FTC’s Khan Outlines Plans For Antitrust Enforcement

Federal Trade Commission (FTC) Chair Lina Khan laid out her policy priorities and vision in a memo to staff dated Wednesday, September 22, and recently made public. 

It’s an early outline of her goals for the agency, which is overseen by five commissioners who vote on enforcement actions and policy statements, reported CNBC.

 The agency enforces antitrust law alongside the Department of Justice Antitrust Division and seeks to protect consumers from unfair business practices and privacy violations.

Khan outlined five principles of her plan:

  1. A “holistic approach to identifying harms.” Khan said the agency should recognize workers and independent businesses can be harmed by antitrust and consumer protection violations, in addition to consumers. The popular antitrust framework has focused heavily on consumer harm, often viewed as whether prices go up or down, to determine a violation of the law. But Khan has argued in her academic writing for a broader approach that could better assess harm by digital platforms, which often charge no or low fees to consumers in exchange for rapid growth.
  2. Focus on “targeting root causes rather than looking at one-off effects.” Khan said staff should look at how certain business models or conflicts of interest can help firms violate the law.
  3. Integrate more “analytical tools and skillsets” for more empirical assessments of business practices.
  4. Be “forward-looking” and acting fast to mitigate harm. Khan said this included paying special attention to “next-generation technologies, innovations, and nascent industries across sectors.”
  5. Democratizing the FTC by making sure it’s “in tune with the real problems that Americans are facing in their daily lives.”

Khan then laid out three specific policy priorities based on those goals:

  1. Addressing consolidation across industries by revising merger guidelines for businesses and deterring deals that are illegal on their face and have overwhelmed commission resources. The agency has seen such an influx in transactions that it’s begun telling some businesses to merge at their own risk even when it hasn’t finished reviewing their deals.
  2. Going after “dominant intermediaries and extractive business models.” Khan wrote that “Business models that centralize control and profits while outsourcing risk, liability, and costs also warrant particular scrutiny, given that deeply asymmetric relationships between the controlling firm and dependent entities can be ripe for abuse.”
  3. Assessing how contracts can set up unfair methods of competition or deceptive practices. Khan mentioned non-competes and repair restrictions in the memo.

Khan encouraged her staff not to think of the consumer protection and competition divisions of the agency as completely separate, and “instead apply an integrated approach.” She also said the agency should expand its “regional footprint” so some members of staff will live in the areas where its work has an impact and the agency can recruit more diverse talent. She added that FTC should hire more technologists and experts from different fields to strengthen its work.

Khan’s tenure at the FTC has been marked by enthusiasm from progressives who see her as a fresh voice for an agency that has been criticized at points for dragging its feet on enforcement, particularly against the tech industry.

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