THE FTC has been taking it on the chin. In a single month, Congress has vetoed a proposed regulation on disclosures about used cars and the Senate Commerce Committee has come up with a series of controversial amendments that may kill the commission's whole authorization bill. One of these amendments would exempt state-licensed professionals from FTC regulation directed against anti-competitive activities such as price-fixing and boycotts. Thus, doctors and lawyers, for example, would continue to be regulated--or not regulated-- by the states.
This is a terrible idea. For years, professional associations were thought to be exempt from the anti- trust laws. The change came in 1975 when the Supreme Court held that minimum-fee schedules enforced by the bar amount to illegal price-fixing. Two years later, the court said that prohibitions against advertising could not be enforced by professional associations. And only last March the Supreme Court upheld an FTC order allowing doctors and dentists to advertise and preventing the American Medical Association from penalizing physicians who work for health maintenance organizations or other prepaid plans instead of on a fee-for-service basis.
States may very well be the proper authorities for determining professional qualifications. State regulators assess competence and educational standards, and they license professionals. But the economic activity of professionals is commerce in the true sense of the word. Price-fixing, deceptive advertising and anti-competitive agreements hurt consumers whether practiced by automobile manufacturers or the local medical establishment.
And the magnitude of that economic activity is not to be sneezed at. General Motors, for example, spends more on health care for its employees than it does on purchases from its largest supplier, U.S. Steel. Some states supervise this activity well, within their own borders; some hardly pay attention at all. If the FTC is pushed out of the picture, there will be no comprehensive, national regulation of this commerce unless the Justice Department's jurisdiction is expanded and its budget substantially increased. That's an impractical solution that is not even supported by the department.
James Miller, who was appointed by President Reagan to be chairman of the FTC, opposes the Commerce Committee's exemption for the professions. He believes that the commission has done useful work in this area that has promoted competition, brought down some prices and served to benefit the consumer. Commission cases have challenged price-fixing agreements among doctors and opposed concerted efforts by physicians to force increases in Medicaid fees and to kill cost-containment programs organized by insurers and unions. The agency has stopped illegal kickbacks by physicians to medical laboratories and opposed organized boycotts designed to coerce local hospitals. FTC actions on eyeglass advertising and generic drugs have saved consumers millions of dollars.
This is just the kind of protection American consumers rightly expect the FTC to provide.