Federal Trade Commission Chairwoman Lina Khan has suffered a few high-profile defeats in court in recent months but is undaunted in her aim to bring a much more aggressive approach to antitrust enforcement to bear on big business and Big Tech.
Khan, appointed to head the FTC in 2021, has led the charge to block mergers and acquisitions based on the logic of the “hipster antitrust” movement, which abandons the consumer welfare standard that guided U.S. antitrust policy for decades in favor of a much more skeptical approach that also considers other factors, such as corporate concentration and income inequality.
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In implementing the agenda, though, Khan has run into stumbling blocks. The commission has suffered high-profile defeats in court, most notably in trying to block Meta from acquiring the virtual reality developer Within and in trying to prevent Microsoft from buying Activision, the publisher of the Call of Duty game franchise. Critics have used the defeats to cast Khan’s leadership as a failure.
Allies, though, say Khan will brush off the losses and make progress toward an overhaul of antitrust enforcement.
“We knew that it was going to be a long process to bring today’s antitrust precedents in line with modern economics and the needs of our economy,” Charlotte Slaiman, the competition director at Public Knowledge, told the Washington Examiner. “So I’m not surprised that that hasn’t been completed in the couple years that [Khan’s] had so far.”
Slaiman argued the FTC has to bring new cases before courts to convince them to change interpretations of antitrust laws such as the Sherman Act, the 1890 law that originally outlawed monopolistic business practices, and to show how the changing aspects of the economy require a more aggressive approach. The process could take several years before a court rules in favor of Khan’s approach, Slaiman said.
In other words, steering antitrust policy is like turning a massive oceanliner — it takes time to change course.
Still, opponents say Khan has failed to gain a foothold. “I don’t believe we’ve seen any evidence that suggests that antitrust regulators at the FTC intend to change course from a very ideologically motivated enforcement approach,” Matt Schruiers, president of the Computer and Communications Industry Association, told the Washington Examiner.
“The FTC, under the leadership of Chair Khan, continues to be committed to its mission of protecting consumers from unlawful business practices and monopoly power that can lead to higher prices, lower wages, and less innovation,” an FTC spokesperson told the Washington Examiner. “The agency looks forward to finalizing the draft merger guidelines that were issued jointly with the Department of Justice, and, as well, the commission will continue to fulfill its congressionally mandated responsibility to screen and, if needed, deter potentially anticompetitive deals that will harm the American public.”
While the FTC failed to block the Microsoft-Activision-Blizzard acquisition or the Meta-Within purchase through the court system, it has had other lawsuits that were successes, such as the Thursday settlement with the health-focused infotech company Surescripts. The company agreed to engage no longer in exclusionary conduct or require nondisclosure agreements. There have been at least a dozen antitrust victories for the FTC and its allies in the Department of Justice’s Antitrust Division, according to Matt Stoller, the director of policy at the American Economic Liberties Project, a left-of-center group that advocates greater skepticism of business concentration.
Critics, though, say the cases in which the Khan FTC has prevailed are with less bearing on the hipster antitrust agenda. Ashley Baker, director of policy at the right-leaning judicial think tank Committee for Justice, said that, instead, Khan’s struggles have arisen in litigated merger cases in which a court had to be more involved. Baker said that the other cases, with which Khan had more success, did not involve trials in which the commission would have to defend its unique perspective on antitrust to a district or court judge.
Khan’s vision for antitrust has created tension among the agency’s employees. The agency plunged in workplace rankings since Khan took over and has seen lawyers leave at the fastest rate in the FTC’s history.
The FTC also lacks two Republican commissioners, making its leadership heavily partisan. President Joe Biden appointed two Republican nominees in early July to replace the former GOP commissioners Noah Phillips and Christine Wilson.
The agency itself has been under increased scrutiny from Congress. Rep. Jim Jordan (R-OH), the chairman of the House Judiciary Committee, has fixated on Khan and the FTC, filing several subpoenas to get interviews with more than 20 staffers at the agency in his effort to “inform potential legislative reforms.” Khan responded on Wednesday, claiming that Jordan was organizing a “campaign to intimidate and harass” the agency’s career staff through emails seeking to interview them.
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Khan offered the agency’s senior staff for Jordan and the Judiciary Committee to interview, but they rejected the offer “without explanation.” Jordan’s email campaign left staff “very worried and anxious,” an FTC official told Politico. “They already don’t have enough time to do the important substantive work on behalf of the American people without getting roped into a fishing expedition and political witch hunt.”
The FTC chairwoman appeared before Jordan and the House Judiciary Committee two weeks ago to defend her tenure as chairwoman and to justify a $160 million increase in the agency’s budget.
Khan made a name for herself when she published “Amazon’s Antitrust Paradox” in 2017, an academic article arguing in favor of antitrust reforms that would help stop Big Tech companies. A key argument was that the modern antitrust system is unequipped to deal with the growing market power that entities such as Amazon had and required giving the FTC more control.
Original Location: Khan plans for FTC to take on big business and Big Tech undimmed by recent failures
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