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Acting chairwoman of the Federal Trade Commission, Maureen
Ohlhausen, announced her first major policy initiative last week:
an Economic Liberty Task Force. Ohlhausen targeted occupational
licensing regulations as a major barrier to economic
opportunities. In particular, Ohlhausen challenges the motive
behind licensing requirements for occupations that pose no public
health or safety concerns, for example, make-up artists, hair
dressers, interior designers and auctioneers. Unnecessary and
overly broad licensing requirements prevent individuals from
entering new professions, create barriers for small businesses, and
can ultimately drive up prices for consumers. The concern is that
there is no legitimate justification for these licensing
requirements, as is strongly suggested by the radical regulatory
differences from state to state. There are not only differences in
the requirements for obtaining a license, but states vary as to
whether a license is required at all.
The focus of the Task Force will be to create awareness of the
issues surrounding occupational licensing regulations, provide
resources for reform, and most importantly, establish partnerships
with stakeholders, governors, state and local officials, and other
leaders. Ohlhausen wants to focus on the FTC's advisory tools
to encourage the review of existing licensing regulations, identify
problems, and promote reform to narrowly tailor regulations to the
extent necessary to address legitimate public policy and health
concerns. Although the focus is on advocacy and partnership, the
FTC will bring enforcement actions if necessary. Some states for
example will delegate regulatory authority to a licensing board
comprised of market participants that may be promoting
self-interest rather than competition. Such states must actively
monitor these boards to ensure evenhanded regulation and avoid an
FTC enforcement action.
Individuals and entities in highly regulated industries should
monitor the Task Force and the partnerships it establishes to
identify industries and regions of focus. Moreover, advocates for
deregulation should reach out to the Task Force both to receive
support and resources and to provide insight as to overly
burdensome and unnecessary licensing regulations that have
displaced competition. Finally, state and local regulatory
authorities should expect greater scrutiny over licensing
regulations, and may benefit from a preemptive review of current
regulations to identify licensing requirements that may be
criticized by the Task Force.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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