2023 will go down as one of the worst years in the Federal Trade Commission’s (FTC’s) 109-year history. This is due to its activist, controversial Chair, Lina Khan, a close advocate of Senator Elizabeth Warren’s visceral anti-business, anti-free market policies. Chair Khan wants to radically change how the FTC approaches antitrust enforcement and will seemingly stop at nothing to get there.
The result has been the FTC has had numerous prominent legal losses, declining staff morale, widespread career professional staff exits, and ethics controversies. Congress has taken notice and is investigating. There are also two commission vacancies that have given Chair Khan, at least temporarily, largely unchecked power to experiment legally while also making the FTC a vessel to more generally promote Bidenomics.
It should not be this way. The FTC has what should be one of the clearest and most publicly important missions of any government agency: to protect the public from deceptive or unfair business practices and from unfair methods of competition. In the post COVID, high-crime era, deceptive and unfair business practices are widespread.
The FTC should be focusing more on cracking down on telemarketing scams, false claims about where companies’ products are made and what they can do, and investment scams against the elderly, which can rob them of their life savings.
Instead, the FTC has been dedicating voluminous resources to go after America’s tech leaders like Amazon and Google. Chair Khan seeks to gut the common sense and clear understanding that business combinations should face antitrust enforcement if they harm consumers. Yet Chair Khan, as she outlined in a 2017 article, is attacking these companies and others for various potential impacts down the road.
Some who are normally likely to be closely aligned with Chair Khan have taken notice and called her out on these matters, at times even more critically than The Wall Street Journal has.
At a New York Times conference, CNBC’s Andrew Ross Sorkin chided Chair Khan for using the same reasoning she is today to oppose the 2018 merger between AT&T and Time Warner, where feared competitive problems from this vertical merger did not occur. Regarding Amazon, Sorkin pointed out he does not even have to go outside his house to find a competitor other than Amazon.
On December 13, in a Yale publication, School of Management Senior Associate Dean Jeffrey Sonnenfeld and his colleague Steven Tian say, “There is one aspect of the Bidenomics agenda that we believe is being poorly carried out and could undermine American competitiveness in key industries – the increasingly brazen and counterproductive antitrust anti-merger overreach led by Federal Trade Commission (FTC) Chair Lina Khan.”
They add, “Antitrust overreach is hurting companies, employees, and consumers.”
On December 12, New York magazine went even further. Mr. Ankush Khardori, a contributing editor who covers legal affairs and has written extensively on the legal challenges former President Donald Trump faces, noted regarding Khan that “the discontent with her tenure inside the FTC is broader and far less ideologically motivated than her defenders would have us believe.”
He adds, “Khan’s failure could ultimately prove fatal to a once-in-a-generation movement to dramatically transform government antitrust policy, for better or worse, so that government regulators and the courts block far more mergers and acquisitions throughout the economy … If her tenure at the FTC turns out to be a failure, it could deal an existential blow to the movement that she has devoted her career to.”
To address these matters, the U.S. Senate should promptly confirm three nominees to new terms at the FTC, giving it a full commission. The FTC should focus on the issues causing the most significant harm to consumers, today. The courts should be used to prosecute bad actors, not to test out novel theories. And Chair Khan should hit the reset button on her priorities.
With these changes, the American people will have a win in 2024, as the FTC will return more closely to its core mission.
