Pluralistic: Mike Lee and Jim Jordan want to kill the law that bans companies from cheating you (29 Apr 2025)


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Mike Lee and Jim Jordan want to kill the law that bans companies from cheating you (permalink)

House and Senate Republicans are on the verge of killing Section 5 of the Federal Trade Commission Act, one of the most potent anti-corruption laws on the US statute books:

https://www.thebignewsletter.com/p/house-gop-proposes-eliminating-key

More than a century ago, Congress passed the FTCA, and they made a point of including a clause that granted the new independent agency broad authority to investigate and prohibit "unfair and deceptive methods of competition." As Matt Stoller writes, over the ensuing 100 years, the FTC has used Section 5 to go after "illegal commissions, firms spying on rivals, sabotage, messing around with patents or regulations."

But starting with the Reagan era, both Republican and Democratic presidents have appointed FTC chairs who were loathe to invoke FTCA 5, shying away from the power and duty Congress had given them. This all changed with Biden's FTC chair Lina Khan, who revived the law, using it to punish companies for invading your privacy, blocking repair, locking workers in with noncompete clauses, and more:

https://www.ftc.gov/system/files/ftc_gov/pdf/P221202Section5PolicyStatement.pdf

FTCA has been repeatedly upheld by the Supreme Court, and Congress liked the way it worked so much that when they created the Department of Transport, they copy-pasted the language of FTCA into the DOT's enabling legislation. Pete Buttigieg, Biden's Transport secretary, refused to use this power, but when Khan's chief of staff moved over to Transport, it became a powerhouse regulator, fighting ripoffs and scams in aviation, rail and more:

https://pluralistic.net/2023/01/10/the-courage-to-govern/#whos-in-charge

Neoclassical economists hate laws like Section 5. The entire basis of neoliberal economics is that the economy can be modeled – and thus controlled – using mathematics. This ideology requires that economists ignore all qualitative aspects of society. Notoriously, economic modeling treats power as irrelevant, because it can't be quantified and plugged into a model:

https://pluralistic.net/2023/04/03/all-models-are-wrong/#some-are-useful

This is a hell of a deal for the powerful. Ignoring power lets a rich person who buys a starving person's kidneys claim to be engaged in a "voluntary transaction." Ignoring power lets private equity funds claim that gouging you on emergency room care and ambulance rides is fine, because you "freely chose" to be rushed to their hospital while dying of a heart attack. If we can all agree that power doesn't matter, then we can do away with all workplace protections, from the minimum wage to worker safety. Take power out of the equation, and you can claim that any worker on starvation wages who loses an arm in a badly maintained machine "freely contracted" into that situation.

Oligarchs and their lickspittles have waged a generations-long war on the very concept of power, and this assault on Section 5 of the FTC Act is just the latest skirmish. You see, "unfair and deceptive" is a qualitative idea, one that requires consideration of power relationships.

The abolition of fairness as a concept is central to Trumpism. Notoriously, Trump has claimed that any time he successfully rips someone off, "That makes him smart":

https://pluralistic.net/2024/12/04/its-not-a-lie/#its-a-premature-truth

The Trump movement is full of extremely successful cheats and liars. There's VCs like Mark Andreesen, whose fund paid a $100m bribe Kickstarter execs in exchange for a fake cryptocurrency launch, in a bid to lure more retail investors into the crypto bubble that Andreesen-Horowitz played a central role in:

https://finance.yahoo.com/news/untold-story-kickstarter-crypto-hail-120000205.html

And of course, there's Elon Musk, who lies about his cars, his robots, his rockets, his AI, and everything else. No wonder Elon Musk wants to get rid of a law that bans "unfair and deceptive methods of competition."

The bid to kill Section 5 of the FTC Act is hidden deep in a budget reconciliation amendment introduced by Rep Jim Jordan (R-OH), which pastes in sloppy language drafted by Sen Mike Lee (R-UT). The mechanism by which this amendment will neuter Section 5 is eye-glazingly complex, though Stoller does his best to make it comprehensible.

Far more important than the method by which Section 5 of the FTC Act will be gutted is the consequence of doing so. Stripping the FTC of the power to chase unfair and deceptive conduct will fire a starting pistol for even more ripoffs and scams. Worse than that, the Jordan amendment will kill enforcement of existing consent decrees from companies that have been successfully prosecuted under Section 5, allowing them to restart the scams that attracted regulatory scrutiny.

The Trump administration has been touting antitrust as its "alternative to regulation," drawing an arbitrary line between "regulation" and "antitrust." Antitrust is absolutely regulation:

https://finance.yahoo.com/news/antitrust-enforcement-not-regulation-doj-163251704.html

Indeed, antitrust is the most important regulation of all, because it's the regulation that keeps companies from getting so large and powerful that they can ignore all the other regulations. Without antitrust, companies become too big to fail, then too big to jail, then too big to care. The Trump admin will absolutely continue to do antitrust, but in the Trumpiest way possible – by attacking companies that offend Trump, rather than attacking companies that harm the public:

https://pluralistic.net/2024/11/12/the-enemy-of-your-enemy/#is-your-enemyis

This is gangsterism, the thing that comes after capitalism collapses into feudalism. In gangsterism, "fairness" and "power" have no place. All that's left is a kind of caveat emptor brainworm that insists that if you got scammed, you should have shopped more carefully. And if you got scammed at gunpoint, you just need to understand that the gun was held by the invisible hand, and it was pointed at you in an economically efficient manner.

Hey look at this (permalink)


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Upcoming books (permalink)

  • Enshittification: Why Everything Suddenly Got Worse and What to Do About It, Farrar, Straus, Giroux, October 7 2025
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  • Unauthorized Bread: a middle-grades graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2026

  • Enshittification, Why Everything Suddenly Got Worse and What to Do About It (the graphic novel), Firstsecond, 2026

  • The Memex Method, Farrar, Straus, Giroux, 2026


Colophon (permalink)

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