Companies Seek to Sway Trump Administration on FTC Choice

By John D. McKinnon 

WASHINGTON--A number of companies and interest groups have waged behind-the-scenes lobbying campaigns over who will chair the Federal Trade Commission, an appointment with far-reaching implications for the high tech and telecommunications sectors.

One effort is being made by companies that have clashed with online search giant Google, a unit of Alphabet Inc. They have been making calls and meeting with Trump administration representatives on behalf of Utah's Republican attorney general, Sean Reyes, according to several people familiar with the matter. Mr. Reyes, who favors greater scrutiny of Google, is viewed as a potential thorn for the search-engine company if he were to chair the FTC.

The other leading candidate for the job is said to be the current acting chairman, Maureen Ohlhausen, a veteran official of the consumer-protection agency.

Four years ago, Ms. Ohlhausen voted with Democrats on the panel to close key aspects of an antitrust investigation of Google. In contrast, Mr. Reyes last year wrote a letter to the FTC in which he urged the commission to consider reopening the investigation. The search giant's business practices--particularly its use of others' intellectual property--have raised concerns among content creators and others.

While both Ms. Ohlhausen and Mr. Reyes bring extensive qualifications, other candidates remain possible and the final decision will be up to President Donald Trump. Some observers believe that Mr. Reyes is the front-runner, but that the longer the debate goes on, the better Ms. Ohlhausen's chances become.

Companies promoting Mr. Reyes include software maker Oracle Inc., which has waged an epic legal battle against Google, and crowdsource review publisher Yelp Inc. Ms. Ohlhausen has drawn public support mostly from conservative groups and legal and regulatory experts, many of them in Washington.

AT&T Inc. and News Corp, along with other companies also have been part of the pro-Reyes effort, according to people involved. News Corp, which owns The Wall Street Journal, has been a vocal critic of the tech giant's dominant position in search.

AT&T and News Corp declined to comment.

So far, Google appears to be maintaining a low profile in the debate over the FTC, which effectively serves as the main regulator for the company's core business. The situation is a dicey one for Google, which enjoyed close relations with the Obama administration. Alphabet Chairman Eric Schmidt also worked closely with the Hillary Clinton campaign .

Some of Ms. Ohlhausen's allies have made public efforts on her behalf, including a letter to Mr. Trump in late January signed by more than a dozen conservative advocacy groups that endorsed her for the permanent chairmanship.

In an interview last week, Ms. Ohlhausen said she has been grateful for the public expressions of support she has received, but "I'm not behind them."

"What I want to do is explain why I think I have a strong agenda for the FTC that I think could advance President Trump's agenda," Ms. Ohlhausen said, citing her support for "advancing economic liberty" and curbing regulatory overreach. Her allies say she shouldn't be regarded as friendly to Google.

A spokesman for Mr. Reyes, Daniel Burton, declined to comment.

The pro-Reyes effort appears informal. Business backers and their allies have been making calls to people who might have influence with the Trump administration, encouraging them to weigh in, according to people familiar with the matter.

Mr. Reyes has gained support from fellow Utah leaders, particularly GOP Sen. Orrin Hatch. Mr. Reyes also has found a Democratic ally in the attorney general for the District of Columbia, Karl Racine, who joined him in the letter concerning the Google antitrust investigation. Mr. Racine said in an interview that he has been impressed enough to offer to help the conservative Republican win the job.

Yelp has taken a prominent role in the business effort, according to two people familiar with the matter. The company considers Mr. Reyes a favorable alternative to Ms. Ohlhausen, who is viewed by some as too close to Google, these people say. Yelp declined to comment.

People familiar with the matter said Oracle also is supporting Mr. Reyes, although the effort hasn't been a priority. An Oracle spokeswoman declined to comment.

The pro-Ohlhausen letter has generated some controversy among conservatives. It originally was drafted to criticize a last-minute regulatory decision by FTC appointees of former President Barack Obama. But as it circulated, the letter morphed to include a strong endorsement of Ms. Ohlhausen, according to several people involved.

One of the more prominent signers, Matt Schlapp, chairman of the American Conservative Union, said recently in a statement that "the letter we signed was not intended to endorse one of the candidates" for FTC chairman, adding that the ACU is "pleased that additional solid candidates like Attorney General Reyes are being seriously considered."

On one level, the efforts are just the latest version of a fight that plays out periodically between companies and industries as new regulators are chosen. The current lobbying efforts might not even affect the president's ultimate decision, although Oracle co-CEO Safra Catz served on the Trump transition team.

But some see a proxy battle at work. Oracle and Google have had a bitter rivalry, the root of which is a seven-year legal battle over Google's use of Oracle software in the Android smartphone operating system. Google won the latest round in May, and Oracle has since increased its efforts to oppose Google in other arenas.

Oracle helps fund several anti-Google lobbying organizations, and beyond the U.S., it has urged European regulators to investigate recent changes to Google's privacy policy.

Drew FitzGerald contributed to this article.

Write to John D. McKinnon at [e-mail]

(END) Dow Jones Newswires

February 23, 2017 07:14 ET (12:14 GMT)

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