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Big Tech’s Complexity Will Strain FTC Resources, Agency Warns

Oct. 2, 2019, 6:37 PM

The Federal Trade Commission is concerned about its ability to litigate future tech cases due to the rising cost of hiring and retaining expert witnesses.

“The escalating costs of expert witnesses is one of the agency’s top challenges,” the FTC’s inspector general Andrew Katsaros said in a Sept. 27 letter. The letter, which was addressed to FTC Chairman Joe Simons, was publicly released Oct. 2.

Expert witnesses, who may charge close to $1,000 an hour, are routinely retained in government lawsuits to help describe why a merger or an anti-competitive practice, such as deceptive tactics that stifle competition, is unlawful and should be challenged. In most federal antitrust cases, both the government and companies facing litigation enlist expert witnesses.

The FTC said that estimating what such expertise will cost is getting harder as it takes on more advanced and rigorous cases, especially those dealing with emerging technologies and privacy issues.

“This increasing complexity, coupled with significant complaints of harmful business practices and fluctuations in merger activity, make it difficult to anticipate the specific investigative and litigation requirements, adding to the even greater difficulty of projecting costs to specific cases,” Katsaros said.

Due to the complexity of tech cases, the FTC “likely faces higher costs” to obtain outside experts, Katsaros added.

The FTC plans to internally assess if it needs to hire more in-house experts to support cases instead of continuing to refer to outside consultants, Katsaros said. Yet the agency acknowledged that it has historically struggled with acquiring and retaining talent.

The letter comes after Chairman Simons has repeatedly told lawmakers that the agency needs more resources as it looks into competition concerns at Facebook Inc and to continue its consumer protection mission, including privacy investigations.

To contact the reporter on this story: Victoria Graham in Washington at vgraham@bloomberglaw.com

To contact the editor responsible for this story: Seth Stern at sstern@bloomberglaw.com

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