People in the news

Jon Leibowitz

Chairman of the Federal Trade Commission (since March 2009)

Why He Matters

Companies' ability to merge became a lot easier under the administration of President George W. Bush. But that's expected to change considerably under President Barack Obama. To assure companies act in a way that won't break anti-trust laws and hurt consumers' ability to purchase products cheaply because of less competition, Obama named Leibowitz to chair the Federal Trade Commission.

The former lobbyist for the Motion Picture Association of America (MPAA), Leibowitz has gained a reputation for aggressively tackling issues related to generic drug distribution and advertisement rights for consumers since joining the FTC in 2004. Obama's nomination of Leibowitz to chair the five-member FTC commission required no Senate confirmation since he was already a member. The FTC commission, which shares anti-trust regulation duties with the Justice Department, contains members from different parties and can not be made up of more than three people from one party. In 2004, Leibowitz was appointed to fill a position as a Democrat for a 7-year term. There is currently one vacant seat for Obama to fill.

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Background

At a Glance

Career History: Commissioner at the FTC (July 2004 to present); Chief lobbyist for the Motion Picture Association of America (2000 to 2004); Chief counsel for Sen. Herb Kohl (D-Wis.) (1989 to 2000)
Birthday: June 17, 1958
Hometown: Englewood, N.J.

Alma Mater: University of Wisconsin, B.A. (American history), 1980; New York University, J.D., 1984
DC Office: 600 Pennsylvania Ave., NW Washington, DC 20580, (202) 326-2222
Web site

Path to Power

Born on the east coast, Leibowitz moved to the Midwest for school, graduating from Wisconsin University in 1980. He moved to New York University to earn a law degree in 1984, and then went on to Washington to work in private practice for two years. From 1986 through 1987, Leibowitz joined former Sen. Paul Simon's (D-Ill.) staff. Then in 1989, Leibowitz became the chief counsel for Sen. Herb Kohl (D-Wis.), where he would work for 11 years.

In 2000, Leibowitz moved back to the private sector as a lobbyist for the MPAA By the time he left in 2004, Leibowitz had become the organization's chief lobbyist. But the call to the public sector was too strong, and President George W. Bush named Leibowitz to the FTC commission in July 2004.

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The Issues

During the 2008 presidential campaign, Obama reiterated repeatedly that President George W. Bush's lax oversight of mergers and other anti-trust issues caused an undue burden on consumers and has partially, led to the current financial turmoil. Bush's Justice Department took most of the flak since the FTC's stance on anti-trust cases has strengthened in recent years.

Liebowitz takes over as head of the commission as Obama's Justice Department plans to even more aggressively increase its anti-trust activities. Bush FTC head, William Kovacic, will continue in his duties as a FTC commissioner.

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Mortgage Lending Oversight

In March 2009, Congress passed a $410 billion 'omnibus' spending package. In it, Chairman of the Senate Commerce, Science and Transportation Committee John D. Rockefeller IV (D-W.V.) and Sen. Byron L. Dorgan (D-N.D.) pushed to authorize the FTC to ban certain predatory lending practices that helped lead to the mortgage market crisis.

"With the U.S. economy in deep recession, 'we have to step up our vigilance on predatory practices in the financial services area' because 'there are a lot of American consumers that are hurting,'" said Leibowitz to Bloomberg News. He also contended that lenders should immediately return money taken illegally if they haven't already done so. "If you are taking money away illegally from consumers you ought to give it back," said Leibowitz.

Leibowitz has not announced specifics on how the FTC will ban predatory lending practices, or what tactics will be banned, but they're expected soon.

Generic Drugs

One case that Leibowitz took on early in his tenure as a FTC commissioner was that of "pay-for-delay" deals that are struck between pharmaceutical companies and generic drug producers. Generic drugs are a cheap form of the original that manufacturers can create after 20 years have passed since the original developer first filed a patent. After 20 years, anyone can manufacture, market and distribute an identical version of the drug. Once multiple options hit the market, the price of the drug often drops.

Pharmaceutical companies have an incentive to delay generic drug companies from selling a duplicate version of a drug in order to keep competition out of the market. Often, in order to stop the production of a generic drug, a pharmaceutical company will sue the competing generic drug company. Sometimes the pharmaceutical company strikes a deal with the generic drug company, which would pay the generic company to not distribute the drug for a period of years. This "pay-for-delay" practice irked Leibowitz. He has led an effort within the FTC to ban these side deals, which he feels violates anti-competition rules.

"These settlements do deny consumers potential access to potentially major savings,'' said Leibowitz. "By settling with all generic applicants, a brand firm ensures that consumers never have a chance to see those savings."

In 2007, Liebowitz's work nearly paid off when Kohl, his former employer, and Sen. Patrick Leahy (D-Vt.) introduced the "Preserve Access to Affordable Generics" act that would have limited these agreements between pharmaceutical companies and generic drug-makers. Leibowitz and the FTC threw their support behind the bill, but it didn't become law because the congressional session ended before it came up for a vote.

Advertising

Another cause Leibowitz has focused on since joining the FTC pertains to advertising. In 2006, his attention swayed toward "pretexting" - the use of a false scenario to obtain an individual's personal information. Pretexting can provide valuable material for advertisers, as well as others who might have more insidious reasons for using such data.

The tactic gained infamy in September 2006 when it became public that private investigators for Hewlett-Packard (HP) were using pretexting to obtain knowledge about board members and journalists. It's now illegal, but Liebowitz and the FTC had already begun investigating 30 data-broker companies suspected of using pretexting in February 2006, months before the HP incident became public.

Leibowitz has also called for stricter controls on online advertising. Advertising companies have continued to use more sophisticated ways of monitoring people's activities on the Internet, and then serving up targeted advertising. "When you're surfing the Internet, you never know who is peering over your shoulder or how many marketers are watching," said Liebowitz. ''People should have dominion over their computers. The current 'don't ask, don't tell' in online tracking and profiling has to end.''

Liebowitz has called for more expansive policies that would limit advertisers' ability to monitor people's Internet habits.

The Network

Liebowitz sits on the FTC commission beside three other members; they include Pamela Jones Harbour (I), J. Thomas Rosch (R) and former FTC Chairman William E. Kovacic (R).

In 1989, Liebowitz joined Sen. Herb Kohl's (D-Wis.) office as the senator's general counsel. Liebowitz stayed in the lawmaker's office for 11 years.

Additional Resources

Story, Louise, "F.T.C. Takes a Look At Web Marketing," The New York Times, Nov. 2, 2007
Brown, Emily Ann, "Regulators Press For Stronger Laws On Phone Records," The Wall Street Journal, Feb. 2, 2006
Rowley, James, "FTC to Draft New Curbs on Mortgage-Lending Abuse, Chairman Says," Bloomberg News, March 20, 2009
Kendall, Brent,"UPDATE: Obama Nominates Jon Leibowitz To Be FTC Chairman," Dow Jones NewsWires, Feb. 27, 2009
Zetter, Kim, "First 'Pretexting' Charges Filed Under Law Passed After HP Spy Scandal," Wired Online, Jan. 9, 2009
Kendall, Brent,"UPDATE: Obama Nominates Jon Leibowitz To Be FTC Chairman," Dow Jones Newswires, Feb. 27, 2009
Wigfield, Mark, "Bush Makes Recess Appointment Of Majoras To Head FTC," Dow Jones Newswires, July 30, 2004
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