Surveying the Damage Done by Khan at the FTC

By Robert Bork Jr.

November 18, 2024

Surveying what will soon be the post-Lina Khan Federal Trade Commission is a bit like being the hotel manager who walks into a room after a rock star has checked out. The mirrors are shattered, the bed is broken, jagged champaign bottle fragments are everywhere, and the television seemed to have been hurled out the window.

Okay, a bit of an exaggeration. But consider Corbin Barthold’s scathing synopsis in City Journal of the managerial, ethical, and philosophical mess Lina Khan is leaving as the departing chair of the Federal Trade Commission. Here’s one of many of his money quotes:

“Despite her scattershot leadership style, Khan did have a clear mission: upending the consumer-welfare standard. For decades, the standard has required courts and regulators to train their attention on corporations that abuse monopoly power (or seek to obtain it via merger) in a way that stifles efficient competition. This narrow focus ensures that antitrust law promotes low prices, high product quality, and market innovation.

“But Khan attacked consumer welfare in ways large and small. Within days of assuming office, she shredded an FTC policy statement that had endorsed it. She brought enforcement actions that tried to evade the standard or to expand it beyond recognition. She strove to make it as hard as possible for any merger, regardless of consumer benefit, to move through the agency’s review process. On her watch, the FTC colluded with European regulators to block deals, and claimed, implausibly, that it had the authority to write its own antitrust rules.”

Barthold reminds us that Khan’s “norm-busting” began with the bait-and-switch trick the Biden Administration played with the Senate, nominating her for a commission seat then elevating her to Chair. Then the twist of the knife: “How much damage has Khan done? Fortunately, less than you might think.

“The simple truth is that Khan wasn’t very good at her job. She broke things that she needed.”

I would add that one thing that Barthold scores as a failure – running off the agency’s most seasoned economists and lawyer and replacing them with her acolytes – will ensure that her legacy lives on. One high-level FTC insider told me that Khan pushed out about 25 percent of the staff, while bringing in young progressives straight from academia and activist groups. The next FTC Chair will have to contend with a staff wedded to progressive antitrust and hostile to reform.

That Khan broke norms at the FTC is indisputable. That is why it will take years to clean up her mess.