Federal Trade Commission at Full Strength: What to Expect Next

Shortgo Posted On May 16, 2022

With Alvaro Bedoya’s confirmation to the Federal Trade Commission, the agency is once again poised to advance the radical agenda of Chair Lina Khan.

Bedoya, the fifth member of the Commission, represents the tie-breaking vote Khan needs to dramatically change the role of the FTC to “shape the distribution of power and opportunity across our economy.”

The FTC has a long history of working in a bipartisan fashion. For the last 40 years, the FTC has operated under the principle of letting economic analysis guide enforcement, with harm to the consumer being at the center of how the laws are enforced. Importantly, the FTC serves as a check on commerce whenever a business operates in an anticompetitive fashion or engages in questionable conduct. At the heart of its mission rests the interest of the consumer, and its enforcement agenda has always been targeted at specific behavior and geared toward market-oriented solutions.

This historical, bipartisan approach is now under imminent threat as Khan has demonstrated a willingness to discard longstanding rules and processes to achieve her objectives.

Unleashing the wrath of Kahn

Looking back to last summer when Chair Khan briefly held a majority provides a preview of what to expect from a fully empowered Khan FTC. Khan wasted no time consolidating power, overturning bipartisan FTC policy, process, and precedents. She eliminated all references to the FTC’s antitrust enforcement mission of supporting market forces. She moved to ensure investigations could be made compulsory by the vote of a single commissioner. She sidelined the role that the FTC’s Administrative Law Judge plays in drafting consumer protection rules. And most egregiously she stockpiled a series of “zombie votes” from a former commissioner to be used after his departure as she saw fit.

As her underlying agenda becomes more evident, it’s clear that Chair Khan is willing to engage in rulemaking that is not intended to protect consumers, but rather designed to regulate entire industries. In fact, she has explicitly stated that the measures she wants to pass are necessary to exert control over entire industries. The focus on regulating sectors instead of policing the actions of individual companies ignores any consideration of the economic impact to whole industries and poses an imminent threat to American competitiveness.

FTC Commissioner Wilson has had a front row seat to Khan’s leadership. While one might expect a Republican commissioner to be critical, Wilson’s criticism should not be overlooked. Wilson’s running commentary of Khan’s lack of transparency and abandonment of longstanding procedural norms upheld by former chairs from either party is particularly noteworthy. More recently and more troubling, Wilson gave a compelling, full-throated, deeply researched critique of Khan’s allegiance to neo-brandeisian economic views and its parallels to Marxism. This chilling speech foreshadows, often in Khan’s own words, the consequentially damaging economic plans of an unelected elitist’s ruling class of academics.

We now know that Wilson’s critique of Khan’s leadership is widely shared by FTC staff. While the FTC has long been one of the most beloved and highly respected agencies from the perspective of the federal employees that work there, consistently ranking among the very top in the annual federal employee survey, staff views at the agency have plummeted since Khan’s arrival.

Career staff sentiment has dropped from 87% to 53% regarding their belief that senior leaders maintain “high standards of honesty and integrity”. And the level of respect staff has for senior leaders has dropped from 83% to 49%. None of this should be a surprise because Khan’s attitude is that those who have worked and continue to work at the FTC are part of the problem. Everything they have done for decades stands in the way of Khan’s interest to use the agency to micromanage the economy to her own liking.

With the FTC absent a fifth Commissioner, the policy and enforcement agenda for the last several months has required bipartisan approaches. But all that changes with Bedoya’s confirmation. He may not be a rubber stamp for Khan, only time will tell. But what is clear is Khan’s desire to not only pursue a bellicose enforcement agenda, but also to usurp the power of Congress and wade into controversial rule making that exceeds the FTC’s statutory authority. The only thing standing in her way is the lack of sufficient support from fellow commissioners, Congressional oversight, and the courts. Left unchecked Khan’s agenda will do real, irreversible damage to our economy.