Tom Williams/CQ Roll Call via AP Images
FTC chair Lina Khan talks with Rep. Lou Correa (D-CA) during the House Judiciary Committee hearing titled “Oversight of the Federal Trade Commission,” July 13, 2023, on Capitol Hill.
As Federal Trade Commission chair Lina Khan entered the House Judiciary Committee hearing room on Thursday, every expectation was that she would face a grilling, along the lines of what FBI director Christopher Wray experienced the day before. And it did start out that way, with committee chair Rep. Jim Jordan (R-OH) and his allies hammering on two familiar subjects: whether Khan ignored an ethics official’s advice in declining to recuse in a merger case involving Meta, and whether Khan overstepped boundaries in seeking information from Twitter about releases of personal user data to journalists.
But as the hearing went on, Republican committee members either moderated their rhetoric or even expressed support for her actions at the FTC. Some started asking about specific cases of monopolistic conduct, from pharmacy benefit managers to grocery chains. The vast majority of Republicans stayed away from Jordan’s line of inquiry. And even where they disagreed with Khan, it was relatively substantive. Remarkably, it became an actually interesting hearing—at times a bipartisan inquiry into various aspects of corporate power, a faint glimmer of actual congressional work on a committee characterized often by spin and shouting.
In the end, the hearing showed that Jordan, in attempting to link his broader critique of the weaponization of government to Khan’s work at the FTC, didn’t have buy-in from his colleagues. If this was supposed to be a springing of a trap, the trap didn’t spring. Jordan’s ambush turned disastrous for him.
In broad strokes, it was difficult to see how the hearing affected Khan’s standing in any way. The main headline out of the hearing at the Financial Times was the revelation, which Khan basically confirmed, that the FTC sent a civil investigative demand to OpenAI about use of personal data, accuracy of information, and “risks of harm to consumers, including reputational harm.” Any news about Khan herself was sidelined.
Faiz Shakir, interim executive director of the American Economic Liberties Project, twisted the knife on Jordan in a statement: “I want to thank Jim Jordan for holding a hearing showing that he’s in the minority in Congress on taking on monopolies.”
TWO JUDICIARY COMMITTEE REPUBLICANS, Rep. Ken Buck (R-CO) and Matt Gaetz (R-FL), offered unrestrained praise of Khan. Buck undermined his own party’s case against Khan’s lack of recusal in the Meta case, pointing out that the ethics official who expressed concerns about Khan’s participation actually had stock in Meta herself, while Khan has no such holdings. Several Democrats reiterated the ethics official’s potential conflict.
Buck also asked if Khan’s children worked for any Big Tech companies. Khan amusingly replied that her child is just six months old. Joke aside, the point was to highlight how Senate Majority Leader Chuck Schumer (D-NY) has two children who work for Facebook and Amazon. He said openly that Khan was being held to an unrealistic ethical standard solely “because you wrote a law review article,” referring to her work prior to government service in writing about Amazon.
Gaetz, after a back-and-forth about the Twitter requests, dug in on the FTC’s enforcement of privacy rules, referring to investigations over Amazon-owned smart doorbell maker Ring and data broker Kochava. He suggested that stronger privacy rules needed to be put together, getting some Democratic colleagues and even Jordan to agree.
Other Republicans focused on Khan’s work, rather than leaning in on Jordan’s critiques. Rep. Tom Massie (R-KY), chair of the Judiciary Committee’s subcommittee on antitrust, which has been relatively dormant in the past six months, initiated his questioning by asking about the FTC’s investigation into independent small businesses going up against dominant grocery chains. Rep. Jeff Van Drew (R-NJ) brought up FTC investigations into robocalls. Rep. Lance Gooden (R-TX) asked about allegations of doping of horses, and even suggested that the FTC could conduct a search of facilities without a warrant, under a law governing horse racing.
All told, it was a remarkably substantive discussion, at least by the low standards of this Congress.
As the hearing went on, Republican committee members either moderated their rhetoric or even expressed support for Khan’s actions at the FTC.
Only the beginning of the hearing featured Jordan and a few handpicked functionaries attacking Khan over a grab bag of issues, including the recusal situation and the investigation into Twitter. Jordan, who earlier in the day said that Big Tech mergers were “good for consumers, good for the country,” went back several times to a deposition in a lawsuit involving Twitter from an auditor at Ernst & Young. That person claimed that the FTC demanded that he produce a report as an independent assessor of Twitter’s finances that reflected negatively on the company, and that if Ernst & Young resigned, it would “create ‘other’ challenges for EY over time.”
This deposition was released just last night, and Khan wasn’t aware of it at all, but Jordan kept pushing it. “I believe in coincidence, I really do, but that’s a pretty lucky coincidence,” said Rep. Becca Balint (D-VT), “that evidence supposedly providing the Republican accusation today was released in such a timely manner.”
Jordan’s allies on the committee stretched to a ridiculous extent trying to find (or invent) some kind of ethical breach. Rep. Harriet Hageman (R-WY) teed off the recusal question, which some on the committee claimed showed that Khan lied to Congress because she claimed she never rejected the advice of an ethics official. In fact, Khan was told that her participation in the Meta case would not be a per se violation. Hageman then proceeded to talk about Khan’s dues to the New York State Bar, somehow as a reflection of her ethics in government service. At one point, there was a question about whether Khan should have called herself “counsel” to the Judiciary Committee, even though she was working as a staffer and not an attorney.
Jordan and others also demanded answers about the FTC’s inquiry into Twitter’s release of personal user data to journalists, but Khan gave the reasonable answer that it was due to an active consent decree Twitter needed to comply with about releasing information without users’ knowledge.
Rep. Kevin Kiley (R-CA) claimed that Khan was 0-4 in merger trials (he didn’t count several cases where companies withdrew their mergers because of an FTC challenge) and asked if she was losing cases on purpose to try to encourage Congress to add authorities. Khan countered that the FTC has seen significant wins in her tenure and that “we fight hard when we believe there’s a law violation.”
But by and large, even Republicans who disagree with Khan confined their arguments to their beliefs about the consumer welfare standard, or maybe did a little special pleading on behalf of favored companies: Gooden mentioned Amgen’s proposed pharmaceutical merger with Horizon, which the FTC has challenged; Rep. Darrell Issa (R-CA) took issue with FTC actions to block a merger between life sciences companies Illumina and Grail. What it was not was a hearing where every Republican lined up to read off the same talking points as Jordan.
By the end, even Jordan was echoing some of Khan’s remarks. After she said earlier in the hearing that “people’s privacy is paramount,” Jordan came back to it in referencing yesterday’s hearing on the FBI. “People’s privacy is paramount, I couldn’t agree more,” Jordan said.
DEMOCRATS, MEANWHILE, GAVE KHAN an opportunity to highlight those wins, in subjects like right to repair, “click to cancel” rules to get out of subscriptions, hospital and pharmaceutical consolidation, proposed bans on noncompete agreements, swipe fees for credit cards, and enforcement of the Robinson-Patman Act on pricing by concentrated sellers. There were also points of agreement with Republicans, on grocery consolidation and scam robocalls.
White House spokesperson Michael Kikukawa backed up Khan’s work in a statement to the Prospect. “President Biden appointed strong leaders to the Federal Trade Commission and Department of Justice because he believes in fair and vigorous enforcement of the antitrust laws,” he said. “Chair Khan has delivered results for families, consumers, workers, small businesses, and entrepreneurs—on everything from protecting our kids from unlawful use of their personal data, to making it cheaper and easier for consumers to repair items they own, to moving to ban non-competes that hurt workers, to stopping bad mergers like a semiconductor megamerger that would’ve stifled innovation.”
Khan’s consistent argument throughout the hearing mirrored what she said in her opening statement: “There have been missed opportunities in last few decades where entire sectors have been allowed to consolidate … We think it’s important to be vigorously enforcing the laws that Congress has charged us with.”
