Panelists: Khan Should Focus on Enforcement, Not Undemocratic Rule Efforts

FTC Chair Lina Khan has engaged in undemocratic efforts to shift antitrust precedent, and she would be better served pursuing antitrust enforcement action to sway the judiciary, panelists told a Computer and Communications Industry Association event Monday.

There’s “no doubt” Khan and DOJ Antitrust Division Chief Jonathan Kanter have “done everything they can to frustrate the merger review process, to inject as much uncertainty as possible and in general tell the business community they are closed for business at both agencies,” said Sean Heather, U.S. Chamber of Commerce senior vice president-international regulatory affairs and antitrust. The Chamber has been critical of the agency over policy shifts and various rulemaking efforts under Khan (see 2111190039 and 2112030042). The agency didn’t comment Monday.

Case-by-case enforcement is the most effective way the FTC has shifted antitrust precedent, but enforcement activity is way down, as Khan focuses efforts on making procedural changes, said ex-FTC acting Chairwoman Maureen Ohlhausen, now co-chair of the 21st Century Privacy Coalition. Strong enforcement based on empirical evidence is the best route in changing judicial precedent, she said: “Yes, it takes time and patience, but” the FTC was created to make that type of change.

Khan’s unprecedented, partisan shifts to rulemaking procedures involved no public input, no public comment and no input from most of the agency’s professional staff, said George Washington University professor Howard Beales, a former FTC Consumer Protection Bureau director: “The rationale for change is expediency: We want to do things faster. And that’s it.”

The manner in which FTC leadership has adopted its policy changes has been “the opposite of Democratic,” said University of Southern California professor Jonathan Barnett. The consumer welfare standard was rejected with minimum notice to Republican commissioners, and there was no traditional engagement with outside stakeholders, he said. The antitrust guidelines were withdrawn without any definition offered to the public in its place, he added: “The public is at the mercy of the discretion of the regulators. ... I don’t see how it’s more democratic than judicial or legislative methods.” The most democratic option is for Congress to act and decide major tradeoffs like a private right of action for privacy requirements, said Brigham Young University professor Aaron Nielson: The problem is Congress isn’t legislating.

There isn’t necessarily a need to legislate on antitrust, said TechFreedom Senior Adjunct Fellow Bilal Sayyed. He noted the Microsoft antitrust case in the 1990s dealt with self-preferencing, which is the target of bipartisan legislation from Sen. Amy Klobuchar, D-Minn., (see 2206070059). “It seems that you can get at the conduct that they’re worried about using existing antitrust law,” said Sayyed, a former director of the FTC’s Office of Policy Planning. The American Innovation and Choice Online Act “creates problems for no particular reason. Under existing antitrust law, you can probably get at the conduct you want to get at.”

Crowell & Moring's Andrew Gavil agreed that the “worst anti-competitive behavior” could be addressed under current antitrust law “if current antitrust law were working well.” He said he’s “sympathetic to the supporters of the bill who feel like it’s just gotten too difficult to address some of that conduct under” current law. “I’m sympathetic to the idea of fixing that instead of approaching it through the bill.”

The disadvantage of issuing policy statements and interpretative rules is that “they’re incredibly easy for the next administration to change,” said George Washington University law professor Richard Pierce. “In this age of extreme political polarity, you can be quite sure that” the current FTC did away with everything it could from the prior administration within two weeks of taking office.