The Wrath of Lina Khan and Josh Hawley
(Graeme Jennings/Pool via AP)
The Wrath of Lina Khan and Josh Hawley
(Graeme Jennings/Pool via AP)
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The Federal Trade Commission and the Justice Department’s antitrust division are soliciting public input on ways to “strengthen” enforcement of antitrust law. The agencies’ request for ideas to “strengthen” antitrust enforcement, as opposed to improve or even reform enforcement, shows the agencies have already determined they need to increase antitrust prosecutions.

The solicitation for comments reflects Federal Trade Commission (FTC) Chair Lina Khan’s call for the FTC to develop a “holistic approach” to antitrust.  The new guidelines will fulfill Khan’s goals by “increasing attention to how mergers and acquisitions effect labor markets” as well as ensure “agencies are giving adequate attention to the range of business strategies and incentives driving mergers and acquisitions,” and determine whether the agencies need to “focus” on particular types of evidence and design frameworks for assessing market power.

In other words, give federal agencies more power to second guess a business’s decisions and operations.

The FTC and Justice Department have also issued a set of questions to guide those responding to their request for input. These questions downplay the effects of antitrust enforcement on consumers. This is not surprising since replacing the consumer welfare standard, the judicial precedent which has guided antitrust enforcement since the 80’s, is a goal of progressives. As the name suggests, the consumer welfare standard evaluates a businesses’ actions by whether or not the actions enhance the welfare of consumers.

This reflects the way the economy should operate in a free-market.

The end result of the FTC and Antitrust Division’s effort will be a guidance for federal officials to help them determine when to bring antitrust actions. While the guidelines do not have the force of law, federal courts have traditionally given agency guidance great deference However, the Supreme Court has ruled that cases where “an agency relies on an old statute to take an unprecedented action that has substantial economic or political effects, a court will not defer to the agency nor uphold the action unless the agency can provide “clear” evidence that Congress authorized it to take the action.”

According to George Washington University Prof. Richard Pierce, abandoning the consumer welfare standard for a “holistic” approach could very well fall into the category for guidelines that do not meet the federal judiciary’s stricter standard for reviewing agency guidance.

Rejection of new federal guidelines will not necessarily protect the consumer welfare standard, since many politicians, policy “experts,” and activists want Congress to pass legislation gutting the standard. Among the standard’s leading foes are Minnesota Sen. Amy Klobuchar, who chairs the Antitrust Subcommittee of the Senate Judiciary Committee, and Massachusetts Sen. Elizabeth Warren. Like Chair Khan and her FTC and Justice Department allies, these Democrats see the consumer welfare standard as a hindrance in their efforts to use antitrust law as an instrument to increase government’s power over private businesses.

Klobuchar, Warren, and Khan are joined in their anti-consumer welfare jihad by conservatives such as Senators Ted Cruz and Josh Hawley. Conservative institutions, including the Heritage Foundation and former Sen. Jim DeMint’s Conservative Parentship Institute, also support abandoning the consumer welfare standard.

These anti-consumer welfare standard conservatives are motivated by a desire to get back at Big Tech for silencing conservative views, notably outright banning Donald Trump once he left office. Many of them agree with Chair Khan that Big Tech companies enjoy monopolies impervious to market pressure, and that these companies' use of their platforms to warp the political process presents a threat to democracy.

Ironically, while Klobuchar and her conservative allies were working on legislation aimed to make online commerce “more competitive” and the FTC and Justice Department were working on new guidance to bring a “holistic” approach to antitrust, Facebook’s parent company, META, experienced a major decline in its stock price. The reason is that Facebook lost one million users in just the last year. Many of these users were young people who prefer sites like Tik Tok. However, people are also leaving Facebook, and other big tech sites, for tech companies that market themselves as more free speech friendly than the existing companies.

If Khan was FTC chair in 2000, she would no doubt have blocked the merger between Time-Warner and AOL. At the time, many feared this merger would birth an untouchable behemoth with unchallenged control over all forms of media, including the then fledgling Internet.

Instead, the merger turned out to be one of the biggest disasters in modern business history. AOL-Time Warner lost its dominant position not because of federal lawsuits but because other companies did a better a job of meeting the needs and wants of consumers in a world of ever-changing new technologies.

The AOL-Time-Warner fiasco is one of a number oi examples showing that, instead of supporting expanded antitrust enforcement, conservatives concerned about Big Tech and woke capitalism should protect the free market from the wrath of Khan.

Norm Singleton is a senior fellow at the Market Institute. 

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