Facebook seeks to dismiss FTC Chair Lina Khan in antitrust case

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Washington – Facebook Inc. to the removal of Federal Trade Commission Chair Lina Khan from the agency’s deliberations on whether to file a new antitrust case against the company, arguing that it cannot be impartial due to its long history of criticizing it and other big-tech companies.

“Chairman Khan has consistently made public statements not only accusing Facebook of disapproving conduct, but specifically expressing her belief that the conduct is consistent with elements of an antitrust crime,” the company said Wednesday in a formal disapproval petition filed with the Federal Trade Commission.

“When the new commissioner has already drawn factual and legal conclusions and held that the target is against the law, the due process of law requires that individual to step down,” Facebook said in the petition.

An FTC spokeswoman did not immediately respond to a request for comment. Ms Khan has previously said she will consult with ethics officials at the Federal Trade Commission if questions of stepping down arise.

Facebook’s request comes two weeks after a similar rejection petition was filed by Amazon.com Inc. , which is facing multiple FTC investigations, and is the latest sign that the tech giants prefer aggression over a conciliatory approach with Ms Khan, who has built her career calling for bold antitrust action to rein in Silicon Valley’s dominant players.

President Biden appointed Ms Khan as chair of the Federal Trade Commission last month, as part of a growing management effort to curb corporate power.

Twitter CEO Jack Dorsey and Google CEO Sundar Pichai have stopped endorsing Facebook CEO Mark Zuckerberg’s proposed changes to Section 230, a law that defines who is legally responsible for online content. Photo: C-SPAN

The Federal Trade Commission must soon decide whether to file a new antitrust lawsuit against Facebook after a judge dismissed the FTC’s previous complaint as legally insufficient. With deadlines approaching in the case — the judge’s June 28 ruling gave the Federal Trade Commission 30 days to file an amended lawsuit — Khan may be forced to face the stepping down case in a swift timeframe.

Ms. Khan has been a prolific writer on antitrust issues, particularly in relation to major technology companies. She previously worked for a progressive antitrust advocacy group and was a key employee on the Congressional Antitrust Committee that conducted a 16-month investigation of large online platforms and last year recommended that lawmakers take steps to rein in them.

The FTC’s vote on a new Facebook lawsuit is likely to be divided. Democrats have a 3–2 commission majority; If Ms Khan sits down, there likely won’t be a majority to sue Facebook again. The commission’s two Republican commissioners voted against the FTC’s first lawsuit against Facebook in December.

The FTC, along with 46 states, alleged that Facebook engaged in an illegal monopoly, including by buying other companies like WhatsApp and Instagram to prevent them from challenging Facebook’s market position. The company denied the allegations, saying it competed fairly and achieved success because its services are popular with consumers.

In a ruling last month, US District Judge James Boasberg in Washington dismissed the FTC’s case at the start of pretrial proceedings, saying the FTC had not made sufficient allegations to support antitrust lawsuits against Facebook. He also said the FTC does not properly challenge Facebook’s policy of refusing to grant interoperability permissions to competing apps. The judge gave the committee 30 days to file a new lawsuit that attempts to make more detailed allegations.

Under the statutory criteria governing disqualification, a corporation seeking to disqualify the commissioner on the basis of a prior judgment must show that the impartial observer can conclude that the commissioner has already judged both the facts and the law in advance before the action can be made.

Ms Khan has to decide in the first place how to process Facebook’s request to be excluded. Past FTC practices show that, at least in some circumstances, the entire commission can have an effect.

Disqualifications have not had much success in the modern era, but there are old court rulings that have overturned FTC enforcement actions on the grounds that the commissioner should have been disqualified.

Write to Brent Kendall at [email protected]

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