BROTHER, MAY I?: THE CHALLENGE OF COMPETITOR CONTROL OVER MARKET ENTRY ADDRESS
MAUREEN K. OHLHAUSEN (Commissioner, US Federal Trade Commission) delivered the opening keynote speech on the " Brother, May I?” problem, where new entrants “are effectively required to obtain permission from incumbent competitors to enter or expand,” and its effect on competition and consumer welfare. Speaking from her perspective as a Commissioner and as the former Director of the FTC’s Office of Policy Planning, Commissioner Ohlhausen explained three common “Brother, May I?” scenarios.
The first and clearest scenario is in the context of state licensing boards, as illustrated by the recent Supreme Court’s North Carolina Board of Dental Examiners v. FTC decision. In that case, the FTC challenged the NC Dental Board, which comprised primarily dentists, to define the practice of dentistry as including the provision of teeth whitening services, therefore prohibiting non-dentists from offering those services. Commissioner Ohlhausen explained the conduct in NC Dental was not merely “regulatory capture,” but constituted the replacement of regulators by the regulated themselves. As several studies suggest, occupational licensing regimes such as the one in NC Dental may harm competition without the offsetting concomitant benefits these regimes seek to attain. The Supreme Court’s decision emphasized that to ensure consumer benefits are not co-opted by the “Brother, May I?” problem, states must clearly articulate decisions to displace competition with other public policy goals and adequately supervise non-state actors implementing those decisions.