Khan Justifies Need for 30% Increase During House Hearing

The FTC’s requested 30% funding increase for FY23 would allow the agency to effectively face corporate defendants with “seemingly endless resources” and fulfill its mission, FTC Chair Lina Khan told the House Financial Services and General Government Subcommittee during a hearing Wednesday.

President Joe Biden’s FTC is seeking $490 million in FY23, up 30% from what the agency got for FY22 and more than 25% above what the White House sought for that year. The $113.5 million increase would allow the FTC to hire an additional 215 full-time employees, increasing staff for enforcement teams, litigation and in-house experts like technologists and economists, said Khan.

It’s a dramatic increase Republican Commissioners Christine Wilson and Noah Phillips don't support, noted ranking member Steve Womack, R-Ark. He said the House Appropriations Committee approved about 5% increases for the agency the previous two years.

Khan cited an unprecedented merger wave, the FTC’s antitrust lawsuit against Meta and an examination of data brokers abusing phone users’ geolocation data as some of the important work that needs attention. Chair Mike Quigley, D-Ill., cited numbers from the merger wave: The FTC handled about 8,000 transactions and $2.5 trillion in deals in 2021, both all-time records. Womack cited a statement in opposition to the budget from Phillips and Wilson, who said the FTC’s productivity has declined substantially under Khan’s leadership.

Khan disagreed, saying enforcement trends are on par with previous years. The deeper question is not how many enforcement actions an agency takes but how lawsuits are structured so bad actors are deterred in the future, she said.

Despite the backlog, the FTC has the authority to challenge transactions after they have been consummated, said Khan. That includes instances where a party’s promises or commitments weren’t kept, she said. She said the FTC’s staff is less than two-thirds the size it was in the 1980s, which is creating a lot of strain.

Rep. David Joyce, R-Ohio, said he’s not confident additional FTC funds would be used appropriately. He questioned the agency’s recent action against Illumina's proposed acquisition of cancer screening manufacturer Grail. Khan said the unanimous, bipartisan decision was before her tenure. She stressed the importance of challenging bad deals and the impact on the economy when enforcers aren’t able to get to certain cases.

The data broker industry is of major concern, Khan told Rep. Norma Torres, D-Calif., responding to Torres describing reports about how tracking applications are selling women’s data for as low as $160, allowing people to target individuals seeking abortions. It’s a very lucrative market, and it’s enormously concerning the degree to which companies are tracking location, said Khan. That there's an entire subeconomy incentivizing the endless collection of data, even if the app doesn’t require location data consent, invites policymakers to set clear limits, said Khan. Rep. Brenda Lawrence, D-Mich., asked if the FTC is using every tool available to combat robocalls. Khan told her robocalls are the top complaint at the FTC, and the agency is going after companies facilitating robocalls upstream, rather than the fly-by-night scammers. The FTC is working with the FCC, which has carrier jurisdiction, Khan said.