Graeme Sloan/Sipa USA via AP Images
Lina Khan, chair of the Federal Trade Commission, testifies during a Senate Judiciary Subcommittee hearing on antitrust laws and enforcement, at the Capitol in Washington, September 20, 2022.
Federal Trade Commission chair Lina Khan will testify tomorrow before a House Judiciary Committee that looks very different from when she served on its staff in 2019-2020. At the time, she was managing an investigation into digital platforms for the Antitrust Subcommittee chair, Rep. David Cicilline (D-RI), which resulted in a blockbuster report that solidified the case against the market power of Big Tech. While only Democrats signed on to the report, the Republican co-chair of the subcommittee, Rep. Ken Buck (R-CO), agreed with practically all of the findings.
Today, Cicilline has resigned, and the Antitrust Subcommittee is led not by Buck, who has been sidelined, but by the libertarian Thomas Massie of Kentucky, who has little to no interest in antitrust (it’s held two hearings all year). Meanwhile, Khan is appearing before the full committee to face attacks on “mismanagement of the FTC and its disregard for ethics and congressional oversight,” according to an advance write-up of the hearing, in addition to “the Commission’s record of enforcement actions and politicized rulemakings.”
Rep. Jim Jordan (R-OH), who chairs the Judiciary Committee, called the hearing. This decision fits with the recent political polarization of the FTC, after a brief period in which the parties were more aligned. Now, Republicans are gunning for Khan, aligned with the corporate conservatism best expressed on the editorial page of The Wall Street Journal, which has devoted a whopping 70 attacks on Khan since she was named chair in June 2021, approximately one every 11 days. House Oversight Committee chair Rep. James Comer (R-KY) is also investigating Khan, basically using the Journal editorial page as a road map.
As I’ve written previously, Khan has become such a target to Journal editorialists and corporate Republicans because she’s effective at enacting a more aggressive stance against corporate power that was absent from the last two Democratic administrations. Business conservatives want to restore the prior bipartisan pro-business bias at the FTC by making an example out of her. With the abrupt about-face from the House Judiciary Committee, they have effectively bought in the Republican ruling class to this line of thinking. The alleged “realignment” of conservatives into a more skeptical stance against American business is not in existence in House Judiciary, and will not be on display tomorrow.
For example, Jordan has latched onto an alleged ethics controversy about Khan’s declining to recuse herself from adjudicating a merger decision involving Meta. The designated ethics official, Lorielle Pankey, suggested in a nonbinding letter that she had a “concern” with Khan participating in the case because she has generally disfavored mergers in the past, though Pankey conceded that it would not be a per se ethics violation for her to participate. What Pankey failed to acknowledge is that she owns between $15,000 and $50,000 in Meta stock, which is certainly more of a per se ethics violation for the ethics official to be weighing in on recusals in a case in which she has a financial interest. Pankey, in fact, owns several stocks that the FTC has pursued enforcement actions against, including Walmart, Procter & Gamble, and Visa.
The basic premise is that a Democrat who runs against corporate power shouldn’t be allowed to implement those views.
This is not even a particularly notable revelation; FTC officials owned shares in 22 of the 60 corporations the agency filed suit against between 2016 and 2021, according to a Wall Street Journal report. (This further shows the stark divide between the news desk at the Journal and the editorial desk.) Amazon is rapidly hiring former FTC staffers in advance of an expected antitrust lawsuit against the company.
To be clear, the offense Khan has made here is that she has a point of view. Unlike virtually everyone who has served at the FTC over the past 40 years, she never worked at a company involved in the case or a competitor to one, and she has no financial stake in the outcome. Conservatives want to blackball anyone who thinks merger policy has been too permissive lately from the agency. Since that’s terrain on which elections are fought, the basic premise is that a Democrat who runs against corporate power shouldn’t be allowed to implement those views.
Nonetheless, Jordan alleged Khan misled the committee with her claim in prior testimony that her lack of recusal was “consistent with the legal statements” that Pankey made. It indeed was; Pankey told Khan verbally there was no per se ethics violation, meaning she could legally work on the case. Jordan said that the episode “raises serious questions about your commitment to the fair and impartial administration of the FTC’s authorities.” This is the expected tenor of the hearing tomorrow. For Republicans, the only fair and impartial way to serve on the FTC is to own large quantities of stock in the companies it oversees.
Months ago, Jordan also subpoenaed the FTC over his investigation into allegations of censorship in social media. The FTC investigated Elon Musk’s purchase of Twitter and whether the company has been complying with prior consent decrees around giving out user information. Part of that involved asking Twitter to identify whatever journalists it gave internal records to for the production of the Twitter Files. Jordan has cast this as forcing a private company to out journalists; in reality, the FTC is looking at whether Twitter is mishandling user data, and giving access to user information outside the company is highly relevant to that.
On the other side of the aisle, Democrats are similarly conflicted. One of the industries (but certainly not the only one) that Khan has gone after is Big Tech. A phalanx of the California delegation, which generally harbors warm views toward Silicon Valley for the simple reason that many of its leaders write checks to them for their re-election campaigns, has opposed Khan’s efforts in this area. Rep. Lou Correa (D-CA) replaced Cicilline as the ranking Democrat on the Antitrust Subcommittee; he did not support the tech antitrust bills that fizzled last year.
So Lina Khan is stepping into a lion’s den. To her right are political opportunists who will defend monopolistic corporations to their death; to her left are at least a segment of politicians who are cozy with some Silicon Valley bigwigs. From the outside are even more arrow-slingers, wishing to impose punishment on anyone who threatens the status quo. They’re using exaggerations, half-truths, and outright deception in an attempt to destroy the career of the first public servant in decades to run the FTC as it’s written in the law, instead of serving as a handmaiden to industry—all while ignoring actual massive conflicts of interest.
What this most resembles is the effort against Michael Pertschuk, who led the FTC in the Carter administration. He also crusaded against corporations on behalf of consumers, and he also became subjected to a smear campaign. It was so successful that it rocked back the agency for decades, with Pertschuk having to abandon his signature effort to crack down on television advertising aimed at children.
This is clearly what corporate America seeks as they attempt to make an example out of Khan. We’ll see what Democrats on the committee and the administration do to ensure history does not repeat itself.
