FTC’s new majority gives Lina Khan a chance to push an aggressive agenda

WASHINGTON — The confirmation of a third Democrat to the Federal Trade Commission on Wednesday ended a partisan stalemate at the agency. This is good news for Lina Khan, president of the agency and Democrat.

It is also a test.

With the FTC’s new Democratic majority – which came with the confirmation of Alvaro Bedoya, who becomes the fifth commissioner, in a post vacant since October – allies and critics of Ms Khan are watching to see if she pushes through plans to tackle Power companies. That could include filing an antitrust lawsuit against Amazon, establishing online privacy rules and exploiting little-used agency powers to clip the wings of companies like Meta, Apple and Google.

As Congress remains in gridlock and the midterm elections approach, agencies like the FTC and the Justice Department are probably the best hope left for activists and policymakers who want the government to limit the power of corporations. businesses. President Biden, who has vowed to get tough, last year ordered the FTC and other federal agencies to take action to limit concentration.

Under Ms. Khan, 33, who became president in June, the FTC has tried to put the brakes on mergers before by threatening to challenge deals after they close. The commission said it would punish companies that make it difficult for users to repair their products. And it settled a case with the company formerly known as Weight Watchers over a diet app that collected data from young children.

But Ms. Khan’s new Democratic majority is essential to a “broader realization of her vision,” former FTC Chairman William E. Kovacic said. “And the clock is ticking.”

In a statement, Ms. Khan said she was “delighted” to be working with Mr. Bedoya and the other commissioners. She did not explain how the FTC’s new majority would affect her plans.

The FTC’s previous split between two Republicans and two Democrats led to deadlocks. In February, the commission could not reach an agreement to advance a study of the practices of pharmaceutical benefit managers.

Sarah Miller, the executive director of the American Economic Liberties Project, a progressive group that wants more antitrust enforcement, described the two FTC Republicans, Noah Phillips and Christine Wilson, as “libertarian resisters” who “have sort of put the brakes” on Ms. Khan’s ability to move her agenda forward.

Mr Phillips said in an email that he supported the commission’s “long tradition of bipartisan work to advance the interests of American consumers”. But he will not support Ms Khan’s program when it “exceeds our legal authority”, raises prices for consumers or hurts innovation, he said.

Ms. Wilson highlighted three speeches she has given in the past year criticizing Ms. Khan’s philosophy. In a speech last month, Ms Wilson said Ms Khan and her allies were inspired by the principles of Marxism.

Sen. Chuck Schumer of New York, Democratic Majority Leader, said Wednesday’s vote confirming Mr. Bedoya was ‘essential to freeing the FTC’

Now Ms Khan may have the option of pursuing legal action against Amazon. She wrote a student law journal article in 2017 criticizing corporate dominance. The FTC began investigating the retail giant under the Trump administration; some state attorneys general have also conducted investigations into the company.

Ms Khan may take legal action challenging Amazon’s recent purchase of the Metro-Goldwyn-Mayer film studio. When the $8.5 billion deal closed in March, an FTC spokeswoman noted that the agency “may challenge a deal at any time if it determines it violates the law.”

Ms. Khan can put her stamp on other transactions. The agency is reviewing Microsoft’s $70 billion purchase of video game maker Activision Blizzard and sent out a request to the companies this year for additional information.

An executive order from Mr. Biden last year encouraging more aggressive antitrust policy prompted the FTC and Justice Department to update the guidelines they use to approve deals, which could lead to tougher scrutiny . Ms. Khan is likely to need the support of the other two Democrats on the committee, Mr. Bedoya and Rebecca Kelly Slaughter, to approve aggressive new guidelines or challenge major mergers.

Ms Khan also said she wanted to strengthen the powers of the agency by looking at regulations governing privacy and how algorithms make decisions. She said the FTC was underutilizing its role as a regulator and that regulation would strengthen its consumer protection mandate.

“As our economy will only continue to digitalise, market-wide rules could help provide clear advice and make enforcement more efficient and effective,” she said the month. last at a privacy conference.

The FTC could also act on demands from progressive activist groups that want the agency to ban data-driven advertising business models and ban non-competition agreements that prevent workers from accepting employment with a competitor. from their current employer.

But former FTC officials said Ms. Khan faced challenges even with the Democratic majority. Creating privacy regulations could take years, said Daniel Kaufman, former deputy director of the agency’s consumer protection office. Companies are likely to challenge in court rules that do not align with the FTC’s mandate to protect consumers from deceptive and unfair practices.

“The FTC’s rule-making capabilities aren’t designed to combat behavioral advertising, so I’ve told my clients that the agency might launch something with a lot of press, but it’s unclear where that is. will go,” Mr. Kaufman, a partner at law firm BakerHostetler, said.

Ms. Khan’s efforts will certainly continue to face opposition from both Mr. Phillips and Ms. Wilson. Mr Phillips said he had reservations about the agency becoming a tougher regulator. In January, he said Congress, not the FTC, should be the one to establish new privacy rules.

Ms. Wilson recently posted screenshots of an internal survey showing that FTC career staff satisfaction has declined. “The new management has marginalized and disrespected the staff, leading to a brain drain that will take a generation to fix,” she said.

To overcome their opposition, Ms. Khan will have to keep her majority intact. That gives leverage to Mr. Bedoya, a privacy expert who has focused on the civil rights dangers of new technologies, and Ms. Slaughter, a former senior member of Senator Schumer’s staff.

Ms. Slaughter said in a statement that Mr. Bedoya’s privacy expertise would serve the FTC well. She did not comment on the agency’s Democratic majority.

Mr. Bedoya was tight-lipped about his own plans, saying only that he was “excited” to work with his new colleagues at the FTC.

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