Internal emails show FTC’s Lina Khan is trying to win by losing

Critics of progressive antitrust law believe that Federal Trade Commission (FTC) Chairwoman Lina Khan’s extraordinary losing streak in high-profile antitrust cases is intentional rather than mere incompetence. For many years, I have suspected that this is the result of a strategic strategy. Last summer, Rep. Kevin Kiley (R-Calif.) grilled Lina Khan during a hearing, asking, “Are you losing on purpose?”

At this point, Mr. Khan was on an astonishing four-game losing streak in antitrust merger litigation. The court recently rejected her bid to block Microsoft’s acquisition of Activision and Meta’s acquisition of the popular health-oriented gaming company and its app, Within. The FTC lost these cases because it had poor knowledge of the facts, failed to prove competitive harm to consumers, extrapolated distant but possible future impacts, and the courts This is because it was based on a new antitrust theory that was not recognized by the Japanese government.

But there may be a solution to this seeming madness. At the 2022 conference, Mr. Khan said that “even if there is a violation of the law” and authorities “think that the current law is difficult to address, there is still great merit in making the effort.” Khan added that a loss in court would send a signal to Congress that lawmakers need to reform antitrust laws.

So does the FTC chairman think that racking up losses against Big Tech companies will force Congress to pass progressive antitrust laws?Ann investigation report A report released last Thursday by the House Judiciary Committee provides evidence that she does so. The report’s title, “Abuse of Power, Waste of Resources, and Fear: What Internal Documents and Career Employee Testimony Show About the FTC Under Chairman Lina Khan,” is based on a shockingly candid internal email and account of the agency’s This is supported by testimony from senior officials.

The Federal Trade Commission has long been known for developing high-quality experts in economics and law, and its deliberations include when to investigate mergers and practices and when to bring antitrust litigation. through a disciplined process that determines the I don’t want to rehash everything here, but to sum up the FTC’s current internal dysfunction, the annual OPM poll of federal employees shows that FTC leadership’s morale and respect for “honesty and integrity” It explains why we see a decline from the highest levels of government to the lowest. Under Khan.

Emails in the report describe an arrogant and aloof chairperson who centralized all the power in the office but did not communicate frequently or effectively enough to leverage that power. . The document documents former Republican FTC Commissioner Christine Wilson’s accusations that Khan kept other commissioners in the dark, withheld information and surprised them with decisions. is. What is most surprising is that Mr. Khan does not seem concerned that his own agency is widely seen as dysfunctional and failing.

In fact, losing seems to be her strategy.

The committee’s report states: “Career FTC employees are concerned that Chairman Khan did not want the FTC to succeed, intentionally placed staff in positions to complete poor quality work product, and even intentionally filed a losing case. Frankly, one administrator said to another, “I’m not sure that being successful (or doing things well) is a common goal. “Because I want to show you what I can’t achieve,” he wrote.

Summarizing one exchange, House investigators concluded: “In other words, it is clear to staff that the chair does not share the staff’s goals of completing quality work and winning cases because the chair wants to force Congress to change the law, not win cases.” “It was clear” in the lawsuit. ”

The head of the FTC sent a letter to the agency’s chief of staff: The public’s perception of the Commission’s performance is crucial to the legitimacy of the system, and the need to explain to the public what we are doing (or more precisely, what we have been doing) is essential. I am aware of this, but I should not be making decisions related to the commission’s enforcement. It’s for PR. ”

But PR is everything. Mr. Khan’s strategy gives ammunition to Republicans such as Sens. Amy Klobuchar (D-Minn.), Sen. Elizabeth Warren (D-Mass.), and Sen. Josh Hawley (R-Missouri). It’s like trying to sell a colleague. The idea that antitrust laws are too weak and too broken to be effective. It’s time for hipster antitrust 2.0!

Khan’s plan to win by losing may turn out to be a poor strategy. Given the FTC’s external failures and internal turmoil, Khan is likely to lose simply by losing.

Robert H. Bork Jr. is Chairman of the Antitrust Education Project.