Facebook is shocked, calls for removal of FTC chairman Khan from antitrust cases against it – TechCrunch

Facebook has joined Amazon to be alarmed at the sudden rise of antitrust hawk Lina Khan to the position of FTC chairman by asking that she be barred from all decisions related to the company. The argument, more or less identical to Amazon’s, is that before her appointment, Khan was too outspoken about her professional opinion that these types of companies violate antitrust rules.

In a letter filed with the FTC and obtained by the WSJ, which the agency was unable to provide and declined to comment, Facebook explained that Khan’s academic publications and articles in other media outlets have prompted withdrawal of decisions about the company in recent years. (I have asked Facebook for a copy of the petition and will update this post when I receive it.)

“Chairman Khan has consistently made public statements accusing Facebook not only of conduct deserving of censure, but also expressing specifically her belief that the conduct complies with the elements of an antitrust offence. When a new commissioner has already drawn factual and legal conclusions and has deemed the target a lawbreaker, due process requires that person to withdraw themselves,” the petition reads.

Neither the FTC nor Khan in any other capacity have responded to Facebook’s and Amazon’s rebuttal requests. She noted in her nomination process that such challenge requests occur and are resolved on a case-by-case basis (as opposed to automatic challenges for things like financial or personal interests). She may already be meeting with the bureau’s ethics experts.

However, Khan has certainly made her policy positions known in numerous articles and newspapers, many of which have argued that antitrust regulators have been very conservative in their interpretation and use of their legal powers, and equally lenient in their oversight of the current crop of huge tech companies. Things like acquiring competitors, artificially lowering prices to pressure a market, or misrepresenting the collection and use of customer data are undisputed or minimally punished.

In particular, she counseled for the House’s investigation into competition in digital markets, an antitrust report released last fall. Amazon and Facebook rely on 1966 and 1970 cases in which an FTC commissioner was dismissed for “bias” about a case during a congressional investigation in which he participated. It is certainly a promising hook to hang a suitcase from, but the circumstances are by no means equivalent. I’m no lawyer, but it doesn’t seem to me that any case or even specific allegations have been pre-empted, just the general idea that Facebook, Apple, Google and Amazon all have monopoly or otherwise have market power. (They didn’t care much when the report was released.)

The main finding of the House report was in fact that there could be no legal action because the existing legislation and regulations are inadequate. Khan has certainly been shouting this from the rooftops for a number of years, but the conclusion is a legislative issue, not an FTC issue. It would be extremely difficult for Khan to anticipate an antitrust case based on laws that have not yet been written.

Khan’s FTC has had an early setback on her watch, but not from her dismissing some of the complaints in the agency’s current antitrust case against Facebook. Lacking evidence that the company exercises monopoly control over social media, the judge told the FTC to come back and try again. Maybe Khan plans to remedy that with an additional application, or maybe she’ll take the loss and try her hand at her forces again in a year or two, but either way it’s probably best to raise the issue from her. alleged “bias” before that decision is announced. (The FTC declined to speculate on whether the recusal request would affect the current proceeding.)

But the agency also has explicit support from the White House in the form of President Biden’s request to prioritize “dominant Internet platforms, with a particular focus on the acquisition of emerging competitors, serial mergers, the accumulation of data, competition by free products and the effect on user privacy.” So Khan probably doesn’t feel the sting of the aforementioned legal challenge.

The petitions filed by Amazon and Facebook have almost no risk to the companies and an outside chance to provoke a denial, so it makes strategic sense to file them. They also later offer breadcrumbs for their unavoidable objections to the FTC’s (under Khan, equally unavoidable) accusations of monopolistic practices. The legal consequences are difficult to predict, but it is usually better to bring a complaint on the table than to bring it up late in the process.

Given Chairman Khan’s stance that the FTC itself should be overhauled and given more powers to bring such actions against companies like Facebook, it seems clear that these are all just the first scandals in a long, long game.