove
without close adult supervision); Philip Morris, Inc., 82 F.T.C. 16
(1973) (consent) (challenging distribution of free sample razor blades
without protective packaging in home-delivered newspapers).
In 1997, we challenged R.J. Reynolds use of the Joe Camel campaign
to market Camel cigarettes, alleging that the campaign induced many
youngsters under the age of 18 to smoke Camel cigarettes or increased
the risk that they would do so.
In 1999, our concern for teenagers and athletes prompted the
Commission to challenge the marketers of purported body-building
supplements containing androstenedione and other steroid hormones for
making allegedly unsubstantiated claims about the safety or lack of
side effects of their products. FTC v. AST Nutritional Concepts &
Research, Inc., Civ. No. 99 WY 2197 (D. Colo., May 4, 2000) (permanent
injunction); FTC v. Met RX USA, Inc., et al., Civ. No. SACV99 1407 DOC
(ANX) (C.D. Cal., Nov. 24, 1999) (stipulated final order for permanent
injunction).
In 2004, in a complaint against the marketer of a product called
the Skinny Pill for Kids, we alleged, among other things, that the
defendants falsely claimed that the Skinny Pill for Kids was proven
safe for children ages 6 to 12. FTC v. Fountain of Youth Group, LLC,
Civ. No. 3:04-CV-47-J-99HTS (M.D. Fla. 2004) (stipulated final order
for permanent injunction).

Question 2. FTC authority to impose civil penalties in cases where
children's health is endangered Mr. Leibowitz, at a hearing last month
this committee examined some of the sports concussion claims used to
children's sports equipment and even dietary supplements. One of the
medical experts at the hearing, Dr. Jeffry Kutcher of the University of
Michigan, told the Committee that:

``The potential harm that I see being caused by products that
claim to prevent concussion, when they do not, is far more than
simply the financial harm of paying more for something that
isn't likely to work as claimed.''

Youth athletes who have already suffered a concussion--as well as
their coaches and parents--could be especially susceptible to false
claims that a product prevents head injuries. Children could end up
putting themselves at greater risk of multiple concussions and lifelong
brain damage if they return to play too soon or if they falsely believe
in a product's claim of concussion prevention.
I introduced legislation that would allow the FTC to impose civil
penalties when companies uses false injury prevention claim to sell
children's sports equipment. For cases such as these, would having
civil penalty authority for violations of Section 5 of the FTC Act help
deter would-be violators from endangering children health?
Answer. I certainly agree with Dr. Kutcher that the potential harm
to young athletes from false or unsubstantiated concussion protection
claims made for sporting goods equipment far exceeds the price of that
equipment and, indeed, may not even be calculable.
We all want sporting goods manufacturers to improve the concussion
protection provided by products they sell. At the same time, it is
critical that they not exaggerate the protective capabilities of those
products in their marketing materials.
The prospect of being subject to civil penalties could deter
sporting goods sellers from making false or misleading safety claims
for their products.
______

Response to Written Questions Submitted by Hon. Mark Warner to
Hon. Jon D. Liebowitz
Question 1. In August 2011, the FTC and the Department of Justice
signed a memorandum of understanding with China, which outlined a
framework for antirust cooperation. Can you outline the Commission's
plans going forward with regard to engagement with China?
Answer. The Commission plans to continue and expand upon its robust
engagement with China's antimonopoly agencies. The new Memorandum of
Understanding provides a framework for enhanced engagement with the
three Chinese antitrust agencies. If re-confirmed, I look forward to
future exchanges between senior officials and staff on issues of
competition policy and practice, including substantive analysis and
procedural best practices. To this end, we plan to continue our
technical assistance programs and workshops for China's antimonopoly
agencies, which have covered a full range of antitrust topics over the
past several years, including programs on merger review, the abuse of
dominance, and the intersection of antitrust and intellectual property
policies. The FTC recently hosted an official from China's Ministry of
Commerce (China's merger review agency) in our Bureau of Competition as
part of our international fellows program (made possible by the
authority granted by Congress under the U.S. SAFE WEB Act) and we look
forward to hosting additional fellows from the Chinese agencies over
the coming years. We will, as appropriate, provide comments on proposed
rules and guidelines issued by China's antimonopoly agencies and share
our experience with China's new agencies as they implement the
antimonopoly law. Finally, in appropriate instances, we will cooperate
with China's agencies on cases under concurrent review.

Question 2. How do you plan to address the technical nature and
handling of specific cases in which enforcement authorities from both
jurisdictions are engaged?
Answer. We will develop our cooperative relations with China's
antimonopoly agencies based on our extensive experience cooperating on
cases with other countries' competition law enforcers, and subject to
all applicable rules regarding confidentiality. Cooperation with sister
antitrust enforcers on cases under common investigation enables the
agencies to identify issues of common interest, improve our analyses,
and avoid inconsistent outcomes on the matter under review, while
promoting greater understanding and convergence toward sound antitrust
analysis. Cooperation may involve exchanges of non-confidential
information, process-related information, such as the timetable for
review, and, as appropriate, staff views on market definition,
competitive effects, and suitable remedies. Discussion of confidential
information submitted by a party or third party occurs only if the
entity grants a waiver of confidentiality. As has been the case with
other jurisdictions, we expect that cooperation on cases with China
will begin modestly and, as we gain experience and mutual trust, may
become more robust over time.

Question 3. There is a major effort underway by U.S. agencies
responsible for trade and investment to address concerns about
discrimination in the approach of China and other economies (EU, India,
Brazil, Korea) to the standards- setting context. How does the FTC
coordinate its approach to IP protection and standards setting with
other departments and agencies in the administration that are
responsible for international standards and IP policies?
Answer. We work together with other U.S. Government agencies to
ensure that foreign governments and audiences understand the importance
of protecting private property rights, including IP rights,
safeguarding a robust competitive process, and ensuring the rule of
law.
The FTC participates in several U.S. Government interagency groups
that address IP issues, including standard setting. For example, with
respect to China the FTC participates in the U.S.-China Joint Committee
on Commerce and Trade (JCCT) and its IP Working Group. In October 2011,
together with USPTO and DOJ Antitrust Division, the FTC co-founded an
inter-agency antitrust-IP coordination group to address issues at the
intersection of intellectual property and competition law and policy.
We also work and coordinate with NIST on standards policy issues that
affect competition.
Through these and other mechanisms, the FTC provides input to and
coordinates with relevant U.S. agencies on the competition-related
aspects of IP and standard setting policies.

Question 4. Where has the FTC identified differences in the
approach it is advocating on standards and IP and the approaches of
other U.S. Government departments/agencies?
Answer. The FTC harmonizes its approach to standards and IP with
the approaches of other U.S. Government departments and agencies. This
harmonization encourages and protects innovation and the resulting
incentives for investment, job growth, and U.S. competitiveness.
To avoid differences in approach, the FTC regularly engages with
other departments and agencies to exchange views regarding each group's
primary focus and expertise. The FTC brings expertise on competition
and a consumer focus to the discussion. Other departments and agencies
bring different expertise and focuses, including patent rights
assignment, export promotion, and international trade negotiations. By
sharing expertise and understanding each other's perspectives, the
agencies can avoid differences in approach.
Examples of the FTC's work with other departments and agencies on
standards and IP include:

As described in the response to 1(C) above, the FTC
participates in interagency discussions regarding IP issues,
including standards, with respect to China.

The FTC and USTR have recently begun a liaison group that
will continue to foster a common understanding of issues
related to standards and intellectual property.

The FTC is an advisory participant in the NTSC Subcommittee
on Standards. The FTC also coordinates with the National
Academies of Science in connection with the standards research
that the NAS conducts on behalf of the USPTO.

The PTO, DOJ Antitrust Division, and the FTC all recently
appointed staff to serve as non-voting members of the American
National Standards Institute's Intellectual Property Rights
Policy Committee. Non-voting observance of this ANSI committee
is one way in which all three agencies maintain a common base
of background facts and knowledge of private institutional
concerns.

In March 2011, the FTC released a report, The Evolving IP
Marketplace: Aligning Patent Notice and Remedies with
Competition,'' \11\ (2011 IP Report), That report articulated
ways in which the law of patent notice and remedies could be
improved to increase innovation and better align the patent
system and competition policy.\12\
---------------------------------------------------------------------------
\11\ This report is available at www.ftc.gov/os/2011/03/
110307patentreport.pdf.
\12\ See 2011 IP Report at 7.

The report was based, in part, on a May 26, 2010,
joint public workshop held by the FTC, Department of
Justice, and the Department of Commerce's U.S. Patent and
Trademark Office on the intersection of patent policy and
competition policy and its implications for promoting
innovation. Assistant Attorney General for the Antitrust
Division Christine Varney, Under Secretary of Commerce for
Intellectual Property and Director of the USPTO David J.
Kappos, U.S. Chief Technology Officer Aneesh Chopra and FTC
---------------------------------------------------------------------------
Commissioner Edith Ramirez each spoke at the workshop.

Eight more days of public hearings explored patent
notice, patent remedies, innovation, and competition issues
with more than 140 participants, including business
representatives from large and small firms, start-ups and
the independent inventor community, leading patent
practitioners, economists, and patent law scholars. The FTC
also received nearly 50 written submissions on these
issues.

The report explains that ``[t]he patent system plays a
critical role in promoting innovation across industries
from biotechnology to nanotechnology, and by entities from
large corporations to independent inventors.'' \13\
---------------------------------------------------------------------------
\13\ 2011 IP Report at 1.

Most of the recommendations in the report are
---------------------------------------------------------------------------
addressed to the courts for their consideration.

The FTC shared a draft of the report with the USPTO
before it was published. The USPTO has expressed agreement
with many of the report's recommendations and has already
implemented some of the report's recommendations for the
USPTO. The FTC expects to continue a dialogue with the
USPTO about these issues.

In 2007, the FTC and DOJ jointly issued a report entitled,
``Antitrust Enforcement and Intellectual Property Rights:
Promoting Innovation and Competition.'' This report focused on
how to incorporate careful consideration of the benefits of
patent rights into antitrust analysis, so that antitrust
enforcers could avoid challenging efficient, legitimate uses of
patent rights, which could undermine innovation incentives and
thereby harm consumers.

Question 5. How does the FTC estimate the likely costs to the U.S.
economy--businesses and workers--of any divergences in policy
approaches among departments and agencies of our government?
Answer. An estimate of the costs to the U.S. economy of any
divergences in policy approaches among different departments and
agencies would inevitably be difficult, if not impossible, and the FTC
has not undertaken such a study. Rather, by taking steps of the kind
described in response to 1(D), the FTC has sought to minimize
divergence in policy approaches to IP and standards setting among the
relevant agencies. We believe our harmonization efforts in the IP and
standard setting areas have been successful. We will continue to work
with other departments and agencies to promote innovation through
strong intellectual property rights and vigorous competition, and to
minimize any costs to the U.S. economy.

Question 6. The FTC has issued reports which say that pay-for-delay
arrangements hurt consumers and increase costs for Federal programs
such as Medicare and Medicaid; in fact, the FTC has said it costs
consumers an estimated $3.5 billion a year. In a report released
October 2011, the FTC pointed to 28 cases that bear the telltale signs
of pay-for-delay, including ``compensation to the generic manufacturer
and a restriction on the generic manufacturer's ability to market its
product.'' The 2011 report highlighted many more cases than an earlier
report your office released on this issue in 2004. Could you give your
opinion as to why these types of arrangements have proliferated in
recent years?
Answer. Since 2005, a few appellate courts--notably the Second and
Federal Circuits--have taken a permissive approach to these deals,
erroneously in my opinion. In essence, they have adopted a legal rule
that allows branded pharmaceutical companies to pay potential generic
competitors any amount of money to stay off the market until patent
expiration, unless the patent was obtained by fraud or the patent
litigation is a sham. The approach presumes all patents are ironclad,
which conflicts with patent law, sound economic analysis, and
established antitrust principles (as well as a prior decision from the
Sixth Circuit). Both the brand company and the generic company make
more money by entering pay-for-delay deals than competing. Therefore,
it is entirely expected that the deals would become commonplace in
response to the lenient treatment that pay-for-delay deals have
received from some courts. Unfortunately, patent settlements that
combine restrictions on generic entry with compensation, according to a
FTC staff analysis, delay generic competition roughly seventeen months
and cost consumers, on average, $3.5 billion a year. Congress could
lower the cost of prescription drugs for both consumers and the Federal
Government by enacting legislation to restrict this practice.
______

Response to Written Questions Submitted by Hon. Mark Begich to
Hon. Jon D. Liebowitz
Question 1. There are a number of companies collecting
unprecedented amounts of personal information about consumers and some
have better track records of protecting that information than others.
Do you feel the FTC has the tools to adequately address data security?
Answer. The Commission has brought more than three dozen actions
challenging companies' failure to implement reasonable and appropriate
data security--most under Section 5 of the FTC Act. I note that what
constitutes reasonable security will depend on the size of the company,
the nature of the data, and the potential risks at issue. Still, I
support the Commission's recommendation that Congress enact Federal
legislation requiring all companies that hold consumer data to take
reasonable measures to safeguard it and to notify consumers when the
security of their information is breached. Such legislation is
important for several reasons. First, it would give the agency a
specific statutory mandate for its data security program. Second,
Congress could require all companies that hold sensitive consumer
data--not just companies within the FTC's jurisdiction--to take
reasonable measures to safeguard it. Third, Federal legislation
requiring notice to consumers when their sensitive information is
compromised in a breach would ensure that consumers, no matter which
state they live in, could take steps to protect themselves. Finally,
legislation would give the Commission authority to seek civil penalties
in data security cases, which would increase the deterrent value of its
orders, as the existing equitable remedies such as disgorgement and
redress are often inadequate in these types of cases.

Question 2. Looking forward with regard to data security, how can
the FTC make sure we are prepared for future technologies and not just
reacting to the past?
Answer. I believe that legal requirements applicable to data
security should be flexible in order to remain current as technology
change and as security threats and vulnerabilities change. The
Commission has followed this approach in its data security program in
applying Section 5 of the FTC Act and in other contexts. In
promulgating the Safeguards Rule to implement the Gramm-Leach-Bliley
Act's security requirements for financial institutions, for example,
the Commission adopted flexible standards based on reasonableness,
rather than prescribing the use of specific technologies. This type of
technology-neutral approach is critical because data security is a
continuously evolving process.
______

Response to Written Questions Submitted by Hon. John Thune to
Hon. Jon D. Leibowitz
Pharmacy Benefit Management
Question 1. In the past few years, the FTC has sent a number of
letters addressing state legislation that attempts to increase Pharmacy
Benefit Management (PBM) transparency. In fact, my own state of South
Dakota has passed legislation attempting to improve PBM transparency.
In each of the letters I reviewed, the FTC sides with the PBMs. These
conclusions seem to be based on 2005 studies that are based on data
from 2002 and 2003. Was the underlying data provided by the PBMs only
or did it include information from any objective third parties?
Answer. Although transparency can be beneficial to consumers, FTC
staff has raised concerns about proposals that would force PBMs to
disclose more confidential business information than other businesses
must legally disclose. Requiring PBMs to disclose certain sensitive
business information could dampen competition and facilitate tacit
collusion among drug manufacturers that compete to be on a formulary or
pharmacies that compete to be in a PBM's pharmacy network; such tacit
collusion could ultimately raise prices to health plans and consumers.
In undertaking any study, the FTC always seeks the most reliable
and valid data that are available, and information from objective third
parties can be very valuable. In this case, the Medicare Modernization
Act of 2003 \1\ directed the FTC to address specific questions, which
the FTC answered in its 2005 study, Pharmacy Benefit Managers:
Ownership of Mail-Order Pharmacies. Because some of the confidential
data needed to answer those questions were not available from any
objective third party,\2\ the FTC subpoenaed data from four groups of
respondents: large PBMs, small and insurer-owned PBMs, retail pharmacy-
owned PBMs, and retail pharmacy chains. The FTC staff then carefully
checked the accuracy of the data provided under subpoena. For example,
FTC staff obtained business documents created by these companies in
their ordinary course of business, which enabled staff to verify that
the data provided to the FTC were consistent with the companies' own
internal analyses discussed in these documents. Furthermore, FTC staff
checked to ensure that the data PBMs reported on prescriptions filled
in retail pharmacies were consistent with data obtained directly from
those pharmacies.
---------------------------------------------------------------------------
\1\ Medicare Prescription Drug, Improvement, and Modernization Act
of 2003, Pub. L. No. 108-173, tit. I, 110, 117 Stat. 2066, 2174, 42
U.S.C. 1395w-101 (2003).
\2\ Federal Trade Commission, Pharmacy Benefit Managers: Ownership
Of Mail-order Pharmacies (Aug. 2005) (``PBM STUDY''), available at
http://www.ftc.gov/reports/pharm
benefit05/050906pharmbenefitrpt.pdf. The vote in favor of the report
was 5-0.
---------------------------------------------------------------------------
Since the release of the FTC's 2005 PBM study, FTC staff has
continued to monitor outside empirical studies of pharmacy benefits,
PBMs, and mail order pharmacies. These are relatively few in number,
and tend to be based on much more limited data sets than those
available for the FTC's report, but their findings are broadly
consistent with those reported in the FTC's report. For example, a
December 2005 study published jointly by the State of Maryland's Health
Care Commission and Insurance Administration found that if Maryland
insurance law were liberalized to allow greater use of mail order
maintenance drugs, Maryland consumers would save 2-6 percent on retail
drug purchases, and third-party payers could receive discounts of 5-10
percent.\3\
---------------------------------------------------------------------------
\3\ Md. Health Care Comm. and Md. Ins. Admin., Mail-Order Purchase
of Maintenance Drugs: Impact on Consumers, Payers, and Retail
Pharmacies, 2-3 (Dec. 23, 2005), available at http://mhcc.maryland.gov/
legislative/mailorderrpt.pdf.

Question 2. Can we trust that the FTC can and will objectively do
its job in examining PBM mergers if we know the FTC has a history of
advocating on behalf of PBMs in state matters?
Answer. The Commission is a competition advocate; it does not
advocate on behalf of private interests. We are an independent,
bipartisan, and expert administrative agency with a strong record of
diligent and effective enforcement to protect consumers from unfair or
deceptive conduct and unfair methods of competition in a great variety
of industries. In fulfilling our mission, we thoroughly investigate
alleged misconduct and review mergers to determine whether they are
likely to injure competition and consumers. We do, and we will continue
to, objectively do our jobs, and we always assess all the evidence
available to us.
______

Response to Written Questions Submitted by Hon. Roger F. Wicker to
Hon. Jon D. Leibowitz
FTC involvement in state alcohol regulation:
Question 1. Are you aware and do you think it appropriate that the
FTC and its field offices have coordinated in the past with private
interests and professional plaintiffs to assist in undermining state
regulatory systems like the one we have in Mississippi?
Answer. The FTC's competition advocacy program, which uses a very
small portion of the agency's resources, responds to requests from
state legislators and regulatory authorities for comments on the likely
competitive effects of proposed laws and rules. FTC staff with
competition expertise explains the nature of any likely competitive
effects and why they may occur. In gathering relevant information to
respond to these requests, FTC staff may consult with a wide variety of
stakeholders, including Federal and state lawmakers, consumers,
industry experts, and large and small businesses, but FTC staff
provides its own analyses in response to requests for comments.
Moreover, FTC staff recognizes that the benefits of healthy
competition--lower prices and greater product variety and convenience--
may not be the only public interests at stake in certain contexts, and
that may be particularly true where the distribution and sale of
alcohol is concerned. State lawmakers have the responsibility to weigh
all of the relevant factors for themselves. FTC staff's analysis simply
provides information that may assist lawmakers and regulators in
assessing the nature and scope of any tradeoffs between the benefits of
competition and other values.

Question 2. Do you see this being a central focus for either of you
moving forward and can you tell me which statutory provisions, if any,
authorize the FTC to become involved in issues relating to how a state
regulates the marketing and sale of alcoholic beverages under its 21st
Amendment authority.
Answer. I do not see this area as a central focus for the FTC
moving forward. In terms of statutory authority, Section 5 of the FTC
Act prohibits both ``unfair methods of competition'' and ``unfair or
deceptive acts or practices'' in most areas of the economy not
expressly exempted from FTC Act scrutiny. Hence, we have scrutinized
proposed mergers in the alcohol industry under the FTC Act and the
Clayton Act. In addition, as explained above, the FTC's competition
advocacy program is designed to respond to requests for comments and to
provide information and analysis on competition issues that state
legislators or other authorities are free to accept or ignore.

Question 3. Under those statutes, what do you see as FTC's proper
role in alcoholic beverage marketing and sale issues--particularly as
it relates to questions of state law?
Answer. I see the FTC's proper role in this area as to continue
enforcing the FTC Act's prohibitions of ``unfair methods of
competition'' and ``unfair or deceptive acts or practices'' through law
enforcement, promotion of effective alcohol industry self- regulation,
and consumer education, and to continue to respond to requests for
comments from state legislators and other regulatory authorities. The
FTC also will continue to respond to Congressional requests in this
area: for example, our 2003 Report, Alcohol Marketing and Advertising:
A Report to Congress,\4\ was conducted under the direction of the
Conferees of the House and Senate Appropriations Committees. Since that
time, the FTC has issued another report dealing with self-regulation by
the alcohol industry \5\ and is now requesting OMB approval under the
Paperwork Reduction Act for a follow-on study in this area.\6\
---------------------------------------------------------------------------
\4\ Alcohol Marketing and Advertising: A Report to Congress (2003),
available at http://www.ftc.gov/os/2003/09/alcohol08report.pdf.
\5\ FTC, Self-Regulation in the Alcohol Industry: Report Commission
(2008), available at http://www.ftc.gov/os/2008/06/
080626alcoholreport.pdf.
\6\ See http://www.ftc.gov/opa/2011/11/alcoholstudy.shtm.

Question 4. How should the FTC coordinate with other Federal
agencies--particularly those charged with regulating alcoholic
beverages--before it adopts a policy position or intervenes in
litigation or legislation?
Answer. The Commission seeks to collaborate with other agencies in
the Federal Government as appropriate to the matter at hand. For
example, the investigation that led to the previously mentioned 2003
Report on Alcohol Marketing and Advertising was conducted in
collaboration with the U.S. Treasury's Alcohol and Tobacco Tax and
Trade Bureau (TTB, formerly the Bureau of Alcohol, Tobacco and
Firearms). The FTC also coordinated the agency's ``We Don't Serve
Teens'' program with the TTB, as well as the U.S. Department of Labor,
U.S. Department of Transportation National Highway Traffic Safety
Administration, and U.S. Department of Education Office of Safe and
Drug Free Schools.

Question 5. I understand why the FTC would be concerned about
unfair methods of competition and unfair or deceptive acts or
practices. But can you tell me what that has to do with state laws
affecting alcoholic beverage marketing or sales? Do you believe that a
state law can be an unfair business practice?
Answer. A duly enacted state statute itself cannot be an unfair
business practice. In particular circumstances, proposed state laws
affecting alcoholic beverage marketing or sales may have procompetitive
or anticompetitive effects. If and when a state legislator asks for
advice on the likely competitive effects of such laws, the FTC staff
responds as appropriate.
PBM's:
Question 6. My constituents have expressed numerous concerns
regarding the potential anticompetitive effects of PBM mergers. They
have informed me this could potentially harm patients by reducing their
choice and access to pharmacy services, resulting in higher drug costs.
I am concerned about the impact these mergers could have on my
constituents. Under your leadership, how should the FTC evaluate and
address these concerns as it reviews ongoing consolidations in this
market? Can we trust the FTC can and will objectively do its job in
examining these mergers?
Answer. Without referring to any particular matter, the FTC would
be concerned about any proposed merger that likely would enable the
merged firm to exploit marketpower by raising price or reducing output.
In addition to these concerns, the Commission also considers the
likelihood that the proposed merger would enable the merged firm to
exercise market power in ways that harm consumers along non-price
dimensions of competition such as product quality, product variety,
service, or innovation. The FTC's concern is always on a merger's
potential to harm competition and consumers, not the identity of the
merging parties. But competition is not just about price; it is about
choices, such as the ease of access to stores or retail outlets that
might be closed if a merger is consummated.
Medco and Express Scripts have disclosed that the FTC is
investigating their proposed merger, but I cannot talk about the
details of the matter. I can tell you that the investigation is being
conducted by an able team of FTC staff, and it will be conducted
objectively, as are all of our investigations.

Question 7. In 2007, the FTC allowed the CVS/Caremark merger to
proceed. Since then, numerous groups have raised concerns about the
conduct of CVS/Caremark. In 2009, the FTC opened an investigation in
these alleged abuses, of which there are signs that even today, these
practices continue. What types of remedies should the FTC consider to
ensure practices like these do not continue to harm consumers?
Answer. It is public knowledge that the FTC is conducting an
investigation of CVS Caremark, a combined pharmacy retailer and PBM.
While I cannot discuss the details of this non-public investigation, I
can tell you that the staffs of the competition, consumer protection,
and economics bureaus are actively working together on this matter.
______

Response to Written Questions Submitted by Hon. John Boozman to
Hon. Jon D. Leibowitz
Question 1. Do transparency, consumer protection concerns, and
access to pharmacists--the frontline/only source of primary care in
parts of rural America--factor into the FTC's investigation of
continued PBM market consolidation?
Answer. Without commenting on any particular merger, as indicated
in the Horizontal Merger Guidelines, the Commission examines many
market facts to determine if a proposed merger is likely to create or
enhance market power. Among the things we consider is evidence relating
to the likelihood that a proposed merger would enable the merged firm
to exercise market power in ways that harm consumers along non-price
dimensions of competition such as product quality, product variety,
service, or innovation. I can assure you that Commission staff is aware
of and will fully consider the concerns of community pharmacists
relating to PBMs.

Question 2. We've seen numerous groups express concern that PBM
consolidation has occurred in conjunction with reduced prescription
drug choices, higher prices, and patient privacy violations. What types
of remedies should the FTC consider to ensure that further PBM
consolidation does not harm consumers?
Answer. The FTC has examined PBMs in various contexts: in merger
investigations; as part of broad-based hearings on health care
competition; and in a ``Conflict of Interest'' study regarding PBM
practices, which was issued in 2005. Scrutiny of competitive issues
relating to PBMs is part of the agency's ongoing efforts to preserve
and promote competition in health care markets. It is now public
knowledge that the FTC is conducting investigations of CVS Caremark and
of the proposed merger of Express Scripts and Medco. While I cannot
discuss the details of these non-public investigations, I can assure
you that the Commission has broad authority to prevent or remedy harm
to competition and consumers wherever found.

Question 3. In response to recent PBM disclosure, abuse, and
transparency legislation passed by various states, the FTC has sent
numerous letters to local officials reiterating PBM-associated cost-
savings. What is the purpose of this advocacy work? In addition, many
of these communications seem to rely on industry-data to support PBM
cost-savings claims. How can one industry's data be used to justify not
regulating that very industry?
Answer. The FTC's competition advocacy program is designed to
respond to requests from state legislators and other regulatory
authorities for an analysis of the likely competitive effects of
proposed laws and rules. In response to such requests, FTC staff has
addressed proposals that would require PBMs to disclose more
confidential business information than other businesses are typically
required to disclose. FTC staff has expressed concern that requiring
PBMs to disclose certain sensitive business information could dampen
competition and facilitate tacit collusion among drug manufacturers
that compete to be on a formulary or pharmacies that compete to be in a
PBM's pharmacy network; such tacit collusion could ultimately raise
prices to health plans and consumers.
Special disclosure requirements might be justified if there was
strong evidence that PBMs exploited an information advantage to charge
their clients unusually high prices. FTC staff has cited evidence on
cost savings as an indication that this is not likely the case. In its
2005 PBM study, Pharmacy Benefit Managers: Ownership of Mail-Order
Pharmacies,\7\ the FTC found the prices for a common basket of
prescription drugs dispensed by PBM-owned mail order pharmacies were
typically lower than the prices charged by retail pharmacies. Moreover,
a 2005 Maryland study found that statutory impediments to the use of
mail-order pharmacies for maintenance drugs can be costly for a State
and its citizens.\8\
---------------------------------------------------------------------------
\7\ Federal Trade Commission, Pharmacy Benefit Managers: Ownership
of Mail-order Pharmacies (Aug. 2005) (``PBM STUDY''), available at
http://www.ftc.gov/reports/pharm
benefit05/050906pharmbenefitrpt.pdf.
\8\ Md. Health Care Comm. and Md. Ins. Admin., Mail-Order Purchase
of Maintenance Drugs: Impact on Consumers, Payers, and Retail
Pharmacies, 2-3 (Dec. 23, 2005), available at http://mhcc.maryland.gov/
legislative/mailorderrpt.pdf (noting greater use of mail-order
maintenance drugs, as would be enabled by liberalizing Maryland
insurance law, would save Maryland consumers 2-6 percent on retail drug
purchases, and provide third-party carriers with discounts of 5-10
percent).
---------------------------------------------------------------------------
The data on which FTC staff relies are not just one industry's
data. The data for the FTC's PBM study were obtained under subpoena
from four groups of respondents--large PBMs, small and insurer-owned
PBMs, retail pharmacy-owned PBMs, and retail pharmacy chains. FTC staff
was able to verify that the data provided to the FTC were consistent
with the companies' internal analyses discussed in their business
documents, which were created in the ordinary course of business, and
that the data PBMs reported on prescriptions filled in retail
pharmacies were consistent with the data obtained directly from these
retail pharmacies. FTC staff also has continued to monitor outside
empirical studies of pharmacy benefits, PBMs, and mail order pharmacies
since the release of the FTC's 2005 PBM Study. These studies are few in
number, and tend to rely on more limited data sets than those available
for our own report, but their findings are broadly consistent with
those of the FTC's 2005 PBM study.
______

Response to Written Questions Submitted by Hon. Patrick J. Toomey to
Hon. Jon D. Leibowitz
Question 1. In the area of consumer protection, the Federal Trade
Commission's FY 2012 budget request stated that the FTC is focused on
``protecting consumers in the financial services marketplace.'' Please
describe in detail the Commission's enforcement, rulemaking, and other
activities over the last 2 years, as well as activities currently
underway. Please include information regarding the personnel, budget,
and other resources required by these activities.
Answer. I appreciate this opportunity to discuss the Commission's
authority, resources, and activities during the past 2 years in
fulfilling our mission to protect consumers of financial services. The
FTC deals with issues that touch the economic life of nearly every
American. It is the only Federal agency with both consumer protection
and competition jurisdiction in broad sectors of the economy. In
consumer protection, the Commission's mandate is to protect consumers
from unfair and deceptive practices. That broad mandate brings the
Commission's work into areas as varied as children's online privacy,
false claims for foods, drugs, and dietary supplements, weight-loss
advertising, scholarship scams, pyramid schemes, and identity theft, to
name just a few. The Commission's actions to protect consumers of
financial services are a very important part of its consumer protection
work.
The FTC is primarily a law enforcement agency, investigating and
prosecuting those who engage in fraud or other unlawful conduct that
harms or is likely to harm consumers. In addition to its law
enforcement role, the Commission engages in rulemaking, consumer and
business education, and research and policy development initiatives to
assist consumers in the financial services marketplace. As part of its
consumer protection mission, the Commission protects consumers at every
stage of the consumer financial services life cycle, from the
advertising and marketing of financial products to debt collection to
mortgage assistance and debt relief.
Authority
The Commission has broad enforcement powers under the Federal
Trade Commission Act (``FTC Act'') to protect consumers of
financial services. The agency can bring law enforcement
actions to enforce Section 5 of the FTC Act, which prohibits
unfair or deceptive acts or practices in or affecting commerce.
In addition, the Commission can bring law enforcement actions
to enforce a number of consumer protection statutes that
specifically relate to financial services, including the Truth
in Lending Act (``TILA''), the Home Ownership and Equity
Protection Act (``HOEPA''), the Consumer Leasing Act (``CLA''),
the Fair Debt Collection Practices Act (``FDCPA''), the Fair
Credit Reporting Act (``FCRA''), the Equal Credit Opportunity
Act (``ECOA''), the Credit Repair Organizations Act (``CROA''),
the Electronic Funds Transfer Act (``EFTA''), and the privacy
provisions of the Gramm-Leach-Bliley Act (``GLB Act''). The
Commission also can enforce rules that it has issued, including
the Mortgage Assistance Relief Services Rule (``MARS Rule''),
the Mortgage Acts and Practices--Advertising Rule (``MAP-Ad
Rule''), and the Telemarketing Sales Rule (``TSR''), as well as
certain rules that other agencies have issued to implement
consumer protection statutes that specifically relate to
financial services, including Regulations B, E, M, and Z. Under
the Dodd-Frank Act, the Commission retains its law enforcement
authority, exercising it concurrently with the Consumer
Financial Protection Bureau (``CFPB'').

The Commission also has authority to issue regulations to
protect consumers of financial services. Pursuant to Section 18
of the FTC Act, the Commission can issue rules to implement
Section 5 of the FTC Act's prohibition on unfair and deceptive
acts and practices relating to financial products and
services.\9\ Pursuant to the Omnibus Appropriations Act of
2009, the Commission also had authority to issue rules
protecting consumers from unfair or deceptive practices in
connection with mortgage-related products and services.
Otherwise, the Commission generally does not have authority to
issue rules to implement consumer protection statutes that
specifically relate to financial services. Pursuant to the
Dodd-Frank Act, the Commission's rulemaking authority under the
2009 Omnibus Appropriations Act and much of the Federal banking
authority consumer protection rulemaking authority passed to
the CFPB as of July 21, 2011. The CFPB also has rulemaking
authority to implement the FDCPA.
---------------------------------------------------------------------------
\9\ The Commission has not used that authority to issue rules
affecting financial practices in more than two decades due to
burdensome procedural requirements required under the Magnuson-Moss
Warranty--FTC Improvement Act that often result in proceedings taking
ten or more years to complete.
---------------------------------------------------------------------------
Resources
As part of fulfilling its consumer protection mission, the
Commission over the past 2 years has allocated significant
resources to conducting the law enforcement and other
activities discussed in detail below. In Fiscal Year 2010, the
Commission allocated 114.6 FTEs (37 percent of its total
Consumer Protection resources), including staff in the Bureau
of Consumer Protection's Divisions of Financial Practices,
Privacy and Identity Protection, Marketing Practices, and
Enforcement, and the agency's regional offices, and $16 million
to its financial services work. In Fiscal Year 2011, the FTC
allocated 101.6 FTEs (33 percent of its total Consumer
Protection resources) and $13.8 million to its financial
services work. The Commission will continue to allocate
significant resources to engage in law enforcement and other
activities to protect consumers of financial services.\10\
---------------------------------------------------------------------------
\10\ The drop in resources between 2010 and 2011 is not indicative
of a change in the Commission's emphasis on protecting consumers in the
financial services marketplace. Rather, the decrease is due to losing
eleven staff to the CFPB, and the time necessary to replace those
positions, and due to the conclusion of several resource-intensive
matters.
---------------------------------------------------------------------------
Recent Law Enforcement Activities
Over the last 2 years, as the economic downturn has persisted,
fraudulent schemes exploiting consumers in financial distress
have proliferated. The Commission's top consumer protection
priority has been and remains using law enforcement to stop
scammers who prey on the most vulnerable consumers, trying to
pick the last dollars out of their pockets through false
promises. In the financial services marketplace, the Commission
has targeted these ``last dollar frauds'' promising assistance
in obtaining mortgage loan modifications and foreclosure
relief; the elimination or reduction of consumers' credit card
debt; tax relief; and credit repair. The Commission also has
been vigilant in engaging in a broad range of activities to
protect consumers in connection with debt collection, mortgage
finance, automobile finance and extended warranties, payment
systems, and credit reporting.\11\ Below is a more detailed
discussion of the Commission's law enforcement activities in
the financial marketplace. In response to your question, I have
identified all actions the Commission has made public during
the specified time-frame of Fiscal Years 2010 and 2011.
Although I cannot discuss non-public investigations, I assure
you that Commission staff has investigated and developed
numerous other matters during Fiscal Years 2010 and 2011 on
which the Commission itself has not yet acted, but will result
in enforcement actions.
---------------------------------------------------------------------------
\11\ The Commission also has brought numerous actions in the past 2
years alleging unfair practices against payment processers assisting
frauds and alleging EFTA and Regulation E violations against frauds
engaging in unauthorized billing practices using consumers' debit
account information. Although these practices involve financial
services, I am not including a discussion of them in this response
because the underlying frauds do not involve financial services.
---------------------------------------------------------------------------
Scams Directed at Consumers in Debt
Mortgage Assistance Relief and Foreclosure Rescue Services--
In Fiscal Years 2010 and 2011, the Commission has filed 13 law
enforcement actions against 76 defendants who offered or
provided purported mortgage assistance relief and foreclosure
rescue services.\12\ All of these cases alleged that the
defendants violated Section 5 of the FTC Act. Most recently,
the Commission recently brought its first case also alleging
violations of the MARS Rule, discussed further below.\13\
During the past 2 years, the Commission has partially or fully
resolved through litigation or settlement 27 cases against 132
defendants, including some of the cases filed during this time
period and some cases previously filed.\14\ In the resolved
cases, the Commission obtained permanent bans and final
judgments totaling over $135.8 million in monetary relief
($56.3 million of which has been suspended based on the
defendants' inability to pay more), for consumer redress and
disgorgement. In addition to bringing its own cases, the FTC
has played a key role in assisting other Federal and state law
enforcers in bringing hundreds of additional law enforcement
actions against loan modification and other foreclosure relief
scams. More cases enforcing the FTC Act and the MARS Rule are
in the pipeline.
---------------------------------------------------------------------------
\12\ FTC v. Christopher Mallett, Case No.1:11-cv-01664-CKK (D.D.C.
filed Sep. 14, 2011) (http://www.ftc.gov/os/caselist/1123105/
index.shtm); FTC v. Phillip A. Flora, Case No. SACV11-00299-AG- (JEMx)
(C.D. Cal. filed Feb. 22, 2011) (http://www.ftc.gov/os/caselist/
1023005/index.shtm); FTC v. U.S. Mortgage Funding, Inc., Case No. 11-
CV-80155-COHN (S.D. Fla. filed Feb. 7, 2011) (http://www.ftc.gov/os/
caselist/1023146/index.shtm); FTC v. Residential Relief Found., Inc.,
JFM 10VC 3214 (D. Md. filed Nov. 15, 2010) (http://www.ftc.gov/os/
caselist/1023234/index.shtm); FTC v. U.S. Homeowners Relief, Inc., No.
SA-CV-10-1452 JST (PJWx) (C.D. Cal. filed Sept. 27, 2010) (http://
www.ftc.gov/os/caselist/1023018/index.shtm); FTC v. National Hometeam
Solutions, LLC, No. 4:08-cv-067 (E.D. Tex. filed Aug. 30, 2010)
(contempt action) (http://www.ftc.gov/os/caselist/0823067/index.shtm);
FTC v. Dominant Leads, LLC, No. 1:10-cv-00997 (D.D.C. filed June 15,
2010) (http://www.ftc.gov/os/caselist/1023152/index.shtm); FTC v. The
Debt Advocacy Ctr., LLC, No. 1:09-cv-2712 (N.D. Ohio filed Nov. 19,
2009) (http://www.ftc.gov/os/caselist/0923143/index.shtm); FTC v. First
Universal Lending, LLC, No. 09-82322-CIV-ZLOCH (S.D. Fla. filed Nov.
18, 2009) (http://www.ftc.gov/os/caselist/0923130/index.shtm); FTC v.
Kirkland Young, LLC, No. 09-23507-CIV-GOLD/MCALILEY (S.D. Fla. filed
Nov. 18, 2009) (http://www.ftc.gov/os/caselist/0923162/index.shtm); FTC
v. Truman Foreclosure Assistance, LLC, No. 09-23543-CV-LEONARD-TURNOFF
(S.D. Fla. filed Nov. 23, 2009) (http://www.ftc.gov/os/caselist/
0923192/index.shtm); FTC v. 1st Guaranty Mortgage Corp., No. 09-CV-
61846 (S.D. Fla. filed Nov.17, 2009) (http://www.ftc.gov/os/caselist/
0923169/index.shtm); and FTC v. Washington Data Res., Inc., No. 8:09-
cv-2309-T-23 TMB (M.D. Fla. filed Nov. 12, 2009) (http://www.ftc.gov/
os/caselist/0923173/index.shtm).
\13\ FTC v. Christopher Mallett, Case No.1:11-cv-01664-CKK (D.D.C.
filed Sep. 14, 2011) (http://www.ftc.gov/os/caselist/1123105/
index.shtm).
\14\ FTC v. Phillip A. Flora, supra; FTC v. U.S. Mortgage Funding,
Inc., supra; FTC v. Residential Relief Found., Inc., supra; FTC v.
National Hometeam Solutions, LLC, supra; FTC v. Dominant Leads, LLC,
supra; FTC v. First Universal Lending, LLC, supra; FTC v. Kirkland
Young, LLC, supra; FTC v. Truman Foreclosure Assistance, supra; FTC v.
1st Guaranty Mortgage Corp., supra; FTC v. Washington Data Res., Inc.,
supra; FTC v. Federal Housing Modification Dept., No. 1:09-cv-01753-RJL
(D.D.C.) (http://www.ftc.gov/os/caselist/0923124/index.shtm); FTC v.
United Credit Adjusters, No. 09-cv-00798 (D.N.J.) (http://www.ftc.gov/
os/caselist/0823211/index.shtm); FTC v. Infinity Group Servs., No.
8:09-cv-00977-DOC-MLG (C.D. Cal.) (http://www.ftc.gov/os/caselist/
0923135/index.shtm); FTC v. Lucas Law Ctr., No. SA-CV-09-770 DOC (ANx)
(C.D. Cal.) (http://www.ftc.gov/os/caselist/0923127/index.shtm); FTC v.
Apply2Save, Inc., (D. Idaho) (http://www.ftc.gov/os/caselist/0923117/
index.shtm); FTC v. Loss Mitigation Servs., Inc., SA-CV-09-800 DOC
(ANx) (C.D. Cal.) (http://www.ftc.gov/os/caselist/0923073/index.shtm);
FTC v. U.S. Foreclosure Relief Corp., SA-CV-09-768 JVS (MLGx) (C.D.
Cal.) (http://www.ftc.gov/os/caselist/0923120/index.shtm); FTC v.
Freedom Foreclosure Prevention Serv., LLC, No. 09-1167 (D. Ariz.)
(http://www.ftc.gov/os/caselist/0923061/index.shtm); FTC v. Data Med.
Capital, Inc., No. SA-CV-99-1266 AHS (EEx) (C.D. Cal.) (http://
www.ftc.gov/os/caselist/x000001.shtm); FTC v. Dinamica Financiera LLC,
No. 09-CV-03554 (C.D. Cal.) (http://www.ftc.gov/os/caselist/0823103/
index.shtm); FTC v. Sean Cantkier, Case No. 1:09-cv-00894 (CKK)
(D.D.C.) (http://www.ftc.gov/os/caselist/0923147/index.shtm); FTC v.
Federal Loan Modification Law Ctr., LLP, Case No. SA-CV-09-401-CJC
(MLGx) (C.D. Cal.) (http://www.ftc.gov/os/caselist/0923070/index.shtm);
FTC v. Home Assure LLC, Case No. 8:09-cv-547-T-23TBM (M.D. Fla.)
(http://www.ftc.gov/os/caselist/0823192/index.shtm); FTC v. Thomas
Ryan, No. 1:09-cv-00535-HHK (D.D.C.) (http://www.ftc.gov/os/caselist/
0923116/index.shtm); FTC v. Hope Now Modifications, No. 1:09-cv-01204-
JBS-JS (D.N.J.) (http://www.ftc.gov/os/caselist/0923079/index.shtm);
FTC v. New Hope Prop., LLC, No. 1:09-cv-01203-JBS-JS (D.N.J.) (http://
www.ftc.gov/os/caselist/0923068/index.shtm); FTC v. National
Foreclosure Relief, Inc., No. 8:09-cv-00117-DOC-MLG (C.D. Cal.) (http:/
/www.ftc.gov/os/caselist/0823067/index.shtm); and FTC v. Safe Harbour
Found. of Florida, Inc., No. 1:08-cv-01185 (N.D. Ill.) (http://
www.ftc.gov/os/caselist/0823028/index.shtm).

Debt Relief Services--In Fiscal Years 2010 and 2011, the
Commission has filed 15 law enforcement actions against 94
defendants who offered or provided purported debt settlement
and other debt relief services.\15\
---------------------------------------------------------------------------
\15\ FTC v. Christopher Mallett, supra; FTC v. Debt Relief USA,
Inc., No. 3:11-cv-02059-N (N.D. Tex. filed Aug. 17, 2011) (http://
www.ftc.gov/os/caselist/0923052/index.shtm); FTC v. Media Innovations,
LLC, No. 8:11-cv-00164-RWT (D. Md. filed Jan. 20, 2011) (http://
www.ftc.gov/os/caselist/0923054/index.shtm); FTC v. Debt Consultants of
Amer., Inc., No. No. 3:10-cv-02447 (N.D. Tex. filed Dec. 2, 2010)
(http://www.ftc.gov/os/caselist/0923152/index.shtm); FTC v. Financial
Freedom of Amer., Inc., No. 3:10-cv-02446 (N.D. Tex. filed Dec. 2,
2010) (http://www.ftc.gov/os/caselist/0923056/index.shtm); FTC v.
Debt.com Mktg., No. SACV10-01788 DOC (Rzx) (C.D. Cal. filed Nov. 22,
2010) (http://www.ftc.gov/os/caselist/0923040/index.shtm); FTC v.
Direct Fin. Mgmt., Inc., No. 10 C 7194 (N.D. Ill. filed Nov. 8, 2010)
(http://www.ftc.gov/os/caselist/1023061/index.shtm); FTC v. Residential
Relief Found., Inc.; FTC v. Dominant Leads; FTC v. Asia Pacific
Telecom, Inc., No. 10 C 3168 (N.D. Ill. filed May 24, 2010) (http://
www.ftc.gov/os/caselist/1023060/index.shtm); FTC v. Advanced Mgmt.
Servs. NW LLC, No. 10-cv-00148- LR (E.D. Wash. filed May 10, 2010)
(http://www.ftc.gov/os/caselist/0923187/index.shtm); FTC v. Credit
Restoration Brokers, LLC, No. 2:10-cv-0030-CEH-SPC (M.D. Fla. filed
Jan. 20, 2010) (http://www.ftc.gov/os/caselist/0823001/index.shtm); FTC
v. JPM Accelerated Servs., Inc., No. 09-CV-2021 (M.D. Fla. filed Nov.
30, 2009) (http://www.ftc.gov/os/caselist/0923190/index.shtm); FTC v.
Econ. Relief Techs., LLC, No. 09-CV-3347 (N.D. Ga. filed Nov. 30, 2009)
(http://www.ftc.gov/os/caselist/0923118/index.shtm: and FTC v. 2145183
Ontario Inc., No. 09-CV-7423 (N.D. Ill. filed Nov. 30, 2009) (http://
www.ftc.gov/os/caselist/0923183/index.shtm).

Eleven of the cases challenged false and unsubstantiated promises
made by entities that they could substantially reduce or
eliminate consumers' debt in violation of Section 5 of the FTC
Act, and, for conduct occurring after the TSR was amended to
cover debt relief services in 2010, in violation of the TSR. In
three of these cases, the Commission challenged the defendants'
practices in connection with the marketing of debt relief
services and mortgage assistance relief services, discussed
above.\16\ Three of the cases charged marketers with using
illegal robocalls to consumers whose phone numbers were on the
Do Not Call Registry, deceptively claiming they could reduce
consumers' credit card interest rates, in violation of Section
5 of the FTC Act and the TSR.\17\ During the same time period,
the Commission has fully or partially resolved 13 cases,
resulting in strong injunctive relief and approximately $197
million (approximately $160.8 million of which was suspended
based on defendants' inability to pay more) as consumer redress
and disgorgement remedies.\18\ More cases enforcing the FTC Act
and the TSR are in the pipeline.
---------------------------------------------------------------------------
\16\ FTC v. Christopher Mallett, supra; FTC v. Residential Relief
Found., Inc., supra; and FTC v. Dominant Leads, supra.
\17\ FTC v. 2145183 Ontario Inc., supra; FTC v. Econ. Relief
Techs., supra; and FTC v. JPM Accelerated Servs., Inc., supra.
\18\ FTC v. Residential Relief Found., Inc., supra; FTC v. Debt
Relief USA, Inc., supra; FTC v. Dominant Leads, LLC, supra; FTC v.
2145183 Ontario Inc., supra; FTC v. Advanced Mgmt. Serv. NW LLC, supra;
FTC v. Media Innovations, LLC, supra; FTC v. Debt.com Mktg., supra; FTC
v. Econ. Relief Techs., LLC, supra; FTC v. MCS Programs, LLC, No. 09-
CV-5380 (W.D. Wash.) (http://www.ftc.gov/os/caselist/0823216/
index.shtm); FTC v. Group One Networks, Inc., No. 8:09-CV-00352 (M.D.
Fla.) (http://www.ftc.gov/os/caselist/0723230/index.shtm); FTC v.
Credit Restoration Brokers, LLC, supra; FTC v. JPM Accelerated Servs.,
Inc., supra; FTC v. Randall L. Leshin, No. 06-61851, CIV-Zloch (S.D.
Fla.) (contempt action resolved Jan. 2010) (http://www.ftc.gov/os/
caselist/0523146/index.shtm).
---------------------------------------------------------------------------
Credit Repair Services--The FTC has filed 4 law enforcement
actions against 14 defendants who offered or provided credit
repair services in the past 2 years.\19\ Two of these cases
have involved alleged violations of the CROA or both the CROA
and FTC Act. The other two cases are contempt actions. In one
of those contempt actions, the defendant was found in civil
contempt of a 2009 Federal court order banning him from
engaging in credit repair activities, arising out of a 2008 FTC
action alleging violations of the FTC Act and CROA. The
remaining contempt action, which is ongoing, alleges violations
of a 2010 Federal court order prohibiting the defendants from
engaging in deceptive marketing practices and from violating
the FTC Act and CROA. During the 2-year period, we have
partially or fully resolved through litigation or settlement 7
cases involving 29 defendants.\20\ In the resolved cases, the
Commission obtained permanent injunctive relief in all of the
cases, bans on engaging in credit repair in 2 cases against 11
defendants, and final judgments totaling $33,886,494 in
monetary relief, including consumer redress and disgorgement.
---------------------------------------------------------------------------
\19\ United States v. RMCN Credit Servs., Inc., No. 4:11-cv-00650
(E.D. Tex. filed Oct. 12, 2011) (http://www.ftc.gov/os/caselist/
0823253/index.shtm); FTC v. Credit Restoration Brokers, LLC, No. 2:10-
cv-00030-CEH-SPC (M.D. Fla. filed Apr. 12, 2011) (contempt action)
(http://www.ftc.gov/os/caselist/0823001/index.shtm); FTC v. RCA Credit
Servs., LLC, No. 8:08-cv-2062-T-27MAP (M.D. Fla. filed June 21, 2011)
(contempt action) (http://www.ftc.gov/os/caselist/0823148/index.shtm);
FTC v. Credit Restoration Brokers, LLC, No. 2:10-cv-00030-CEH-SPC (M.D.
Fla. filed Jan. 20, 2010) (http://www.ftc.gov/os/caselist/0823001/
index.shtm).
\20\ FTC v. Credit Restoration Brokers, LLC, supra; FTC v. RCA
Credit Servs., LLC, supra; FTC v. Advantage Credit Repair LLC, No.
1:08-cv-05994 (N.D. Ill.) (http://www.ftc.gov/os/caselist/0823223/
index.shtm); FTC v. United Credit Adjusters, Inc., supra; FTC v.
Nationwide Credit Servs., Inc., No. 3:08-cv-01000-HLA-TEM (M.D. Fla.)
(http://www.ftc.gov/os/caselist/0823219/index.shtm); FTC v. Clean
Credit Report Servs., Inc., No. 1:08-cv-22922-AJ (S.D. Fla.) (http://
www.ftc.gov/os/caselist/0823220/index.shtm); FTC v. Latrese & Kevin
Enters. Inc., No. 3:08-cv-01001-MMH-JRK (M.D. Fla.) (http://
www.ftc.gov/os/caselist/0823007/index.shtm).

Tax Relief Services--In the past 2 years, the Commission has
filed one case against three defendants and two relief
defendants who offered tax relief services./21/ This case
alleged that the defendants violated Section 5 of the FTC Act.
The case currently is in litigation.
---------------------------------------------------------------------------
\21\ FTC v. American Tax Relief, LLC, No. 11-6397 DSF (PJWx) (C.D.
Cal. filed Sept. 24, 2010) (http://www.ftc.gov/os/caselist/1023083/
index.shtm).
---------------------------------------------------------------------------
Payday Loans
In Fiscal Years 2010 and 2011, the FTC has filed four law
enforcement actions against 30 defendants who offered or
collected on payday loans.\22\ In each of these cases, the
Commission alleged that the defendants violated Section 5 of
the FTC Act. In one case, the Commission also alleged that the
defendants violated FDCPA and the FTC's Credit Practices Rule.
In another, the Commission alleged that the defendants violated
EFTA, and the FTC's Credit Practices Rule. All four of these
actions are currently pending, and the Commission has secured
preliminary relief in each of them. In one case, the court
issued an opinion granting summary judgment in favor of the
Commission, but a final order has not yet been issued. The
Commission also has resolved an outstanding action against four
defendants who deceived payday loan applicants into buying an
unwanted product.\23\ The Commission alleged that the
defendants violated Section 5 of the FTC Act. The Commission
obtained permanent injunctive relief as well as a final
judgment of $5,206,872.
---------------------------------------------------------------------------
\22\ FTC v. LoanPointe, LLC, Case No. 2:10 CV-00225 DAK (C.D. Utah
filed Mar. 15, 2010) (http://www.ftc.gov/os/caselist/1023021/
index.shtm); FTC v. Moneymaker, 2:11-cv-00461-JCM-RJJ (D. Nev. Filed
Apr. 14, 2011) (http://www.ftc.gov/os/caselist/1023165/index.shtm); FTC
v. Direct Benefits Group, LLC, Case No. 6:11-cv-01186-JA-GJK (M.D. Fla.
filed Jul. 19, 2011) (http://www.ftc.gov/os/caselist/1123114/
index.shtm); and FTC v. Payday Fin.l, LLC, Case No. 3:11-cv-03017-RAL
(D.S.D. filed Sept. 6, 2011) (http://www.ftc.gov/os/caselist/1123023/
index.shtm).
\23\ FTC v. Swish Mktg., Inc., C09-03814 (N.D. Cal. filed Aug. 20,
2009) (http://www.ftc.gov/os/caselist/0723241/c0903814.shtm).
---------------------------------------------------------------------------
Debt Collection
In Fiscal Years 2010 and 2011, the FTC filed six law
enforcement actions against 30 defendants engaged in debt
collection.\24\ These actions alleged violations of Section 5
of the FTC Act and the FDCPA. Two of the actions also included
allegations in connection with the marketing of payday loans,
discussed above.\25\ The agency has partially or fully resolved
through litigation or settlement four of these cases with
regard to eight defendants\26\. In the resolved cases, the
Commission obtained $5.645 million in civil penalties. In
addition, in June 2011, the Commission filed an amicus brief
opposing the settlement of a private class action because
consumers would receive only a minimal payment to surrender
their rights under the FDCPA.\27\ More cases enforcing the FTC
Act and the FDCPA are in the pipeline.
---------------------------------------------------------------------------
\24\ FTC v. Forensic Case Mgmt. Servs., Inc., LACV11-7484 RGK (C.D.
Cal. filed Sept. 12, 2011) (http://www.ftc.gov/opa/2011/09/
rumson.shtm); U.S. v. West Asset Mgmt., Inc., 1:11-cv-00746-ODE-JFK
(N.D. Ga. filed March 10, 2011) (http://www.ftc.gov/opa/2011/03/
wam.shtm); FTC v. LoanPointe, supra; FTC v. Payday Fin., LLC, supra;
U.S. v. Allied Interstate, Inc., 10-cv-04295-PJS-AJB (D. Minn. filed
Oct. 21, 2010) (http://www.ftc.gov/opa/2010/10/alliedinterstate.shtm);
U.S. v. Credit Bureau Collection Servs., 2:10-cv-169 (S.D. Ohio filed
Feb. 24, 2010) (http://www.ftc.gov/opa/2010/03/creditcollect.shtm).
\25\ FTC v. LoanPointe, LLC, supra, and FTC v. Payday Financial,
LLC, supra.
\26\ FTC v. LoanPointe, LLC, supra; U.S. v. Allied Interstate,
Inc., supra; U.S. v. West Asset Mgmt., Inc.. supra; U.S. v. Credit
Bureau Collection Servs., supra.
\27\ See Press Release, FTC, FTC Files Amicus Brief in U.S.
District Court Opposing Proposed Class Action Settlement with Debt
Buyer Midland Funding LLC, June 23, 2011, available at http://
www.ftc.gov/opa/2011/06/amicusmidland.shtm.
---------------------------------------------------------------------------
Mortgage Finance
Mortgage Advertising--Given that there has been relatively
less mortgage origination and advertising recently in light of
the economic downturn and credit crunch, the Commission has
focused its resources on combating ``last dollar frauds,'' as
discussed above. Commission staff, however, continues to
actively monitor the mortgage marketplace, including mortgage
advertising.

Fair Lending/Mortgage Origination--In the past 2 years, the
FTC has brought two law enforcement actions against four
defendants who allegedly were violating fair lending laws in
connection with offering or providing mortgages to
consumers.\28\ These cases alleged that the defendants violated
the FTC Act, ECOA, and Regulation B. Both of these cases
settled, with the court entering judgments against the
defendants for $5.5 million and $2.9 million, with these
judgments being suspended upon payment of $1.5 million and
$200,000, respectively. In addition the orders bar the
defendants from discriminating on the basis of national origin
in credit transactions and require them to establish fair
lending monitoring programs.
---------------------------------------------------------------------------
\28\ FTC v. Gateway Funding Diversified Mortgage Servs., L.P., 08-
5805 (E.D. Pa. filed December 15, 2008) (http://www.ftc.gov/os/
caselist/0623063/index.shtm); FTC v. Golden Empire Mortgage, Inc.,
CV09-03227 (C.D. Cal. filed May 7, 2009) (http://www.ftc.gov/os/
caselist/0623061/index.shtm).

In addition, the Commission has been investigating several
companies to determine whether the Commission would have reason
to believe that any of the targets have violated Section 5 of
the FTC Act, The Consumer Credit Protection Act, 15 U.S.C.
1601 et seq., or ECOA and Regulation B in connection with the
---------------------------------------------------------------------------
selling of homes and originating mortgages to consumers.

Mortgage Servicing--In June 2010, the Commission settled
allegations that Countrywide Home Loans, Inc., in connection
with servicing consumers' mortgages, engaged in unfair and
deceptive acts and practices in violation of Section 5 of the
FTC Act.\29\ In addition to barring Countrywide from engaging
in the same or similar acts and practices in the future, the
settlement agreement requires that the company must pay $108
million dollars to injured consumers. To date, more than $72
million of the $108 million has been paid to over 288,000
consumers, with the FTC and its redress administrator working
diligently to return the remaining redress amounts to injured
consumers.
---------------------------------------------------------------------------
\29\ FTC v. Countrywide Home Loans, Inc., Case No. CV-10-4193 (C.D.
Cal. filed June 7, 2010) http://www.ftc.gov/os/caselist/0823205/
index.shtm.
---------------------------------------------------------------------------
Automobile Finance and Warranties
Holder in Due Course Rule--In May 2011, the Commission
announced that it had reviewed the contracts of nearly 50
franchised and independent auto dealers in 45 states, and two
large online automobile dealers, and found that these dealers
were in compliance with the FTC's Holder in Due Course
Rule.\30\ Based on these findings, the FTC staff closed its
investigations of these dealers without law enforcement
actions.
---------------------------------------------------------------------------
\30\ See Press Release, FTC, FTC Finds Broad Compliance Among Auto
Dealers with Rule That Protects Consumers With Car Loans, May 16, 2011,
available at http://www.ftc.gov/opa/2011/05/holderrule.shtm.

Robocalls Promising Extended Automobile Warranties--The FTC
has filed three law enforcement actions against 13 defendants
who violated the Telemarketing Sales Rule and other laws by
making pre-recorded robocalls to consumers that deceptively
offered to extend their existing automobile warranties.\31\ Two
of those cases have been fully resolved and one remains
pending. During the 2-year period, the FTC also has fully
resolved through litigation or settlement three such cases
involving 13 defendants.\32\ In the resolved cases, the
Commission obtained permanent injunctive relief, including bans
on any future telemarketing, and final judgments totaling
$77,493,620 in monetary relief, including consumer redress and
disgorgement. More cases targeting these robocallers are in the
pipeline.
---------------------------------------------------------------------------
\31\ FTC v. Econ. Relief Techs., LLC, supra; FTC v. Asia Pacific
Telecom, Inc., , supra; FTC v. Khalilian, No. 10- 21788 (S.D. Fla.
filed June 2, 2010) (http://www.ftc.gov/os/caselist/1023173/
index.shtm).
\32\ FTC v. Voice Touch, Inc., No. 09 CV 2929 (N.D. Ill.) (http://
www.ftc.gov/os/caselist/0823263/index.shtm); FTC v. Econ. Relief
Techs., LLC, supra; and FTC v. Khalilian, supra.
---------------------------------------------------------------------------
Credit Reporting
The Commission continues to enforce the FCRA against
consumer reporting agencies and users of consumer reports to
ensure that consumer reports are only supplied to those with a
permissible purpose. In the past 2 years, the Commission has
brought 9 law enforcement actions and obtained over $2 million
in civil penalties.\33\ In the Teletrack, Inc. matter for
example, the Commission's complaint alleged that Teletrack
violated the FCRA by selling consumer reports obtained from its
credit reporting business to marketers, who did not have a
``permissible purpose.'' Teletrack sold lists of consumers who
previously sought payday loans to third parties that wanted to
use the information to target potential customers. In addition,
the Commission settled cases with three resellers of consumer
reports where the complaints alleged that because of the
companies' basic security failures, hackers were able to access
sensitive consumer report information.
---------------------------------------------------------------------------
\33\ U.S. v. Teletrack, No. 1:11-CV-2060 (N.D. Ga. filed June 24,
2011) (http://www.ftc.gov/os/caselist/1023075/index.shtm); In the
Matter of SettlementOne Credit Corporation, FTC Docket No. C-4330 (Aug.
19, 2011) (http://www.ftc.gov/os/caselist/0823208/index.shtm); In the
Matter of ACRAnet, Inc., FTC Docket No. C-4331 (Aug. 19, 2011) (http://
www.ftc.gov/os/caselist/0923088/index.shtm); and In the Matter of
Fajilan and Assocs., Inc., FTC Docket No. C-4330 (Aug. 19, 2011)
(http://www.ftc.gov/os/caselist/0923089/index.shtm); U.S. v. First
Advantage SafeRent, Inc., Civ. No. 10-0090 (D. Md. 2010) (http://
www.ftc.gov/os/caselist/0823016/index.shtm); U.S. v. Credit Bureau
Collection Servs., Civ. No. 10-0169 (S.D. Ohio 2010) (http://
www.ftc.gov/os/caselist/0623226/index.shtm); U.S. v. Direct Marketing
Assocs. Corp., Civ. No. 10-0696 (D. Ariz. 2010); U.S. v. Central
Credit, LLC, Civ. No. 10-0565 (D. Nev. 2010); FTC v. Navone, No. 2:08-
CV-01842 (D. Nev. filed Dec. 30, 2009) (http://www.ftc.gov/os/caselist/
0723067/index.shtm).

In July 2010 the FTC staff sent warning letters to 18
companies offering free credit reports warning them of the need
to comply with the Free Credit Report Rule. As a result of this
campaign, the entities that received the letter either shut
down or changed their practices.
Recent Rulemaking Activities
Mortgage Assistance Relief Services Rule--In November 2010,
the Commission issued the Mortgage Assistance Relief Services--
or ``MARS''--Rule, to prevent loan modification and foreclosure
rescue companies from engaging in deceptive and unfair acts and
practices.\34\ Among other things, it prohibits the mortgage
assistance relief providers from making deceptive claims,
requires that they disclose key information, and bars them from
collecting fees until consumers receive a loan modification or
other relief. Administration of the MARS Rule transferred to
the CFPB on July 21, 2011, but the Commission retains the
authority to enforce the MARS Rule, concurrently with the CFPB.
---------------------------------------------------------------------------
\34\ Mortgage Assistance Relief Services, Final Rule, 75 Fed. Reg.
75092 (Dec. 1, 2010), available at http://www.ftc.gov/os/fedreg/2010/
december/R911003mars.pdf.
---------------------------------------------------------------------------
Telemarketing Sales Rule Amendments Regarding Debt Relief
Services--In July 2010, the FTC issued amendments to the
Telemarketing Sales Rule designed to curb deception and abuse
in debt relief services.\35\ In addition to prohibiting
deceptive claims for debt relief services and mandating
disclosures, this Rule prohibits providers of debt relief
services from collecting fees unless and until they have
delivered acceptable results to consumers.
---------------------------------------------------------------------------
\35\ Telemarketing Sales Rule, Final Rule Amendments, 75 Fed. Reg.
48458 (Aug. 10, 2010), available at http://www.ftc.gov/os/2010/07/
100810tsrdebtreliefamendments.pdf.
---------------------------------------------------------------------------
Mortgage Acts and Practices--Advertising Rule--In July 2011,
the FTC issued its Mortgage Acts and Practices--Advertising
Rule (``MAP-Ad Rule''), which bans deceptive claims about
consumer mortgages in advertising or other types of commercial
communications.\36\ The Rule is intended to protect consumers
from such claims and to create a level playing field for
legitimate businesses to compete in the marketplace. Under the
Dodd-Frank Act, administration of the MAP-Ad Rule transferred
to the CFPB on July 21, 2011, but the FTC retains the authority
to enforce the Rule concurrently with the CFPB.
---------------------------------------------------------------------------
\36\ Mortgage Acts and Practices--Advertising, Final Rule, 76 Fed.
Reg. 43826 (July 22, 2011), available at http://www.ftc.gov/os/fedreg/
2011/07/110719mortgagead-finalrule.pdf.
---------------------------------------------------------------------------
Credit Reporting--In the past 2 years, the Commission has
completed the rulemakings required by the Fair and Accurate
Credit Transaction Act (``FACT ACT'') amendments to the FCRA.
In July 2011, the Commission issued amendments to the Risk-
Based Pricing Rule to implement the Dodd-Frank Act.\37\ In
February 2010, pursuant to the Credit CARD Act of 2009, the
Commission amended the Free Credit Report Rule to require
disclosures in the advertising of free credit reports and to
restrict practices that might confuse consumers as they attempt
to obtain their federally mandated free annual credit
reports.\38\
---------------------------------------------------------------------------
\37\ Fair Credit Reporting Risk-Based Pricing Regulations, Final
Rules, 76 Fed. Reg. 41602 (July 15, 2011), available at http://
www.ftc.gov/os/2011/07/110706riskbasedpricingfrn.pdf.
\38\ Free Annual File Disclosures, Final Rule, 75 Fed. Reg. 9726
(Mar. 3, 2010), available at http://www.ftc.gov/os/2010/02/
100223facta.pdf.
---------------------------------------------------------------------------
Recent Consumer and Business Education Activities
Although law enforcement is the primary means used by the
Commission to combat mortgage lending acts and practices that harm
consumers, the Commission also takes an active role in educating
American consumers about issues that affect their financial well-being.
Accordingly, virtually every law enforcement action has an education
component. That helps consumers learn how to recognize, avoid and
report a similar experience. The agency empowers consumers by providing
practical, objective, actionable, and plain language information in
English and Spanish.
In addition, the Commission understands that many businesses seek
guidance on how to comply with the laws and regulations enforced by the
Commission. To that end, the FTC also engages in extensive business
education related to the financial services marketplace, designed using
``plain English'' to help businesses learn how easy it is to comply
with the law.
The FTC communicates to consumers and businesses through print
publications; websites that feature video, interactive games, blog
posts and audio content; the media; and partnerships with other
government agencies, industry associations, and non-profits that help
us leverage resources, raise awareness and improve compliance. FTC
staff also attend and speak at conferences and workshops.
As detailed below, the Commission issued or updated a significant
number of consumer and business education materials over the past 2
years. These items are part of an extensive library of materials at
ftc.gov/consumer and business.ftc.gov.
Additionally, the Commission maintains ftc.gov/MoneyMatters, which
offers short, practical tips, videos, and links to reliable sources on
a variety of topics from credit repair, debt collection, job hunting
and job scams to vehicle repossession, managing mortgage payments and
avoiding foreclosure rescue scams.
The Commission's YouTube channel--YouTube.com/FTCvideos--features
videos ranging from 15 seconds to 10 minutes on a variety of financial-
related subjects, including dramatic stories of people who have avoided
mortgage foreclosure rescue scams and an animated production outlining
the rights of debtors and the rules for debt collectors.
In Fiscal Year 2011, the agency distributed more than 16 million
publications, and logged more than 24 million visits to its consumer
and business information on ftc.gov. The ``Credit'' consumer
information index page is consistently one of the most viewed pages on
the FTC website.

Mortgage Assistance Relief Services--For consumers, the
Commission issued: Mortgage Assistance Relief Scams: Another
Potential Stress for Homeowners in Distress, Forensic Mortgage
Loan Audit Scams: A New Twist on Foreclosure Rescue Fraud, and
For Homeowners, published in cooperation with the Making Home
Affordable program and Hope Now (an alliance of housing
counselors, mortgage companies, investors, and other mortgage
market participants). The Commission worked with the Treasury
Department and the Department of Housing and Urban Development,
as well as with loan servicers and non-profit organizations, to
create and distribute these educational materials to consumers,
including a notice sent to homeowners with their monthly
mortgage statement warning them against scams. The Commission
also issued business education materials: Mortgage Assistance
Relief Services Rule: A Compliance Guide for Business and
Mortgage Assistance Relief Services Rule: A Compliance Guide
for Lawyers to help businesses meet their obligations under the
MARS Rule.

Debt Relief Services--For consumers, the Commission issued
or updated Settling Your Credit Card Debts, Knee Deep in Debt,
and Fiscal Fitness: Choosing a Credit Counselor. For business,
the Commission released Debt Relief Services: Is Your Company
Complying with the Rules?, Debt Relief Services & the
Telemarketing Sales Rule: A Guide for Business, and Complying
with the Telemarketing Sales Rule.

Debt Collection--This past year, the Commission issued the
consumer publication, Paying the Debts of a Deceased Relative:
Who is Responsible?, to explain what to do when a loved one
dies and debt collectors are calling, and Debt Collection
Arbitration: The Who, What, Why, and How to explain how debt
collection arbitration works and consumers rights.

Mortgage Advertising--In March 2011, the Commission updated
its consumer publication, Reverse Mortgages: Get the Facts
Before Cashing in on Your Home's Equity.

Mortgage Servicing--In June 2010, the Commission updated
Mortgage Servicing: Making Sure Your Payments Count.

Payment Methods--In September 2011, the FTC released a new
business publication, New Rules on Electronic Payments Lower
Costs for Retailers, in English and Spanish, informing
businesses that accept payment by credit or debit card about
rules implemented as part of the Dodd-Frank Act, including
interchange fees for debit card transactions, minimum dollar
amounts for credit card purchases, and the networks available
on a debit card for routing transactions. In the last 2 years,
the FTC also updated its publications about gift cards.
Recent Research and Policy Development Activities
The financial services marketplace in the United States is dynamic.
The Commission therefore engages in public workshops and other research
efforts so that it may better understand particular consumer protection
issues in the changing marketplace, and advocate for policies that
promote protections for consumers. During the past 2 years, the
Commission has engaged in such activities in the area of debt
collection and automobile financing. In addition, the Commission staff
often submits formal staff comments and provides informal feedback on
financial services issues to other Federal and state policymakers.

Debt Collection--In July 2011, the Commission issued a final
policy statement clarifying when the FTC would take action
against collectors who are trying to collect the debts of
deceased consumers.\39\ In April 2011, the FTC held a public
workshop to address the impact of new debt collection
technologies and currently staff is working on a report
summarizing what the Commission learned from the workshop.\40\
In July 2010, the Commission issued a report called ``Repairing
a Broken System: Protecting Consumers in Debt Collection
Litigation and Arbitration'' that discussed the serious
problems in the system for resolving debt collection disputes
and that recommended significant reforms to improve the
efficiency and equity of these systems.\41\ In late 2009, the
FTC commenced a comprehensive, empirical study of the debt
buying industry, and the Commission continues to work on this
study. In addition, each March, the Commission has submitted to
Congress its FDCPA Annual Report.\42\
---------------------------------------------------------------------------
\39\ Statement of Policy Regarding Communications in Connection
With the Collection of Decedents' Debts, Policy Statement, 76 Fed. Reg.
44915 (July 27, 2011), available at http://www.ftc.gov/os/2011/07/
110720fdcpa.pdf.
\40\ See Press Release, FTC, FTC to Hold Workshop on Ways to
Protect Consumers As Debt Collection Technologies Change, Apr, 25,
2011, available at http://www.ftc.gov/opa/2011/04/debtcollection.shtm.
\41\ FTC, Repairing a Broken System: Protecting Consumers in Debt
Collection Litigation and Arbitration (July 2010), available at http://
www.ftc.gov/os/2010/07/debtcollectionreport.pdf.
\42\ FTC, Annual Report 2010: Fair Debt Collection Practices Act,
available at http://www.ftc.gov/os/2010/04/P104802fdcpa2010annrpt.pdf;
FTC, Annual Report 2011: Fair Debt Collection Practices Act, available
at http://www.ftc.gov/os/2011/03/110321fairdebt
collectreport.pdf.

Mortgage Advertising--The Commission staff is coordinating
with the CFPB staff regarding their possible development of a
new mortgage shopping form and streamlined mortgage disclosures
---------------------------------------------------------------------------
under Section 1098 of the Dodd-Frank Act.

Fair Lending/Mortgage Origination--In December 2010, FTC
staff submitted comments to the Board of Governors of the
Federal Reserve (``Board'') recommending ways the Board could
strengthen the rules under the Home Mortgage Disclosure Act
(``HMDA'')\43\. HMDA and its implementing Regulation C require
some mortgage lenders to collect and report mortgage data that
the FTC and other government enforcement agencies use to
analyze whether the lenders are complying with ECOA and
Regulation B.
---------------------------------------------------------------------------
\43\ FTC Staff Comment Before the Board of Governors of the Federal
Reserve Concerning the Home Mortgage Disclosure Act (Dec. 3, 2010),
available at http://www.ftc.gov/os/2010/12/
101217Federalreserveregulation.pdf.

Automobile Finance--Under the Dodd-Frank Act, as of July 21,
2011, the Commission acquired the authority to issue rules
prohibiting unfair and deceptive acts and practices in
connection with motor vehicle dealers, using the notice and
comment rulemaking procedures in Section 553 of the
Administrative Procedure Act. To consider whether any new
initiatives would be appropriate in this area--such as
enforcement actions, business or consumer education, and
rulemaking--in 2011 the FTC conducted three roundtable events
around the country, in Detroit, San Antonio, and Washington,
D.C., to gather information on consumer protection issues that
may arise in the sale, lease, or financing of motor
vehicles\44\. FTC staff is considering what it learned through
these roundtables, and it will recommend, if appropriate,
measures to the Commission to protect consumers who buy,
finance, or lease motor vehicles.
---------------------------------------------------------------------------
\44\ See http://www.ftc.gov/bcp/workshops/motorvehicles.

Payment Methods--Title IV of the Credit CARD Act, effective
August 2010, amended EFTA to make it applicable to general-use
prepaid cards, gift certificates, and store gift cards. It also
required the Board, in consultation with the FTC, to issue
related rules. The Commission's staff consulted with the Board,
in connection with its development of these final rules, which
the Board issued in April 2010. Among other things, the rules
provide that gift card funds cannot expire for at least 5
years, and inactivity fees can be charged only after a card has
not been used for at least 1 year. For all cards sold after
January 31, 2011, the expiration date must be clearly disclosed
on the card, and fees must be clearly disclosed on the card or
---------------------------------------------------------------------------
its packaging.

In addition, Section 508 of the Credit CARD Act required the FTC to
conduct a study regarding the cost-effectiveness of making emergency
automated teller machine (ATM) technology available. Such technology is
intended to permit ATM users under duress to electronically alert a
local law enforcement agency that an incident is taking place at the
ATM. The Commission's Bureau of Economics conducted this study and
issued its report to Congress in April 2010.\45\ The report concluded
that the available evidence did not permit definitive conclusions about
whether emergency-PIN or alarm button systems reduce ATM crimes. The
report also determined that these systems may impose substantial
implementation costs, although no formally derived cost estimates of
implementing these technologies are currently available.
---------------------------------------------------------------------------
\45\ FTC, Bureau of Econ. Staff Report, Credit Card Accountability
Responsibility and Disclosure Act of 2009--Report on Emergency
Technology for Use with ATMs (2010), available at http://www.ftc.gov/
opa/2010/05/atm.shtm.

Credit Reporting--In July 2011, the FTC issued a staff
report that compiles and updates the agency's guidance on the
FCRA and withdrew the 1990 FCRA Commentary.\46\ The staff
report, entitled ``Forty Years of Experience with the Fair
Credit Reporting Act: An FTC Staff Report and Summary of
Interpretations,'' provides a brief overview of the FTC's role
in enforcing and interpreting the FCRA and includes a section-
by-section summary of the staff's interpretations of the Act.
In January 2011, pursuant to the FACT Act amendments to the
FCRA, the Commission submitted its fourth interim report to
Congress describing progress the agency has made on a national
study examining the accuracy of credit reports.
---------------------------------------------------------------------------
\46\ FTC Staff Report, 40 Years of Experience with the Fair Credit
Reporting Act: An FTC Staff Report with Summary of Interpretations
(July 2011), available at http://www.ftc.gov/os/2011/07/
110720fcrareport.pdf.
---------------------------------------------------------------------------
______

Response to Written Questions Submitted by Hon. Kelly Ayotte to
Hon. Jon D. Leibowitz
Question 1. The United States' relationship with China has been in
the news a lot lately regarding currency manipulation, trade,
protection of Intellectual Property, counterfeit electronic parts in
the military supply chain, and a host of other issues. China has even
managed to become an issue in the Presidential race. In August, the
FTC, along with DOJ, signed an MOU outlining a framework for antitrust
cooperation with China. Can you give the Committee a sense of plans
going forward with regard to engaging with China? How do you plan to
address the technical nature and handling of specific cases that span
multiple jurisdictions.
Answer. The Commission plans to continue and expand upon its robust
engagement with China's antimonopoly agencies. The new Memorandum of
Understanding provides a framework for enhanced engagement with the
three Chinese antitrust agencies. If re-confirmed, I look forward to
future exchanges between senior officials and staff on issues of
competition policy and practice, including substantive analysis and
procedural best practices. We will continue our technical assistance
programs and workshops for China's antimonopoly agencies, which have
covered a full range of antitrust topics over the past several years,
including programs on merger review, the abuse of dominance, and the
intersection of antitrust and intellectual property policies. The FTC
recently hosted an official from China's Ministry of Commerce (China's
merger review agency) in our Bureau of Competition as part of our
international fellows program (made possible by the authority granted
by Congress under the U.S. SAFE WEB Act). We look forward to hosting
additional fellows from the Chinese agencies over the coming years. We
will, as appropriate, provide comments on proposed rules and guidelines
issued by China's antimonopoly agencies and share our experience with
China's new agencies as they implement the antimonopoly law. Finally,
in appropriate instances, we will cooperate with China's agencies on
cases under concurrent review.
We are very much looking forward to further developing our
cooperative relations with China's antimonopoly agencies based on our
extensive experience cooperating on cases with other countries'
competition law enforcers and subject to all applicable rules regarding
confidentiality. Cooperation with sister antitrust enforcers on cases
under common investigation enables the agencies to identify issues of
common interest, improve analyses, and avoid inconsistent outcomes on
the matter under review, while promoting greater understanding and
convergence toward sound antitrust analysis. Cooperation may involve
exchanges of non-confidential information, process-related information,
such as the timetable for review, and, as appropriate, staff views on
market definition, competitive effects, and suitable remedies.
Discussion of confidential information submitted by a party or third
party occurs only if the entity grants a waiver of confidentiality. As
has been the case with other jurisdictions, we expect that cooperation
on cases with China will begin modestly and, as we gain experience and
mutual trust, may become more robust over time.

Question 2. In your response to my question on the use of Section 5
you indicated in your answer that Section 5 was indeed limited in part
by the remedies available to the FTC. The fact that remedies are
limited does not replace the need to give guidance to the business
community on what types of anti-competitive conduct are uniquely
enforceable under Section 5 and not enforceable under the antitrust
laws. Beyond invitation to collude, what guidance can and should the
Federal Trade Commission offer?
Answer. The Commission's decision criterion for bringing a Section
5 ``unfair methods of competition'' case is whether the practice is
likely to harm competition. As the Supreme Court has found, Congress
clearly intended the FTC's Section 5 authority to extend beyond the
bounds of the antitrust laws. We have used, and will continue to use,
this authority judiciously, and when we use the authority, we will
thoroughly explain our actions so as to provide guidance for the
business community. Recently, the Commission has issued such guidance
in the detailed Complaint and the Analysis to Aid Public Comment that
accompanied our action against U-Haul for allegedly inviting its rival
to collude on price. We also issued such guidance in our Complaint and
Analysis to Aid Public Comment in the Intel matter, which described our
allegations against Intel and described why we concluded that deceptive
conduct by Intel skewed competition in its favor in violation of
Section 5. Additionally, we issue guidance through speeches,
congressional testimony, workshop materials, and advisory opinions.

Question 3. In regard to your remedies point, Section 5 does not
provide for fining authority, nor does it provide for follow-on private
litigation which can seek treble damages. However, in the Intel case,
which you mentioned was settled, the original Federal Trade Commission
complaint suggested compulsory licensing of Intel's intellectual
property as a potential remedy. Compulsory licensing as a remedy can be
far more damaging than a fine or facing treble damages. Further, it has
been widely viewed as an inappropriate remedy in single-firm conduct
cases, including by the Supreme Court. When is it appropriate to
threaten or consider compulsory licensing as a remedy? Is it
irresponsible to treat such a problematic remedy so casually given the
implications for how such a remedy might expansively be used by foreign
antitrust authorities in jurisdictions which have suspect and limited
judicial review?
Answer. The Federal Trade Commission is obligated by law to request
remedies that restore competition as it would have been but for the
anticompetitive conduct of each respondent. When the Commission issues
a complaint, it must provide the respondent with notice as to the range
of remedies that might be imposed on it if all of the law violations
alleged in the Complaint are proven. That notice enables each
respondent to understand, and litigate as it thinks appropriate, not
only the facts and law relating to the conduct alleged, but the
propriety of potential remedies in the event that it is found to have
broken the law. The Commission gives great and careful thought to
remedies, seeking to narrowly tailor them to each matter at hand, but,
at the beginning of a litigation, the Commission must be clear as to
what the broadest possible range of remedies may be supported by the
evidence. Decisions are either made by a Federal district court judge
or appealed to a Federal circuit court, or both. We are not aware of
any principle of Supreme Court (or other) jurisprudence holding that
compulsory licensing is always an inappropriate remedy in
monopolization cases. In fact, although infrequent, in some instances
it is foreseeable that that some form of compulsory licensing may be
necessary to restore competition to a market in which competition has
been stunted by a monopolists' anticompetitive conduct. Where that is a
possibility, the respondents must have notice of it. Accordingly, we
take the utmost care in considering such remedies, and we make every
effort to ensure that this is understood by our foreign partners.

Question 4. Mr. Leibowitz, in testimony before the House Energy and
Commerce Committee, David Vladeck of the Federal Trade Commission
stated that the Interagency Working Group on Food Marketed to Children
would not propose that food companies change the trade dress elements
of their packaging or remove brand equity characters, like Tony the
Tiger, from food products. Please confirm that your final
recommendations will not endorse any restrictions on packaging or in-
store marketing, including packaging and in-store marketing that
features characters not owned or controlled by food companies.
Answer. The Interagency Working Group report is being finalized now
and has not yet been formally approved by the four member agencies.
However, I support the exclusion of packaging and in-store displays,
including characters and trade dress used in such packaging and
displays, from the scope of covered marketing activities.
______

Response to Written Questions Submitted by Hon. John D. Rockefeller IV
to Dr. Rebecca M. Blank
Question 1. Small and rural businesses are the backbone of this
country's economy and provide jobs for millions of Americans. Too often
they are overlooked and don't have a chance to take advantage of
opportunities and assistance provided by the government. What is your
experience with small and rural businesses?
Answer. I believe that supporting small and rural businesses is an
essential component of the Commerce Department's mission. A number of
my cousins run small family farms in rural Missouri and I have watched
them deal with the challenges as well as the rewards of self-employment
in an uncertain economic climate.
One way to help small and rural businesses take advantage of
beneficial services and programs regardless of where a business is
located is to ensure they are able to access information and services
on-line. CommerceConnect is one example of a customer service
initiative that connects American firms with federal, state, and local
business assistance resources, including more than 70 Department of
Commerce programs.
Additionally, access to broadband is indispensable to ensuring
access to information which enables economic growth. I am pleased to
report that the Commerce Department has invested approximately $4
billion in expanding broadband access since 2009. West Virginia was
awarded $130 million from the National Telecommunications and
Information Administration's (NTIA) Broadband Technology Opportunities
Program (BTOP) for expanding and improving broadband infrastructure in
the state with an additional $4.5 million to promote increased
broadband adoption. These projects will directly benefit more than
1,000 community anchor institutions, including hospitals, public safety
agencies, libraries and government offices. Every K-to-12 school in the
state will be connected to broadband, and one project will bring
broadband service to the sparsely populated and terrain-challenged
areas of Hardy County, West Virginia.
The Economic Development Administration (EDA) is another bureau
within the Commerce Department, with which I have worked, that provides
critical economic development support to rural communities and small
businesses. EDA's approach is to support bottom-up economic
development. EDA recognizes that jobs are not created in Washington,
DC, but in regions and communities-and particularly by small
businesses-all across the country. EDA's approach to investment
empowers rural communities to access the specific assistance needed to
support long-term economic development. Historically, slightly more
than 50 percent of EDA investments have been made in rural areas.
If confirmed, I will be committed to ensuring the Department's
programs and services are accessible to small and rural businesses in
West Virginia and across the Nation. These firms are vital to our
economy and future job growth.

Question 2. What will you do to reach firms that may be reluctant
to partner with the government or may not know about the Department's
partnership opportunities?
Answer. In recent years, the Commerce Department has taken
important steps to enhance its outreach to American businesses through
web portals, contact centers and field staff to enable firms to access
information and services provided by the Commerce Department regardless
of where they are located.
For example, CommerceConnect is a customer service initiative that
connects American firms with federal, state, and local business
assistance resources, including more than 70 Department of Commerce
programs. Demand for CommerceConnect services has increased
significantly since it was launched in 2009, which is an indication of
the value its services provide to businesses nationwide. In FY 2011,
CommerceConnect assisted 875 clients, referring them to over 1,300
programs, products and services to address their business needs.
Building on the success of initiatives like CommerceConnect, in
October, President Obama established BusinessUSA, a common, open, web
service for small businesses and businesses focused on exporting. This
effort intends to connect businesses to resources across Federal
government agencies more easily and provide personalized, efficient
service. Through BusinessUSA, we aim to reach businesses in every
corner of the country. The Department of Commerce and the Small
Business Administration are serving as leaders of a growing inter-
agency Steering Committee working to advance BusinessUSA. Together, the
Committee will design, develop and launch this new service, as well as
ensure BusinessUSA becomes a dynamic service that implements ongoing
improvements based on customer feedback. The initial website release is
scheduled for early 2012.
Other outreach to U.S. firms occurs through public events with
senior Department officials. One of the best aspects of my work as a
senior Commerce Department official has been the opportunity to travel
to cities across the country to talk about the work we are doing at the
Department to create jobs through programs such as the National Export
Initiative. In addition, newsletters, webinars, and conferences also
provide important opportunities to educate business owners about the
services available to them through the Department of Commerce that can
help grow their business.
______

Response to Written Questions Submitted by Hon. Maria Cantwell to
Dr. Rebecca M. Blank
Question 1. Marine Operations Center--Pacific CMOC-P--From the
beginning, I have been an adamant opponent of relocating the Marine
Operations Center-Pacific (MOC-P) from the Puget Sound to Newport,
Oregon. For that reason alone, it has been extremely difficult to get
information from the Department on the project. As a result, I demanded
an Inspector General's report of NOAA's MOC-P acquisition. Have you
read the Inspector General's Report? If not, you should carefully read
and evaluate the Inspector General's report and compare it with your
experience at NOAA. At a minimum, I believe you will be very
disappointed with NOAA's process.
I urge you to reach out to MOC-P personnel. As Deputy Secretary, I
want you to hold a closed door meeting with NOAA MOC-P employees,
without senior management. I want you to hear from NOAA employees
themselves about the process of the move, the necessity of maintaining
fleet and collaborative science presence in Seattle. Can you commit to
meeting with NOAA employees in Seattle to discuss this important issue?
Answer. If confirmed, I look forward to visiting NOAA employees and
facilities around the country and I will certainly familiarize myself
with MOC-P, and read and evaluate the Inspector General's report.

Question 2. Ship time, stock assessment surveys and Orcas--I am
very concerned about the impact of drastic cuts to ship time, and the
recent decommissioning of the McArthur II. Fishing quotas in the North
Pacific are based on stock assessment survey data. Without stock data,
regional fishery management councils are forced to lower the total
allowable catch due to stock uncertainty. Cutting ship time will
decrease stock data, which will decrease catch, net profit, and
therefore, could eliminate jobs for Washington state fishermen. As
Deputy Secretary of Commerce, how would you direct NOAA to restore ship
time and protect commercial and recreational fishing jobs in my state?
Answer. If confirmed, I will work to support the requested
resources for ship time and ensure that future budget requests put NOAA
in the best position to support the fishing industry with current, high
quality data. I will also continue to work to ensure NOAA continues to
plan the most efficient allocation of available resources to meet
NOAA's highest priority ship observation needs.

Question 3. Endangered southern resident orca research funding was
cut, eliminating offshore vessel based surveys and inhibiting NOAA
scientists from collecting data critical to the recovery of Orcas. As
secretary, how will you work to restore ship time funding for critical
programs such as orca research mandated by the Endangered Species Act?
Answer. If confirmed, I will be a strong advocate for NOAA to have
the best science on which to base its decisions. As you note, ship time
to collect data and information about fisheries, orcas and ocean
acidification is vital to ensuring NOAA's decisions are scientifically
sound. If confirmed, I would continue to work with the Secretary,
Members of Congress, the fisheries community, academia, and others to
promote and to continuously strengthen the excellence of NOAA's
research and science efforts.

Question 4. Interagency Coordination on Infectious Salmon Anemia
Virus--Infectious salmon anemia virus was recently detected in wild
salmon populations off British Columbia, Canada. This is a huge concern
for Washington state industry because the virus virtually wiped out
fishing industries in Chile and Norway. Recently I introduced an
amendment to H.R. 2112 which calls on the National Aquatic Animal
Health Task Force (NOAA is a member) to produce a report to Congress
outlining the threat. My amendment was cosponsored by Senators
Murkowski, Begich, Boxer, Feinstein, Murray, Wyden and Merkley. As the
Deputy Secretary of Commerce, will you evaluate the threat of
infectious salmon anemia on our commercial, tribal and recreational
fisheries? Can your analysis include potential pathways for
transmission--both in the natural environment and in commerce?
Furthermore, will you direct NOAA to test the susceptibility of Pacific
salmon, steelhead, cod, and herring to the virus? Understanding the
species at rick will enable NOAA to maximize tax payer dollars to
prioritize surveillance and monitoring regimes.
Answer. NOAA is taking this threat very seriously. Healthy salmon
populations are vitally important to the economy, culture, and natural
environment of the United States, particularly the Pacific Northwest.
NOAA is committed to increasing its testing and surveillance of wild,
farmed, and hatchery salmon in sites across the Pacific Northwest to
ensure that any potential threat of a virus is detected at the smallest
scale. In addition, NOAA is working on emergency response plans should
we detect the virus. NOAA's approach will continue to be both
collaborative and thorough so we can rely on the best expertise in
ensuring that our salmon populations remain healthy and our salmon
fisheries remain economically viable.
______

Response to Written Questions Submitted by Hon. Mark Pryor to
Dr. Rebecca M. Blank
Question 1. Do you believe public-private partnerships are an
effective mechanism to address our country's growing workforce gap and
build on successful initiatives such as science parks?
Answer. Yes, public-private partnership can be an important tool in
economic development. Public-private partnerships promote dialogue and
collaboration between private industry and federal, state, and local
officials which can help identify challenges and foster solutions to
issues such as industry workforce training needs in a particular
region. Strong regional clusters often grow from dynamic public-private
partnerships that connect business leaders, universities, non-profit
organizations, government officials, and other strategic partners to
help regions capitalize on shared strengths to enhance regional
economies, create jobs, and compete globally.
Many of the Commerce Department's Economic Development
Administration's (EDA) investments are built on successful public-
private partnerships, including the recently implemented Jobs and
Innovation Accelerator Challenge, which brought together both public
and private partners to build upon America's regional innovation
clusters with the goal of creating jobs and leveraging key industries
for economic growth.
EDA makes strategic investments that foster job creation,
particularly in areas of long-term economic hardship or adjustment, by
investing in public assets and providing economic supports such as
workforce training. Public-private partnerships focused on these types
of investments are sometimes necessary to reduce the risk to private
sector businesses and increase the overall level of investment in
economically distressed regions.
Examples:

The Delta Center for Economic Development at Arkansas State
University in Jonesboro, Arkansas

The Delta Center is an EDA University Center that provides
technical support, strategic planning services, research and analysis,
training, and leadership development for local governments, chambers of
commerce, and development organizations across Arkansas. Through the
Delta Center, University faculty works directly with community leaders
to identify assets and leverage them to build local capacity and grow
the economy. The Delta Center also operates a business incubator and,
with the assistance of Arkansas State's College of Business, supports
the development and growth of small businesses. Since the beginning of
2010, the Delta Center has assisted more than 440 firms, helped create
141 jobs, and helped save 286 jobs.
The Sandia Science and Technology Park in New Mexico is
internationally recognized, master-planned, and strategically located
near the U.S. Department of Energy's Sandia National Laboratory. The
Science and Technology Park is an entire community dedicated to linking
public sector research with private sector business opportunities where
companies and startups collaborate on a broad assortment of
technologies, products, and services. The Park is home to 33 companies
employing over 2,000 people in higher-skill, higher-wage jobs.
Since 2000, EDA has invested $2.8 million in four projects at the
Park. EDA's investments have assisted various stages of the Park's
development, from developing the Park's initial strategic plans, to
building a fiber optic security network, to installing a state-of-the-
art point of presence communication system. The total project costs for
these four projects was $4.9 million.
The Commonwealth Center for Advanced Manufacturing (CCAM) in Prince
George County, Virginia.
CCAM is a public-private partnership that connects best-in-class
manufacturers and many of Virginia's top institutions of higher
education, including the University of Virginia, Virginia Tech
University, and Virginia State University. CCAM's mission is to
transform applied research into business advantages through
collaboration and delivery of new ``production ready'' solutions to
factories. In September 2011, EDA invested $4 million of an $8.8
million project, to construct office and high-bay manufacturing space
at the CCAM facility.
______

Response to Written Questions Submitted by Hon. Mark Warner to
Dr. Rebecca M. Blank
Question 1. In 2010, the President announced a goal of clearing 500
MHz of spectrum over the next decade. NTIA released an initial report
in January 2011 which included 115 MHz of spectrum. Unfortunately, only
15 MHz was being cleared by Federal agencies, the rest would have to be
shared. It is my understanding that NTIA is working on a follow up
report which should be released soon. What is the status of the report?
Answer. The report,--An Assessment of the Viability of
Accommodating Wireless Broadband in the 1755-1850 MHz Band, is
currently in the interagency clearance process managed by the Office of
Management and Budget. We intend to release this report as soon as it
is final in the coming weeks.

Question 2. How much closer will we be to the goal of 500 MHz on
unencumbered spectrum within 10 years?
Answer. NTIA and the Federal agencies have been working diligently
to meet the President's goal as quickly as possible. NTIA's plan
identified over 2,200 megahertz of spectrum for evaluation, prioritized
spectrum bands for review, and targeted four spectrum bands
representing 410 megahertz of spectrum based upon the potential for
relocation within five years.
The upcoming report on the 1755-1850 MHz band will provide a
recommendation on the repurposing of as much as 95 megahertz of
additional spectrum toward the 500 megahertz goal. In January 2012, the
Federal agencies will identify the next band(s) to be reviewed, and
will begin the process toward making additional reallocation
recommendations next fall. In addition to the Federal spectrum being
identified by NTIA, the Federal Communications Commission (FCC)
identified another approximately 280 MHz of spectrum that could
potentially be repurposed for wireless broadband. The reallocation of a
significant portion of this spectrum is dependent on Congress enacting
legislation to authorize the FCC to conduct incentive auctions.
NTIA's most recent status report, including more information on the
spectrum bands for future consideration and upcoming activities, is
available at http://www.ntia.doc.gov/files/ntia/publications/
second_interim_progress_report_on_
the_ten_year_plan_and_timetable.pdf.

Question 3. Will the report any process improvements or other
efforts to help Federal agencies better utilize spectrum?
Answer. No. The report focuses on assessing the viability of
accommodating wireless broadband services in the 1755-1850 MHz band.
This involves identifying the systems currently in the band as well as
the costs of moving these systems to comparable bands. However, in the
American Jobs Act, President Obama put forward proposals to improve the
process by which Federal agencies relocate their systems to other
spectrum, including providing agencies the necessary up-front financial
resources to plan their relocation activities more effectively and
accurately (thus increasing certainty in relocation costs and a faster
relocation schedule); ensuring that agencies come out of the process
with comparable, or where appropriate, updated capabilities; and
ensuring that agencies can recover the costs of sharing their spectrum.

Question 4. I have been concerned for some time now about the state
of spectrum management policy, as you know. Spectrum is a limited
resource and licensees and users are typically more comfortable with
the status quo than with efficiency measures. As you know, I have been
working with Senator Roger Wicker on bipartisan legislation to
modernize the Federal spectrum relocation process in an effort to clear
underutilized Federal spectrum for other uses by making the process
more predictable and transparent for both Federal agencies and
potential spectrum auction bidders. I have also actively encouraged
public safety licensees and commercial licensees to manage spectrum
more efficiently, and I have sought ways to consolidate use of spectrum
where possible. S. 522 was reintroduced this Congress and although it
passed the Commerce Committee without objection last year, the bill
seems to be stalled because of Administration opposition to process
improvements which include creating an independent panel comprised of
OMB, NTIA, and the FCC to review Federal agency relocation plans and a
timeline for transitions. Aside from requests for Congress to authorize
the use of the Spectrum Relocation Fund for forward-planning funding
for Federal agencies--which was included in the spectrum legislation
passed by the Senate Commerce Committee this past summer--I have
received no concrete suggestions or ideas from the Administration. I am
very concerned about the lack of serious dialogue about this
legislation and about a way forward. Will you commit to working with me
to improve the Federal spectrum relocation process so that we can clear
underutilized Federal spectrum for other useful purposes?
Answer. Yes.

Question 5. Can you offer any specific recommendations regarding
process improvements?
Answer. In the American Jobs Act, the President put forward
proposals to improve the process by which Federal agencies relocate
their systems to other spectrum, including providing agencies the
necessary up-front financial resources to plan their relocation
activities more effectively and accurately (thus increasing certainty
in relocation costs and a faster relocation schedule); ensuring that
agencies come out of the process with comparable, or where appropriate,
updated capabilities; and ensuring that agencies can recover the costs
of sharing their spectrum. I support these proposals and, if confirmed,
I look forward to working with Congress to establish the statutory
framework necessary to meet the Nation's spectrum needs in the long
term.

Question 6. I understand the Commerce Department is very focused on
implementing patent reform. Can you provide an update on how this
process is going?
Answer. Under the America Invents Act (AIA), the U.S. Patent and
Trademark Office (USPTO) is charged with implementing new rules to
modernize the U.S. patent system, conducting studies, and establishing
new programs. The agency is on track to implement all the changes in
accordance with statutory due dates.
First, there are 20 provisions in the AIA that impact USPTO
operations and require the agency to promulgate new rules in a staged
manner over a period of 60 days to 18 months from the date of
enactment. The USPTO has implemented seven of those provisions to date,
including the establishment of a prioritized examination procedure
(Track One) option, and is on schedule to issue Notices of Proposed
Rulemaking (NPRMs) for nine additional ones in mid-January. Thereafter,
the USPTO will turn to assembling NPRMs for the remaining provisions.
Second, Congress has mandated the USPTO to conduct seven studies
and consult on two additional ones over a period of four months to
three years from enactment. The agency is well under way to timely
completion of the first two studies, with report due dates in mid-
January 2012. For those two studies, on the issues of prior user rights
and on options to aid independent inventors and small businesses, the
USPTO has conducted public hearings and collected written comments from
the public. The public hearing on prior user rights was conducted on
October 25, 2011, at USPTO headquarters. Two hearings on international
protection for independent inventors and small business were conducted
at USPTO headquarters on October 27, 2011, and at the University of
Southern California Law School on November 1, 2011. The agency is
currently drafting these reports and soon will begin the third study
with a report due date in mid-June 2012.
Lastly, the USPTO must establish four new programs within three
years of enactment. The agency has the first program--pro bono legal
assistance for under-resourced independent inventors and small
businesses--running and is working on launching the other three
programs.

Question 7. How much of an effect will the changes Congress
authorized have on innovation and economic activity?
Answer. The America Invents Act will help to spur innovation and
the economy in various ways, both in the short term and in the long
term.
First, the AIA contains provisions to assist patent holders in
obtaining more certain patent property rights. The AIA migrates the
United States to a first-inventor-to-file system, which entails a
simplified prior art system for judging the novelty and obviousness of
a claimed invention. The AIA also contains a provision to streamline
the information and process for submitting an inventor's oath/
declaration, facilitating the ability of assignees to file patent
applications. The AIA further contains a provision to allow a third
party to submit prior art to the USPTO during patent examination, thus
enabling examiners to weed out unpatentable inventions early in
examination. With more certain patent property rights, patent owners
will be able to license and sell their patents and inventions faster
and easier both nationally and internationally.
Second, the AIA offers ways to remove bad patents from the patent
system, thereby clearing patent thickets and opening doors for new
technology to advance. In particular, the AIA establishes a post-grant
review and inter partes reviews, both of which enable a third party to
challenge the patentability of an issued patent if certain conditions
are met. The agency in turn is statutorily bound to make a decision
within 12 months with a six month good cause extension possible. Post
grant review and inter partes review offer an alternative to district
court litigation and will be faster and cheaper for the parties.
Third, the AIA requires the USPTO to establish specialized programs
to assist independent inventors and small businesses in securing patent
protection for their inventions. These provisions are critical to the
U.S. economy as two out of three new jobs are created by small
businesses. More specifically, the USPTO has already established a pro
bono program to assist under-resourced independent inventors and small
businesses to file and prosecute patent applications before the USPTO.
In the same spirit, the USPTO is required to establish a Patent
Ombudsman to further assist independent inventors and small businesses
in prosecuting patent applications in the USPTO. And the AIA requires
the USPTO to study and report to Congress on ways that the USPTO or
other government agencies can financially assist small business in
obtaining global patent rights, such as through a loan or grant
program.
Finally, the AIA contains financial provisions that are favorable
to fully funding the USPTO, such as granting the USPTO fee setting
authority and imposing a 15 percent surcharge on current fees. With
additional funds, the agency will be able to hire more examiners and
administrative patent judges to tackle the backlog of unexamined patent
applications and pending appeals, respectively. The agency likewise
will be able to modernize its outdated automation systems. Both changes
will speed patent examination, enhance the quality of review, and bring
forward inventions to market that are presently sitting in the USPTO
files.

Question 8. Can you provide an overview of the SelectUSA program
and how it is progressing?
Answer. SelectUSA was established by Executive Order on June 15,
2011 to create jobs, spur economic growth, and promote American
competitiveness by facilitating business investment in the United
States. SelectUSA resides within the U.S. & Foreign Commercial Service
(USFCS) of the International Trade Administration (ITA) at the U.S.
Department of Commerce (DOC). SelectUSA serves as a single point of
contact for individual companies, U.S. economic development
organizations (EDOs), foreign EDOs, and other relevant stakeholders
that need assistance or guidance regarding investing in the United
States. SelectUSA serves investors primarily through ombudsman,
advocacy and information clearinghouse activities. It works with
foreign companies who are considering U.S. investment, as well as with
expanding domestically based companies who are weighing U.S. versus
non-U.S. locations.
Ombudsman: SelectUSA provides comprehensive ombudsman support to
current or prospective investors encountering obstacles or confusion in
the Federal regulatory process, or seeking to identify Federal
resources (e.g., programs or existing investment incentives) that will
facilitate business investment, retention, or expansion in the United
States. The program facilitates this service at the request of a
company, or an EDO on behalf of a company.
Advocacy: SelectUSA will, at the request of a U.S. EDO engaged in
an international business investment location competition, provide U.S.
government-level advocacy (e.g., promotion) of the United States as a
destination for a company to invest. Individual U.S. state, local, and
regional EDOs often compete against one another as well as national
level foreign governments in site selection competitions. To level the
international playing field, SelectUSA can, when appropriate, promote
the U.S. business climate to a potential investor in an ongoing
international business investment location competition that may be at
risk or in which a decision is imminent, and when a federal-level
engagement can convey the appropriate support.
Information Clearinghouse Activities: SelectUSA serves as an
information clearinghouse for current or prospective business
investors, their agents, and the U.S. EDOs that seek to attract,
retain, or expand business investments in their respective communities.
SelectUSA responds to investor inquiries, disseminating information to
companies that need it to investigate the logistical process of making
an investment in the United States. SelectUSA leverages media and its
own brand to disseminate information to current and prospective
investors and U.S. EDOs, driving demand to its suite of services and
promoting the United States as a destination for business investment.

Question 9. How will SelectUSA encourage more investments from
foreign companies?
Answer. SelectUSA encourages foreign direct investment in the
United States by providing foreign investors with information and
guidance on the process of investing in the United States.
SelectUSA's Ombudsman service is targeted to the needs of foreign
investors and helps firms understand and navigate the Federal
regulatory process if they encounter confusion or difficulty. The
program also helps firms identify Federal resources (e.g., programs or
existing investment incentives) that will facilitate business
investment, retention, or expansion in the United States. SelectUSA
also responds to investor inquiries and disseminates information
regarding U.S. market and investment trends, as well as the competitive
advantages of investing in the United States.

Question 10. How will this program interact with state and local
economic development efforts?
Answer. SelectUSA provides U.S. state, regional, and local EDOs
with support in their efforts to attract, retain, or expand business
investment in their respective communities. This support is provided in
a geographically neutral manner--the program never directs a current or
prospective investor to one investment destination over another within
the United States. SelectUSA's Advocacy service can assist U.S. EDOs as
they compete for an investment decision against foreign governments,
when appropriate, by coordinating federal-level engagement to encourage
investment in the United States (e.g., promoting the United States
overall as a destination for investment). This support helps level the
international field for U.S. EDOs engaged in international business
investment location competitions. Senior leadership in the U.S.
Department of Commerce or elsewhere in the U.S. Government may be asked
to engage on behalf of a U.S. EDO to promote the United States as the
investment destination rather than another country. The ombudsman
service (described above) is also leveraged to support U.S. EDOs.
______

Response to Written Questions Submitted by Hon. Mark Begich to
Dr. Rebecca M. Blank
Question 1. Alaska recently endured a massive winter storm with
hurricane force winds and a strong tide surge. There's no question
lives were saved because of advance notice of the timing and severity
of this approaching storm. Alaskans took heed and hunkered down,
boarded up buildings and got away from the coast, stayed with family
and friends or in village schools. Our Polar orbiting weather
satellites (JPSS) need replacement to maintain the accuracy of the
Nation's forecasts. These are a big ticket item in tough economic
times--but absolutely necessary to protect lives and property. This
information also necessary for National Defense. What does the Commerce
Department need to strengthen our weather forecasting through
modernization of the weather satellite system?
Answer. First, let me say how pleased we were by the JPSS funding
level in the FY 2012 final appropriation for the National Oceanic and
Atmospheric Administration (NOAA). We very much appreciate the support
and recognition of the program's importance. Our National Weather
Service's (NWS) Weather Forecast Offices (WFOs) in Anchorage and
Fairbanks recognized the storm potential of the recent storm in Alaska
almost six days in advance. This was primarily due to predictions
provided by numerical weather models prior to the storm. These models
were fed, in large part, by data from NOAA polar-orbiting satellites.
Both Geostationary Operational Environmental Satellites (GOES) and
Polar Operational Environmental Satellites (POES) were critical to
forecast operations: GOES, when the storm was south of 50N latitude and
the Western Aleutian Islands; and POES, when the storm crossed into the
Central Bering Sea. The Fairbanks WFO and the Alaska Regional
Operations Center provided around the clock Impact Decision Support
Services to the state and Federal partners throughout the event, and
provided staffing at the state Emergency Operations Center 15 hours per
day Monday through Thursday. WFOs Fairbanks and Anchorage, the NWS
Alaska Aviation Weather Unit, and the NWS Alaska Regional Operations
Center continued to provide weather support to the state and Federal
partners, and communities as restoration and recovery efforts proceeded
following the storm.
Geostationary and polar-orbiting satellites are complementary data
sources required to meet NOAA's forecast mission. Between these two
systems, the Nation is provided with advance notice of unexpected
severe weather, such as hurricanes, winter storms, and even solar
storms; however, it is imperative that these programs receive adequate
and timely funding over the next several years to ensure mission
continuity. The Department of Commerce appreciates the strong
bipartisan effort that resulted in $924 million for JPSS in the FY 2012
CJS conference report. This funding is vital to keeping the program on
track and to avoid exacerbating the likely gap in observations that is
the result of previous funding challenges. The lack of timely and
adequate funds in FY 2011 has led to an almost 100 percent chance of a
gap in polar-orbiting satellite coverage in the afternoon orbit between
the end of NPP's operational life and the launch of JPSS-1. In order to
prevent that gap from increasing, the JPSS program will need adequate
and timely funds over the next several years, which is why the current
funding level is so important. Similarly, the next-generation GOES-R,
scheduled to launch in 2015, will provide continuity of coverage and
improvement over our current GOES satellites, but one of the biggest
risks to the program's success is budget uncertainty. GOES-R received
full funding in the FY 2012 CJS conference bill, but the program will
need sustained funds in order to meet the targeted launch date. With
sustained adequate funding, the Department of Commerce will be able to
maintain and strengthen our weather forecasting through modernization
of the weather satellite system.

Question 2. These satellite systems are a major portion of the
Department's budget and can crowd out other worthy programs. Is there a
way to think creatively about how to pay for them, such as through
future spectrum sales? Would you be willing to work with this committee
on such approaches?
Answer. Our weather satellite systems are important pieces of
national infrastructure that support two of the Department of
Commerce's Primary Mission Essential Functions. We believe that
accurate weather forecasting is a key national security concern,
protecting this Nation from the damage of severe storms, supporting
large amounts of weather-dependent commerce, and providing vital
information to the military. In this tight fiscal environment, it is
imperative that we have stable and adequate funding for the weather
satellite program, which may require alternative sources of funding.
The Department of Commerce and NOAA have examined using spectrum
auction proceeds as a potential alternative for programs like the Joint
Polar Satellite System; however this would require legislation to
achieve. If confirmed, I would look forward to continuing to work with
the Secretary to explore these and other potential funding options with
the Committee.

Question 3. Alaska provides up to 60 percent of the Nation's
seafood in any given year. Managing these marine fisheries is a major
responsibility of the Commerce Department. I am concerned in these
tough economic times there will be a reduction in the basic research
and management efforts--like stock assessments. Will the Commerce
Department continue to support the basic research needed to maintain
this economic engine and the sustainability of our stocks?
Answer. It is important that NOAA carry out its Magnuson-Stevens
Act responsibilities to utilize sound science to sustain healthy fish
stocks and a healthy and profitable fishing industry. However, NOAA is
limited by current budget realities. If confirmed, I will continue to
work with the Secretary to ensure NOAA invests its resources in a
manner that fulfills its obligations and sustains our Nation's
commercial and recreational fishing businesses to the fullest extent
possible during these trying fiscal times.

Question 4. Alaska fishermen generally have trust in the science
and management under the Magnuson Stevens Act, but fishermen elsewhere
tell me they do not. What can we do to bridge this gap in trust between
fishermen and managers of this important Federal responsibility?
Answer. The National Oceanic and Atmospheric Administration's
(NOAA) National Marine Fisheries Service (NMFS) shares a goal with the
fishing industry of ensuring there is a healthy and sustainable fishing
industry in the future. An effective working relationship with the
fishing industry is essential to meeting this important goal, and NOAA
has made significant efforts over the past two years to improve this
relationship. If confirmed, I pledge to continue to work with the
Secretary to make sure that NOAA continues its efforts to improve
relations with the fishing industry.

Question 5. Alaska's economy depends on international exports of
seafood, minerals and other resources. What steps can we take to
strengthen our Nation's international trade? How can the Commerce
Department improve relationships with tribal entities and in rural
areas, which sometime feel overlooked, to improve economic stability
and foreign trade even in these constrained budget times?
Answer. The Commerce Department is working hard to promote the
National Export Initiative (NEI), with a goal of doubling exports of
U.S. goods and services by the end of 2014. Since it was announced, the
NEI has leveraged government resources and policies to help create
conditions that have allowed exports to grow at an annualized rate of
16.3 percent, a pace that puts us ahead of schedule toward the goal. If
confirmed, I will continue to work alongside Secretary Bryson, the
International Trade Administration and other bureaus within the
Department to ensure the Department remains on track to double exports
in five years. We must continue to robustly enforce our trade laws to
provide a fair and level playing field for U.S. firms and workers as
well as maximize opportunities to expand market access abroad through
direct advocacy and removing barriers to trade.
Further, the recently adopted free trade agreements with Korea,
Panama and Colombia will benefit many industries in Alaska by
eliminating and lowering tariffs for U.S. products and increasing
market access for U.S. goods and services. Korea is a particularly
important market for Alaska's energy, seafood and other products. The
Commerce Department stands ready to work with businesses throughout
Alaska and the Nation to ensure they are able to take advantage of the
benefits these trade agreements provide as the Administration moves
forward with implementation of the agreements.
To work effectively with any specific community, government
officials need to develop working relationships which enable dialogue
and collaboration. This then opens the door to share information about
relevant programs and services. As Under Secretary for Economic
Affairs, I oversaw the 2010 Decennial Census. I know from my work with
the U.S. Census Bureau how important it was for census workers to
develop relationships with Native American communities and tribal
entities. Engaging community leaders an developing partnerships with
Native communities was essential for the Census Bureau to complete the
2010 Census.
If confirmed as Deputy Secretary, I will encourage the same
approach to engage tribal entities in Alaska to promote exports and
economic growth. Further, I would welcome your suggestions on how the
resources of the Commerce Department can best help tribal entities grow
their businesses and create jobs.
______

Response to Written Questions Submitted by Hon. Olympia J. Snowe to
Dr. Rebecca M. Blank
Question 1. As the Ranking Member of the Subcommittee on Oceans,
Atmosphere, Fisheries, and Coast Guard, the concerns of Maine's
fishermen are my concerns. Given that prior to Secretary Bryson's
confirmation you served as Acting Secretary and prior to that, served
as Acting Deputy Secretary, I know you are well aware of the concerns
of New England fishermen and the marine community, which have been
detailed in numerous independent reports by the Inspector General and
outside consultants.
Addressing these problems has been a significant focus for both the
agency and the Department in recent years--indeed, in 2010, a year when
we saw the worst oil spill in our Nation's history, the Department's
Inspector General still identified ``Effectively Balancing NOAA's Goals
of Protecting the Environment and Supporting the Fishing Industry'' as
one of the Department's top challenges in 2011. While we have moved on
to name new--top challenges‖ for 2012, the fishermen of Maine
are still working to address some of the practical and operational
concerns that adversely affect their businesses.
Just this morning, I, along with the rest of the New England
delegation, received a letter from a group of groundfish fishermen
asking for our support in building critical management infrastructure
and funding for science so that we can have better fisheries
management. They believe, as do I, that we should be promoting
stability, profitability and flexibility for the fishing industry in
our work here in Washington. If you are confirmed as Deputy Secretary,
how will you ensure that NOAA is actively seeking pragmatic solutions
to constructive requests for cooperation from the fishing industry, and
working aggressively to implement them?
Answer. To promote a healthy and sustainable fishing industry, we
must work together with fisheries stakeholders to ensure that the
resources on which the fishing industry depends are healthy and used
sustainably. The Department and NOAA are dedicated to empowering
fishermen to participate as partners in the development of workable
solutions to New England fisheries management issues. If confirmed, I
look forward to continuing to work with the Secretary and NOAA to
ensure the fishing industry has a voice in the ongoing development of
fisheries management practices and infrastructure in New England and
across the Nation.

Question 2. The American manufacturing sector, like the rest of the
American economy, was hit hard by the latest recession. But as a result
of a confluence of events, U.S. manufacturers have been on an uneven
playing field when it comes to competing with the rest of the world
since before the recent economic downturn. Specifically, rising health
care and energy costs, compliance with myriad regulations, and high
tort litigation costs are placing American manufacturers at a strong
disadvantage. As an anecdote, the U.S. corporate tax rate remains by-
and-large unchanged over the past two decades, while major competitors
have lowered theirs. These so called external costs, according to the
National Association of Manufacturers (NAM), have resulted in a nearly
18 percent disadvantage for U.S. manufacturing firms when compared with
similar costs for nine of America's major trading partners. It is no
wonder, then, that manufacturing in May grew at the slowest pace in 20
months, and it has lost over six million jobs--or roughly one-third of
its employment--over the past decade.
Despite these challenges, there can be no doubt that manufacturing
is essential to our Nation's future. In 2008, U.S. manufacturing
generated $1.64 trillion worth of goods, meaning that if it were a
country, it would be the eighth largest economy in the world.
Furthermore, the United States is the world's largest manufacturing
economy, as it produces 21 percent of all global manufactured products.
American manufacturing is responsible for 12 million American jobs
directly, and another 6.6 million indirectly, for a total of one in six
private sector jobs. And U.S. manufacturing employees have notably
higher annual earnings and are recognized as the most productive
workers in the world. According to the Manufacturers Association of
Maine, workers in my home state's manufacturing sector earn almost
$1,000 per month more than their counterparts in other sectors, and
they have increased output per employee by 66 percent over the past 8
years--from $60,000 in 2001 to $89,000 in 2009. If confirmed, what
specific steps will you take as Deputy Secretary of Commerce to
strengthen the position of American manufacturers in the global
economy, so that they can create jobs and opportunity here?
Answer. The American manufacturing sector is critical to our long-
term economic strength. Many years ago, I worked with a variety of
heavy manufacturing industries as a consultant for an economic
forecasting company, a job which taught me a great deal about the
realities of business and the value of a strong domestic manufacturing
base. U.S. manufacturers are a primary source of exports and provide
good paying jobs for hard-working Americans. Secretary of Commerce John
Bryson has made it one of his top priorities to help the domestic
manufacturing sector succeed and thrive. If confirmed as Deputy
Secretary, it will be my privilege to support Secretary Bryson and the
Obama Administration in this work by helping U.S. manufacturers become
more innovative at home and competitive abroad. Recognizing how
critical the manufacturing sector is to the overall U.S. economy, the
Obama Administration is committed to building domestic manufacturing
capabilities to create the new products, new industries and new jobs of
the future.
At the Commerce Department, we are bolstering our efforts to help
strengthen and grow manufacturing in the United States. Our National
Institute of Standards and Technology (NIST) is particularly well-
positioned to support this goal because of its unique mission to work
closely with industry. As such, NIST recently created the position of
Chief Manufacturing Officer and appointed Michael Molnar to serve in
this new role.
Mr. Molnar, a manufacturing industry executive, will be responsible
for planning and coordinating NIST's broad array of manufacturing
research and services programs. He will serve as NIST's central point
of contact with the White House, the Department of Commerce and other
agencies on technical and policy issues related to manufacturing. This
new position will leverage NIST's strong relationships with industry to
accelerate innovation that will create 21st-century manufacturing jobs
and enhance our global competitiveness. As part of this effort, he will
work to promote and support the Advanced Manufacturing Partnership
launched this summer by President Obama that brings industry,
universities and the Federal Government together to invest in emerging
technologies.
To further help manufacturers succeed, the Department will continue
to invest in research and development; work to increase exports of
manufactured goods through the National Export Initiative, which is on
track to achieve the Administration's goal of doubling U.S. exports
over five years; and robustly enforce our trade laws to ensure American
firms can compete fairly in the global marketplace. Additionally, the
Department will prioritize programs with a record of success in
benefiting manufacturers such as the Hollings Manufacturing Extension
Partnership. Further, the Department will work aggressively to
implement the recently adopted America Invents Act to ensure American
manufacturers and their employees are able to realize the full benefit
of their ingenuity, innovation and hard work by speeding the delivery
of a patentable idea to the marketplace.
If confirmed as Deputy Secretary, I will meet regularly with all
bureau chiefs of the Department to measure progress and ensure that
these and other top priorities of the Department remain on track. If
confirmed, I will also continue to oversee the Department's annual
budget planning and will work to prioritize and coordinate program
funding across bureaus to ensure programs and initiatives that
demonstrate success in helping U.S. manufacturers are adequately funded
in a time of reduced overall budgets.
______

Response to Written Questions Submitted by Hon. John D Rockefeller IV
to Maureen K. Ohlhausen
Question 1. I urge the FTC to remain vigilant about children's
privacy issues and to use all the tools at its disposal to protect
children's privacy. Ms. Ohlhausen, do you agree that the proposed
changes are necessary to strengthen COPPA?
Answer. The FTC has sought to protect children's online privacy for
many years through the promulgation and enforcement of the COPPA Rule,
other enforcement actions under Section 5 of the FTC Act, and consumer
and business education and outreach efforts. I strongly support these
activities by the FTC to protect children's privacy. In September 2011,
the Commission proposed changes to the COPPA Rule to reflect
technological changes in the marketplace, such as Internet access
through smart phones and gaming platforms and new methods of
information collection. I agree that it is necessary to strengthen and
update the COPPA Rule to continue to protect children's privacy as they
access the Internet through new devices and their personal information
is collected in new ways that were not anticipated in the original
COPPA Rule promulgated over a decade ago.

Question 2. During the debate over the Dodd-Frank Act, I worked
hard to preserve FTC's authorities and prevent the transfer of consumer
protection authority for financial products and services over to the
Consumer Financial Protection Bureau (CFPB.) The result will be that
there are two ``cops on the beat'' in this essential area. How do you
anticipate that the FTC and the CFPB will work together? Once the CFPB
has a director in place and begins to exercise its full authority, what
role do you see for the FTC in consumer financial protection?
Answer. As you acknowledged in your question, the FTC's authority
over an array of nonbank financial products and services was
essentially preserved in the Dodd-Frank Act. I anticipate that the FTC
will successfully coordinate and consult with the CFPB regarding
rulemaking and enforcement activities involving consumer financial
products and services, as well as with regard to handling financial
complaints and promoting financial literacy. The FTC already has a good
track record of coordinating oversight and enforcement with other
federal agencies, such as the FDA and the FCC, which can provide a
template for its work with the CFPB. It is also my understanding that
the FTC and CFPB are in the process of negotiating a memorandum of
understanding, as required by the Dodd-Frank Act. If confirmed, I would
encourage the FTC to maintain an active enforcement agenda and to
coordinate with the CFPB to protect consumers effectively, while
avoiding undue duplication of efforts or regulatory inconsistency.

Question 3. There are some who believed that the FTC should step
back and let the CFPB take over all aspects of consumer financial
protection. I am pleased to see that the FTC has not taken that
approach and has continued aggressive enforcement. In your next term, I
urge you to stay vigilant and continue to protect consumers from
financial frauds and scams. Ms. Ohlhausen, what are your thoughts on
how the FTC should use its authority in conjunction with the CFPB?
Answer. American consumers are facing many challenges in connection
with the recent financial downturn, and I believe that one way the FTC
should use its enforcement authority to challenge violations that seek
to exploit consumers' vulnerabilities, such as in the areas of debt
collection, loan modification, and mortgage servicing. For example,
after the official launch of the CFPB this summer, the FTC has brought
a case against Rincon Management Services for abusive debt collection
practices and against payday lender Payday Financial for deceptive
practices. I believe the FTC should continue to pursue these kinds of
violations.

Question 4. Since the repeal of Prohibition, states have been the
primary authority when it comes to regulating the distribution and sale
of alcohol. States have enacted varied laws that presumably reflect the
attitudes and beliefs that their citizens have about alcohol sales and
health and safety issues. Ms. Ohlhausen, the Office of Policy Planning
has issued reports and other public documents regarding state
regulation of alcohol sales. The FTC has a mission to promote
competitive free markets, but alcohol is a drug highly susceptible to
abuse (particularly by minors) and is not akin to consumer products or
services. Why does the FTC have an interest in using its resources to
weigh in on state laws and regulations regarding alcohol sales and
distribution?
Answer. Alcohol usage, particularly underage drinking, poses many
challenges for states and the federal government, and the sale and
distribution of alcohol can raise issues that fall under the
Commission's FTC Act and Clayton Act authority over competition and
consumer protection matters. Thus, the Commission has long engaged in a
wide variety of activities involving the alcohol industry, including
antitrust enforcement regarding mergers in the spirits and wine
industries and consumer protection enforcement, such as the recent
action against Phusion Projects for deceptive advertising of its Four
Loko product. The Commission staff has also engaged in policy-oriented
work in connection with alcohol for many decades, including monitoring
alcohol advertising for compliance with self-regulatory principles,
providing views to other federal agencies on alcohol labeling issues,
issuing economic studies of the alcohol industry, providing a
Congressionally requested report on the advertising of certain alcohol
products, and creating public-private education campaigns to discourage
serving alcohol to teens. Through these activities carried out over
many years, the FTC has gained expertise in competition and consumer
protection issues related to the distribution and sale of alcohol.
State officials have for several decades contacted the FTC staff to
request advice on the likely impact on consumers and competition of
particular proposed state legislation or regulation in a variety of
areas in which the FTC has expertise, such as healthcare, gasoline,
privacy, and alcohol. In response to these requests, the FTC staff,
with the approval of the Commission, routinely issues letters that
provide such advice to aid the requesting state officials based on the
Commission's experience and expertise in certain industries. These
letters only offer advice, however, and the state official must make
his or her own decision about what best serves the state's
constituents' needs. For alcohol distribution issues in particular, the
FTC staff has stated that ``clearly, other public interests are at
stake besides the consumer interests in low prices, product variety,
and convenience, and states must weigh policy choices for themselves.''
(FTC Staff Wine Report, July 2003, at 2.)
______

Response to Written Questions Submitted by Hon. Bill Nelson to
Maureen K. Ohlhausen
Question 1. As a former state legislator and insurance
commissioner, I am a firm believer in our system of federalism. Alcohol
regulation, in particular, is an area historically reserved to the
states under a three-tiered system of regulation. You have written
extensively as a private citizen and a government official about the
interstate commerce aspects of alcohol marketing. As an FTC
Commissioner, what would be your view on the proper role of the
Commission in the regulation and marketing of alcohol? And as an FTC
commissioner, do you anticipate pushing for policies that contemplate a
larger role for the FTC in promoting direct shipment of wine or
alcohol?
Answer. Alcohol usage, particularly underage drinking, poses many
challenges for states and the federal government, and the sale and
distribution of alcohol can raise issues that fall under the
Commission's FTC Act and Clayton Act authority over competition and
consumer protection matters. Thus, the Commission has long engaged in a
wide variety of activities involving the alcohol industry, including
antitrust enforcement regarding mergers in the spirits and wine
industries and consumer protection enforcement, such as the recent
action against Phusion Projects for deceptive advertising of its Four
Loko product. The Commission staff has also engaged in policy-oriented
work in connection with alcohol for many decades, including monitoring
alcohol advertising for compliance with self-regulatory principles,
providing views to other federal agencies on alcohol labeling issues,
issuing economic studies of the alcohol industry, providing a
Congressionally requested report on the advertising of certain alcohol
products, and creating public-private education campaigns to discourage
serving alcohol to teens. If confirmed, I would support the FTC
continuing to exercise its enforcement and study authority in
connection with the alcohol industry in the same manner as it has done
in the past.

Question 2. What express provisions of federal or constitutional
law give the Federal Trade Commission authority over alcohol or to
promulgate policies affecting the sale or marketing of alcohol?
Answer. The FTC has authority under the FTC Act and the Clayton Act
to review mergers and authority under the FTC Act to challenge
anticompetitive behavior in many industries, including the alcohol
industry, and to exercise consumer protection oversight over marketing
and advertising practices in many industries, including alcohol. In
addition, Section 6 of the FTC Act gives the FTC authority to conduct
studies and issue reports.

Question 3. In a 2003 report issued by FTC staff, you wrote
``consumers could reap significant benefits if they had the option of
purchasing wine online from out-of-state sources and having it shipped
directly to them. Consumers could save money, choose from a much
greater variety of wines, and enjoy the convenience of home delivery.''
What analysis, if any, did staff give to the public health and public
safety implications of direct shipment of alcohol to consumers?
Answer. The 2003 FTC staff wine report included an economic study
of the effects on price and availability of a state prohibition on the
direct shipment of wine, as well as an examination of whether direct
shipment would allow minors easier access to wine. Recognizing that the
states play a vital role in alcohol regulation and the prevention of
underage drinking, the report also included the results of a survey of
the 24 states that permitted the direct shipment of wine about whether
they had experienced problems with minors accessing alcohol through
direct wine shipments (most states reported few, if any, problems) and
what safeguards they employed to prevent such access. The 2003 wine
report also noted, however, for alcohol distribution issues ``clearly,
other public interests are at stake besides the consumer interests in
low prices, product variety, and convenience, and states must weigh
policy choices for themselves.'' (FTC Staff Wine Report, July 2003, at
2.)
______

Response to Written Questions Submitted by Hon. Maria Cantwell to
Maureen K. Ohlhausen
Question 1. Since 2007, oil prices have jumped from $90 per barrel
in December 2007, to $147 per barrel in June 2008, to $31 per barrel in
December 2008, to $115 per barrel in March 2012, to around $100 per
barrel today. During this same period, there has been little change in
the world's oil supply and demand balance. What is your explanation for
this oil price volatility?
Answer. The volatility in oil prices has created many challenges
and concerns for American consumers and the U.S. economy. As part of
the FTC's extensive oversight of the petroleum industry, which includes
enforcement and monitoring, its staff has also undertaken studies and
produced extensive reports. A September 2011 report by the staff of the
FTC Bureau of Economics found that crude oil prices since 2005 have
changed due to shifts in both world-wide demand and supply. The report
found that despite the global recession, which affected consumption in
some areas, overall consumption increased by almost 7% between 2004 and
2010, which has put upward pressure on crude oil prices, despite
increases in world production.

Question 1a. To what extent do you believe forces beyond changing
global crude prices and supply and demand fundamentals play a role in
this price volatility?
Answer. According to the FTC staff's September 2011 report,
currently over 70% of the world's proven oil reserves are in OPEC
member countries. OPEC's attempts to maintain the price of oil by
limiting output and assigning quotas also plays a role in price
volatility. In addition, it appears likely that political instability
in some oil producing regions may also contribute to price volatility.
The FTC should also be vigilant about detecting any anticompetitive
conduct that may affect oil prices and that falls under the FTC's
jurisdiction (OPEC's activities do not).

Question 1b. To the extent you believe that forced beyond supply
and demand fundamentals play a role in this price volatility, how will
you use the tools and resources of the Commission to improve the
Commission's current protections for consumers and ensure a wholesale
petroleum market free from fraud and manipulation?
Answer. I believe it is important for the FTC to be vigilant about
whether any anticompetitive conduct that violates the U.S. antitrust
laws is contributing to the volatility of oil prices. I support the
Commission's use of its many tools to ensure a well-functioning
wholesale petroleum market, including enforcement, monitoring, and
research.

Question 2. I authored legislation that was included as part of the
Energy Independence and Security Act of 2007 that, for the first time,
charged the Federal Trade Commission with the responsibility of
policing the wholesale petroleum markets for manipulation. I was
pleased the Commission completed a Final Petroleum Market Manipulation
Rule that did not include a safe harbor for futures markets activities.
As the final rule makes clear, oil futures markets are inextricably
linked to wholesale oil markets, and policing the wholesale markets for
manipulation requires a view into the oil futures markets. Over the
last three years, oil consumers have ridden a gas-price roller coaster
with fluctuating prices that cannot be explained by supply and demand
fundamentals. For example, December crude oil prices have varied from
$85 per barrel in 2007, to $31 in 2008, to $73 in 2009, to $86 in 2010,
with peaks at $147 in June 2008 and around $100 today.
Like the Commission, the Federal Energy Regulatory Commission
(FERC) was given nearly identical market manipulation authority in the
2005 energy bill, and to date it has aggressively used this authority
to conduct 93 investigations resulting in 45 settlements totaling over
$150 million in penalties. Congress intended that the Commission
enforce its market manipulation rule with the same proactive
aggressiveness that FERC employs, to deter manipulative behavior,
prosecute bad actors, and draw a bright line to distinguish legal from
prohibited behavior.
I wrote to the Commission on March 25, 2011, asking for an
investigation into gas price volatility and asking what specific steps
it was taking to proactively enforce its final Petroleum Market
Manipulation Rule. I was terribly disappointed with the Commission's
response on April 19, 2011, that provided no information on what the
Commission was doing to implement aggressively and proactively the
Final Petroleum Market Manipulation Rule. The response letter confirmed
that the Commission is doing little more than ``monitoring daily
gasoline and diesel prices'' and ``evaluating complaints'' through
``email and telephone hotlines.'' Chairman Leibowitz stated that when
the Petroleum Market Manipulation Rule was finalized that ``This new
Rule will allow us to crack down on fraud and manipulation that can
drive up prices at the pump. We will police the oil markets--and if we
find companies that are manipulating the markets, we will go after
them.''
Do you believe the Commission has done everything it could have to
use the authority of the Petroleum Market Manipulation Rule
aggressively in order to protect consumers from unnecessarily high and
volatile gas and diesel prices?
Answer. It is my understanding that the FTC is conducting an
investigation to determine whether certain oil producers, refiners,
transporters, marketers, physical or financial traders, or others have
engaged in anticompetitive conduct or provided false or misleading
information regarding oil or petroleum products to a federal agency. As
a private attorney, I do not at this time know the current state of
this investigation. If confirmed, I would consult with agency staff and
the Commissioners about how the FTC has conducted the investigation and
its progress to date.

Question 2a. If confirmed, would you support the Commission being
more aggressive and proactive in implementing the Petroleum Market
Manipulation Rule in order to protect consumers from unnecessarily high
and volatile gas and diesel prices?
Answer. If confirmed, I would consult with agency staff and the
Commissioners about the status of the current investigation and whether
there is evidence that entities have violated the Petroleum Market
Manipulation Rule. If the investigation reveals evidence of illegal
conduct, I would support enforcement action by the FTC.

Question 3. Recently, a group of Attorneys General from 36 states
and 3 U.S. territories recently sent a letter to the Commission urging
you to take action against the unfair competition suffered by U.S.
manufacturers and workers when they are forced to compete against
companies that use stolen information technology to illegally cut their
costs. The letter included examples of this problem, including a paper
mill in Washington State that must compete with a Mexican paper mill
using over $10 million in stolen software. U.S. manufacturers and
workers are among the most efficient in the world, and I have no doubt
they can compete with anyone that plays by the rules. But they cannot
possibly compete against manufacturers that gain an unfair cost
advantage by stealing millions of dollars in U.S. technologies. Is
there anything, in your view, that the Commission can do to help
protect U.S. manufacturers and workers against this form of unfair
competition?
Answer. The FTC should examine under Section 5 of the FTC Act any
``unfair methods of competition'' that harm competition, consistent
with agency precedent and guiding case law.
Question 3a. Do you believe that existing federal law gives the
Commission authority it needs to address this type of unfair
competition, or would it need additional tools or authority from
Congress?
Answer. Whether the activities you describe would constitute unfair
methods of competition under Section 5 of the FTC Act as guided by
agency precedent and relevant case law is a complex and novel matter.
Without an analysis of the likely effects on competition of the conduct
at issue, I cannot at this time determine whether the FTC can address
such conduct as an ``unfair method of competition'' under the FTC Act.
______

Response to Written Questions Submitted by Hon. Mark Warner to
Maureen K. Ohlhausen
Question 1. In August 2011, the FTC and the Department of Justice
signed a memorandum of understanding with China, which outlined a
framework for antirust cooperation. Can you outline the Commission's
plans going forward with regard to engagement with China?
Answer. It is my understanding that the FTC will participate in
periodic high-level consultations among the FTC, the U.S. Department of
Justice, and China's three antitrust agencies to promote communication
and cooperation among the agencies. Specific activities will include
exchanges of information and advice; training programs and workshops to
enhance agency effectiveness; the provision of comments on proposed
laws, regulations, and guidelines; and cooperation on specific cases or
investigations, when in the agencies' common interest.

Question 1a. How do you plan to address the technical nature and
handling of specific cases in which enforcement authorities from both
jurisdictions are engaged?
Answer. The FTC and Chinese antitrust agencies may (but are not
required to) work together on antitrust cases and mergers that impact
both the U.S. and China. It is my understanding that the FTC may share
views and non-confidential information with the Chinese agencies but
that it may not share confidential information unless the parties who
provided the information agree and grant a waiver. If confirmed, I will
consult with FTC staff and the Commissioners about specific cases that
involve enforcement authorities from both jurisdictions to ensure that
they are handled in a fair and expeditious manner that, where
appropriate and consistent with U.S. antitrust law, enhances
convergence towards internationally-recognized best practices and
avoids conflicting outcomes.

Question 1b. There is a major effort underway by U.S. agencies
responsible for trade and investment to address concerns about
discrimination in the approach of China and other economies (EU, India,
Brazil, Korea) to the standards-setting context. How does the FTC
coordinate its approach to IP protection and standards setting with
other departments and agencies in the administration that are
responsible for international standards and IP policies?
Answer. I believe it is important for the U.S. government to strive
to speak internationally with one voice on these issues, and it is my
understanding that the FTC works with other federal agencies to
coordinate the U.S. approach to IP protection and standard setting
policy. For example, the FTC participates in U.S. government
interagency discussions and processes and works with the State
Department and agencies with responsibility for international trade,
intellectual property, and other policies. The FTC is part of
interagency groups that can include USTR, the Department of Commerce,
the Department of State, and other federal agencies on some aspects of
implementation of competition laws and policies of other countries,
such as China.

Question 1c. Where has the FTC identified differences in the
approach it is advocating on standards and IP and the approaches of
other U.S. government departments/agencies?
Answer. I am not aware of instances in which the FTC has identified
differences in its approach on standards and IP and the approaches of
other U.S. government departments or agencies. It is my understanding
that the FTC's position has generally been that properly understood,
antitrust and intellectual property are not in conflict, that the mere
exercise of intellectual property rights does not harm competition, and
that the kinds of practices in connection with IP that do harm
competition are the same as those regarding other forms of property,
such as collusion and improper exclusion. If confirmed, I will consider
carefully any differences between the approach the FTC is advocating on
standards and IP and the approaches of other parts of the U.S.
government.

Question 1d. How does the FTC estimate the likely costs to the U.S.
economy--businesses and workers--of any divergences in policy
approaches among departments and agencies of our government?
Answer. It is my understanding that the FTC works with other
federal agencies to coordinate the U.S. approach to a variety of
issues, such as IP and privacy law, in an effort to reduce any
divergences in policy among departments and agencies. Given these
efforts, I believe the FTC understands that any divergence in policy
approaches among departments and agencies in the U.S. government may
impose costs, but I am not aware of how the FTC estimates what these
costs would be.

Question 2. The FTC has issued reports which say that pay-for-delay
arrangements hurt consumers and increase costs for federal programs
such as Medicare and Medicaid; in fact, the FTC has said it costs
consumers an estimated $3.5 billion a year. In a report released
October 2011, the FTC pointed to 28 cases that bear the telltale signs
of pay-for-delay, including ``compensation to the generic manufacturer
and a restriction on the generic manufacturer's ability to market its
product.'' The 2011 report highlighted many more cases than an earlier
report your office released on this issue in 2004. Could you give your
opinion as to why these types of arrangements have proliferated in
recent years?
Answer. It is important for the FTC to be vigilant about
maintaining competition in the pharmaceutical marketplace to protect
consumers, and the FTC has challenged as anticompetitive some
agreements between branded and generic pharmaceutical companies that
would have delayed generic entry into the marketplace. Although a
federal circuit court in 2003 found illegal an agreement between a
branded and a generic pharmaceutical company to delay entry, several
other federal circuit courts subsequently held that similar agreements
were not illegal. I believe that these agreements have proliferated in
recent years because they benefit the parties to the agreement and the
risk that such agreements will be found illegal under the antitrust
laws is greatly reduced in light of these subsequent court decisions.
______

Response to Written Question Submitted by Hon. Mark Begich to
Maureen K. Ohlhausen
Question. I have heard some concerns about the FTC overstepping its
authority and overturning state laws regulating alcohol. Do you believe
that the FTC is in a better position to determine which alcohol laws
contribute to the ``welfare'' of a state's citizens than its own
legislators and locally elected officials?
Answer. Alcohol usage, particularly underage drinking, poses many
challenges for states and the federal government, and the sale and
distribution of alcohol can raise issues that fall under the
Commission's FTC Act and Clayton Act authority over competition and
consumer protection matters. Thus, the Commission has long engaged in a
wide variety of activities involving the alcohol industry, including
antitrust enforcement regarding mergers in the spirits and wine
industries and consumer protection enforcement, such as the recent
action against Phusion Projects for deceptive advertising of its Four
Loko product. The Commission staff has also engaged in policy-oriented
work in connection with alcohol for many decades, including monitoring
alcohol advertising for compliance with self-regulatory principles,
providing views to other federal agencies on alcohol labeling issues,
issuing economic studies of the alcohol industry, providing a
Congressionally requested report on the advertising of certain alcohol
products, and creating public-private education campaigns to discourage
serving alcohol to teens. Through these activities over many years, the
FTC has gained expertise in competition and consumer protection issues
related to the distribution and sale of alcohol.
State officials have for several decades contacted the FTC staff to
request advice on the likely impact on consumers and competition of
particular proposed state legislation or regulation in a variety of
areas in which the FTC has expertise, such as healthcare, gasoline,
privacy, and alcohol. In response to these requests, the FTC staff,
with the approval of the Commission, routinely issues letters that
provide such advice to aid the requesting state officials based on the
Commission's expertise in consumer protection and competition issues in
these industries. These letters only offer advice, however, and the
state official must make his or her own decision about what best serves
the state's constituents' needs. For alcohol distribution issues in
particular, the FTC staff has stated that ``clearly, other public
interests are at stake besides the consumer interests in low prices,
product variety, and convenience, and states must weigh policy choices
for themselves.'' (FTC Staff Wine Report, July 2003, at 2.)
______

Resonse to Written Questions Submitted by Hon. Roger F. Wicker to
Maureen K. Olhausen
FTC involvement in state alcohol regulation:
Question 1. Are you aware and do you think it appropriate that the
FTC and its field offices have coordinated in the past with private
interests and professional plaintiffs to assist in undermining state
regulatory systems like the one we have in Mississippi?
Answer. As part of a broad policy inquiry, in 2002, the FTC staff
held a workshop to examine possible barriers to e-commerce in ten
industries, including online contact lenses, real estate brokerage, and
wine. The Commission staff eventually issued a report on online wine
sales (2003), a report on online contact lens sales (2004), and a
report on real estate brokerage (2007). In connection with the workshop
and the subsequent report on online wine sales, the FTC staff consulted
with representatives of the wine industry, wholesalers, state attorneys
general, state alcohol regulators, state tax collectors, and private
delivery companies. The FTC staff also solicited public comment and
reviewed materials from the (then) Bureau of Alcohol, Tobacco,
Firearms, and Explosives.
The 2003 FTC staff wine report included an economic study of the
effects on price and availability of a state prohibition on the direct
shipment of wine, as well as an examination of whether direct shipment
would allow minors easier access to wine. Recognizing that the states
play a vital role in alcohol regulation and the prevention of underage
drinking, the report also included the results of a survey of the 24
states that permitted the direct shipment of wine about whether they
had experienced problems with minors accessing alcohol through direct
wine shipments (most states reported few, if any, problems) and what
safeguards they employed to prevent such access. The 2003 wine report
also noted, however, for alcohol distribution issues ``clearly, other
public interests are at stake besides the consumer interests in low
prices, product variety, and convenience, and states must weigh policy
choices for themselves.'' (FTC Staff Wine Report, July 2003, at 2.)
In 2005, the Supreme Court in Granholm v. Heald, 544 U.S. 460, held
unconstitutional New York and Michigan laws that prohibited the direct
shipment of wine from out-of-state producers but permitted it for in-
state producers in a challenge brought by private parties. In its
decision, the Supreme Court referred to the FTC's 2003 staff wine
report, which is a publicly available document. The FTC did not
participate in the case before the Supreme Court, however.
In connection with its authority under Section 6 the FTC Act to
conduct studies and issue reports, I think it is appropriate for the
FTC staff to have consulted with a wide array of interests in the
workshop and preparation of the 2003 FTC staff wine report. I also
believe that, consistent with Constitutional requirements, it is up to
the officials of each state to determine what system of alcohol
distribution best serves the needs of the state's residents.

Question 2. Do you see this being a central focus for either of you
moving forward and can you tell me which statutory provisions, if any,
authorize the FTC to become involved in issues relating to how a state
regulates the marketing and sale of alcoholic beverages under its 21st
Amendment authority.
Answer. The FTC has authority under the FTC Act and the Clayton Act
to review mergers and authority under the FTC Act to challenge
anticompetitive behavior in many industries, including alcohol, and to
exercise consumer protection oversight over marketing and advertising
practices by many industries, including alcohol. In addition, Section 6
of the FTC Act gives the FTC authority to conduct studies and issue
reports and, pursuant to this authority, upon the request of state
officials, the FTC staff, with approval by the Commission, provides the
requesting official advice on the likely impact on consumers and
competition of a proposed law or regulation identified by the official.
If confirmed, I would support the FTC continuing to exercise its
enforcement and study authority in connection with the alcohol industry
in the same manner as it has done in the past but I do not anticipate
this issue will be a central focus for me.

Question 3. Under those statutes, what do you see as FTC's proper
role in alcoholic beverage marketing and sale issues--particularly as
it relates to questions of state law?
Answer. Alcohol usage, particularly underage drinking, poses many
challenges for states and the Federal Government, and the sale and
distribution of alcohol can raise issues that fall under the
Commission's FTC Act and Clayton Act authority over competition and
consumer protection matters. Thus, the Commission has long engaged in a
wide variety of activities involving the alcohol industry, including
antitrust enforcement regarding mergers in the spirits and wine
industries and consumer protection enforcement, such as the recent
action against Phusion Projects for deceptive advertising of its Four
Loko product. The Commission staff has also engaged in policy-oriented
work in connection with alcohol for many decades, including monitoring
alcohol advertising for compliance with self-regulatory principles,
providing views to other Federal agencies on alcohol labeling issues,
issuing economic studies of the alcohol industry, providing a
Congressionally requested report on the advertising of certain alcohol
products, and creating public-private education campaigns to discourage
serving alcohol to teens. Through these activities carried out over
many years, the FTC has gained expertise in competition and consumer
protection issues related to the distribution and sale of alcohol.
State officials have for several decades contacted the FTC staff to
request advice on the likely impact on consumers and competition of
particular proposed state legislation or regulation in a variety of
areas in which the FTC has expertise, such as healthcare, gasoline,
privacy, and alcohol. In response to these requests, the FTC staff,
with the approval of the Commission, routinely issues letters that
provide such advice to aid the requesting state officials based on the
Commission's experience and expertise in certain industries. These
letters only offer advice, however, and the state official must make
his or her own decision about what best serves the state's
constituents' needs. For alcohol distribution issues in particular, the
FTC staff has stated that ``clearly, other public interests are at
stake besides the consumer interests in low prices, product variety,
and convenience, and states must weigh policy choices for themselves.''
(FTC Staff Wine Report, July 2003, at 2.)

Question 4. How should the FTC coordinate with other Federal
agencies--particularly those charged with regulating alcoholic
beverages--before it adopts a policy position or intervenes in
litigation or legislation?
Answer. I believe it is appropriate for the FTC to coordinate and
consult with other Federal agencies that regulate alcoholic beverages
to inform itself about relevant issues and to share its expertise with
those agencies. It is my understanding that the FTC staff has done so
on a number of occasions.

Question 5. I understand why the FTC would be concerned about
unfair methods of competition and unfair or deceptive acts or
practices. But can you tell me what that has to do with state laws
affecting alcoholic beverage marketing or sales? Do you believe that a
state law can be an unfair business practice?
Answer. As noted in my answer above, state officials have for
several decades contacted the FTC staff to request advice on the likely
impact on consumers and competition of particular proposed state
legislation or regulation related to alcohol, and the FTC staff, with
the approval of the Commission, has issued letters that provide such
advice to aid the requesting state officials based on the Commission's
experience and expertise. These letters only offer advice, however, and
the state official must make his or her own decision about what best
serves the state's constituents' needs. I do not believe that a state
legislature's passage of a law can be challenged as an unfair business
practice under the Federal antitrust laws pursuant to the state action
doctrine articulated by the Supreme Court in Parker v. Brown, 317 U.S.
341 (1943).
PBM's
Question 6. My constituents have expressed numerous concerns
regarding the potential anticompetitive effects of PBM mergers. They
have informed me this could potentially harm patients by reducing their
choice and access to pharmacy services, resulting in higher drug costs.
I am concerned about the impact these mergers could have on my
constituents. Under your leadership, how should the FTC evaluate and
address these concerns as it reviews ongoing consolidations in this
market? Can we trust the FTC can and will objectively do its job in
examining these mergers?
Answer. Consumers clearly have concerns about healthcare costs and
availability, including for pharmaceuticals and pharmacy services. The
FTC engages in extensive oversight of competition and consumer
protection matters in healthcare, reviewing mergers, challenging
conduct, issuing guidance, and conducting research. If confirmed, I
would support the FTC continuing to actively oversee competition and
consumer protection concerns in healthcare, including pharmaceuticals
and pharmacy services, to ensure that illegal conduct is detected and
challenged. I believe the FTC can and will objectively examine PBM
mergers under the laws it enforces.

Question 7. In 2007, the FTC allowed the CVS/Caremark merger to
proceed. Since then, numerous groups have raised concerns about the
conduct of CVS/Caremark. In 2009, the FTC opened an investigation in
these alleged abuses, of which there are signs that even today, these
practices continue. What types of remedies should the FTC consider to
ensure practices like these do not continue to harm consumers?
Answer. If confirmed, I will consult with FTC staff and the
Commissioners to determine whether the investigation has found evidence
of illegal conduct by CVS/Caremark. If there has been illegal conduct,
I believe the FTC should consider remedies that are tailored to the
violations and that seek to restore or safeguard competition in the
market and to protect consumers' choices and privacy.
______

Response to Written Questions Submitted by Hon. John Boozman to
Maureen K. Olhausen
Question 1. Do transparency, consumer protection concerns, and
access to pharmacists--the frontline/only source of primary care in
parts of rural America--factor into the FTC's investigation of
continued PBM market consolidation?
Answer. It is my understanding that the FTC's publicly announced
investigation of CVS/Caremark will examine the company's practices
under both the Commission's competition and consumer protection
missions. The impact on consumers of further PBM market consolidation
should be part of any antitrust review, including non-price factors,
such as quality and access concerns.