Policy

Lina Khan wants to hear from you

The new FTC chair is trying to get herself, and the sometimes timid tech-regulating agency she oversees, up to speed while she still can.

FTC chair Lina Khan

Lina Khan is trying to push the FTC to corral tech companies

Photo: Graeme Jennings/AFP via Getty Images

"When you're in D.C., it's very easy to lose connection with the very real issues that people are facing," said Lina Khan, the FTC's new chair.

Khan made her debut as chair before the press on Wednesday, showing up to a media event carrying an old maroon book from the agency's library and calling herself a "huge nerd" on FTC history. She launched into explaining how much she enjoys the open commission meetings she's pioneered since taking over in June. That's especially true of the marathon public comment sessions that have wrapped up each of the two meetings so far.

"The agency's decisions in actions affect the lives of so many people around the country," Khan explained, and those public comment opportunities "have been hugely important in surfacing issues that might not have been front-of-mind for commissioners."

Indeed, the comments have become something of an open mic on consumer protection and antitrust, and so far surfaced frustrations from across the U.S. with food delivery apps, right-to-repair limits, connected devices and more.

Khan has moved to streamline the FTC's process for adopting new rules to govern unfair or deceptive practices that are widespread in the U.S. economy. These venting sessions may well provide the basis for those agency efforts, even though such broad rule-makings led Congress to prune the agency's power in the 1980s.

But the public comments seem to provide something else for Khan — a way to get herself, and the whole FTC, up to speed on the biggest issues affecting businesses and consumers while Congress and the White House still want the agency to move quickly.

"My approach generally is really to make sure at a first order level we're understanding fully what's going on," said Khan, a 32-year-old law scholar who became a leader of the movement for antitrust reform, and now one of its chief enforcers, in just a few short years. She said she's especially interested in the incentives at work in particular markets and business models.

As she spoke at FTC headquarters, she alluded to the various criticisms of the agency: that it doesn't fully understand the would-be tech giants and the digital markets they've come to dominate, that it's pulling its punches even with the powers it has, that it's too afraid of losing in court and setting bad precedent.

Khan said many of those criticisms are fair and that the FTC's worry about the state of its powers in particular was getting in the way of needed enforcement. "If you're not bringing cases, you're not signaling that there are any problems in the market," she said.

The agency has recently seen some stinging losses in court. The Supreme Court in April curtailed the FTC's authority to quickly secure money for consumers, and in June a federal court temporarily dismissed its marquee antitrust case against Facebook.

For now, though, Congress and the White House seem inclined to back the FTC in corralling tech after years of companies facing virtually no regulation and insisting they've done nothing wrong. The gridlocked Congress, for instance, has looked to the FTC on issues like privacy and competition. President Joe Biden, in naming Khan as chair, seemed to take for granted the criticisms that the FTC has for decades been too timid and intellectually out-gunned under Democratic and Republican administrations alike.

In July, Biden even issued his own sweeping order on competition, which Khan called "a hugely significant document." Then there have been her own efforts — to speed up rule-makings, to remove the agency's self-imposed limits on its powers over "unfair methods of competition," to issue guidance boosting consumers' rights to repair their devices and to clear the way to require more disclosure of future deals from those who break the merger laws. The monthly open meetings are new, too.

"It's, what — week five, week six for us?" she said, adding that she's giving herself the rest of the summer to "understand how the agency works" and get a sense of what's already being worked on so she can implement her agenda.

Khan is hardly working alone. The agency's chief technologist recently floated the idea of forcing companies to give up algorithms built on data abuses and restructuring companies that "sacrifice security" illegally. Khan and the other commissioners also spent Wednesday testifying in a congressional hearing about what kinds of additional consumer protection powers and funding the agency is seeking.

It's a long and ambitious set of changes to have rolled out in just a few weeks, far more than the bread-and-butter patrolling for scams and potentially anticompetitive mergers that has defined the FTC's efforts in recent decades. And those are just the things Khan will talk about. She and an aide declined to answer questions about the Facebook case, which the FTC must re-file by mid-August to continue, or its Amazon investigations, or the two companies' efforts to have her recuse herself from their cases because of her prior work in law journals and Congress.

The recusal petitions are the most obvious attempt to reshape how Khan is doing things, but she's also facing plenty of criticism. The two Republican commissioners said the recent changes at the FTC create uncertainty for businesses and discard guardrails that courts and Congress have urged on an agency that was once derided as a "National Nanny." They also claimed they've been kept out of the decision-making loop on the shifts, despite Khan's assertions that she's trying to increase transparency at the agency.

"These changes seem to be a clear attempt by the new chair and the Biden-Harris administration to consolidate power in order to pursue an agenda that will completely re-shape our economy," Rep. Cathy McMorris Rodgers, the top Republican on the House's powerful Energy and Commerce Committee, said at a Wednesday oversight hearing.

McMorris Rodgers said that, given the changes, it's "hard to justify" the FTC's regular pleading for more money and power, and Rep. Gus Bilirakis, the top Republican on the subcommittee holding the hearing, even announced his office was soliciting messages from FTC whistleblowers.

"This committee definitely cares about the FTC process remaining open and transparent," Bilirakis said.

For instance, two recent bills, out of several proposed by Republican members, would create time limits on consent decrees — meaning FTC settlements with companies would have built-in expiration dates — and raise standards for the FTC to declare certain practices "unfair." The bills stand little chance in the Democratic-controlled House, and even some Republican members have joined with Democrats to urge the FTC to move forward on tech. But the risk to Khan's agenda is hardly theoretical.

Congressional elections come every two years, and Republicans will surely return to power at some point. Congress, even under Democrats, has previously rebuked the FTC. Perhaps most famously, the agency's attempts to regulate children's advertising in the 1970s prompted a campaign from advertisers that damaged the agency's reputation and resulted in lawmakers reining in the agency's regulatory powers.

The cycle of the agency pushing harder on rules and cases, only for Congress to yank it back, goes much further than the Trump or Obama administrations. The pattern dates all the way back to the first decade of the FTC, which was founded in 1914.

Khan made clear she's aware of this: The old book she brought along, which she picked up during an earlier stint as an agency staffer, is from the FTC's 1918 report on the meatpacking industry.

"This is actually the report and subsequent action that then led the agency to have its jurisdiction limited in this area," she explained. "There was a sense that the agency had gone too far and investigated too hard."

Khan said the changes she's pursuing are often about trying to fully leverage what makes the FTC unique, especially its ability to police "unfair methods of competition" and "unfair or deceptive acts or practices."

"That's one core prism of how I'm thinking," Khan said. "I'm sure some of this thinking will evolve."

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