ICLE Director of Law & Economics Programs Gus Hurwitz was a guest on The Cyberlaw Podcast to discuss commitments made last week by leaders of the artificial-intelligence (AI) industry to political leaders in Washington, as well the European Commission’s struggles to get other jurisdictions to adopt the EU’s regulatory framework for AI.

Other topics included the Federal Communication Commission’s new cybersecurity label for IoT devices, the Environmental Protection Agency’s regulations for water-system cybersecurity, and the latest U.S. Justice Department/Federal Trade Commission draft merger-review guidelines.

The full episode is embedded below.

The FTC and DOJ have done it: on July 19 they released the long awaited (or dreaded) draft merger guidelines, which . . . well, could have been worse, given current agency leadership, but could have been better (as demonstrated by the certainly imperfect, but still better, 2010 guidelines they replaced). Jumping on the agencies’ myopia bandwagon, I protest: it’s late July and I’m on vacation, damnit! Having been deep in the central American jungle, I’m late to this party, even as the party I’d long planned has been interrupted.

Read the full piece here.

QUESTION PRESENTED

Whether the court should overrule Chevron v. Natural Resources Defense Council, or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.

INTEREST OF AMICI CURIAE

The Manhattan Institute for Policy Research (“MI”) is a nonpartisan public policy research foundation whose mission is to develop and disseminate new ideas that foster greater economic choice and individual responsibility. To that end, MI has historically worked sponsored scholarship and filed briefs supporting economic freedom against government overreach.

Richard Epstein is the Laurence A. Tisch Professor of Law at New York University. He also serves as the Peter and Kirsten Bedford Senior Fellow at the Hoover Institution and the James Parker Hall Distinguished Service Professor of Law emeritus and a senior lecturer at the University of Chicago.

Todd Zywicki is George Mason University Foundation Professor of Law at George Mason University Antonin Scalia School of Law and a research fellow of the GMU Law and Economics Center.

Justin “Gus” Hurwitz is a senior fellow and academic director of the Center for Technology, Innovation, and Competition at the University of Pennsylvania Carey Law School.

Geoffrey Manne is the president and founder of the International Center for Law and Economics and a distinguished fellow at Northwestern University’s Center on Law, Business, and Economics.

This case interests amici because it involves an agency regulation that was not explicitly authorized by statute. Indeed, it gives the Court a chance to revisit Chevron—either overruling it or clarifying that statutory silence does not require judicial deference.

SUMMARY OF ARGUMENT

Family-run fishing businesses face a fraught and competitive environment even before the intrusion of burdensome regulations. Here, the National Marine Fisheries Service (“NMFS”) promulgated a rule for certain classes of herring boats that sweeps in most such businesses, as portrayed in the Oscar-winning movie CODA. If a vessel needs a monitor and has not already been assigned one under a federally funded program, it must pay for one itself. The cost for most herring boats exceeds $710 per sea day.

Petitioners, four family-owned and -operated fishing companies, contend that the industry-funding requirement which is not explicitly authorized by statute—will have a devastating economic impact on the herring fleet and will disproportionately impact small businesses, destroying historic communities.

The district court ruled for the government, finding that various provisions of the Magnuson-Stevens Fishery Conservation and Management Act (“MSA”) together conferred broad authority on the NMFS to implement regulations to carry out fishery management plan’s measures. Without any analysis, the court also found that, even if the statute were ambiguous, the government’s reading would be reasonable under Chevron Step Two and thus worthy of judicial deference. A divided panel of the D.C. Circuit affirmed, reasoning that the MSA’s authorization for the placement of monitors, through silence on funding, left room for agency discretion. This Court granted certiorari to determine whether the Court should overrule Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837 (1984), or at least clarify that statutory silence concerning controversial powers expressly but narrowly granted elsewhere in the statute does not constitute an ambiguity requiring deference to the agency.

The Court should now take this opportunity to overhaul the Chevron-deference regime, because this experiment in rebalancing the relationship between administration and judicial review has failed. It has led to agency overreach, haphazard practical results, and the diminution of Congress. Although intended to empower Congress by limiting the role of courts, Chevron has instead empowered agencies to aggrandize their own powers to the greatest extent plausible under their operative statutes, and often beyond. Congress has proved unequal to the task of responding to this pervasive agency overreach and now has less of a role in policymaking than in the pre-Chevron era. Courts, in turn, have become sloppy and lazy in interpreting statutes. It’s a vicious cycle of legislative buckpassing and judicial deference to executive overreach.

Chevron deference rests on the presumption that Congress won’t over-delegate and that agencies will be loyal agents. But the past 40 years have shown that Congress loves passing the buck and agencies are actually principals who pursue their own interests. The time has more than come for the Court to revisit Chevron, whether it chooses to overrule it explicitly or keep it nominally under a newly restricted standard. Cf. Kisor v. Wilkie, 139 S. Ct. 2400 (2019) (preserving Auer deference but reworking it so completely that both Chief Justice Roberts, who joined Justice Kagan’s majority opinion, and Justice Kavanaugh, who joined Justice Gorsuch’s effective dissent, noted that there wasn’t much difference between the two).

On July 19, the Department of Justice (DOJ) and Federal Trade Commission (FTC) (the agencies) finally issued new draft Merger Guidelines (DMG), open to public comments for two months. The DMG embody a set of thirteen individual Guidelines, which “are not exhaustive of the ways that a merger may substantially lessen competition or tend to create a monopoly” (Guideline 13). Coincidentally or not, the decision to promulgate thirteen Guidelines is a bad omen – the DMG are fatally flawed from start to finish.

Read the full piece here.

Yesterday, Lina Khan’s FTC released their long-awaited draft merger guidelines for public comment. Regrettably yet unsurprisingly, the new guidelines are a radical departure from established case law and antitrust thinking. They’re marked by a failure to account for the role of efficiencies in the competitive process, and a failure to distinguish between the implications of generally pro-competitive vertical mergers and horizontal mergers. If the FTC’s 0-4 losing track record in merger litigation so far is any indication, then they’re likely to be struck down by courts nationwide.

Read the full piece here.

Fifteen months after the close of the comment period, we finally have the release of the draft merger guidelines by the Federal Trade Commission (FTC) and the U.S. Justice Department (DOJ).

While there is a lot to digest in the 51 page document with over 100 (largely stale) footnotes, the broad picture is clear: the goal of this document is to stop more mergers. Period.

Read the full piece here.

In baseball, it’s three strikes and you’re out. By that standard, antitrust enforcers at the Federal Trade Commission should have stepped off the playing field a while ago.

In tallying up the losses, it’s hard to know where to start. The regulatory parade of follies includes the agency’s debatable effort to block Altria’s minority equity investment in Juul, a struggling e-cigarette maker; its puzzling suit to block Facebook’s acquisition of Within, a metaverse fitness app; and now a federal court’s rejection of its challenge to Microsoft’s acquisition of the video-game publisher Activision (which the FTC immediately appealed).

Read the full piece here.

Why do monopolies exist? Many textbooks point to barriers to entry as a cause of monopolies.

Tyler Cowen and Alex Tabarrok’s textbook says: “In addition to patents, government regulation and economies of scale, monopolies may be created whenever there is a significant barrier to entry, something that raises the cost to new firms of entering the industry.” Greg Mankiw’s textbook goes as far as to say: “The fundamental cause of monopoly is barriers to entry.”

Read the full piece here.

The European Commission early last month published its draft template for DMA-compliance reports. This is the document that gatekeepers will periodically need to fill out, and which subsequently will be used to determine whether they comply with the European Union’s Digital Markets Act (DMA).

Read the full piece here.