NRPLUS MEMBER ARTICLE L ast month’s congressional hearing featuring Federal Trade Commission (FTC) chairwoman Lina Khan uncovered a troubling state of the agency. Khan’s answers to questions from the House Judiciary Committee demonstrated that she conflates the FTC’s responsibilities with her long-held ideology that fuses politics and antitrust, undermining the power of consumer choice and the principles on which a free economy thrives. Her allocation of resources to questionable investigations and potential speech regulation further erodes confidence in the agency’s intentions. And the FTC’s attempts to expand its regulatory authority through strategic lawsuits and pressure on Congress set a dangerous precedent.
Khan once served on the committee staff, but the hearing was far from a cordial reunion. The hearing openly aimed to scrutinize what GOP committee members saw as the agency’s mismanagement, disregard for ethics, and politicization under Khan’s leadership. Often characterized as a partisan affair in the media, with Republicans on the offensive and Democrats on the defensive, the hearing did more than expose the existing political divide; it shed light on serious concerns about the FTC.
One of the alarming revelations was Khan’s belief that politics should drive antitrust enforcement. When questioned about social-media censorship by Jim Jordan (R., Ohio), Khan candidly expressed her view that antitrust is fundamentally about keeping businesses small. This perspective, held by Khan and other neo-Brandeisians, elevates politics over market dynamics and disregards the essence of a free economy. Adam Smith, the renowned economist, emphasized that business performance should be driven by consumer choice, not government intrusion. Antitrust’s guiding principles should be protecting consumer sovereignty and supporting honest business, rather than concentrating power over consumers and businesses in the hands of a select few neo-Brandeisians, whom Thomas Sowell would call “the anointed.”
Another cause for concern is the FTC’s allocation of resources to questionable investigations. Congressman Jordan pointed out that the FTC’s Twitter investigation appears politically motivated. Khan failed to dispel his concerns, claiming that consumer privacy was the objective of the Twitter probe. However, a GOP staff report reveals that the FTC’s evidentiary requests to Twitter went beyond privacy concerns, such as demanding that all internal communications mentioning Elon Musk be turned over to the commission. Moreover, the FTC’s reported interest in the identities of journalists interacting with Twitter raises First Amendment concerns about the potential regulation of free speech and freedom of the press.
The committee also questioned the FTC’s investigation into ChatGPT. Khan’s justification was that the owner, OpenAI, might be engaging in “fraud and deception,” citing reports of “defamatory statements” and “flatly untrue things” from the service. But the platform’s disclaimer clearly states that it makes no claims that its output is factually correct. This raises further questions about the FTC’s true intentions.
Additionally, the FTC seems to be extending its regulatory reach beyond its rightful authority. Congressman Kevin Kiley (R., Calif.) questioned Khan about the FTC’s track record of losing merger cases, to which she responded that she believed the mergers were illegal, but sometimes court decisions do not favor the agency. However, filing losing cases appears to be part of her larger strategy to reshape antitrust regulations. The New York Times interviewed a former FTC staffer who revealed that these cases are part of a long-term effort to redefine antitrust principles. The NYT cited Khan expressing her hope that losing court battles might pressure Congress to enact more stringent antitrust laws. Also, companies contemplating mergers now must consider the potential consequences of trigger-happy FTC opposition. The agency’s litigation and extensive discovery processes can impose substantial costs, drain executives’ time, and introduce delays that render mergers futile.
The troubling state of affairs at the FTC raises valid concerns about the direction of antitrust enforcement and the agency’s declining respect for free markets and individual liberties. How long will it take, then, for the FTC’s crusade against a consumer-driven economy to prompt Congress to action? If the crusade continues, it is imperative for Congress and the courts to set boundaries for the FTC and ensure that antitrust enforcement remains grounded in principles of economic freedom and consumer choice.