One trick used by public figures to avoid giving straight answers to uncomfortable questions is the non-denial denial. A non-denial denial is a long response that may appear to the casual listener like a denial, but in fact avoids giving a yes or no answer.
Federal Trade Commission (FTC) Chair Lina Khan provided several examples of the non-denial denial during her appearance before the Subcommittee on Financial Services and General Government of the House Appropriations Committee. Khan appeared before the Subcommittee, which has jurisdiction over funding the FTC, to justify the Biden Administration’s request for a 11% budget increase for Fiscal Year 2025. Khan claimed the agency is smaller now than it was in the 1980s while the economy and thus the FTC’s workload has grown larger. She also said the costs of pursuing antitrust cases have increased because the agency must now hire economic experts to counter testimony from the defendant’s paid experts.
When Khan was questioned if she was concerned that the FTC’s newly aggressive position toward potential mergers and acquisitions was discouraging beneficial mergers, Khan gave a non-denial denial. Instead of answering the question directly, Khan bragged about how her aggressive enforcement of antitrust laws was discouraging ‘illegal” mergers. This assumes that only those who know their mergers would be found illegal under federal antitrust law are being discouraged from pursuing the transactions.
The fact is that Khan’s hyper-litigious-neo-Brandeisian approach to antitrust is causing companies (particularly smaller companies) to forgo even beneficial mergers or acquisitions that would ultimately be approved by the government. This is because the costs of defending the merger can make it cost prohibitive to the businesses (again this totally hits small or medium-sized businesses looking to merge to better compete with their bigger rivals) contemplating a merger.
This is not the only, or even the worst, non-denial denial Khan uttered during her appearance. Khan also avoided directly answering questions regarding her use of taxpayer money to help implement the Digital Markets Act (DMA). The DMA claims to promote competition by forcing large tech companies—a category comprised almost exclusively of successful American companies—to disclose their intellectual property to their smaller competitors, and even allow their competitors to access their operating systems. The DMA also outlaws “preferencing” which is where a company manipulates algorithms altogether so their own products appear at the top of a search results. Outlawing preferencing is supported by big tech critics on both the left and right.
Congress has failed to pass legislation making preferencing a violation of federal antitrust law. Despite claiming that her agency is underfunded, Chair Khan somehow found money to dispatch FTC employees to assist their EU counterparts in implementing the DMA. A Freedom of Information Act (FOIA) request by the Competitiveness Coalition (of which the Market Institute is a member) revealed the extent of the FTC’s cooperation with the EU antitrust bureaucrats.
Among the FOIA request’s revelations, starting in May of 2021, the overworked and underpaid (according to Chair Khan) FTC officials and staff made over 41 trips to Europe. Rather than try to justify using limited resources to help the EU implement a law that would burden American companies to benefit their European, and even Chinese competitors, Khan discussed how the FTC’s international unit was created during the Bush Administration. Chair Khan also discussed how many American companies favor ‘harmonizing” regulations between the EU and our trading partners.
Whatever harmonization merits, it does not justify a US government agency working to help European bureaucrats impose new burdens on US companies. If the FTC is going to consult with EU antitrust enforcers, it should be to encourage them to reject heavy-handed regulatory schemes like the DMA.
Lina Khan’s refusal to directly address concerns about the possibility that her “merger tax” has damaged the US economy by discouraging beneficial mergers and assisting the European Union to implement the DMA is one more reason that Congress should refuse to increase the FTC’s budget. Instead, Congress should demand the FTC make more efficient use of its limited resources by forbidding it from using taxpayer money to help foreign governments impose new regulations on US companies.
