FTC Defends Enforcement Record Amid Khan Criticism
The FTC defended its enforcement track record under Chair Lina Khan this week, as detractors criticized her aggressive antitrust approach as being anti-free market.
House Judiciary Committee Republicans pressed Khan at an oversight hearing last month, noting her 0-4 record in merger litigation (see 2307130059). FTC Public Affairs Director Douglas Farrar lauded the agency Tuesday for blocking its 15th “potentially illegal merger” in the past 18 months. CooperCompanies' abandoning its proposed acquisition of Cook Medical’s reproductive health business while facing an FTC investigation will protect consumer choice, Khan tweeted Tuesday.
She defended her views on antitrust enforcement during an appearance on PBS last week with DOJ Antitrust Division Chief Jonathan Kanter. Antitrust enforcement is about “preserving open, competitive markets,” which ensures the “best ideas win,” she said. Khan said it’s a fair question to ask if enforcers risk weakening American companies’ ability to compete with foreign economic powers like China and Russia. Enforcers shouldn’t be expected to protect “domestic monopolies,” she said: The better approach is to allow an open market and free enterprise, which will allow the best U.S. companies to out-innovate state-backed monopolies in China and Russia, she said.
Khan is working with DOJ enforcers to update their merger guidelines. Industry groups responded to the agencies’ draft document saying the language shows the agencies rely on false beliefs about the economy that improperly target the tech sector (see 2307190048). Kanter told PBS that enforcers ask themselves when deciding to act: How does competition in a market present itself, and does a merger threaten that competition? The guidelines are a “reflection of modern case law,” and that includes new challenges presented by the tech sector, he said.
The guidelines are nonbinding, but the document is essentially a warning to industry that the FTC and DOJ “don’t think mergers generally are a good thing,” Jeff Westling, American Action Forum technology and innovation policy director, said in an interview Wednesday. “There might be cases where the FTC won’t challenge a merger, but for the most part, they’re seeing additional concentration in markets and saying” that’s a bad thing: “If I’m a business, if I’m a tech startup, I’m worried because, am I going to be able to sell my tech startup?”
It’s good the FTC is willing to bring cases when there’s a risk the agency could lose, said Public Knowledge Competition Policy Director Charlotte Slaiman: It means previous enforcers might have been too “risk-averse.” Enforcers need to be “pushing the envelope” because historically enforcement hasn’t been sufficient, she said: “That’s why we’re facing the huge problems of concentration in key areas of the economy that we see today.” The guidelines were going to be “controversial” because anything the agency does in this area sparks a lot of conversation, she said.
Khan’s ideologically driven approach to antitrust enforcement shows a lack of respect for free markets and individual liberty, said American Enterprise Institute telecom fellow Mark Jamison, who was on President Donald Trump’s FCC transition team. In a National Review column Wednesday, Westling wrote that the antitrust views of Khan and Kanter are a return to some of the views from nearly a century ago, and they’re a departure from decades of bipartisan precedent. Khan said in her interview that the FTC wants what Congress wants: That businesses bring ideas to the market and “compete on the merits.”