FTC Chair Lina Khan Outlines New Vision for Antitrust Enforcement, Consumer Protection

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  • Federal Trade Commission Chair Lina Khan encouraged her staff to prioritize addressing "dominant intermediaries," or gatekeepers, and unfair contracts and better deterring "facially illegal" mergers in a new memo.
  • The memo is an early outline of her goals for the agency.
  • Khan has been among the leading voices for more vigorous antitrust enforcement and sparked a movement in the field with her 2017 Yale Law Journal article entitled "Amazon's Antitrust Paradox."

Federal Trade Commission Chair Lina Khan laid out her policy priorities and vision in a memo to staff dated Wednesday and recently made public.

It's an early outline of her goals for the agency, which is overseen by five commissioners who vote on enforcement actions and policy statements. The agency enforces antitrust law alongside the Department of Justice Antitrust Division and seeks to protect consumers from unfair business practices and privacy violations.

Khan outlined five principles of her plan:

  1. Have a "holistic approach to identifying harms." Khan said the agency should recognize that workers and independent businesses, in addition to consumers, can be harmed by antitrust and consumer protection violations. The popular antitrust framework has focused heavily on consumer harm, often viewed as whether prices go up or down, to determine a violation of the law. But Khan has argued in her academic writing for a broader approach that could better assess harm by digital platforms, which often charge no or low fees to consumers in exchange for rapid growth.
  2. Focus on "targeting root causes rather than looking at one-off effects." Khan said staff should look at how certain business models or conflicts of interest can help firms violate the law.
  3. Integrate more "analytical tools and skillsets" for more empirical assessments of business practices.
  4. Be "forward-looking" and act fast to mitigate harm. Khan said this includes paying special attention to "next-generation technologies, innovations, and nascent industries across sectors."
  5. Democratize the FTC by making sure it's "in tune with the real problems that Americans are facing in their daily lives."

Khan then laid out three specific policy priorities based on those goals:

  1. Addressing consolidation across industries by revising merger guidelines for businesses and deterring deals that are illegal on their face and have overwhelmed commission resources. The agency has seen such an influx in transactions that it's begun telling some businesses to merge at their own risk even when it hasn't finished reviewing their deals.
  2. Going after "dominant intermediaries and extractive business models." Khan wrote, "Business models that centralize control and profits while outsourcing risk, liability, and costs also warrant particular scrutiny, given that deeply asymmetric relationships between the controlling firm and dependent entities can be ripe for abuse."
  3. Assessing how contracts can set up unfair methods of competition or deceptive practices. Khan mentioned non-competes and repair restrictions in the memo.

Khan encouraged her staff not to think of the consumer protection and competition divisions of the agency as completely separate and "instead apply an integrated approach." She also said the agency should expand its "regional footprint," so some members of staff will live in the areas where its work has an impact and the agency can recruit more diverse talent. She added that FTC should hire more technologists and experts from different fields to strengthen its work.

Khan's tenure at the FTC has been marked by enthusiasm from progressives who see her as a fresh voice for an agency that has been criticized at points for dragging its feet on enforcement, particularly against the tech industry.

Khan has been among the leading voices for more vigorous antitrust enforcement and sparked a movement in the field with her 2017 Yale Law Journal article titled "Amazon's Antitrust Paradox." The article, which Khan wrote while still a law student, argued a popular antitrust framework focused on consumer welfare was inadequate to assess dominant tech firms such as Amazon.

But her time at the helm has also been marked by intense opposition from the commission's two Republicans. At the commission's newly open meetings, Commissioners Noah Joshua Phillips and Christine Wilson have criticized the way public comment is held until the end of the voting sessions and argued that certain votes were rushed ahead of public input.

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