The Wolves of K Street by Brody Mullins & Luke Mullins

Author:Brody Mullins & Luke Mullins
Language: eng
Format: epub
Publisher: Simon & Schuster
Published: 2024-05-07T00:00:00+00:00

13

Spring 2011

Federal Trade Commission headquarters, Washington, DC

One afternoon in the spring of 2011, the five top officials at the Federal Trade Commission gathered at the agency’s DC headquarters for a meeting of such sensitivity that it wasn’t listed on its public agenda. The FTC’s three Democratic and two Republican commissioners wore business attire as they took their places in the rounded, wood-paneled hearing room. Beside them, a coterie of agency lawyers, government economists, and other stern-faced officials settled into chairs. Located a few blocks from the US Capitol, the sturdy limestone and granite building was intended to project a stable and robust federal government during the upheaval of the Great Depression; FDR had laid the cornerstone himself in 1937.1 On either side of the building are matching limestone sculptures depicting shirtless, muscle-bound men, each restraining an angry workhorse. The sculptures—called Man Controlling Trade—are thought to symbolize the agency’s mission to shield consumers from the abuses of corporate capitalists.2 It had been a long time, though, since the agency had lived up to its New Deal–era mandate.

After crossing paths with Tommy Boggs during the children’s TV advertising debate of the late 1970s, when it was derided as “The National Nanny” by the Washington Post, the FTC had grown increasingly accommodating to corporate empire building. By the turn of the twenty-first century, it was green-lighting some of the largest corporate mergers in American history, including the $81 billion merger of Exxon and Mobil, the $90 million merger of pharmaceutical firms Pfizer and Warner-Lambert, and the $165 billion merger of America Online and Time Warner.

Inside the agency, however, some rank-and-file bureaucrats nursed a cautious optimism that the recent election of Barack Obama—with his soaring calls to eradicate the influence of special interests in government—would revive the FTC’s tradition of tough-minded regulation. And when they discovered the subject of the meeting that day at the agency’s headquarters, these staffers grew even more hopeful. Unlike the general public, some FTC employees were permitted to attend the gathering. So, with a buzz of intrigue and anticipation, the staffers filed into the hearing room, found seats in the observation benches, and watched the FTC commissioners begin the proceedings.

It was the alleged actions of an iconic technology firm that had brought the federal regulators together that day. Many months earlier, the FTC had begun receiving complaints that Google, the Internet search engine giant based in Mountain View, California, had been illegally using its market power to bludgeon rivals, smother competition, and harm consumers.

Internet competitors, such as Yelp Inc. and Tripadvisor Inc., had accused Google of stealing its content by copying information from their online reviews, while Amazon.com claimed that the company generated search results that unfairly steered users to Google-owned products and services. The meeting was convened so that the FTC’s five commissioners could consider authorizing a formal antitrust investigation into Google’s business practices, a decision that could very well lead to an antitrust lawsuit against the company. Bringing an antitrust case against Google would send an unmistakable

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