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.