Weekly review | The regulatory report

IN THE NEWS

• The U.S. District Court for the District of Columbia has issued a ruling resolving lawsuits challenging Google’s dominance as a search engine provider. The court found that “Google is a monopolist and has acted as one to maintain its monopoly,” in violation of the Sherman Act. U.S. District Judge Amit P. Mehta wrote the 277-page ruling, finding that Google’s practices “impair competitors’ ability to compete” and “have enabled Google to raise prices for text ads without significant competitive pressure.” The ruling followed a nine-week trial that ended in November 2023.
• The Biden administration has proposed a regulation that would prevent airlines from imposing additional costs on families who wish to sit next to each other on a plane. The proposed regulation aims to ease the financial burden on families traveling with children. The proposed rule is part of President Joseph R. Biden’s broader effort to combat corporate practices that unfairly increase costs for consumers.
• On August 8, 2024, a Biden administration regulation aimed at improving staffing and the quality of care in federally funded nursing homes went into effect. The Centers for Medicare and Medicaid Services (CMS) ordered that each resident must receive 3.48 hours of nursing care and that a registered nurse must be on-site 24 hours a day, seven days a week. The regulation also requires facilities to conduct evidence-based, data-driven assessments to determine needed resources and staffing levels. Opponents of the regulation objected, arguing that the new requirements were “burdensome” and resulted in “unachievable standards.” Opponents also claimed that CMS failed to account for shortages of skilled workers, such as registered nurses.
• President Joseph R. Biden invoked his authority under the Defense Production Act of 1950 (DPA) to accelerate production of heat pumps, a more energy-efficient alternative to air conditioners and traditional water heaters. Heat pumps produce up to 50 percent fewer greenhouse gases and reduce energy consumption compared to traditional heating and cooling systems. President Biden invoked the threats of climate change to use the DPA, which gives the President broad powers to influence domestic industry in the interest of national defense. Under the same authority, President Biden allocated $169 million for the same purpose in 2023. In this second round of awards, the U.S. Department of Energy announced an $85 million investment in heat pumps.
• The U.S. Court of Appeals for the Sixth Circuit has temporarily blocked the Federal Communications Commission’s reinstatement of net neutrality rules, suggesting that the commission is likely to lose the lawsuit against the broadband providers. The commission’s proposed net neutrality rules, originally passed during the Obama administration and repealed during the Trump administration, would allow the commission to regulate internet access. The court ruled that “net neutrality is likely to be an important issue requiring clear congressional authorization” and that “the commission has failed to meet the high standards for imposing such rules.” The Sixth Circuit’s suspension of net neutrality rules will remain in effect until the court fully reviews the case and decides on the merits.
• The New Jersey Department of Environmental Protection has issued a bill that would update regulations to protect land resources, such as creating risk zones for buildings at risk of flooding due to rising sea levels to address the impacts of climate change. The updated regulations are intended to help residents and communities better respond to rising sea levels and chronic flooding, thereby protecting New Jersey’s communities and resources. Key goals of the bill include improving water quality through proper stormwater management, reducing stormwater volume and removing pollutants, and promoting nature-based solutions, such as issuing permits for wetland restoration research projects.
• By a 3-2 vote, the Georgia State Board of Elections passed a new rule that allows Georgia counties to require “reasonable investigations” before certifying election results. Supporters of the rule claim that the board should have the ability to review documents if questions remain, thereby protecting voters. Opponents of the rule, however, argue that the rule gives the board the authority to delay certification of election results at the request of an individual, and that this is unnecessary because Georgia has not had problems with certification of votes in previous elections.
• The U.S. District Court for the Southern District of New York has entered a consent decree resolving a civil lawsuit brought by the Commodity Futures Trading Commission that requires FTX, a cryptocurrency exchange service, and its affiliate Alameda Research (Alameda) to pay $12.7 billion. The court found that FTX, Alameda, and others violated multiple laws and regulations, including the Commodity Exchange Act, through a widespread scheme to defraud customers, digital asset lenders, and other actions. The consent decree also permanently enjoined FTX, Almeda, and their respective representatives from engaging in future actions, including conducting digital asset transactions on behalf of others.

WHAT WE READING THIS WEEK

• In an article in the Vanderbilt Law ReviewLaura E. Dolbow, Associate Professor of Law at the University of Colorado Law School, provided insight into when and how often Congress explicitly precludes judicial review of agency actions. When Congress precludes judicial review, “courts cannot review agency actions for arbitrariness or procedural defects.” Dolbow concluded that most barriers to judicial review involve internal agency decisions, such as allocating resources, setting priorities, and managing personnel. Dolbow argued that when interpreting barriers to judicial review, courts and policymakers should consider the availability of alternative oversight tools—such as political oversight, internal oversight, and public participation.
• In a Brookings Institution paper, Samantha Gross, director of the Energy Security and Climate Initiative at Brookings, argues that to combat climate change, the United States should work to reduce its demand for oil rather than focusing on curtailing production. Gross outlined three ways the United States can reduce oil demand and, in turn, its drastic impact on the climate: regulating oil production so that producers operate it in the most environmentally friendly way possible; implementing policies that reduce the country’s oil use; and working directly with energy companies that can make the transition away from oil smoother. If the United States focuses solely on reducing oil production, Gross said, other countries will make up the difference, producing oil in more environmentally damaging ways than the U.S.
• In a report published by the Urban Institute, Jason Cohn, a research associate at the institute, and Jason D. Delisle, a nonresident senior fellow at the institute, compared the College Cost Reduction Act (CCRA), a law that establishes accountability rules for colleges by reforming their grant and loan programs, to the Biden administration’s Saving on a Valuable Education (SAVE) plan, an income-based repayment plan. Cohn and Delisle’s report included findings that the CCRA would increase benefits for college-educated borrowers while decreasing benefits for bachelor’s degree borrowers, and that those using the Public Service Loan Forgiveness plan would repay more under the CCRA than under the SAVE plan. Cohn and Delisle argued that a time-based loan forgiveness provision could be considered to distribute more of the CCRA’s proposed benefits to low-income, bachelor’s degree borrowers.

EDITORIAL CHOICE

• In an essay in The regulatory reviewAbigail Slater, economic policy adviser to Senator JD Vance (R-Ohio), discussed the lesser-known path to net neutrality: the Federal Trade Commission (FTC) instead of the Federal Communications Commission (FCC). In the absence of a legislative solution, Slater argued that the FCC could reclassify broadband internet access so that the FTC could regulate it—since the Federal Trade Commission Act prohibits the FTC from regulating telecommunications. Then the FTC would rely on “its general authority to police unfair and deceptive” practices. Slater noted that as a “law enforcement agency with quasi-regulatory authority,” the FTC would wait until there are net neutrality violations and complaints from affected consumers before intervening. Slater questioned, however, whether the FTC’s approach to net neutrality should take precedence over the legislative process.