WASHINGTON — The confirmation of a third Democrat to the Federal Trade Commission on Wednesday broke a partisan deadlock at the agency. That’s good news for Lina Khanthe agency president and a Democrat.
It is also a test.
With the FTC’s new Democratic majority — which came with the confirmation of Alvaro Bedoya, who will become the fifth commissioner, in a position vacant since October — Ms. Khan’s allies and critics are looking to see if she follows through on plans to bring it down. business to tackle flow. That could include filing an antitrust lawsuit against Amazon, instituting online privacy rules, and tapping under-used agency powers to clip the wings of companies like Meta, Apple and Google.
With Congress stalling and midterm elections approaching, agencies like the FTC and the Justice Department are probably the best hope for activists and policymakers who want the government to curb corporate power. President Biden, who pledged to crack down last year ordered the FTC and other federal agencies to take measures to limit the concentration.
Under Ms Khan, 33, who became chairman in June, the FTC has already tried to suppress mergers by threatening to challenge deals after they close. The committee has said it will punish companies that make it difficult for users to repair their products. And the reached a settlement with the company once known as Weight Watchers about a diet app that collected data from young children.
But Ms Khan’s new Democratic majority is vital to a broader “realization of her vision,” said William E. Kovacic, a former FTC chairman. “And the clock is ticking.”
In a statement, Ms Khan said she was “excited” to work with Mr Bedoya and the other Commissioners. She did not elaborate on how the FTC’s new majority would affect her plans.
The FTC’s earlier split between two Republicans and two Democrats led to deadlocks. In February, the committee could not reach an agreement to proceed with an investigation into the practices of pharmacy benefit administrators.
Sarah Miller, the executive director of the American Economic Liberties Project, a progressive group that wants more antitrust enforcement, described the FTC’s two Republicans, Noah Phillips and Christine Wilson, as “libertarian holdouts” who have “put on the brakes a bit.” on Ms Khan’s ability to move her agenda forward.
Mr. Phillips said in an email that he supported the committee’s “long tradition of bipartisan work to advance the interests of American consumers.” But he will not support Ms Khan’s agenda if it “exceeds our legal authority”, raises prices for consumers or harms innovation, he said.
Ms Wilson pointed to three speeches she gave in the past year in which she criticized Ms Khan’s philosophy. In a speech last month, Ms. Wilson said Ms. Khan and her allies draw on principles from Marxism.
New York Senator Chuck Schumer, the Democratic majority leader, said Wednesday’s vote confirming Mr. Bedoya was “critical to unleashing the FTC.”
Now Ms Khan may be given the opportunity to file a lawsuit against Amazon. They wrote a student law review article in 2017 criticized the company’s dominance. The FTC began investigating the retail giant under the Trump administration; some state attorneys general have also performed inquire with the company.
Ms Khan could file a lawsuit to challenge Amazon’s recent purchase of the movie studio Metro-Goldwyn-Mayer. When the $8.5 billion transaction closed in March, an FTC spokeswoman noted that the agency can “challenge a deal at any time if it finds it violates the law.”
Ms Khan can make her mark on other deals. The agency is investigating Microsoft’s $70 Billion Purchase of Video Game Publisher Activision Blizzard and sent a request to the companies this year for additional information.
An executive order from Mr Biden last year encourage more aggressive antitrust policies urged the FTC and Justice Department to update the guidelines they use to approve deals, which could lead to tighter scrutiny. Ms Khan will likely need the support of the committee’s two other Democrats, Mr Bedoya and Rebecca Kelly Slaughter, to pass aggressive new guidelines or challenge major mergers.
Mrs Khan also said she wants to increase the agency’s powers by taking into account regulations regarding privacy and how algorithms make decisions. She has said the FTC has underused its role as a regulatory agency and that regulation would strengthen its mandate to protect consumers.
“As our economy will only continue to digitize, market-wide rules can help send a clear warning and make enforcement more effective and efficient,” she said at a privacy conference last month.
The FTC could also respond to requests from progressive activist groups who want the agency to ban data-driven advertising business models and ban non-compete clauses that prevent employees from taking a job with a competitor of their current employer.
But former FTC officials said Ms Khan faced challenges even with the Democratic majority. Creating privacy rules can take years, says Daniel Kaufman, former deputy chief of the agency’s consumer protection agency. Companies are likely to challenge rules in court that don’t fit the FTC’s mandate to protect consumers from deceptive and unfair practices.
“The FTC’s regulatory capabilities aren’t designed to tackle behavioral advertising, so I’ve told my clients the press-heavy agency could get something off the ground, but it’s unclear where it will go,” Mr. Kaufman, a partner at the law firm BakerHostetler, said.
Ms Khan’s efforts will certainly continue to meet resistance from Mr Phillips and Ms Wilson. Mr Phillips has reservations about the agency becoming a more muscular regulator. In January, he said Congress, not the FTC, should be the one making new privacy rules.
Ms. Wilson recently posted screenshots of an internal survey showing that satisfaction among FTC career staff has fallen. “New leadership has marginalized and disrespected the workforce, resulting in a brain drain that will take a generation to resolve,” 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 dangers of new technologies in the civil rights field, and Ms. Slaughter, a former top 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 kept tight-lipped about his own plans, saying only that he was “excited” to work with his new FTC colleagues.
