A Raft of Document Requests from the FTC and Media

by | Feb 7, 2024 | FOIA, FTC, Litigation

FOIAengine: Who’s Asking What, and Why?

Days after the Federal Trade Commission launched an investigation of the five biggest players in artificial intelligence, Lina Khan was on a charm offensive aimed at winning the confidence of her biggest enemies on Wall Street. 

As the agency’s controversial chair and chief lightning rod since taking office in June 2021, Khan has learned some things about how best to deflect her critics through politesse, poise, and the art of the cable-news sound bite.  Although she’s a protégé of Sen. Elizabeth Warren (D-Mass.) – who hailed Khan’s nomination as a long-sought opportunity to finally go after the tech giants that the FTC now is investigating – Khan’s style is conversational, not confrontational. 

Source: CNBC

So there she was, in New York City early last Monday morning, January 29, live from CNBC’s “Squawk on the Street” studio overlooking Times Square, amiably explaining why the Commission was messing with Amazon, Alphabet, Microsoft, OpenAI, and Anthropic. 

The FTC’s compulsory document demands – known in agency parlance as 6(b) orders, and bearing the weight of federal subpoenas – seek broad access to the AI business arrangements of the five companies.  

Antitrust authorities in the European Union and the United Kingdom are also investigating.  The inquiries are a consequence of the firing, and subsequent rehiring, of Sam Altman at OpenAI.  Microsoft’s involvement laid bare how close some of the companies are, and highlighted how little was previously known about the arrangements.

“The goal here, really, is to look under the hood, “ Khan told the CNBC show’s co-hosts on that late-January morning.  “We see risk of consolidation, risk of monopolization.  We’re already hearing some of the classic ‘national champion’ arguments; the idea that it’s somehow in America’s national interest to be protecting monopolies.  And, unfortunately, we’ve been down that road before.  We see now, with Boeing, some of the dangers of that strategy . . . with planes falling apart in the sky.”  

Ouch.  Comparing the big AI players to Boeing was like a poker-game tell.  If executives of the five companies were hoping for any sign of flexibility from Khan, they learned something that morning.  The five AI companies have 45 days to comply. 

With the FTC seeking so many documents, we decided to turn the table and take another look at the trove of Freedom of Information Act requests to the FTC recently added to FOIAengine, our competitive-intelligence database that tracks FOIA requests in as close to real-time as their availability allows.

FOIA requests to the federal government often represent signals of events to come.  The requests can be an important early warning of bad publicity, impending litigation, or uncertainties to be hedged and gamed out.  Invariably, there is something noteworthy. 

Last month, we examined FOIA requests to the FTC made by activist legal organizations, some with considerable financial and litigation resources.  (See “Busting Trusts, Breaking with Tradition.”)  Today, we’re digging into the many recent FOIA requests to the FTC made by media organizations. 

As we noted in our previous story, progressivism at the FTC hasn’t extended to FOIA.  Unlike other enforcement agencies such as the Securities and Exchange Commission and the Food and Drug Administration, the FTC seldom refreshes its FOIA logs.  The most recent update was last July.  Still, the available logs provide noteworthy insights into who’s covering the FTC, and what they want to know.  Twenty percent of the 719 FOIA requests logged by the agency during the majority of Khan’s tenure came from media organizations. 

Capitol Forum (41 requests) and Bloomberg (29 requests) far outpaced all other media requesters.  mLex, a LexisNexis affiliate, was in third place with 11 FOIA requests.  The Wall Street Journal came in fourth, with seven requests – including one dating to November 2022 that signaled a major investigative project getting underway.  The Journal published the results of its investigation – “How the Funeral Industry Got the FTC to Hide Bad Actors” – just two days ago.       

Rounding out the list of top news media requesters, with five FOIA requests each:  FTC Watch, Forbes; and ProPublica. 

The competition between Capitol Forum and Bloomberg comes with an interesting backstory, which we’ll get to farther down.

Capitol Forum calls itself “an investigative news organization providing our subscribers with detail-oriented reporting on antitrust, merger control, corporate investigations, and energy.”  The FTC falls squarely in its sweet spot.  Capitol Forum says its reporting “reconstructs the policy process to yield market insights.” 

Consistent with its stated mission, Capitol Forum made numerous FOIA requests for, among other things, FTC visitor logs; professional calendars of FTC staff; correspondence between FTC staff and the White House; FOIA requests denied under the 7(A) law-enforcement exemption of the FOIA Act; contracts with, and invoices from, expert witnesses; and “Top Violators” reports. 

Capitol Forum often was keenly focused on information that could be gleaned about specific companies, including merger partners Kroger and Albertsons, and L3 Harris and Aerojet Rocketdyne. 

As an example, Capitol Forum’s Lydia O’Neal, whose LinkedIn profile says she’s Brussels-based, requested “correspondence between staff of the FTC and outside trade groups, attorney general offices, unions, members of Congress, other government agencies, corporations, and/or nonprofits that include references to the proposed merger of L3Harris Technologies Inc. and Aerojet Rocketdyne Holdings Inc. from Dec. 18, 2022, through today.” 

According to Docket Alarm, Capitol Forum occasionally files suit to enforce its FOIA requests, but it hasn’t sued the FTC.

Bloomberg’s FOIA requests were more broad-ranging and trended political.  Examples:  There were numerous requests for “correspondence between members of Congress – senators and congressmen – and FTC commissioners, bureau directors and their deputies.”  Another request sought  “copies of any and all communications between the Federal Trade Commission and the International Competition Network regarding the formation of agendas and policy.”

The above requests came from Daniel Papscon, then an antitrust reporter for Bloomberg Law.  According to his LinkedIn profile, Papscon left Bloomberg last November to go to work as an antitrust correspondent for Capitol Forum.  Which brings us back to the apparent competition between the two media organizations – the modern-day equivalent of an old-fashioned newspaper war.

The owners of Capitol Forum, who do business as DBW Partners, sued Bloomberg in 2019 over the latter’s practice of surreptitiously obtaining Capitol Forum’s reports and, within minutes, republishing summaries for Bloomberg subscribers.  Capitol Forum’s lawsuit gained national attention, even meriting coverage in the Hollywood Reporter, because it challenged what is widely seen as a common journalistic practice.

“Despite the copyrighted and proprietary nature of Capitol Forum’s content, Bloomberg has been  illegally soliciting, obtaining, summarizing, and distributing Capitol Forum’s analyses,” Capitol Forum’s complaint alleged.  “Within minutes of the release of many of Capitol Forum’s reports, Bloomberg will illegally obtain the report from one or more of Capitol Forum’s subscribers, and then republish a summary of that report on its own First Word copyrighted subscription service, usually including direct quotations from the Capitol Forum report.”

Bloomberg countered that in a world of citizen journalists and 24-hour news cycles, “news can no longer be contained for any meaningful amount of time.”  U.S. District Court Judge Reggie Walton agreed, and dismissed the case.  Capitol Forum and Bloomberg soon settled the dispute on undisclosed terms. 

Capitol Forum was back in federal court in 2022 with an almost identical copyright-infringement complaint.  But this time it didn’t slap the suit on a deep-pocketed media company.  The new target was a broker-dealer, Market Securities.  That case is moving ahead.  

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Next:  The latest hedge fund FOIA requests to the Food and Drug Administration.

John A. Jenkins, co-creator of FOIAengine, is a Washington journalist and publisher whose work has appeared in The New York Times Magazine, GQ, and elsewhere.  He is a four-time recipient of the American Bar Association’s Gavel Award Certificate of Merit for his legal reporting and analysis.  His most recent book is The Partisan: The Life of William Rehnquist.  Jenkins founded Law Street Media in 2013.  Prior to that, he was President of CQ Press, the textbook and reference publishing enterprise of Congressional Quarterly.  FOIAengine is a product of PoliScio Analytics (PoliScio.com), a new venture specializing in U.S. political and governmental research, co-founded by Jenkins and Washington lawyer Randy Miller.  Learn more about FOIAengine here.  To review FOIA requests mentioned in this article, subscribe to FOIAengine.    

Write to John A. Jenkins at [email protected].