Washington, D.C. – The following remarks were delivered by House Judiciary Committee Chairman Bob Goodlatte (R-Va.) during a Subcommittee on Regulatory Reform, Commercial and Antitrust Law oversight hearing on “Occupational Licensing: Regulation and Competition.”
Chairman Goodlatte: The United States has been and continues to be a champion of free and open markets. An open marketplace cultivates competition among service providers and is the very foundation of maintaining lower prices, higher quality products and services, and superior innovation. The antitrust laws established in this country serve a valuable role in promoting competition, and the Judiciary Committee routinely exercises its oversight authority to ensure that these laws are applied in a manner that is transparent, fair, predictable, and reasonably stable over time.
All occupational licensing restrains competition to a certain extent, by restricting who can provide certain services. While occupational licensing can serve the important function of maintaining quality and safety in key vocations, poorly executed licensing schemes can be detrimental. In some instances, control of regulatory boards by incumbent interests can transform the boards into market gatekeepers, limiting entry into regulated industries and benefiting the established practitioners that control the boards. Often, boards’ licensing requirements are not proportional to the regulated occupation’s impact on public health, making it difficult for newcomers to enter well-paying industries, harming consumers through higher prices, and generally disrupting otherwise competitive marketplaces.
The Federal Trade Commission and Acting Chairman Ohlhausen have made significant strides to fight back the tide of anticompetitive occupational licensing. It was an FTC enforcement action that led to the Supreme Court’s recent decision in North Carolina Dental, which cast doubt on whether boards fall under the “state action doctrine,” a judicial rule granting antitrust immunity to state-level regulations restricting competition. The FTC has also issued guidance regarding when a state exerts sufficient “active supervision over a regulatory board controlled by market participants such that it can invoke state action antitrust immunity,” and the Commission recently launched an Economic Liberty Task Force to address regulatory hurdles to job growth, including occupational licensing.
States around the country have also made inroads to limit the undesirable aspects of occupational licensing. Occupational licensing requirements are an often-unnecessary burden on low-income Americans and military families struggling to earn a living. During the most recent legislative session in Arizona, state representative Jeff Weninger sponsored a bill that allows individuals with household incomes below 200 percent of the federal poverty line to obtain an occupational license without paying the accompanying fee. A similar bill passed in Florida this year.
Finally, Congressman Issa recently introduced the Restoring Board Immunity Act to address two major problems related to occupational licensing boards: (1) the costs associated with onerous and arbitrary occupational licensing; and (2) the potential that the threat of monetary damages under federal antitrust law may chill the willingness of worthy individuals to serve as board members and officers.
Today’s hearing will help inform the Committee regarding the recent proliferation in occupational licensing, the impact of the Supreme Court’s decision in North Carolina Dental, and potential legislation to address concerns in this important area.
I look forward to hearing the witnesses’ views on these issues and how the FTC, States, and Congress can work together to address the anticompetitive impacts arising from the significant growth in occupational licensing. Today’s testimony will help the Committee gain a better understanding of the seriousness of these issues and how they might be addressed.
# # #