Lina Khan Appointed FTC Chair
On June 15, 2021, President Biden appointed Lina M. Khan as Chair of the Federal Trade Commission (“FTC”) following her Senate confirmation earlier that day. The appointment is being celebrated by those calling for more aggressive antitrust enforcement — particularly of large digital platform companies — and those who favor an approach to antitrust that goes beyond a consumer welfare focus. While Chair Khan’s appointment could lead to more aggressive merger and non-merger enforcement, it remains to be seen whether she will seek to implement some of her bolder ideas and how the courts, and parties under investigation, may respond.
Chair Khan became well-known in antitrust circles in 2017 following publication of a law review article she wrote while still a law student at Yale. The article advocated for, among other things, a movement away from the consumer welfare standard that has served as the underpinning of modern antitrust law.1 Progressive Democrats in particular have cited the article — which focuses on large digital platform companies — as part of a push to reign in “big tech” and legislate the most significant changes to the antitrust laws in years.2
Following her time at Yale, Khan worked as a Legal Director for the Open Markets Institute before moving on to academic positions at Columbia Law School. She also served as Counsel for the U.S. House Committee on the Judiciary, Subcommittee on Antitrust, Commercial, and Administrative Law, where she helped prepare a 2020 report on competition in digital markets.3
In addition to questioning the consumer welfare approach to antitrust, Chair Khan has also advocated for enjoining mergers rather than using divestitures and behavioral conditions to resolve competitive concerns,4 for structural separation remedies (such as divestitures, asset sales, and limitations on entry into certain business lines) over behavioral remedies,5 for the FTC to engage in notice and comment rulemaking to define “unfair methods of competition” under Section 5 of the Federal Trade Commission Act,6 for potentially applying common carrier regulations to large technology platforms,7 and has criticized the Supreme Court’s decision in Ohio v. American Express Co. as improperly creating a special rule of antitrust analysis for “two-sided” markets.8
Confirmation Hearing Signals
One notable theme during Khan’s confirmation was concern that the FTC lacked the technical know-how and authority to keep pace with ever-evolving marketplaces. For instance, in her Senate questionnaire, Khan identified the lack of sophisticated analytic or empirical tools as one of the biggest challenges facing the FTC.9 She struck a similar cord in her hearing, where she identified “deep information asymmetries” between enforcers and companies as a major barrier to effective enforcement, commenting that regulators and enforcers have been “slow to catch up to the underlying business realities and empirical realities of how these [digital platform] markets work[.]”
Outside the antitrust space, when pressed by senators about the FTC’s role in policing content moderation by social media platforms, Khan stated that she supported use of the FTC’s information collection authorities as a means to gain more transparency into content moderation decisions.
What This Means for You
Chair Khan’s confirmation gives the Democrats a 3-2 majority until current FTC Commissioner Rohit Chopra is confirmed to lead the Consumer Financial Protection Bureau (“CFPB”). President Biden has not nominated Commissioner Chopra’s successor, so his confirmation to the CFPB will return the FTC to a 2-2 split. Notably, President Biden has yet to nominate anyone to lead the Department of Justice’s Antitrust Division.
While her academic writing provides some clues, Chair Khan’s enforcement priorities are as of yet largely unknown. Technology companies are clearly in Khan’s spotlight, but her prior criticism of many of these companies may require recusals from matters involving these companies. In addition, some of Chair Khan’s bolder ideas may face resistance — from other commissioners, the FTC’s professional staff, and the courts. Still, companies before the FTC should expect greater scrutiny of proposed mergers, stricter vetting of proposed remedies, and longer merger reviews.
1 Lina M. Khan, Amazon’s Antitrust Paradox, 126 Yale L.J. 710 (2017).
2 See, for example, the Competition and Antitrust Law Enforcement Reform Act, introduced by Senator Amy Klobuchar in February. S. 225, 117th Cong. (2021).
3 H. Comm. on the Judiciary, Subcomm. on Antitrust, Commercial, and Administrative Law, 116th Cong., Investigation of Competition in Digital Markets: Majority Staff Rep. and Recommendations (2020).
4 Lina Khan, How to reboot the FTC, Politico: The Agenda (April 13, 2016), https://www.politico.com/agenda/story/2016/04/ftc-antitrust-economy-monopolies-000090/.
5 Lina M. Khan, The Separation of Platforms and Commerce, 119 Colum. L. Rev. 973 (2019).
6 Rohit Chopra & Lina M. Khan, The Case for “Unfair Methods of Competition” Rulemaking, 87 U. Chi. L. Rev. 357 (2020).
7 Khan, supra note 1, at 797–800.
8 Lina Khan, America Has a Major Market Power Problem & SCOTUS Just Made It Worse, Take Care (Jul. 5, 2018), https://takecareblog.com/blog/america-has-a-major-market-power-problem-and-scotus-just-made-it-worse.
9 Khan has also cited the FTC’s recently diminished penalty authority under Section 13(b) as a key challenge for the agency. See Darren Tucker, Ryan Will, and Mike Matthews, Unanimous Supreme Court Limits FTC’s Ability to Seek Monetary Remedies, The V&E Report (April 29, 2021), https://www.velaw.com/insights/unanimous-supreme-court-limits-ftcs-ability-to-seek-monetary-remedies/.
This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.