Good Riddance, Lina Khan
Under Khan's leadership, the Federal Trade Commission has been bad for business and bad for consumers.
No one was sure what a Kamala Harris presidency would mean for Lina Khan, the controversial chair of the Federal Trade Commission (FTC) appointed by President Joe Biden. But with Harris, too, on her way out, and Republicans slated to take over the White House, we can probably say goodbye—and good riddance—to Khan's reign.
With Khan heading the agency, the FTC has taken an aggressive stance against mergers and acquisitions, an aggressive stance against big tech companies, and an odd view of the agency's purpose and authority.
"Khan has framed several regulatory issues in the dramatic terms of someone facing an emergency that cannot wait for congressional action," noted Kevin Frazier, an assistant professor at St. Thomas University College of Law, in a recent Reason piece. But "the FTC does not have any emergency powers. Congressional inaction does not increase the FTC's jurisdiction. Judicial opposition does not excuse the FTC's experimentation with novel theories of enforcement. Even economic upheaval doesn't change anything about when and how the FTC may fulfill its finite mandate."
That finite mandate was something Khan and her supporters seemed intent on constantly chipping away at.
Even before being appointed FTC Chair, Khan was one of the leaders of a strange—and often infuriating—school of thought about antitrust law. Known as neo-Brandeisians, new structuralists, or sometimes (by critics) as "hipster antitrust," this school dismissed the idea that antitrust's purpose should be to protect consumer welfare. Instead, neo-Brandeisians were concerned with an abstract promotion of competition—a fixation leading to the conviction that businesses getting too big, successful, or dominant was itself something to be feared and stopped.
Proving actual harm to consumers was out; proving that practices harmed a big business' competitors was the new game. But under these rules, doing anything that successful businesses do—including innovating, bundling products for improved efficiency, and acquiring new products—could be considered part of an antitrust law violation.
As you might imagine, this is a philosophy that could prove bad for not just business but for consumers, too.
It also proved legally dubious. Under Khan's leadership, the FTC has embarked on a series of enforcement fiascos and racked up an impressive roster of losses in court. This has been the silver lining of Khan and her ilk's novel ideas about antitrust law: they're often out of line with modern legal standards for how to interpret antitrust cases and current conceptions about the proper role of the FTC.
But that silver lining may have been short-lived, as Khan and the Biden administration began remaking rules and regulations (like those surrounding mergers and acquisitions) to better accommodate their worldview. So, the sooner Khan and other neo-Brandeisians lose power, the better for free markets and consumer welfare.
Of course, there's no guarantee that Trump's FTC picks will be better. Today's Republican party has actually adopted some of the anti–free market ideas beloved by many Democrats, and almost no one embodies this tendency better than future Vice President J.D. Vance. Vance has even complimented Khan, saying last February that he looks at her "as one of the few people in the Biden administration that I think is doing a pretty good job."
So it's not totally inconceivable that the upcoming Trump/Vance administration could keep Khan around. But doing so would give tacit credit to Biden, and I can't see Trump being OK with that. Nor is it like Trump to pass up an opportunity to install someone he perceives as his own loyalist.
Trump's FTC pick will almost certainly come with his or her own problems, and some of these might even echo Khan's issues. The previous Trump administration was hostile to tech companies, too, albeit not as aggressively apt to use antitrust law against them as the Biden administration has been.
But, for now, let's enjoy what little political comforts we can, and celebrate the fact that Khan—and her brand of expansive antitrust antics—are likely not long for Washington.
