FTC Commissioner Resigns To Protest Agency's 'Disregard for the Rule of Law'
Chair Lina Khan has flouted the rule of law and due process, Commissioner Christine Wilson wrote.
Christine Wilson, the lone Republican commissioner at the Federal Trade Commission (FTC), announced her resignation Tuesday in a scathing op-ed published by The Wall Street Journal. Steered by Chair Lina Khan, Wilson says, the FTC has engaged in ethics violations and politicized, arbitrary antitrust actions with little regard for congressional mandate or judicial guidance. Following Wilson's exit, the watchdog will have only three of its five commissioners and all will be Democrats.
"Much ink has been spilled about Lina Khan's attempts to remake federal antitrust law as chairman of the Federal Trade Commission," Wilson began. "Less has been said about her disregard for the rule of law and due process and the way senior FTC officials enable her."
She singled out the FTC's Section 5 policy statement, issued in November, which greatly expanded the FTC's effective authority. The statement redefined antitrust specifically to enable the FTC to take regulatory action against any present business practice that might harm future economic competition, regardless of whether the practice is causing harm in the present. The policy statement broke with the modern consensus on antitrust, which prioritizes consumer welfare.
Wilson also criticized Khan's decision not to recuse herself in the agency's action to prevent Meta's acquisition of virtual reality startup Within. Before joining the FTC, Khan publicly argued that Meta should be prevented from acquiring any other firms. "I dissented on due-process grounds, which require those sitting in a judicial capacity to avoid even the appearance of unfairness. The law is clear," Wilson stated, adding that her dissent, which also included ethics-based objections, was redacted in a manner that "served no purpose but to protect Ms. Khan from embarrassment."
Wilson is not alone in her concerns. She wrote that the Federal Employee Viewpoint Survey conducted in 2020 found that "87% of surveyed FTC employees agreed that senior agency officials maintain high standards of honesty and integrity," while "today that share stands at 49%."
"I have failed repeatedly to persuade Ms. Khan and her enablers to do the right thing, and I refuse to give their endeavor any further hint of legitimacy by remaining," Wilson wrote.
Despite the fact that she is a Republican, Wilson's resignation is not partisan pouting. Khan's FTC, with the support of President Joe Biden, is working on an economically debunked antitrust playbook from the past, according to a new report from Timothy J. Muris, former FTC chairman and a visiting senior fellow at the American Enterprise Institute.
Today's radical antitrusters—the so-called neo-Brandeisians—lean heavily on precedents set by the Robinson-Patman Act of 1936 as well as Supreme Court case law in the 1960s–70s, Muris wrote. Both advanced political, not economic, goals, and both harmed consumers; such efforts sought to coddle small, inefficient competitors based on the theory that big business is inherently bad.
Congress codified the Robinson-Patman Act to protect retail and supply chain incumbents against the competitive efficiencies of the chain store model—e.g., the Great Atlantic & Pacific Tea Company (A&P). "The act's main effect on A&P and other chains was to hinder them from obtaining goods at lower wholesale prices than their smaller competitors were paying and thus from passing the savings to consumers," Muris recounted. "A&P and other supermarket chains lost sales and profits as they raised retail prices to cover the higher cost of wholesale goods. The act's ultimate victims were the millions of ordinary consumers forced to pay higher prices for food and other necessities."
The Supreme Court's mid-century merger jurisprudence was so haphazard that it prompted Justice Potter Stewart to suggest the Court's "sole consistency" was that "the Government always wins." In United States v. Von's Grocery Company (1966), the case in which the dissenting Stewart penned that phrase, a Court majority blocked Von's acquisition of the smaller grocery chain Shopping Bag in Los Angeles (their combined market share was a scant 7.5 percent in the city).
"So strong was the populist wave and the conviction that 'big is bad,'" wrote Muris, "that lawyers defending mergers would desperately argue their merger did not lead to efficiencies and cost savings, lest the merger be viewed as one that allowed the merged firms to gain market share (i.e., get bigger) because cost savings would reduce prices."
Those mid-century antitrust overreaches were rejected by subsequent generations of judges, antitrust officials, and academics—including Obama-era policymakers and today's courts. Nevertheless, neo-Brandeisians like Khan and Biden seem determined to reanimate the antitrust failures of yesteryear. And so do their Republican allies.