FTC Chair Faces Criticism in Congressional Hearing – Trending2days


Lina Khanthe chair of the Federal Trade Commission, faced more than three hours of criticism and ridicule from Republicans in a House hearing on Thursday, as emboldened critics increasingly put pressure on the agency for its crackdown on the growing power of tech giants.

During the highly partisan hearing, Republicans accused Ms. Khan, 34, who has carried out an aggressive agenda of lawsuits and investigations against tech companies, of “harassing” businesses. The lawmakers, who repeatedly cut off Ms. Khan midsentence, also ridiculed her for the FTC’s recent losses in antitrust cases and for wasting government resources.

“You are now 0 for 4 in merger trials,” Representative Kevin Kiley, Republican of California, said at a House Judiciary Committee hearing. “Why are you losing so much?”

The blistering session capped a bruising week that has brought greater scrutiny to the FTC. Khan’s first public appearance since a judge ruled on Tuesday against the agency’s attempt to stop Microsoft’s $70 billion acquisition of Activision. It was a major defeat in a tech case for the FTC after another judge decided in May against its attempt to block Meta’s acquisition of a virtual reality app maker, Within.

Ms. Khan, a legal scholar, has become a lightning rod for her efforts to rein in corporate power and to give the FTC more teeth in enforcement. Since President Biden picked her to lead the agency two years ago, she has said the FTC was too complacent and needed to pursue more lawsuits against companies, even if it did not always win. Even in court losses, she has said, the cases expose the need to update antitrust laws for the digital age.

Ms. Khan’s aggressive agenda, which has spanned industries beyond tech, has rattled the agency, where two Republican commissioners and several senior officials have resigned. Christine Wilson, one of the former Republican members, accused Ms. Khan of abusing her power as chair, This month, Mr. Biden nominated the solicitor general for Virginia, Andrew Ferguson, and for Utah, Melissa Holyoak, to fill the Republican seats.

In Thursday’s hearing, Ms. Khan appeared unruffled. She highlighted the FTC’s challenges to mergers in the pharmaceutical, semiconductor, defense and energy markets. Many of those challenges did not go to court.

She said she didn’t bring cases that she thought would lose but, without referring to the Microsoft case, acknowledged the risks of her strategy.

“We fight hard when we believe there was a law violation, and unfortunately things don’t always go our way,” Ms. Khan said.

The losses have not weakened her focus on the tech industry. On Thursday, the FTC filed to appeal the court decision on Microsoft’s deal with Activision. Also this week, it opened an investigation into the artificial intelligence start-up OpenAI, which makes the ChatGPT chatbot, for potentially harming consumers with privacy and security lapses and for spreading false information about individuals.

Ms. Khan’s strategy may take years to pay off, said Megan Gray, a lawyer and a former member of the FTC’s staff. “She knows that this is a long-term effort and this is not a Pollyanna new antitrust push,” Ms. Gray said.

The White House reiterated its support for Ms. Khan on Thursday. “Chair Khan has delivered results for families, consumers, workers, small businesses and entrepreneurs,” Michael Kikukawa, a White House assistant press secretary, said in a statement.

At the hearing, the court loss this week provided more ammunition for Republicans in their complaints against the FTC

Representative Darrell Issa, Republican of California, criticized Ms. Khan’s judgment in pursuing the case to block Microsoft’s acquisition of Activision. Regulators rarely bring cases against so-called vertical mergers of two companies that don’t compete directly. That was the case with Microsoft, a console maker, and Activision, a video game maker. And Sony, Microsoft’s competitor, has a large market share, Mr. Issa said.

He also criticized the FTC for pursuing a case to block the pharmaceutical giant Illumina from merging with Grail, a cancer test maker, after a judge in the agency’s internal court disagreed with its fight to prevent the deal.

“My problem here today is that you’re a bully,” Mr. Issa said. “The reality is we are a global market, and you are thinking only of who you want to go after for some reason. And I can’t find your logic.”

Representative Jim Jordan, the Republican chair of the Judiciary Committee, accused the agency of “harassing” Twitter in its investigation of the company’s security practices. Mr. Jordan, who has accused Democrats of censoring Republican views, has praised Twitter’s owner, Elon Musk, for loosening restrictions on speech.

“My concern is the sustained attack on Twitter when the ownership there changed,” Mr. Jordan said.

Ms. Khan replied: “We at the FTC have no view on who should or should not own a company. All we care about is that the company is following the law.

Democrats came to Ms. Khan’s defence.

Representative Jerrold Nadler from New York, the committee’s ranking Democrat, said it was the FTC’s job to investigate Twitter for violating a consent decree that it agreed to more than a decade ago after previous security violations.

“Unfortunately, I expect that today you will be the target of a barrage of personal attacks and wild accusations about the work of the FTC under your leadership,” Mr. Nadler said.


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