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[Senate Hearing 109-318]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-318
 
                  NOMINATIONS OF J. THOMAS ROSCH AND 
 WILLIAM E. KOVACIC TO BE COMMISSIONERS OF THE FEDERAL TRADE COMMISSION

=======================================================================

                                HEARING

                               before the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                               __________

                           NOVEMBER 14, 2005

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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26-352                      WASHINGTON : 2006
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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                     TED STEVENS, Alaska, Chairman
JOHN McCAIN, Arizona                 DANIEL K. INOUYE, Hawaii, Co-
CONRAD BURNS, Montana                    Chairman
TRENT LOTT, Mississippi              JOHN D. ROCKEFELLER IV, West 
KAY BAILEY HUTCHISON, Texas              Virginia
OLYMPIA J. SNOWE, Maine              JOHN F. KERRY, Massachusetts
GORDON H. SMITH, Oregon              BYRON L. DORGAN, North Dakota
JOHN ENSIGN, Nevada                  BARBARA BOXER, California
GEORGE ALLEN, Virginia               BILL NELSON, Florida
JOHN E. SUNUNU, New Hampshire        MARIA CANTWELL, Washington
JIM DeMint, South Carolina           FRANK R. LAUTENBERG, New Jersey
DAVID VITTER, Louisiana              E. BENJAMIN NELSON, Nebraska
                                     MARK PRYOR, Arkansas
             Lisa J. Sutherland, Republican Staff Director
        Christine Drager Kurth, Republican Deputy Staff Director
                David Russell, Republican Chief Counsel
   Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
   Samuel E. Whitehorn, Democratic Deputy Staff Director and General 
                                Counsel
             Lila Harper Helms, Democratic Policy Director

                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on November 14, 2005................................     1
Statement of Senator Inouye......................................     2
Statement of Senator Stevens.....................................     1

                               Witnesses

Kovacic, William E., Nominee to be Commissioner of the Federal 
  Trade 
  Commission.....................................................     8
    Prepared statement...........................................     9
    Biographical information.....................................    10
Rosch, J. Thomas, Nominee to be Commissioner of the Federal Trade 

  Commission.....................................................     2
    Prepared statement...........................................     3
    Biographical information.....................................     4

                    NOMINATIONS OF J. THOMAS ROSCH 
                     AND WILLIAM E. KOVACIC TO BE 
             COMMISSIONERS OF THE FEDERAL TRADE COMMISSION

                              ----------                              

                       MONDAY, NOVEMBER 14, 2005

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 2:30 p.m. in room 
SD-562, Dirksen Senate Office Building, Hon. Ted Stevens, 
Chairman of the Committee, presiding.

            OPENING STATEMENT OF HON. TED STEVENS, 
                    U.S. SENATOR FROM ALASKA

    Well thank you very much. I'm sorry to be slightly late. We 
have two nominees for the Federal Trade Commission here today.
    J. Thomas Rosch is a noted antitrust lawyer who currently 
practices law in San Francisco. He has chaired the antitrust 
sections of both the American Bar Association and the 
California Bar Association.
    And earlier in your career you were the Director of the 
FTC's Bureau of Consumer Protection?
    Mr. Rosch. That is correct Mr. Chairman.
    The Chairman. It's a long way around to get a promotion 
isn't it? Go to San Francisco and come back.
    Our other nominee is William, correct me if I'm wrong, 
Kovacic.
    Mr. Kovacic. That's right sir.
    The Chairman. Professor of law at George Washington 
University. He also served in the FTC I'm told, he was General 
Counsel from 2001 through 2004.
    Mr. Kovacic. Yes.
    The Chairman. And along with a distinguished academic 
career, I'm told you served as attorney-advisor to FTC 
Commissioner Douglas, and as an attorney in the FTC's Bureau of 
Competition.
    Mr. Kovacic. Yes sir.
    The Chairman. Well that's very much of a compliment to both 
of you that you would come back to be part of the agency that 
you've worked for in the past. And we will be pleased to 
continue this hearing as soon as my friend has made a 
statement, Senator Inouye.

            STATEMENT OF THE HON. DANIEL K. INOUYE, 
                    U.S. SENATOR FROM HAWAII

    Senator Inouye. Well I'd just like to thank both of them 
for giving their service to this country. Oftentimes I wonder 
why men and women do that. That's a lot of sacrifice. And I 
commend you for that. Both you have great experiences in 
antitrust work, but as you know your responsibilities will be 
much broader than that. And so I'll wait until question time.
    The Chairman. Yes sir. Let me call on you first Mr. Rosch, 
if you have a statement. Would you introduce for the record, so 
the record will show who is with you today. Hold that mike a 
little bit closer to you perhaps.

STATEMENT OF J. THOMAS ROSCH, NOMINEE TO BE COMMISSIONER OF THE 
                    FEDERAL TRADE COMMISSION

    Mr. Rosch. Thank you Mr. Chairman, I'd be very pleased to 
do exactly that. They've come from both California and Illinois 
to be with me today and I would like to introduce them. First, 
my wife Kitty, my wife of 44 years, actually 44 plus now, she 
will remind me. Our son, Tom, and his wife, Debbie; our 
daughter, Laura Gillette, and her husband, Ed; and my four 
granddaughters who are about to get the civics lesson of their 
lives, and I'm going to do it in order of age if you don't mind 
because I'll get in trouble if I don't. Starting with Amy who 
is 6 minutes older than Catherine, then Catherine, Carolyn and 
finally Julia. Thank you Mr. Chairman.
    The Chairman. Thank you very much. Please proceed with your 
statement.
    Mr. Rosch. Mr. Chairman, at the outset, let me express my 
gratitude to you and to the Committee for permitting us to 
appear before you today. We know you have a lot of things on 
your plate, and it is very good of you to fit us in.
    I've had the privilege over the last month to meet with a 
number of members, I met with Senator Inouye, among others, and 
I've also met their staffs and I met with the staff of this 
Committee. And I'd like to share with you briefly a couple of 
frequently asked questions, as well as my answers to those 
questions.
    First, I've often been asked what I consider to be the 
central priorities of the Commission over the next several 
years and why. Those priorities it seems to me are three fold: 
They are energy, health care and high tech including biotech.
    That is so for two reasons. First, those sectors 
collectively account for a huge share of this Nation's economy. 
And second, there are unique challenges to effective law 
enforcement in those sectors. That said, I think there's a 
unifying principle, and that principle is Visible Presence. I 
am a great admirer of the way the highway patrol goes about its 
business. When they're on my tail, I tend to be very cautious 
in the way that I drive. I think it's equally critical to 
effective law enforcement for the Commission to have a visible 
presence in these as well as other sectors.
    With respect to consumer protection specifically, I've had 
occasion to review the chart in the office that adjoins this 
hearing room listing the Top Ten unfair acts or practices 
today. And I'm struck by the extent to which they are the same 
or similar acts or practices with which the Commission's Bureau 
of Consumer Protection was concerned when I had the privilege 
of serving as its Director 30 years ago. But I'm also struck by 
the differences. Thirty years ago, those acts or practices 
occurred primarily in the bricks and mortar context. Today, 
they occur primarily in the Internet context.
    Additionally, the Internet has spawned some new problems: 
spam; spyware; identity theft; privacy invasion among others, 
which I know the Commission has been working on closely with 
this Committee. So I believe that both the Commission and this 
Committee simply have to focus on the Internet. And to do that, 
we need the U.S. Safe Web Act to facilitate cross border 
cooperation because Internet wrongdoing impacting the United 
States can occur just as easily overseas as it can here at 
home. So I thank this Committee for its support for this 
legislation and express the hope that it is soon enacted.
    Finally, Mr. Chairman, I've been frequently asked why I am 
interested in this position, Co-Chairman Inouye asked me 
specifically about that. And I'll be brief because it's a 
pretty easy question for me to answer. Kitty and I were a 
couple of Nebraska kids. Over the past 65 plus years, this 
country has been absolutely wonderful to us. It's time for us 
to give back. We've concluded that the best way to do that is 
to share with the Commission the background and experience in 
antitrust and consumer protection that I've had over the past 
40 years. That's what I plan to do.
    And I'd be remiss if I didn't mention the attraction of 
working at an agency with a staff like the Commission's. They 
were superb 30 years ago, they are superb today. We'll have our 
differences because our roles are different. But those 
differences will be discussed civilly, respectfully and 
professionally. So, if confirmed, I look forward to returning 
to the FTC again. Thank you.
    [The prepared statement and biographical information of Mr. 
Rosch follow:]

 Prepared Statement of J. Thomas Rosch, Nominee to be Commissioner of 
                      the Federal Trade Commission

    Mr. Chairman, Co-Chairman Inouye, distinguished Members of this 
distinguished Committee. At the outset, let me express my gratitude to 
you for permitting us to appear before you today. I know you have a lot 
of things on your plate, and it is very good of you to fit us in.
    I would also like to take a minute to introduce the members of my 
family who have come from California and Illinois to be with me this 
afternoon: my wife of 44 years, Kitty; our son, Tom, and his wife, 
Debbie; our daughter, Laura Gillette, and her husband, Ed; and my four 
granddaughters who are about to get the civics lesson of their life, in 
order of age--Amy (who is six minutes older than Catherine), Catherine, 
Carolyn and Julia.
    Mr. Chairman, I've had the privilege of meeting with a number of 
you--or your staffs--including the staff of this Committee--during the 
past month. I'd like to share with you briefly a couple of frequently 
asked questions, as well as my answers to those questions.
    First, I've frequently been asked what I consider to be the 
Commission's likely priorities over the next few years. They are three 
fold: energy, health care and high tech (including biotech). That is so 
for two reasons. To begin with, those three sectors collectively 
account for a huge share of this Nation's economy. Second, there are 
unique challenges to effective law enforcement in those sectors. That 
said, there is a unifying principle, and that principle is visible 
presence. I am a great admirer of the way the highway patrol does its 
job. When they're on my tail, I tend to drive very cautiously. I think 
it's equally critical to effective law enforcement for the Commission 
to have a visible presence in these (as well as other) sectors.
    With respect to consumer protection specifically, I've had occasion 
to review the chart in the office that adjoins this hearing room: the 
Top Ten list of unfair or deceptive acts or practices. I'm struck by 
the extent to which they are the same or similar acts or practices with 
which the Commission's Bureau of Consumer Protection was concerned when 
I had the privilege of serving as its Director 30 years ago. But I'm 
also struck by the differences. Thirty years ago, those acts or 
practices occurred primarily in a bricks or mortar context. Today, they 
occur primarily in the Internet milieu.
    Additionally, the Internet has spawned some new problems--spam; 
spyware; identity theft; privacy invasion--which I know the Commission 
has been working on closely with this Committee. I believe that both 
the Commission and this Committee must focus on the Internet. To do 
that, we need the U.S. Safe Web Act to facilitate cross border 
cooperation because Internet wrongdoing impacting the U.S. can occur 
just as easily overseas as it can here at home. So I thank this 
Committee for its support for this legislation and express the hope 
that it is soon enacted.
    Finally, Mr. Chairman, I've been frequently asked why I am 
interested in this position. That's the easiest question. Kitty and I 
were a couple of Nebraska kids. Over the past 65 plus years of our 
lives, this country has been extraordinarily good to us. It's time for 
us to give back. And we've concluded that the best way to do that is to 
share with the Commission the background and experience in antitrust 
and consumer protection that I've had over the past 40 years. That's 
what I plan to do.
    And I'd be remiss if I didn't mention the attraction of working at 
an agency with a staff like the Commission's. They were superb 30 years 
ago, they are superb today. We'll have our differences because our 
roles are different. But those differences will be discussed civilly, 
respectfully and professionally. So, if confirmed, I look forward to 
returning to the FTC again. Thank you.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name (Include any former names or nicknames used): John Thomas 
Rosch (J. Thomas Rosch; Tom Rosch).
    2. Position to which nominated: Commissioner, Federal Trade 
Commission.
    3. Date of Nomination: September 29, 2005.
    4. Address (List current place of residence and office addresses):

        Residence: information not released to the public.
        Office: 505 Montgomery Street San Francisco, CA 94111.

    5. Date and Place of Birth: Council Bluffs, Iowa 10/4/39.
    6. Provide the name, position, and place of employment for your 
spouse (if married) and the names and ages of your children (including 
stepchildren and children by a previous marriage).

        Carolyn Lee Rosch, Housewife.
        Thomas Lee Rosch--43.
        Laura Lee Rosch--39.

    7. List all college and graduate degrees. Provide year and school 
attended.

        Harvard College, Cambridge, Massachusetts 1957-1961 B.A. Magna 
        Cum Laude 1961.

        Jesus College, Cambridge University Cambridge, England 1961-
        1962 Knox Fellow (no degree).

        Harvard Law School, Cambridge, Massachusetts 1962-1965 L.L.B. 
        Cum Laude 1965.

    8. List all management-level jobs held and any non-managerial jobs 
that relate to the position for which you are nominated.

        McCutchen, Doyle, Brown & Enersen, Attorney, San Francisco, CA 
        Associate attorney 1965-1972; Partner 1972-1973; 1975-1993.

        Federal Trade Commission Washington, D.C. Director of Bureau of 
        Consumer Protection 1973-1975.

        Latham & Watkins LLP, Attorney, San Francisco, CA Partner 1994-
        present.

    9. List any advisory, consultative, honorary or other part-time 
service or positions with Federal, State, or local governments, other 
than those listed above, within the last five years: Instructor, Haas 
School of Business. University of California, Berkeley, CA 2005.
    10. List all positions held as an officer, director, trustee, 
partner, proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business, enterprise, 
educational or other institution within the last five years.

        Partner, Latham & Watkins LLP (see #8 above).

        Instructor, Haas School of Business. University of California 
        (see #9 above).

    11. Please list each membership you have had during the past ten 
years or currently hold with any civic, social, charitable, 
educational, political, professional, fraternal, benevolent or 
religious organization, private club, or other membership organization. 
Include dates of membership and any positions you have held with any 
organization. Please note whether any such club or organization 
restricts membership on the basis of sex, race, color, religion, 
national origin, age or handicap:

        a. Chair, American Bar Association, Antitrust Section (1991: 
        member 1975-present).

        b. Chair, California State Bar Antitrust & Trade Regulation 
        Section (1993: member 1990-present).

        c. Board of Directors, The Eisenhower Institute Washington, 
        D.C., 1992-present.

        d. Board of Directors and Advisory Board, California Supreme 
        Court Historical Society, 1995-present San Francisco, CA.

        e. Board of Directors and Advisory Board, Northern District of 
        California, U.S. District Court Historical Society 1998-
        present, San Francisco, CA.

        f. Advisory Board, Bureau of National Affairs Antitrust & Trade 
        Regulation Reporter, 1974-present.

        g. Advisory Board, Practising Law Institute, 1995-present.

        h. The Bohemian Club, San Francisco, CA, 1989-October 2005. *

        i. The Pacific Union Club, San Francisco, CA, 1985-October, 
        2005. *

        * These clubs restrict membership on the basis of sex. I have 
        submitted my resignation to both of them.

    12. Have you ever been a candidate for public office? If so, 
indicate whether any campaign has any outstanding debt, the amount, and 
whether you are personally liable for that debt. No.
    13. Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years.

        $3,000--Elizabeth Dole 2000.
        $2,000--Bush/Simon Fund Raiser 2001.

    14. List all scholarships, fellowships, honorary degrees, honorary 
society memberships, military medals and any other special recognition 
for outstanding service or achievements.

        a. Ames Award, Harvard College 1961 (award to outstanding 
        senior for scholarship, leadership and character).

        b. Knox Fellow, Cambridge University 1961-1962 (Harvard College 
        scholarship awarded to senior based on scholarship).

        c. Fellow, American College of Trial Lawyers (1986-present).

        d. California Antitrust Lawyer of the Year 2003 (California Bar 
        Association Award).

        e. California Lawyer Magazine ``Best In The West'' Antitrust 
        Lawyer (2004).

        f. Ranked as Leading Antitrust Attorney by Chambers USA: 
        America's Business Lawyers; The Best Lawyers In America; Legal 
        Media Group's Expert Guide to Competition and Antitrust 
        Lawyers: and Global Competition Review's GCR 100.

    15. Please list each book, article, column. or publication you have 
authored, individually or with others, and any speeches that you have 
given on topics relevant to the position for which you have been 
nominated. Do not attach copies of these publications unless otherwise 
instructed.

    Publications

        a. ``The George Court and Economic Welfare: A Business 
        Perspective,'' Competition Magazine (California State Bar 
        2003).

        b. ``Developments In The Law of Vertical Restraints'' 
        (Practising Law Institute annually 1990-present).

        c. ``Manual of FTC Practice and Procedure'' (Bureau of National 
        Affairs, 1990) (with periodic updates).

        d. Messages From the Chairman, Competition Magazine (American 
        Bar Association Antitrust Section, 1990).

        e. Chairman's Keynote Speech, Antitrust Law Journal (American 
        Bar Association Antitrust Section, 1990).

        f. ``Traps In Judicial Deference to Business Judgment'' (The 
        Conference Board, 1987).

    Speeches (Except Speeches as FTC Bureau Director)

        a. Chair, and Speeches on Development In Vertical Restraint and 
        Consumer Protection Law at Practicing Law Institute Annual 
        Antitrust Institutes 1980-present.

        b. Chair, and Speeches on Joint Venture, Monopolization 
        Vertical Restraint and Class Action Law at Conference Board 
        Symposia 1978, 1980, 1984-2003.

        c. Speeches on Consumer Protection, Monopolization and Vertical 
        Restraint Law at ABA Antitrust Section Spring and Annual 
        Meeting Programs 1977-80, 1983-1990, 1992, 1997, 2000.

        d. Speeches on Developments In Ethics In Government 
        Investigations, Price Discrimination at Golden State Institutes 
        1990-1992, 2003.

        e. Speeches on Magnuson-Moss Act and Vertical Restraints at 
        Northwestern Law School Antitrust Institutes 1975, 1998.

    16. Please identify each instance in which you have testified 
orally or in writing before Congress in a nongovernmental capacity and 
specify the subject matter of each testimony: None.

                   B. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers.
    I will continue to receive retirement benefits from Latham & 
Watkins as described in my Ethics Commitment letter to Christian S. 
White, dated September 8, 2005 (copy attached). Under the Latham & 
Watkins partnership agreement, on the day I retire from the firm I will 
receive a prorated final partnership payment for my work performed in 
2005, which will not be based on any firm services performed after my 
departure. I also will be reimbursed the value of my Latham & Watkins 
LLP capital account upon the day of my retirement. Also, under the 
Latham & Watkins partnership agreement, as amended, I will be entitled 
to receive a retirement payment for ten years after leaving the firm. 
During the time that I am in government service, these payments will be 
a fixed amount. I understand that so long as I am a government employee 
and am receiving fixed retirement payments from the firm. I will not 
participate personally and substantially as a Commissioner in any 
particular matter that would have a direct and predictable effect on 
Latham & Watkins' ability or willingness to meet this financial 
obligation unless I first obtain a written waiver under 18 U.S.C. 
208(b)(1). After I leave government service, pursuant to the amended 
partnership agreement, the share of partnership income for each of the 
remaining years will be based on my five highest earning years in the 
10 years prior to retirement. Lastly, I will continue to hold interests 
in four Limited Liability Companies held by certain partners of Latham 
& Watkins LLP (VP Fund Investments 2004, LLC; Mutual Partners, LLC: 
P.E. Partners II, LLC and P.E. Partners III, LLC) which cannot be 
divested at this time.
    Upon confirmation, I will resign from my unpaid positions as 
instructor at the Haas School of Business of the University of 
California and as a board member of the Eisenhower Institute. Pursuant 
to 5 CFR Sec. 2635.502, I will not participate in any particular matter 
involving specific parties which one of the parties is, or is 
represented by, either of these entities for one year from the last 
date I provided services to these entities unless I am authorized to 
participate.
    2. Do you have any commitments or agreements, formal or informal, 
to maintain employment, affiliation or practice with any business, 
association or other organization during your appointment? No.
    3. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    All such investments, obligations and liabilities are described in 
detail in the above-referenced Ethics Commitment letter to Christian S. 
White and my Executive Branch Public Financial Disclosure Report, both 
of which are attached hereto. My financial disclosure report identifies 
several stock holdings as well as several stock mutual funds. I 
understand that under 5 CFR Sec. 2640.201(a), consistent with 18 
U.S.C.Sec. 208(b)(2), I may participate in any particular matter 
affecting one or more holdings of a diversified mutual fund where the 
otherwise disqualifying financial interest in the matter arises because 
of my ownership of an interest in the fund. Consistent with the 
prohibitions of 18 U.S.C. Sec. 208(a), unless I obtain a waiver under 
section 208(b)(1) or I qualify for a regulatory exemption under section 
208(b)(2), I will not participate personally and substantially in any 
particular matter in which I have, or any person or organization whose 
interests are imputed to me has, a financial interest, if the 
particular matter will have a direct and predictable effect on that 
financial interest. Also, I will seek a conflict of interest waiver 
concerning my holdings held in four Limited Liability Companies held 
through by certain partners of Latham & Watkins, LLP (VP Fund 
Investments 2004, LLC: Mutual Partners, LLC: P.E, Partners/II, LLC and 
P.E., Partners III, LLC), which cannot be divested at this time. Until 
I receive such a waiver, I will not participate personally and 
substantially in any particular matter that will have a direct and 
predictable effect on the financial interests of these LLCs. No other 
assets have been identified as presenting a conflict at this time, 
however, should any asset become a conflict, I will divest conflicting 
financial interests. I may seek certificates of divestiture from the 
U.S. Office of Government Ethics for any assets divested, where 
permissible. I will not participate personally and substantially in any 
particular matter that will have a direct and predicable effect on any 
of these interests until divestiture has been accomplished or until a 
waiver has been obtained.
    4. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 15 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    The attached letter to Christian S. White and the attached 
Financial Disclosures describe the financial investments that I have 
made. A list of the firm clients with matters for which I have been the 
principal responsible attorney is attached as Schedule A. I have marked 
with an asterisk those clients with matters involving the Federal 
Government. Of these clients I believe the only one with a matter 
currently before the Commission is McKesson Corporation.
    5. Describe any activity during the past 5 years in which you have 
been engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy: None.
    6. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.
    As discussed in my Ethics Commitment letter (copy attached), 
consistent with the prohibitions of 18 U.S.C. Sec. 208(a), unless I 
obtain a waiver under section 208(b)(1) or I qualify for a regulatory 
exemption under section 208(b)(2), I will not participate personally 
and substantially in any particular matter in which I have, or any 
person or organization whose interests are imputed to me has, a 
financial interest, if the particular matter will have a direct and 
predictable effect on that financial interest. Further, I will not 
participate in any particular matter involving specific parties in 
which one of the parties is, or is represented by, any client for whom 
I personally performed legal services, for one year from the last date 
I provided services to the client unless I am authorized to 
participate. I understand that I will have a continuing obligation to 
comply with ethics laws and regulations that will require vigilance 
regarding any changes in my financial interests, the financial 
interests of persons and organizations imputed to me under the ethics 
laws and regulations, and other outside interests. I will keep the 
Agency's ethics officials informed about any new or changing interests 
and will take all appropriate steps to avoid or remedy potential 
conflicts.

                            C. LEGAL MATTERS

    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? No.
    2. Have you ever been investigated. arrested, charged, or held by 
any Federal, State, or other law enforcement authority of any Federal, 
State, county, or municipal entity, other than for a minor traffic 
offense? No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination: None.
    6. Have you ever been accused, formally or informally, of sexual 
harassment or discrimination on the basis of sex, race, religion or any 
other basis? No.

                     D. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committees? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the Committee with requested 
witnesses, including technical experts and career employees. with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.

    The Chairman. Mr. Kovacic.

STATEMENT OF WILLIAM E. KOVACIC, NOMINEE TO BE COMMISSIONER OF 
                  THE FEDERAL TRADE COMMISSION

    Mr. Kovacic. Mr. Chairman, Mr. Co-Chairman, I'd like to 
introduce my wife Kathryn Fenton, and to thank her for her 
encouragement and indispensable support to me in this endeavor.
    The Chairman. We welcome your wife.
    Mr. Kovacic. I am deeply honored that President Bush has 
nominated me to be a member of the Federal Trade Commission, 
and I am most grateful to this Committee for considering my 
appointment. I also thank the staff of the Committee which was 
enormously generous with its attention and assistance in the 
process. And let me also recognize my considerable debt to FTC 
Chairman Majoras, Commissioners Leary, Harbour, and Leibowitz, 
and to the FTC's Office of Congressional Relations for being my 
shepherds in the process leading to the hearing. And I should 
add that no person has been more helpful to me than Orson 
Swindle, whose seat I would occupy if I am fortunate to be 
confirmed.
    I began my acquaintance with the FTC about the time that 
Tom Rosch did--thirty years ago exactly, when I served as a 
legislative assistant on the majority staff of Senator Philip 
Hart's Judiciary Subcommittee on Antitrust and Monopoly. In my 
year with Senator Hart's subcommittee staff, I studied the 
agency while working on the measure that Congress enacted in 
1976 as the Hart-Scott-Rodino Antitrust Improvements Act. The 
FTC became, and has remained to this day, the principal focus 
of my professional life. Twice before, as Chairman Stevens 
mentioned, I worked at the Commission from 1979 to 1983, as a 
staff attorney and an attorney advisor and then as the agency's 
General Counsel from 2001 through 2004. More the any other 
subject, the FTC has occupied my attention as an academic and a 
researcher.
    My aim in seeking your approval is not simply to return, 
once again, to a wonderful institution that is dear to me. 
There is a vast difference between simply having a job and 
doing something useful with the job. If I am fortunate to be 
confirmed, I will apply my knowledge and experience to the 
challenges that now command the careful attention of the 
Commission's members and its exceptional staff. Three 
priorities stand out to me, and they very much resemble Tom 
Rosch's list.
    The first is to participate in devising effective 
litigation and non-litigation strategies to address the 
competition and consumer protection issues of greatest concern 
to consumers. The most pressing matters include energy--a 
subject whose importance was underscored in this Committee's 
hearings last week--health care, and information security and 
privacy.
    My second aim is to contribute to the Commission's existing 
efforts to enhance the infrastructure of cooperation and 
coordination with government institutions at home and abroad to 
strengthen the implementation of competition and consumer 
protection policy.
    The third is to help ensure that the Commission sustains 
and enhances the deep base of knowledge that is indispensable 
to success in formulating competition and consumer protection 
programs. Key means to this end include investments in research 
and analysis and the maintenance and continuing enhancement of 
the FTC's already superb staff of attorneys, economists, and 
administrative professionals.
    My larger ambition mirrors the goal that Chairman Majoras 
set for the agency's leadership when she celebrated the FTC's 
90th anniversary in September last year. Academic and popular 
commentators often exhort government officials to ``pick the 
low hanging fruit.'' Wouldn't you like a dollar for every time 
you've heard that aphorism? These observers rarely urge 
policymakers on the other hand to plant trees that will bear 
fruit long after they have left office. I would measure my own 
contributions not simply by the current output of matters, but 
also by investments that make the FTC successful for the longer 
term.
    If I am fortunate enough serve on the agency again, I will 
do my best to work with the Members of the Commission, with the 
agency's staff, and indeed with the Members of this Committee 
to fulfill the destiny that Senator Albert Cummins foresaw for 
the FTC in the year of its creation: to make the Federal Trade 
Commission ``the most efficient protection to the people of the 
United States that Congress has ever given by way of a 
regulation of commerce.''
    Thank you.
    [The prepared statement and biographical information of Mr. 
Kovacic follow:]

Prepared Statement of William E. Kovacic, Nominee to be Commissioner of 
                      the Federal Trade Commission

    Chairman Stevens, Co-Chairman Inouye, and Members of the Commerce 
Committee. I am deeply honored that President Bush has nominated me to 
be a member of the Federal Trade Commission, and I am most grateful to 
this Committee for considering my appointment. I also thank the staff 
of this Committee and the staffs of the Committee's members for their 
generous, thoughtful assistance. Let me also recognize my considerable 
debt to FTC Chairman Majoras, Commissioners Leary, Harbour, and 
Leibowitz, and to the FTC's Office of Congressional Relations for 
guiding me in this process. And no person has been more helpful to me 
than Orson Swindle, whose seat I would occupy if I am fortunate to be 
confirmed.
    I began my acquaintance with the Federal Trade Commission thirty 
years ago in serving as a legislative assistant on the majority staff 
of Senator Philip Hart's Judiciary Subcommittee on Antitrust and 
Monopoly. In my year with Senator Hart's subcommittee staff, I studied 
the agency while working on the measure that Congress enacted in 1976 
as the Hart-Scott-Rodino Antitrust Improvements Act. The FTC became, 
and has remained, the principal focus of my professional life. Twice 
before I have worked at the Commission, first as a staff attorney and 
an attorney advisor from 1979 to 1983, and then as the agency's General 
Counsel from 2001 through 2004. More the any other subject, the FTC has 
occupied my attention as an academic and a researcher.
    My aim in seeking your approval is not simply to return, once 
again, to a wonderful institution that is dear to me. There is a vast 
difference between simply having a job and doing something useful with 
the job. If I am fortunate to be confirmed, I will apply my knowledge 
and experience to the challenges that now command the careful attention 
of the Commission's members and its exceptional staff. Three priorities 
stand out.
    The first is to participate in devising effective litigation and 
non-litigation strategies to address the competition and consumer 
protection issues of greatest concern to consumers. The most pressing 
matters include energy--a subject whose importance was underscored in 
this Committee's hearings last week--health care, and information 
security and privacy.
    The second is to contribute to the Commission's existing efforts to 
enhance the infrastructure of cooperation and coordination with 
government institutions at home and abroad to strengthen the 
implementation of competition and consumer protection policy.
    The third is to help ensure that the Commission sustains and 
enhances the deep base of knowledge that is indispensable to success in 
formulating competition and consumer protection programs. Key means to 
this end include investments in research and analysis and the 
maintenance and continuing enhancement of the FTC's already superb 
staff of attorneys, economists, and administrative professionals.
    My larger ambition mirrors the goal that Chairman Majoras set for 
the agency's leadership when she celebrated the FTC's 90th anniversary 
in September last year. Academic and popular commentators often exhort 
government officials to ``pick the low hanging fruit.'' These observers 
rarely urge policy makers to plant trees that will bear fruit long 
after they have left office. I would measure my own contributions not 
simply by the output of current policy initiatives, but also by 
investments that make the FTC successful for the longer term.
    If I am fortunate to be confirmed, I will do my best to work with 
the members of the Commission, the agency's staff, and the Members of 
this Committee to fulfill the destiny that Senator Albert Cummins 
foresaw for the FTC in the year of its creation--to make the Federal 
Trade Commission ``the most efficient protection to the people of the 
United States that Congress has ever given . . . by way of a regulation 
of commerce.''
    I look forward to your questions.
                                 ______
                                 
                      A. BIOGRAPHICAL INFORMATION

    1. Name (Include any former names or nicknames used): William Evan 
Kovacic.
    2. Position to which nominated: Commissioner, Federal Trade 
Commission.
    3. Date of Nomination: July 28, 2005.
    4. Address (List current place of residence and office addresses):

        Residence: information not released to the public.

        Office: George Washington University Law School, 2000 H Street, 
        NW., Washington, DC 20052.

    5. Date and Place of Birth: Poughkeepsie, New York, October 1, 
1952.
    6. Provide the name, position, and place of employment for your 
spouse (if married) and the names and ages of your children (including 
stepchildren and children by a previous marriage).

        Spouse: Kathryn Marie Fenton,
        Partner,
        Jones Day,
        51 Louisiana Avenue. N.W.,
        Washington, DC 20001.

        No children.

    7. List all college and graduate degrees. Provide year and school 
attended.

        A.B., Public and International Affairs, Princeton University, 
        1974.
        J.D., Columbia University, 1978.

    8. List all management-level jobs held and any nonmanagerial jobs 
that relate to the position for which you are nominated.

        General Counsel,
        Federal Trade Commission,
        June 2001 through December 2004.

        Professor,
        George Washington University Law School,
        June 1999 to present (on leave: June 2001 through July 2004).

        Visiting Professor,
        George Washington University Law School,
        August 1998 through June 1999.

        Visiting Professor,
        Washington College of Law,
        American University,
        August 1994 through June 1995.

        Professor,
        George Mason University School of Law,
        June 1986 to June 1999.

        Associate,
        Bryan Cave,
        September 1983 to June 1986.

        Attorney Advisor,
        Commissioner George W. Douglas,
        Federal Trade Commission,
        January 1983 to September 1983.

        Attorney,
        Planning Office,
        Bureau of Competition,
        Federal Trade Commission,
        September 1979 to January 1983.

        Law Clerk to the Honorable Roszel C. Thomsen, Senior United 
        States District Judge,
        U.S. District Court for the District of Maryland,
        September 1978 to September 1979.

        Legislative Assistant, Majority Staff,
        Subcommittee on Antitrust and Monopoly,
        U.S. Senate Committee on the Judiciary,
        June 1975 to July 1976.

    9. List any advisory, consultative, honorary or other part-time 
service or positions with Federal, State, or local governments, other 
than those listed above, within the last five years.

        Advisor,
        Antitrust Modernization Commission,
        May 2005 to the present.

    10. List all positions held as an officer, director, trustee, 
partner, proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business, enterprise, 
educational or other institution within the last five years.

        Consultant,
        Bates & White,
        April 2005 to present.

        Consultant,
        BearingPoint,
        May 2005 to present.

        Consultant,
        International Law Institute,
        August 2005 to present.

        Member,
        International Board of Advisors,
        Concurrences [published by Thomson Transactive],
        January 2005 to present.

        Contributing Editor,
        Antitrust Law Journal [published by the ABA Section of 
        Antitrust Law],
        August 1997 to present.

        Member,
        Board of Advisors,
        Center for Research in Regulated Industries,
        Rutgers University,
        September 1998 to June 2001, January 2005 to present.

        Member,
        Editorial Board,
        Journal of Regulatory Economics [published by Kluwer Academic 
        Publishers],
        January 2005 to present.

        Member,
        Advisory Board,
        The Government Contractor [published by Thomson West],
        June 1999 to present.

        Member,
        Board of the Glencairn Governance [homeowners' association, 
        Clifton, Virginia],
        May 1998 to present.

        Member,
        Advisory Board,
        University of Detroit Jesuit High School & Academy,
        July 2003 to present.

    11. Please list each membership you have had during the past ten 
years or currently hold with any civic, social, charitable, 
educational, political, professional, fraternal, benevolent or 
religious organization, private club, or other membership organization. 
Include dates of membership and any positions you have held with any 
organization. Please note whether any such club or organization 
restricts membership on the basis of sex, race, color, religion, 
national origin, age or handicap.

    American Bar Association

        Member,
        September 1980 to present.

        Vice-Chair,
        Antitrust, Competition, and Trade Regulation Committee,
        Section of Administrative Law and Regulatory Practice,
        July 1990 to August 1992.

        Co-Chair,
        Amicus Committee,
        Section of Antitrust Law,
        August 1998 to June 2001.

        Contributing Editor,
        Antitrust Law Journal,
        Section of Antitrust Law,
        August 1997 to present.

        Chair,
        Sherman Act Section 1 Committee,
        Section of Antitrust Law,
        August 1994-August 1997.

        Vice-Chair,
        Public Contract Law Educators Committee,
        Section of Public Contract Law,
        August 1996 to August 1998.

        Chair,
        Public Contract Law Educators Committee,
        Section of Public Contract Law,
        August 1989 to August 1996.

    Federal Bar Association

        Member,
        September 1986 to present.

        Chair,
        Antitrust and Trade Regulation Section,
        October 1990 to September 1993.

    Republican National Committee

        Charter Member,
        June 2000 to present.

    Computer Law Association

        Member,
        Board of Directors,
        April 2001 to June 2001.

    St. Claire of Assisi Roman Catholic Church

        Parish member,
        January 1995 to present.

    Western Economic Association International

        Member,
        January 1990 to present.

    American Political Science Association

        Member,
        January 2000 to present.

    International Bar Association

        Member,
        January 2004 to present.

    American Society of International Law

        Member,
        January 2001 to present.

    Association of American Law Schools

        Council Member,
        Antitrust and Economic Regulation Section,
        January 1994 to January 1996.

        Chair,
        Antitrust and Economic Regulation Section,
        January 1997 to January 1998.

    RAND Corporation Alumni Association

        Member,
        January 2004 to present.

    University of Detroit Jesuit High School and Academy

        Member,
        Board of Advisors,
        July 2003 to present.

    United States Naval Institute

        Sustaining Member,
        October 1995 to present.

        Note: None of these organizations restricts membership on the 
        basis of sex, race, color, religion, national origin, age, or 
        handicap.

    12. Have you ever been a candidate for public office? No.
    13. Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past 10 years.

        Bush-Cheney 2004 (March 2004): $2000.
        Republican National Committee (April 2005): $500.

    14. List all scholarships, fellowships, honorary degrees, honorary 
society memberships, military medals and any other special recognition 
for outstanding service or achievements.

    George Washington University Law School

        Chair Appointment to the E.K. Gubin Professorship of Government 
        Contracts Law: 2004.
        Recipient, Distinguished Faculty Service Award: 2001.

    George Mason University School of Law

        Chair Appointment to the George Mason University Foundation 
        Professorship: 1998.

        Recipient, Richard S. Murphy Teaching Award: 1998.

        Recipient; George Mason University Alumni Association Teaching 
        Award: 1998 Recipient, Phi Delta Phi Teaching Award: 1992-93.

        Recipient. George Mason University Distinguished Faculty Award: 
        1990.

        Elected, Faculty Speaker at the Commencement Exercises for the 
        School of Law (chosen by a vote of graduating students): 1989, 
        1990, 1991, 1992, 1993, 1995, 1996, and 1998.

    Washington College of Law, American University

        Recipient: First-Year Class Teaching Award: 1994-1995.

    Federal Trade Commission

        Recipient, Award for Distinguished Service: 2005.

    American Bar Association, Section of Antitrust Law

        Recipient, Chair's Award for Distinguished Service for 2003-
        2004.
        Recipient, Chair's Award for Special Service for 2000-2001.

    University of Detroit Jesuit High School and Academy

        Recipient, Alumnus of the Year Award: 2000.

    Federal Bar Association

        Recipient, Award for Distinguished Service: 1993.

    15. Please list each book, article, column, or publication you have 
authored, individually or with others, and any speeches that you have 
given on topics relevant to the position for which you have been 
nominated. Do not attach copies of these publications unless otherwise 
instructed.

    Books

        Antitrust Law in Perspective: Cases, Concepts and Problems in 
        Competition Policy (Thomson West 2002) (with Andrew I. Gavil 
        and Jonathan B. Baker).

        Teacher's Manual to Accompany Antitrust Law in Perspective: 
        Cases, Concepts and Problems in Competition Policy (Thomson 
        West 2002) (with Andrew I. Gavil and Jonathan B. Baker).

        Antitrust Law and Economics in a Nutshell (5th edition, Thomson 
        West 2004) (with Stephen Calkins and Ernest Gellhorn).

    Chapters in Books and Other Published Collections of Papers

        Achieving Better Practices in the Design of Competition Policy 
        Institutions, in On the Merits--Current Issues in Competition 
        Law and Policy 195 (Paul Lugard & Leigh Hancher eds., 
        Intersentia, 2005).

        Competition Policy Cooperation and the Pursuit of Better 
        Practices, in The Future of Transatlantic Economic Relations: 
        Continuity Amid Discord 65 (David M. Andrews, Mark A. Pollock, 
        Gregory C. Shaffer & Helen Wallace eds., Robert Schuman Centre, 
        European University Institute, 2005).

        Toward a Domestic Competition Network, in Competition Laws in 
        Conflict 316 (Richard Epstein & Michael Greve eds., American 
        Enterprise Institute, 2004).

        Private Participation in the Enforcement of Public Competition 
        Laws, in Competition Law Yearbook 2003 (British Institute of 
        International Comparative Law, 2004).

        The Significance of the Microsoft Antitrust Litigation for 
        Postal Services Operators, in Future Directions in Postal 
        Reform 18 (Michael A. Crew & Paul R. Kleindorfer eds.: Kluwer, 
        2001).

        Antitrust and Competition Policy in Transition Economies: A 
        Preliminary Assessment, in 1999 Fordham Corporate Law Institute 
        513 (Barry E. Hawk, ed. 2000).

        The U.S. Government Sues Microsoft, in The American Annual 
        1999, at 167 (Grolier 1999).

        Comments on a Paper by Robert Cooter, in Economic Dimensions in 
        International Law 317 (Jagdeep S. Bhandari & Alan O. Sykes, 
        eds.: Cambridge: Cambridge University Press, 1997).

        Overview: Public Utility Policymaking in Transition, in XIX 
        Public Utilities Law Anthology, Pt. I, Jan.-June 1996 (1997).

        Competition Policy Analysis of Joint Ventures and Teaming 
        Arrangements by Government Agencies and the Courts, in 
        Subcontracting, Teaming and Partnering in the Age of 
        Consolidation and Cooperation (American Bar Association, 
        Section of Public Contract Law: November 1997).

        Predatory Pricing Standards and Competition in Postal Areas, in 
        Diffusion of New Regulatory Approaches in Postal Services 67 
        (Ulrich Stumpf & Monika Plum, eds.: Wissenschaftliches Institut 
        fur Kommunikationsdienste GmbH Bad Honnef, Germany, April 
        1997).

        Commissions, Courts, and the Access Pricing Problem, in Pricing 
        and Regulatory Innovations Under Increasing Competition 53 
        (Michael A. Crew, ed.: Kluwer, 1996).

        Antitrust and the Evolution of a Market Economy in Mongolia, in 
        De-monopolization and Competition Policy in the Post-Communist 
        Countries 89 (Ben Slay, ed.: Westview, 1996) (with Robert S. 
        Thorpe).

        Public Choice and the Origins of Antitrust Policy, in The 
        Causes and Consequences of Antitrust: A Public Choice 
        Perspective 243 (Fred S. McChesney & William F. Shughart III 
        eds.: University of Chicago, 1995).

        The Law and Economics of Privacy: Applications to Regulated 
        Industries, in Incentive Regulation for Public Utilities 113 
        (Michael A. Crew, ed.: Kluwer, 1994).

        The Application of Legal Safeguards Against Predation to the 
        Postal Services Industry, in Commercialization of Postal and 
        Delivery Services: National and International Perspectives 45 
        (Michael A. Crew & Paul R. Kleindorfer. eds.: Kluwer, 1994).

        Post-Appointment Preference Shaping and Its Influence on 
        Judicial Analysis of Economic Regulation Issues, in 
        Commercialization of Postal and Delivery Services: National and 
        International Perspectives 93 (Michael A. Crew & Paul R. 
        Kleindorfer, eds.: Kluwer, 1994).

        Determining Constraints on Pricing, in The Strategy and Tactics 
        of Pricing 360 (Thomas T. Nagle & Reed K. Holden, eds.: 
        Prentice Hall, 1994) (with Neil E. Graham).

        The Changing Equilibrium of Antitrust Policy, in II The 
        Antitrust Impulse: An Economic, Historical, and Legal Analysis 
        575 (Theodore P. Kovaleff, ed.: M.E. Sharpe Publishers, 1994).

        Comment: Perennial Gales and the International Mail, in 
        Regulation and the Evolving Nature of Postal and Delivery 
        Services 217 (Michael A. Crew & Paul R. Kleindorfer, eds.: 
        Kluwer, 1993).

        The Effect of Government Involvement, in American Bar 
        Association, Section of Antitrust Law, Antitrust Law 
        Developments 963-1016 (3d edition: American Bar Association 
        1992).

        The Antitrust Law and Economics of Essential Facilities in 
        Public Utility Regulation, in Economic Innovations in Public 
        Utility Regulation 1 (Michael A. Crew, ed.: Kluwer, 1992).

        Antitrust and Competitiveness: Is Legislation to Exempt 
        Production Joint Ventures Necessary? in Proceedings of the N.Y. 
        State Bar Association Antitrust Law Symposium 66 (Jan. 1990).

        Government Support for Research and Development, in The 
        Shrinking Industrial Base: Restructuring the Defense Industry 
        and Ensuring American Competitiveness for the 1990s (Annual 
        Meeting Program Volume, American Bar Association, Section of 
        Public Contract Law: August 1990).

        The Sorcerer's Apprentice: Public Regulation of the Weapons 
        Acquisition Process, in Arms, Politics, and the Economy: 
        Historical and Contemporary Perspectives 104 (Robert Higgs, 
        ed.: Holmes & Meier and The Independent Institute, 1990).

        Blue Ribbon Defense Commissions: The Acquisition of Major 
        Weapons Systems, in Arms, Politics, and the Economy: Historical 
        and Contemporary Perspectives 61 (Robert Higgs, ed.: Holmes & 
        Meier and The Independent Institute, 1990).

        Illegal Agreements With Competitors, in Tales from Toronto 
        (Annual Meeting Program Volume, American Bar Association, 
        Section of Public Contract Law, August 7-9, 1988).

        Federal Regulation of Business: Antitrust and Environmental 
        Law, in Henry M. Butler, William Fischel & William E. Kovacic, 
        Significant Business Decisions of the Supreme Court, 1986-1987 
        Term 57 (Washington Legal Foundation: 1988).

        The Federal Trade Commission and Congressional Oversight of 
        Antitrust Enforcement: A Historical Perspective, in Public 
        Choice and Regulation: A View from Inside the Federal Trade 
        Commission 63 (Robert Mackay, James C. Miller III & Bruce 
        Yandle, eds.: Hoover Press, 1987).

        Antitrust, in The Business Government Relationship 173 (William 
        M. Wolff, Jr., ed.: Open University, University of Maryland, 
        1983).

        Current Legal Standards of Predation, in Strategy, Predation, 
        and Antitrust Analysis 101 (Steven Salop ed.: Federal Trade 
        Commission, 1981) (with James D. Hurwitz, Thomas Sheehan & 
        Robert H. Lande).

    Journal Articles

        The Impact of Leniency and Whistleblowing Programs on Cartels, 
        International Journal of Industrial Organization (Forthcoming 
        2005) (with Cecile Aubert and Patrick Rey).

        An Interdisciplinary Approach to Improving Competition Policy 
        and Intellectual Property Policy, Fordham International Law 
        Review (Forthcoming 2005) (with Andreas Reindl).

        Measuring What Matters: The Federal Trade Commission and 
        Investments in Competition Policy Research and Development, 72 
        Antitrust Law Journal 861 (2005).

        The Modern Evolution of U.S. Competition Policy Enforcement 
        Norms, 71 Antitrust Law Journal 377 (2003).

        Extraterritoriality, Institutions, and Convergence in 
        International Competition Policy, 97 American Society of 
        International Law Proceedings 309 (2003).

        Economic Regulation and the Courts 1982 to 2001: Ten Cases That 
        Made a Difference, 21 Journal of Regulatory Economics 23 
        (2002).

        Institutional Foundations for Economic Law Reform in Transition 
        Economies: The Case of Competition Policy and Antitrust 
        Enforcement, 77 Chicago-Kent Law Review 265 (2001).

        Private Monitoring and Antitrust Enforcement: Paying Informants 
        to Reveal Cartels, 69 George Washington Law Review 766 (2001).

        Evaluating Antitrust Experiments: Using Ex Post Assessments of 
        Government Enforcement Decisions to Inform Competition Policy, 
        9 George Mason Law Review 843 (2001).

        Transatlantic Turbulence: The Boeing-McDonnell Douglas Merger 
        and International Competition Policy, 68 Antitrust Law Journal 
        805 (2001).

        Antitrust After Microsoft: Upgrading Public Competition Policy 
        Institutions for the New Economy, 32 West Los Angeles Law 
        Review 51 (2001).

        Lessons of Competition Policy Reform in Transition Economies 
        for U.S. Antitrust Policy, 74 St. John's Law Review 361 (2000).

        Antitrust Policy: A Century of Economic and Legal Thinking, 
        Journal of Economic Perspectives 43 (2000) (with Carl Shapiro).

        Designing Antitrust Remedies for Dominant Firm Misconduct, 31 
        Connecticut Law Review 1285 (1999).

        Competition Policy in the Postconsolidation Defense Industry, 
        44 Antitrust Bulletin 421 (1999).

        The Civil False Claims Act as a Deterrent to Participation in 
        Government Procurement Markets, 6 Supreme Court Economic Review 
        201 (1998).

        Merger Enforcement in Transition: Antitrust Controls on 
        Acquisitions in Emerging Economies, 66 University of Cincinnati 
        Law Review 1075 (1998).

        Perilous Beginnings: The Establishment of Antimonopoly and 
        Consumer Protection Programs in the Republic of Georgia, 43 
        Antitrust Bulletin 15 (1998) (with Ben Slay).

        Law, Economics, and the Reinvention of Public Administration: 
        Using Relational Agreements to Reduce the Cost of Procurement 
        Regulation and Other Forms of Government Intervention in the 
        Economy, 50 Administrative Law Review 141 (1998).

        The Quality of Appointments and the Capability of the Federal 
        Trade Commission, 49 Administrative Law Review 915 (1997).

        Antitrust Policy in Ukraine, 31 George Washington Journal of 
        International Law & Economics 1 (1997) (with Roger A. Boner).

        Creating Competition Policy: Betty Bock and the Development of 
        Antitrust Institutions, 66 Antitrust Law Journal 231 (1997).

        Getting Started: Creating New Competition Policy Institutions 
        in Transition Economies, 23 Brooklyn Journal of International 
        Law 403 (1997).

        Antitrust Policy and Horizontal Collusion in the 21st Century, 
        9 Loyola Consumer Law Reporter 97 (1997).

        Administrative Adjudication and the Use of New Economic 
        Approaches in Antitrust Analysis, 5 George Mason Law Review 313 
        (1997).

        Antitrust Decisionmaking and the Supreme Court: Perspectives 
        from the Thurgood Marshall Papers, 42 Antitrust Bulletin 93 
        (1997).

        Downsizing Antitrust: Is It Time to End Dual Federal 
        Enforcement?, 41 Antitrust Bulletin 505 (1996).

        Whistleblower Bounty Lawsuits as Monitoring Devices in 
        Government Contracting, 29 Loyola of Los Angeles Law Review 
        1799 (1996).

        The Competition Policy Entrepreneur and Law Reform in Formerly 
        Communist and Socialist Countries, 11 American University 
        Journal of International Law & Policy 437 (1996).

        Procurement Reform and the Choice of Forum in Bid Protest 
        Disputes, 9 Administrative Law Journal of the American 
        University 461 (1995).

        Designing and Implementing Competition and Consumer Protection 
        Reforms in Transitional Economies: Perspectives from Mongolia, 
        Nepal, Ukraine, and Zimbabwe, 44 DePaul Law Review 1197 (1995).

        Accounting for Regulation in Determining the Application of 
        Antitrust Rules to Firms Subject to Public Utility Oversight, 
        40 Antitrust Bulletin 483 (1995).

        Competition Policy, Rivalries, and Defense Industry 
        Consolidation, 8 Journal of Economic Perspectives 91 (1994) 
        (with Dennis Smallwood).

        Competitive Access Issues and Telecommunications Regulatory 
        Policy, 20 Journal of Contemporary Law 419 (1994) (with Alex 
        Larson and Douglas Mudd).

        The Identification and Proof of Horizontal Agreements Under the 
        Antitrust Laws, 38 Antitrust Bulletin 5 (1993).

        Competition Policy, Economic Development, and the Transition to 
        Free Markets in the Third World: The Case of Zimbabwe, 61 
        Antitrust Law Journal 253 (1992).

        The Influence of Economics on Antitrust Law, 30 Economic 
        Inquiry 294 (1992).

        Regulatory Controls as Barriers to Entry in Government 
        Procurement, 25 Policy Sciences 29 (1992).

        Commitment in Regulation: Defense Contracting and Extension to 
        Price Caps, 3 Journal of Regulatory Economics 219 (1991).

        Matsushita: Its Construction and Application by the Lower 
        Courts, 59 Antitrust Law Journal 609 (1991) (with Susan S. 
        DeSanti).

        Reagan's Judicial Appointees and Antitrust in the 1990s, 60 
        Fordham Law Review 49 (1991).

        Merger Policy in a Declining Defense Industry, 36 Antitrust 
        Bulletin 543 (1991).

        The Reagan Judiciary and Environmental Policy: The Impact of 
        Appointments to the Federal Courts of Appeals, 18 Boston 
        College Environmental Law Review 669 (1991).

        Predatory Pricing Safeguards in Telecommunications Regulation: 
        Removing Impediments to Competition, 35 St. Louis University 
        Law Journal 1 (1990) (with Alex Larson).

        The Antitrust Paradox Revisited: Robert Bork and the 
        Transformation of Modern Antitrust Policy, 36 Wayne Law Review 
        1413 (1990).

        Comments and Observations on the Sherman Act: The First 
        Century, 59 Antitrust Law Journal 119 (1990).

        Antitrust Analysis of Joint Ventures and Teaming Arrangements 
        Involving Government Contractors, 58 Antitrust Law Journal 1059 
        (1990).

        Failed Expectations: The Troubled Past and Uncertain Future of 
        the Sherman Act as a Tool for Deconcentration, 74 Iowa Law 
        Review 1105 (1989).

        Congress and the Federal Trade Commission, 57 Antitrust Law 
        Journal 869 (1989).

        Federal Antitrust Enforcement in the Reagan Administration: Two 
        Cheers for the Disappearance of the Large Firm Defendant in 
        Nonmerger Cases, 12 Research in Law & Economics 173 (1989).

        Reform of United States Weapons Acquisition Policy: 
        Competition, Teaming Arrangements, and Dual-Sourcing, 6 Yale 
        Journal on Regulation 249 (1989) (with William B. Burnett).

        Illegal Agreements With Competitors, 57 Antitrust Law Journal 
        517 (1988).

        Public Choice and the Public Interest: Federal Trade Commission 
        Antitrust Enforcement During the Reagan Administration, 33 
        Antitrust Bulletin 467 (1988).

        Built to Last? The Antitrust Legacy of the Reagan 
        Administration, 35 Federal Bar News & Journal 244 (June 1988).

        Industrial Policy: Reindustrialization Through Competition or 
        Coordinated Action?, 2 Yale Journal on Regulation 1 (1984) 
        (with James C. Miller III, Thomas F. Walton & Jeremy A. 
        Rabkin).

        The Federal Trade Commission and Congressional Oversight of 
        Antitrust Enforcement, 17 Tulsa Law Journal 587 (1982).

        Judicial Analysis of Predation: The Emerging Trends, 35 
        Vanderbilt Law Review 63 (1982) (with James D. Hurwitz).

    Monographs, Reports, and Working Papers

        Competition Policies for Growth: Legal and Regulatory Framework 
        for Sub-Saharan Countries (U.S. Agency for International 
        Development, May 2001) (with Cynthia L. Clement, Andrew I. 
        Gavil, and Georges Korsun).

        The State of Federal Antitrust Enforcement--2001: Report of the 
        Task Force on the Federal Antitrust Agencies (American Bar 
        Association, Section of Antitrust Law, January 2001) (with Joe 
        Sims, Mary Cranston, Michael Denger, Richard Steuer, and 
        Patricia Vaughn).

        Advisory Report on the Development of Consumer Protection Law 
        in Vietnam (Aug. 1997) (Prepared for the Ministry of Justice of 
        the Government of Vietnam under United Nations Development 
        Program VIE/94/003).

        Advisory Report on Approaches to Competition Policy in Vietnam 
        (July 1997) (Prepared for the World Bank and the Central 
        Institute of Economic Management of the Government of Vietnam) 
        (with William A.W. Nielson).

        Recommended Action Plan for Implementing Georgia's Antimonopoly 
        and Consumer Protection Laws (U.S. Agency for International 
        Development, Center for Economic Policy and Reform, Analytical 
        Report No. 9: May 1997).

        Recommended Guidelines for Implementing Georgia's Antimonopoly 
        and Consumer Protection Laws (U.S. Agency for International 
        Development. Center for Economic Policy and Reform. Analytical 
        Report No. 8: Apr. 1997) (with Ben Slay).

        Analysis of Competition in Mongolia & Three Case Studies 
        (University of Maryland, Center on Institutional Reform and the 
        Informal Sector, Country Report No. 14: 1994) (with Karen 
        Turner Dunn and Robert S. Thorpe).

        Antitrust Analysis and Defense Industry Consolidation (American 
        Bar Association. Section of Public Contract Law: 1994) (with 
        Richard Feinstein and Patrick Sheller).

        Study of Monopolies and Competition Policy in Zimbabwe: Final 
        Report of the Zimbabwe Monopolies Commission Study (U.S. Agency 
        for International Development, Project on Implementing Policy 
        Change, September 1992) (with Anthony Davis, Clive Gray, David 
        Gordon, and Eugenia West).

        The Antitrust Government Contracts Handbook (American Bar 
        Association, Section of Antitrust Law: 1990).

        Nonprice Predation Under Section 2 of the Sherman Act (American 
        Bar Association, Section of Antitrust Law, Monograph No. 18: 
        1991) (with E. Thomas Sullivan et al.).

        The Reagan Judiciary Examined: A Comparison of Environmental 
        Law Voting Records of Carter and Reagan Appointees to the 
        Federal Courts of Appeals (Washington Legal Foundation, Working 
        Paper Series No. 36: October 1989).

        The Reagan Judiciary Examined: A Comparison of Antitrust Voting 
        Records of Carter and Reagan Appointees to the Federal Courts 
        of Appeals (Washington Legal Foundation, Working Paper Series 
        No. 34: April 1989).

        The Antitrust Paradox Revisited: Robert Bork and the 
        Transformation of Modern Antitrust Policy (Washington Legal 
        Foundation, Working Paper No. 32: February 1989).

        Permanence and Regulatory Change: The Longevity of Reagan 
        Antitrust and Consumer Protection Policy at the Federal Trade 
        Commission (Washington Legal Foundation, Working Paper No. 29: 
        December 1988).

        Reliance on FTC Consumer Protection Law Precedents in Other 
        Legal Forums (American Bar Association, Section of Antitrust 
        Law, Working Paper No. 1: July 1, 1988) (with Lawrence 
        Fullerton et al.).

        A Basic Antitrust Compliance Manual for the Moving and Storage 
        Industry (National Moving & Storage Association and The 
        National Institute of Certified Moving Consultants: 1987).

        Coping with a Mature Product in a Changing Industry: White 
        Paper of the National Task Force on the Yellow Pages Industry 
        (Aug. 6, 1987) (with Steven Heckmyer, et al.).

        Horizontal Mergers: Law and Policy (American Bar Association, 
        Section of Antitrust Law, Monograph No. 12: 1986) (with William 
        Blumenthal et al.).

    Magazine, Newsletter, and Newspaper Articles

        Developing Competition Policy in Transition Economies: 
        Milestones in 2000, 4 International Antitrust Bulletin 40 
        (American Bar Association, Section of Antitrust Law, Spring 
        2001).

        The Competition Conundrum. The American Lawyer 77 (January 
        2001).

        Competition Policy in the Caribbean: First Steps Toward a 
        Regional Solution, 3 International Antitrust Bulletin 46 
        (American Bar Association, Section of Antitrust Law, Fall/
        Winter 2000).

        United States v. Microsoft Corp.: Turn-of-the-Century Turning 
        Point, George Washington Law School Magazine 26 (August 2000).

        The New Indonesian Competition Law, 2 International Antitrust 
        Bulletin 35 (American Bar Association, Section of Antitrust 
        Law, Summer 1999).

        Capitalism, Socialism, and Competition Policy in Vietnam, 13 
        Antitrust 57 (Summer 1999).

        The Crusade Against Monopolists, Corporate Counsel Magazine 44 
        (June 1999).

        The Big, The Bad and The Merged, Washington Post Outlook 
        Section, December 6, 1998, at C1.

        The Guns of September, Corporate Counsel Magazine 89 (August 
        1998).

        Institutional Innovations in Competition Policy in Peru: 
        Indecopi After Five Years, 1 International Antitrust Bulletin 
        34 (American Bar Association, Section of Antitrust Law, Summer 
        1998).

        Evaluating the Effects of Procurement Reform, The Procurement 
        Lawyer 1 (American Bar Association, Section of Public Contract 
        Law, Vol. 33, No. 2: Winter 1998).

        Expanded Antitrust Scrutiny Requires Greater Caution, The 
        Procurement Lawyer 23 (American Bar Association, Section of 
        Public Contract Law, Vol. 30, No. 3: Spring 1995).

        Breyer, Like Ginsburg, Is Pro-Business, San Diego Union-
        Tribune, May 22, 1994, at G-1.

        Antitrust Law for a Transition Economy, Legal Times, August 2, 
        1993, at 41 (with Robert Thorpe).

        Anti-Competitive Forces May Stir Anew, National Law Journal, 
        May 24, 1993, at 19 (with Ernest Gellhorn).

        Judicial Appointments and the Future of Antitrust Policy, 7 
        Antitrust 8 (Spring 1993).

        Bibliography of Recent Academic Scholarship, Public Contract 
        Newsletter, American Bar Association, Section of Public 
        Contract Law (Quarterly: 1990 to 1995).

        Illegal Agreements with Competitors, 76 American Dahlia Society 
        Bulletin 6 (Dec. 1989).

        Investigating Private University Price-Fixing, Collegiate Times 
        (1989).

        Steady Reliever at Antitrust, Wall Street Journal, October 10, 
        1989, at A18.

        Legal Ledger--Antitrust Compliance, Direction Magazine 
        (National Moving & Storage Association) (January-April 1988).

        Teaming Arrangements and the Acquisition Process, Defense News, 
        November 27, 1987, at 24 (with William Burnett).

        The Emerging Role of Competition in the Weapons Acquisition 
        Process, Antitrust and Trade Regulation Section Report (Federal 
        Bar Association: Vol. 1, No. 2, Summer 1987).

        Armed Services Using Competition Strategy to Reduce Expenses, 
        Legal Times, July 13, 1987, at 14 (with William Burnett).

        The Analysis of Mergers in Industries Subject to Rapid 
        Technological Change, in Manual on the Economics of Antitrust 
        Law 7-1 (American Bar Association, Section on Antitrust Law, 
        Economics Committee: March 1987).

        Rule of Reason: D.C. Circuit Adopts Judge Bork's Analysis, 
        Legal Times, Oct. 6, 1986, at 20.

        ``The Consequences of Multiplicity in Competition Policy 
        Reviews of Mergers in the Telecommunications Sector''--
        Testimony at the Federal Communications Commission En Banc 
        Session on Telecommunications Mergers, Washington, D.C. (Dec. 
        14, 1998).

        ``Analytical Approaches and Institutional Processes for 
        Implementing Competition Policy Reforms by the Federal Trade 
        Commission'' (Testimony Before the Federal Trade Commission 
        Hearings on Changing Nature of Competition in a Global & 
        Innovation Driven Age: Dec. 12, 1995) (with Ernest Gellhorn).

    Interviews, Speeches and Transcribed Remarks Not Otherwise 
Contained in the Materials Listed Above

        Interview with William E. Kovacic, General Counsel, Federal 
        Trade Commission, The Antitrust Source 1 (American Bar 
        Association, Section of Antitrust Law, January 2004), available 
        at http://www.antitrustsource.com.

        An Interview with William Kovacic, 6 Global Competition Review 
        14 (July/August 2003).

        Panel Discussion: Antitrust on the Pacific Rim, in 2002 Fordham 
        Corporate Law Institute 521 (Barry E. Hawk, ed. 2003).

        Panel Discussion: Administrative Antitrust Authorities--
        Adjudicative and Administrative Functions, in 2002 Fordham 
        Corporate Law Institute 411 (Barry E. Hawk, ed. 2003).

        Panel Discussion: Mergers and Acquisitions, 2001 Fordham 
        Corporate Law Institute 219 (Barry E. Hawk, ed. 2002).

        Holding Legislators Accountable for Their Regulatory Promises, 
        2000 Law Review of Michigan State University--Detroit College 
        of Law 9 (2000).

        Panel Discussion: Antitrust in Transition Economies, in 1999 
        Fordham Corporate Law Institute 563 (Barry E. Hawk, ed. 2000).

    16. Please identify each instance in which you have testified 
orally or in writing before Congress in a non-governmental capacity and 
specify the subject matter of each testimony.
    William E. Kovacic & Steven Schooner, Proposed Changes to Part 9 of 
the Federal Acquisition Regulation Relating to Contractor 
Responsibility -Testimony Before the Committee on Small Business, House 
of Representatives, U.S. Congress (Oct. 21, 1999).

                   B. POTENTIAL CONFLICTS OF INTEREST

    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers: None.
    2. Do you have any commitments or agreements, formal or informal, 
to maintain employment, affiliation or practice with any business, 
association or other organization during your appointment? If so, 
please explain.
    If I am fortunate to be confirmed to be a member of the Federal 
Trade Commission, I will request that my current employer (George 
Washington University) grant me an unpaid leave of absence from my 
position on the faculty of the George Washington University Law School. 
If George Washington University grants me the leave of absence, I will 
be abide by the restrictions described in my letter of July 22, 2005 to 
Christian S. White, the Designated Agency Ethics Official of the 
Federal Trade Commission. A copy of my letter to Mr. White is attached 
to my answers to the Committee's Questionnaire. If George Washington 
University does not grant me a leave of absence, I will resign from the 
George Washington Law School faculty upon my confirmation as a member 
of the Federal Trade Commission.
    3. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    My letter of July 22, 2005 to Christian S. White, mentioned in my 
answer to Question B.2. above, describes all investments, obligations, 
liabilities or other relationships which could involve potential 
conflicts of interest in the position to which I have been nominated. 
For the Committee's reference, I have attached a copy of the July 22, 
2005 letter to my answers to the Committee's Questionnaire.
    4. Describe any business relationship, dealing, or financial 
transaction which you have had during the last 5 years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    My letter of July 22, 2005 to Christian S. White, mentioned in my 
answer to Question B.2. above, describes all business relationships, 
dealings, or financial transactions I have had since September 15, 
2000--for myself, on behalf of any client, or acting as an agent--that 
could in any way constitute a possible conflict of interest in the 
position to which I have been nominated. For the Committee's reference, 
I have attached a copy of the July 22, 2005 letter to my answers to the 
Committee's Questionnaire.
    5. Describe any activity during the past 5 years in which you have 
been engaged for the purpose of directly or indirectly influencing the 
passage, defeat, or modification of any legislation or affecting the 
administration and execution of law or public policy: None.
    6. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.
    My letter of July 22, 2005 to Christian S. White, mentioned above, 
states the steps I will take to resolve any potential conflict of 
interest, including all matters raised in my responses above. I will 
abide by the commitments presented in my letter to Mr. White.

                            C. LEGAL MATTERS

    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? No.
    2. Have you ever been investigated, arrested, charged, or held by 
any Federal. State, or other law enforcement authority of any Federal. 
State. county, or municipal entity, other than for a minor traffic 
offense? No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? No.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere ) of any criminal violation other than a minor traffic 
offense? No.
    5. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination.
    If I am fortunate to be confirmed, my service as a member of the 
Federal Trade Commission would draw heavily upon my past experience at 
the Commission--as an attorney in the Bureau of Competition, as an 
attorney advisor to a commissioner, and as General Counsel--and upon my 
experience from June 1975 to July 1976 as a legislative assistant on 
the majority staff of the Senate Judiciary Subcommittee on Antitrust 
and Monopoly. During my year with the Senate Antitrust Subcommittee, I 
worked extensively on assignments concerning the statute Congress 
eventually passed as the Hart-Scott-Rodino Antitrust Improvements Act 
of 1976. These experiences have given me a special affection for the 
Federal Trade Commission and an intense personal and professional 
interest in the responsibilities that Congress has entrusted to the 
agency.
    6. Have you ever been accused, formally or informally, of sexual 
harassment or discrimination on the basis of sex, race, religion or any 
other basis? No.

                     D. RELATIONSHIP WITH COMMITTEE

    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committees? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the Committee with requested 
witnesses, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.

    The Chairman. Thank you very much. I'm struck by the fact 
that the two of you have a background in this agency and as you 
both said, have a dedication to it. At no time has that been 
required more than it is now. I do hope that you can work 
together in terms of dealing with the issues that face us. And 
I'm one who shares your opinion about the importance of the FTC 
in terms of overall structure in protecting the whole concept 
of interstate commerce. Now, we've had a lot of issues that are 
before us recently. We've had some involving mergers and other 
you know, the issues that you read about in the editorials all 
the time.
    But let me ask you this, I'm hearing more, and more about a 
staff driven agency. Now you both were members of the staff, do 
you think this Commission ought to be a staff driven entity, or 
should the priorities be set by the Commission itself, rather 
than by the staff. Mr. Rosch?
    Mr. Rosch. I think Mr. Chairman that the priorities ought 
to be set by the Commission. I think we're well advised to get 
input from the staff. That was the way it was when I was there 
before, I would expect that it would be that way in the future. 
Let me add one thing to what Mr. Kovacic has said, and it's in 
answer to your question as well. I think that the staff is 
particularly important when it comes to trying cases. At that 
juncture they're up against some of the finest lawyers in the 
United States. And it's critically important that the 
Commission have not only the lead counsel, but the bench 
strength in order to go face to face with them. And I would 
hope that over the period of time that Bill and I are there, if 
we are so lucky as to be confirmed, that we're going to be able 
to develop that kind of bench and lead counsel experience.
    The Chairman. Mr. Kovacic.
    Mr. Kovacic. There's no more important responsibility for 
the Commissioners than to set priorities and to provide 
guidance to the staff about what the agency's use of resources 
should be. I think that requires a continuing collaboration 
with the staff to understand what those who are closest to the 
development of specific cases know. But in the first instance 
and continually, the functions of setting priorities, 
determining directions, specifying how the agency will act, 
deciding what specific initiatives will be chosen are perhaps 
the most important functions that the Commissioners themselves 
can perform. It is their responsibility.
    The Chairman. Well I ask that question, because I heard the 
other day, I can't believe I heard that the staff, that the 
Commission actually appealed a decision of the Commission. I 
can't believe that, but isn't that what we heard? That they 
really sought a further review after the Commission made a 
decision. Now I firmly believe in having a very strong staff, 
but I also believe this Commission absolutely needs to have a 
bipartisan--your our bipartisan router in the whole area of 
interstate commerce as we continue down this long river of 
global enterprise and I think that unless you really have the 
cooperation and the understanding of who's in charge, there's 
going to be a difficult time.
    We had a hearing as you both mentioned, that one of you 
mentioned, last week about the oil industry coming in to 
explain the pricing system and what led to these very high 
prices. We've been asked to deal with the legislation to give 
the FTC authority to have direct involvement in the concept of 
price gouging when it involves interstate commerce. Have either 
of you expressed an opinion about that, whether Congress should 
enact that law?
    Mr. Rosch. I've not expressed an opinion, but I do have 
some opinions, Your Honor. Not Your Honor, sorry that's a slip 
of the tongue. Mr. Chairman.
    The Chairman. I wouldn't have made a very good judge. But 
let me ask your opinion then. As you know the Chairman said 
that she believed that the FTC should not have that authority, 
and we had a split in the attorney generals from the states on 
that issue. Do you believe Congress should extend that 
authority to FTC?
    Mr. Rosch. Well let me say first Mr. Chairman, and Mr. Co-
Chairman, that I believe that the FTC has an arsenal of tools 
with which to deal with virtually any sector of the American 
economy and I don't think energy is any exception. It has the 
authority to challenge mergers. It has the authority to conduct 
investigations into collusion and when there's reason to 
believe that there is collusion I do believe that the American 
public is entitled to know whether there is.
    It has the authority to challenge unfair acts or practices 
that are deceptive. And it also has authority, though more 
limited to challenge unfair methods of competition. Now all of 
that said, the next question is, does it need any more 
authority, and my own view is that that's debatable. It's 
debatable because despite the fact that the Supreme Court has 
held that Section 5 of the FTC Act is broader than the Sherman 
Act, lower courts have expressed a view that it is in fact co-
extensive with the Sherman Act. If and to the extent that this 
Committee and the Senate and the Congress, believe that the FTC 
should go beyond the Sherman Act in Section 5, then I believe 
that that power must come from the Congress.
    The Chairman. Mr. Kovacic.
    Mr. Kovacic. One thing that I think the Committee 
appreciates and I want to make clear is that certainly should 
the Congress decide to enact legislation, let there be no 
question in your minds that I would faithfully enforce it. I 
look at the collective experience that we've had at the state 
level with price gouging legislation. One of my fields at 
George Washington has been teaching contracts. And I've had 
some occasion to look at that experience, and the theme that I 
think some of the witnesses raised in the hearing last week is 
some of the difficulty associated with defining and applying a 
prohibition on price gouging.
    I think that there is a real possibility in the studies 
that the Congress has requested the Commission to make and it 
is now undertaking, and perhaps in a more extensive and 
collaborative relationship with the state attorneys general (an 
area where perhaps more effort could be devoted) to get a more 
careful sense of precisely how the state laws have worked in 
practice.
    The impression I get from looking at the literature, is 
that the experience on the whole has been relatively limited, 
and somewhat ambiguous. But I think there is the possibility 
there for the Congress to learn a great deal more, for the 
Commission to learn a great deal more before suggesting 
specific adjustments in legislation that go beyond the 
considerable authority that the agency already has.
    The Chairman. Thank you. Senator Inouye.
    Senator Inouye. Well if I may followup, I'm certain that 
you are well aware that GAO issued the report in May of 2004 
suggesting that the FTC mergers of these oil companies resulted 
in high prices. Knowing that, would you favor the Congress as 
suggested, or alluded to by the Chair consider amending the 
laws so that you would have authority to enforce--take 
enforcement action. Not just investigate in the case of price 
gouging, because you did have price gouging, $6 a gallon for no 
reason whatsoever.
    Mr. Kovacic. It would be a significant change in our 
general approach to competition policy and consumer protection 
to give the agency the authority to cap prices in specific 
instances. This would be, I think, a significant expansion of 
the authority the Commission previously has exercised, though I 
agree with Ton Rosch that it would be possible to interpret 
elements of our existing authority to give us the capacity at 
the intersection of competition and consumer protection 
doctrine to do that.
    I think the great challenge for us would be to define--and 
I think this has remained the problem that is not well resolved 
in the commentary or discussions--specifically what the 
excessive price would be. I do think that the GAO study was 
useful in that in contributed to our knowledge of the effects 
of the mergers. As I pointed out, in my time as General Counsel 
while I had the opportunity to appear before several 
Congressional bodies, I have great concern about the soundness 
of some of the methodologies they used to reach their results, 
and I think the GAO is entirely well-founded in pressing the 
Commission to justify and explain the effects of what it's 
done. To the extent that further efforts to evaluate the 
consequences of our past acts are to be a greater element of 
what we do, I think that is a very sensible way to go ahead. 
The matter that troubles me the most in deciding what the 
operational standard would be, would be to decide precisely 
what the formula for setting the ceiling would be, even in 
times of emergency.
    Mr. Rosch. Mr. Co-Chairman, can I take a swing at that 
myself. My own view is that there is a difference between 
challenging or at least investigating and possibly challenging 
acts or practices that lead to higher prices on the one hand. 
And directly trying to cap prices on the other hand. As I've 
indicated, I think that if and to the extent high prices are 
the result of collusion the American public has every right to 
have the FTC investigate and challenge those acts or practices. 
Very clearly the Commission has that authority.
    The Commission also has the authority to challenge acts or 
practices that lead to higher prices, insofar as those involve 
deception and that's true of deceptive manipulation as well.
    Where I think the Commission can make a tremendous 
contribution is in connection with the sort of thing that 33.83 
contemplates. And that is conducting an investigation and 
throwing sunlight on the results of that investigation. If it 
is correct that the oil companies are making what appear to 
some to be excessive profits, then it seems to me that the 
proper thing to do is to throw sunlight on the reasons for 
that, and for the profits in the first instance at least, 
before one goes to the extreme step of trying to impose price 
caps. I guess the reason that I have this reaction on price 
caps is that I was here in 1973, and 1975, when President Nixon 
imposed price caps and I recall gas station lines stretching 
for two miles or so if you could get gas at all.
    And I also recall that when they took the caps off, that we 
suffered a period of inflation that sent interest rates into 
the teens. And so I must say, that I am very reluctant to 
endorse the Commission's imposing any such caps. Should as a 
policy matter that is thought be the right thing to do, I 
believe frankly that that is something that the Congress, 
rather than an agency should do.
    Senator Inouye. Is there any other agency with the 
authority to enforce price gouging, anti-price gouging laws, 
short of collusion?
    Mr. Kovacic. Senator, I don't think at the federal level 
that there is. The main efforts to date are those that the 
Committee heard testimony on last week, and those have been 
state-by-state efforts that have principally been focused on 
the activities, the operations of retailers and wholesalers. 
Most of our experience has come indirectly from looking at what 
public utility commissions and federal regulators such as the 
Federal Communications Commission have done in the past in 
setting ceilings for prices. For gasoline and other refined 
products in this country the answer to this date has only been 
in the states.
    The Chairman. What about Justice, what about the Department 
of Justice?
    Mr. Kovacic. Mr. Chairman, in using it's antitrust 
authority under the Sherman Act, the Department would face the 
same limits imposed by doctrine that the FTC does. It's been 
fairly clear, standard competition law from the 1940s onward 
that a decision by a firm to raise its prices, so long as the 
price raising isn't the result of improper behavior, is 
unbounded, that the high price is not forbidden.
    The Chairman. The Senator's question as I understood it 
covered the industry itself, collusion between entities in the 
industry certainly would fall under the Justice Department 
wouldn't it?
    Mr. Kovacic. It would, and the Federal Trade Commission as 
well could unmistakably challenge collusion involving 
participants in the industry. I was referring before to what 
might be considered to be purely unilateral behavior.
    Senator Inouye. I have one more question. We're now in the 
process of considering amendments to the 1996 
Telecommunications Act, and we find for example that words are 
now in our vocabulary that never appeared in those days such as 
spyware. Does the FTC need additional authority or power to 
cope with spyware problems?
    Mr. Kovacic. Senator, I think for myself that the 
suggestions that have been made in several legislative 
proposals to make the existing penalties more powerful both on 
the civil side and on the criminal side would be useful 
enhancements of the authority that the Commission has--
certainly on the civil side--and for public authorities with 
criminal enforcement power to use greater criminal sanctions.
    I also think that a useful supplement to the existing 
legislative scheme is a measure that this Committee in 
different forms has endorsed and that Tom mentioned a moment 
before, and that's the US SAFE WEB Act, I think the US SAFE WEB 
Act would give the Commission far better capacity to work with 
other competition and consumer protection authorities worldwide 
to deal in particular with problems caused by spyware. Because 
the wrongdoers today are geographically highly mobile and they 
are technologically adroit, I fear that in some ways we are 
running a half step behind them to the extent that our 
framework for cooperating with other public authorities that 
have the capacity to work with us to deal with these problems 
is weak.
    So I would say that's an area in which I would simply add 
my own endorsement for views that this body has accepted 
already, and that is that improving the foundation for sharing 
information will give us a decided advantage in dealing with 
spyware as well.
    Senator Inouye. Well thank you very much. And Mr. Chairman, 
if I may I would like to submit a few questions.
    The Chairman. Yes. I have a couple of other questions. 
Gentlemen, we hear too much I think about the global economy on 
the news media and other places. But as a matter of fact the 
Commission's practices have been to look at our own economy in 
determining what is fair competition, what is necessary in 
terms of acquisitions, mergers. To what extent should the 
policies of the FTC change because of the advent of the 
participants in the global economy? We have global giants now, 
the German post office, really indirectly owns one of the air 
carriers in the United States now. We have so many different 
entities coming in from China that are really--they're 
purchasing part of our infrastructure, but they're competing 
literally through one of our own corporate shells with our 
existing economy. Have you looked at this in terms of whether 
the Chairman should broaden our scope as far as determining 
what is competition and who we're competing with as far as the 
FTC is concerned? Is it strictly interstate commerce that we 
should be dealing with, or are we going to be in your terms 
looking at global commerce?
    Mr. Rosch. Well Mr. Chairman, I think in the antitrust 
area, the seeds have been planted that Bill was talking about 
earlier. There is close cooperation among many nations in terms 
of antitrust enforcement and to some extent I think that has 
been spearheaded by the Justice Department initially. But the 
FTC has participated in that effort and I think it is bearing 
fruit. In the consumer protection area I sense that it's not as 
well developed and it should be for the very reasons Bill 
mentioned.
    These practices can occur in the Far East, in Europe, and 
yet they can impact the United States and they can impact the 
world for that matter. And I think it's important as I said in 
my opening statement that there be a degree of international 
cooperation which cannot exist at the present time without 
legislation from this Committee and this Congress.
    Mr. Kovacic. Mr. Chairman, I think one of the most 
encouraging trends in antitrust analysis within the U.S. 
agencies and within the larger community of competition 
authorities worldwide is a greater recognition over time that 
markets--the so-called relevant markets in which mergers or 
other behavior are analyzed--increasingly has to take place in 
a global context. In evaluating the significance of individual 
U.S. firms, or the significance of transitions involving U.S. 
firms, the competitive arena in which to assess their behavior 
more and more is not simply the United States or North America, 
or the Western Hemisphere, it's truly global.
    An encouraging tendency--and I observed this frequently in 
my time as FTC General Counsel--is that in the deliberations in 
which markets are defined and the significance of behavior or 
individual transactions are evaluated, the FTC and its staff 
increasingly are pressed in the direction of asking ``Do we 
have the right frame of reference? '' More and more, the answer 
to the question of who competes and who's competitively 
important involves an examination of global players and not 
simply U.S. firms operating in the U.S. Because this is 
becoming a norm that competing agencies feel they should follow 
internationally, I have a significant degree of confidence that 
the trend toward acknowledging the significance of 
international players will continue.
    The Chairman. Well Senator Inouye, in terms of this 
Committee, we had that function with regard to communications 
all too often as to whether an entity is too large. But when 
you look at the entity in terms of its competition with other 
entities from foreign countries the size of the competitors 
here at home become irrelevant in terms of the competition in 
the world market from one of our entities. I wonder if we've 
got the proper frame of reference to really succeed in the 
global market if our standard is, is the size of the relative 
competitors within our own economy as compared to the global 
market. I'm not sure that this has crept enough into the FTC 
standard to really look at what our American companies are 
competing with. And whether the size of those companies is 
relevant now to other companies here at home, or the total 
competition out in the global scene. And I can't ask a question 
about matters that I think might come before you, but I've been 
told about several that do exist now where because of the 
competition from foreign companies coming in to do business in 
the United States, the size of the existing largest competitor 
in our own economy is such, that it's very hard to compete with 
the coalitions and the mergers that have already been put 
together abroad. This is going to be particularly true I think 
in the communications field before this decade is out. It's 
going to be one of the No. 1 questions, the question won't be 
size, are these entities too large, and if we look at just the 
United States, they will seem large. But if you look at the 
global market, which is really the market for this industry in 
the telecommunications industry in the future, they will be 
small. I'm just urging that you make sure that in terms of your 
service at the FTC that you look at the field of competition 
and not the size of the competitors here at home. I think that 
is going to be a very difficult problem for you in your term.
    I want to thank you. Any further questions Senator?
    Senator Inouye. I just want to emphasize the point that you 
brought up that it is a problem for us, not just on the 
Commerce Committee, but also on the Defense Committee and right 
now we're coping with a major decision, should we open up 
purchases to the world when we know that the manufacturers in 
certain countries are being subsidized by their governments and 
not paying taxes that our manufacturers would have to pay, but 
they happen to be our allies. If this continues we could put 
ourselves out of business. It is a serious problem. Thank you 
very much.
    The Chairman. Thank you. And we look forward to reporting 
your nominations. I think you're exceptionally qualified, each 
one of you and we congratulate you and as a matter of fact envy 
you, as lawyers with an opportunity to serve at the FTC during 
this critical period of our history. Thank you very much 
Gentlemen.
    Mr. Kovacic. Thank you.
    Mr. Rosch. Thank you.
    [Whereupon, at 3:15 p.m., the hearing was adjourned.]

                                  
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