FTC head Lina Khan did not have the best of it facing a new congressional inquiry, after her agency just lost the injunction case vs the Microsoft Activision deal.
As reported by IGN, Khan was at a hearing simply called the Oversight of the Federal Trade Commission. This was one of several hearings where Congress inquired the FTC and deliberated on the merits of the agency’s decision making.
While Khan has become a somewhat famous personality because of the role she took in the Microsoft Activision deal, she has been a divisive character in politics since she took the chairpersonship of the FTC.
As this NPR piece explains, Khan’s agenda has been to expand the FTC’s role of overseeing consumer protection, towards taking on industry giants. That includes Microsoft, but also Amazon, Twitter, and others, with a particular focus on tech.
Her agenda has so far led to staggering losses when it comes to actually bringing competition and antitrust cases to court. But, this Skadden analysis suggests that she is succeeding in a broader agenda of setting precedents that expand what the FTC can do in the future.
It should also be said that there is a high correlation between Lina Khan’s tenure and a new toxic work environment in the FTC that wasn’t there before. This MLex article discusses a survey that revealed lower trust in FTC of their leadership. Famously, former FTC regulator Christine Wilson blamed Khan’s tenure for her resignation.
On the heels of the FTC’s latest loss, Khan was grilled by Republican Representative Kevin Kiley. He asked her:
“You seem to be losing quite a bit, and I don’t say that to be disrespectful, but these are, after all, taxpayer funds.
You are now 0-4 in merger trials. The average win rate for the FTC in the modern antitrust era is around 75 percent. So I have to ask, why are you losing so much?”
Reuters reported on the rest of this exchange:
FTC chair Khan: “We fight hard when we believe there was a law violation, and unfortunately things don’t always go our way”
Rep Kiley: “Are you bringing cases you expect to lose?”
FTC chair Khan: “Absolutely not.”
Rep Kiley: “Okay well your track record seems to suggest otherwise.”
Later on, Kiley had these questions to ask about the Microsoft Activision deal itself:
“The court not only rejected your assertion of a likely anti-competitive effect but found just the opposite. The record evidence points to more consumer access.
So why should Americans have faith in your judgment when this Biden-appointed judge says you’re so far off the mark?”
Khan didn’t give a straight answer, but curiously, she both shifted responsibility from herself to her staff, and also stated that she couldn’t answer much because the case was under appeal.
This answer made some gamers question if the FTC was told to appeal, for the express purpose of allowing her to dodge questioning in this hearing.
It would be hard to prove Khan had such motivation short of her admitting it directly. But it can be said that skepticism reflects a new found distrust of the agency because of Khan’s actions in regards to this deal.
It’s a shame that it’s come to this, as Khan’s FTC is still properly acting on its mandate. For example, they are going after Amazon for using dark patterns and other tricks to trick consumers into signing up for Amazon Prime.
However, we should not fall for the trap into being partisan in regards to this issue. Every case and action the FTC takes deserves individual scrutiny, and as (Democrat) Judge Corley has decided, FTC is on the wrong side of the Microsoft Activision deal.
It may not be the best outcome, but perhaps when the Microsoft Activision deal is finally completed, Khan and her FTC will learn some lessons on how they should go about their agenda.
