Quotations from Chairman Majoras

Federal Trade Commission Chairman Deborah Platt Majoras recently gave an expansive interview to the San Francisco Chronicle, commenting on policy issues from anti-spam regulation and privacy initiatives to merger enforcement and childhood obesity.

Text of the interview appears here on the Chronicle’s web site.

Selected quotations from the Chairman follow:

The role of the FTC. “A lot of people don’t realize that the FTC was founded not only to do antitrust enforcement, but to actually be a market think tank for consumers. We do a lot of policy and market research.”

Anti-Spam efforts. “Spam, we believe, is on the rise again. It’s more malicious. It’s more dangerous now than it was before. I think we have done some good things with [the Canned Spam Act]. But it’s like playing “Whac-a-Mole”—you hit them in one place and they pop up in another . . . Most of the spam is crossing three or four international borders before it hits your mailbox. We are working really hard to form partnerships with lots of foreign countries so we can work with them to track down the biggest and worst spammers. I’m proud of work we’ve done on Canned Spam, but it isn’t a problem that we’re going to solve overnight. Quite frankly, I don’t think legislation can solve it.”

Merger enforcement. The perception that the Bush Administration is more friendly to mergers is “simply not borne out at the FTC. You look at the number of merger filings, it’s pretty even since about the first Bush administration. I can’t think there was a merger that people have pointed to and said, ‘Why didn’t you guys take a closer look?' or 'Why didn’t you challenge it?' To me, it’s not some political thing that shifts a whole heck of a lot. I think I’ve brought three cases in the past week.”

Factors used to review mergers. “The main thing you look at are the competitive effects. Will the firms be able to more easily collude or signal to each other on pricing? The other is whether the newly merged firm would be able to exercise some market power because no other competitor in the marketplace could substitute the same way. That’s the theory, for example, in the Whole Foods-Wild Oats case that we just brought (to block the two organic grocery chains from joining forces)—that the Wall Street Journal editorial board keeps ridiculing me for.”

Gasoline prices. “The difficulty here is that there is a lot of misperception about this market. Everywhere you go, you hear ‘Oh, the market has become so much more concentrated.’ Interestingly enough, it hasn’t in many parts of it, particularly at the exploration and actual oil end of it. Refining has tightened some. On the other hand, small refiners have bought up other refiners so they have been able to compete with large integrated refiners. The difficulty is that we have looked for anti-competitive behavior in this industry time and again, and we keep looking for it. Congress would like the problem to be solved by me suing a bunch of oil companies—or OPEC. Like that’s going to solve our energy problem. It’s just not.”

Childhood obesity. “We don’t know if it’s true [that the marketing of unhealthful foods to children causes childhood obesity]. We know that childhood obesity rates are at a level that cannot be sustained if we care about the health of our next generation. My best guess is that it’s multiple factors—that our kids have a more sedentary lifestyle, that food portions have gotten bigger, that food is less healthy. Everybody who can play a role and try to solve the problem ought to do it. We try to be a facilitator to push industry to change some of their practices.”

Advertising violent movies, games to children. “Talk about First Amendment issues. Every restriction on violent video games that has been tried in any state in the last number of years—and there have been about a dozen—have been struck down by federal courts. So this is an area in which self-regulation is critical. Is this embarrassing to companies that they aren’t actually following their own standards? Then good.”