Facebook Seeks FTC Chair Lina Khan's Removal from Antitrust Cases

Facebook Seeks FTC Chair Lina Khan's Recusal

Facebook has followed Amazon’s lead in expressing concern over the appointment of Lina Khan as Chair of the Federal Trade Commission (FTC). The company has formally requested that Khan recuse herself from any decisions pertaining to Facebook.

Basis for the Recusal Request

The request mirrors Amazon’s argument, asserting that Khan’s prior public statements demonstrate a pre-existing bias against companies like Facebook. Before assuming her role at the FTC, Khan frequently voiced her opinion that these firms potentially violate antitrust regulations.

According to a letter submitted to the FTC – details of which were reported by the WSJ, though the agency has not commented – Facebook contends that Khan’s academic work and published articles establish grounds for recusal when considering cases involving the company.

The petition states, “Chair Khan has consistently issued public statements not only criticizing Facebook’s actions but also specifically asserting her belief that such actions constitute an antitrust offense.” It further argues that due process necessitates recusal when a commissioner has already reached factual and legal conclusions regarding a company’s alleged wrongdoing.

Response from the FTC and Chair Khan

As of yet, neither the FTC nor Chair Khan has responded to the recusal requests from Facebook and Amazon. However, Khan acknowledged during her nomination process that such requests are common and are evaluated on a case-by-case basis.

Khan’s Stance on Antitrust Regulation

Khan has consistently advocated for a more assertive approach to antitrust enforcement. She has argued that regulators have historically been too lenient in their oversight of large technology companies.

Her criticisms have focused on practices such as acquiring competitors, engaging in predatory pricing, and mishandling user data. She believes these actions have often gone unchallenged or received insufficient penalties.

Role in the House Antitrust Investigation

Khan previously served as counsel for the House’s Investigation of Competition in Digital Markets, which produced an antitrust report last fall. Facebook and Amazon cite precedents from 1966 and 1970, where FTC Commissioners recused themselves after participating in congressional investigations.

However, the companies’ argument hinges on the idea of “prejudgment,” and some legal observers question the equivalence of the current situation. It’s argued that Khan has not prejudged specific cases, but rather expressed concerns about the overall market power of companies like Facebook, Apple, Google, and Amazon.

Legislative Needs and Current Legal Challenges

The House report itself suggested that existing laws may be inadequate to address the challenges posed by dominant tech companies. Khan has long maintained that legislative updates are necessary to empower the FTC to effectively regulate these firms.

The FTC recently experienced a setback in its antitrust case against Facebook, with a judge dismissing some complaints due to insufficient evidence of monopolistic control. Khan may seek to address these deficiencies with a revised filing.

White House Support and Strategic Considerations

Despite this legal challenge, Khan has the explicit support of the White House. President Biden has directed the FTC to prioritize oversight of dominant internet platforms, focusing on issues like acquisitions, mergers, data accumulation, and user privacy.

The petitions filed by Amazon and Facebook carry minimal risk for the companies while offering a potential, albeit unlikely, path to Khan’s recusal. Strategically, these filings also lay the groundwork for future objections to the FTC’s allegations of monopolistic practices.

A Long-Term Regulatory Battle

Given Khan’s commitment to reforming and strengthening the FTC, these actions are widely viewed as the initial moves in a protracted regulatory battle. The outcome will likely shape the future of antitrust enforcement in the technology sector.

Ultimately, these events signal a significant shift in the regulatory landscape for major tech companies, with increased scrutiny and potential challenges on the horizon.