Back in 2021, then-32-year-old Lina Khan’s rise to chairwoman of the Federal Trade Commission (FTC) was heralded in the press as a new era in antitrust, and a forthcoming revolution that would jettison forty years of antitrust law in our nation.
True to her progressive viewpoint, Ms. Khan used her position to target tech companies, on the flimsy basis that big companies were somehow antithetical to competition. To the cheers of many in Washington, she wielded her new power to pursue an agenda with the singular emphasis on breaking up big businesses.
The four-decade-old standard that has guided our antitrust system is the familiar “consumer harm” doctrine, which, in simplified language, states that in order for a business to be guilty of an antitrust violation, there must be some degree of consumer harm.
In Chair Khan’s world, however, consumer harm was never a consideration. Instead, a company’s large size was enough to warrant investigation and legal action.
Overwhelmingly, her pursuits have been blocked both in the courts and in Congress. She partnered with Representative Ciccilline at the House Judiciary Committee and her allies in the Senate to usher in a new standard for antitrust laws, but the bills she championed died in Congress, never having gained a critical mass of support.
Her failed track record is extensive – and it’s worth revisiting her many forays to kill America’s thriving competition.
In 2022, Ms. Khan set her sights on Meta’s acquisition of Within Limited. The FTC sued to block Meta’s attempt to purchase the virtual reality company, with the Khan standard of “Too Big to Exist” as the basis of the lawsuit. The court rejected the FTC’s novel legal theory. And today, her failure to block this merger has become another American success story, with the augmented reality market expected to reach $454 billion by 2030 with 23 million jobs across numerous companies.
More recently, Khan has devoted taxpayer dollars to blocking Microsoft’s acquisition of video game developer Activision Blizzard. Now twice, the federal court has rejected the FTC’s case, with a Biden-appointed judge finding that the merger would “enhance, not lessen, competition in the cloud-streaming market.” Even more to the point, the judge found that the “FTC has not raised serious questions whether the proposed merger is likely to substantially lessen competition.”
The FTC’s years-long pursuit of Amazon defies any premise of a legal framework. Ms. Khan has targeted one of Amazon’s most popular practices on its website – matching rivals’ discounts. This practice benefits consumers in the form of lower prices, fuels competition, and, significantly, mirrors a popular longstanding practice of physical stores. The FTC has failed to identify a remedy or alternative conduct for Amazon to pursue. Does it really make sense for the government to demand that retailers showcase less-than-great deals for consumers.
Artificial Intelligence is a new area for Ms. Khan, and she has announced her intention to investigate companies involved in the AI space, where companies are leading a revolution in business, medicine, cybersecurity, defense, and more.
Ms. Khan tipped her hand in a recent interview in which she spoke of her desire to “make sure these dominant firms aren’t maintaining their monopolies” in AI. Never mind that she has so degraded the definition of “monopoly” that even when new markets are developing and a dozen or so companies are competing in a space, she imagines monopolies.
American innovation continues to thrive, despite the FTC’s best efforts to stifle growth. Every week the “Magnificent Seven” continue to drive the market to new highs – the Dow hitting 38,000, the S&P hitting 5000, and the individual stocks hitting all-time highs. These household names – Apple, Amazon, Google, Meta, Microsoft, Nvidia and Tesla – together are worth more than the stock markets of the UK, Japan, France, China and Canada combined.
The FTC’s adventures in rewriting antitrust laws have come at a significant cost to U.S. taxpayers. Ms. Khan’s whack-a-mole approach of hitting as many things as she possibly can, hoping to land a win, means Americans get to pay for the government’s misguided anti-business lawsuits through their taxes, and in the form of higher costs as consumers as businesses have to shell out massive legal fees to keep an ever-encroaching FTC at bay.
As we enter Lina Khan’s final year at the helm of the FTC, we can be grateful that her agenda has been, for the most part, thwarted. Her failures highlight the rigor of our antitrust standard, and the competitive edge that America enjoys when we steer clear of an anti-business regulatory culture. Here’s to another year of failed launches at the FTC.
Barbara Comstock is a former congresswoman and member of the Virginia House of Delegates, current senior adviser at Baker Donelson and adviser to NetChoice.
