Doctors, lawyers, and antitrust
The Federal Trade Commission, already hit with Congress's veto of its defects-disclosure proposal for used cars, is engaged in yet another legislative battle on Capitol Hill. This time the fight is in the Senate, where a bill restricting the commission's authority to prosecute or even investigate alleged or suspected abuses among a wide range of professional groups is gaining momentum.
As recently passed by the Senate Commerce Committee, the bill would exempt many state-licensed professions - such as doctors, dentists, lawyers, and engineers - from FTC jurisdiction altogether.
Clearly, the rollback of the commission's traditional authority in this area constitutes piecemeal and arbitrary antitrust legislation. Congress should either exempt professionals from all the antitrust laws on the books, not merely the FTC Act, or stand pat.
The FTC has become an easy target these days. Ever since the agency started its investigation into television advertising aimed at children and was branded the ''national nanny,'' the commission has been under steady legislative siege. As a result, Congress has already curbed some of the expansive powers it gave to the commission in the 1970s.
But, while the FTC may require a more carefully crafted statutory harness, exempting professionals from the antitrust laws is too important an issue to be part of a bill disciplining the FTC for excessive social engineering.
Specifically, the bill as approved by the Senate Commerce Committee would prohibit the FTC from taking any action against, or even investigating, classic collusive activities - such as price fixing and group boycotts, restrictive professional codes, or other practices that can keep prices artificially high in the professions.
For example, in the health care area, the FTC could not investigate alleged conspiracies to obstruct cost-containment programs. The bill would also exempt state-licensed professionals from challenges under the FTC Act to false advertising and fraudulent marketing practices.
The Supreme Court recently affirmed by a tie vote an FTC decision barring the American Medical Association and its state affiliates from restricting truthful advertising by member physicians. If the bill approved by the Senate Commerce Committee were enacted by the full Congress, the FTC would not be able to enforce that order or others like it.
The Senate bill would not, however, alter the other federal antitrust laws. The Department of Justice could still bring criminal and civil actions; and private parties could institute treble damage actions challenging alleged violations by professionals of the Sherman Act and other federal antitrust laws.
State attorneys general could also bring suit against professionals to redress antitrust injuries suffered by citizens of their respective states. Thus , if the Senate bill were enacted, it would create a jurisdictional paradox - antitrust challenges involving the professions could be brought by the Justice Department, state attorneys general or private parties, but not the FTC.
This legal anomaly should be avoided.
Professional services are an increasingly important part of the economy. Restrictions on competition among professionals that increase consumer costs without producing countervailing benefits should be scrutinized closely.
There does not appear to be any sound justification for exempting professionals from the antitrust laws which apply to virtually all other business enterprises. If a special exemption is to be written for the profession , Congress should uniformly change all of the antitrust statutes. A legislative determination of this magnitude should not merely be an appendage to a bill reauthorizing the FTC for three more years.