Stock Groups

FTC Chair Khan outlines vision for antitrust enforcement, consumer protection

[ad_1]

Lina Khan, nominee for Commissioner of the Federal Trade Commission (FTC), testifies during a Senate Committee on Commerce, Science, and Transportation confirmation hearing on Capitol Hill in Washington, DC, April 21, 2021.

AFP – Getty Images Lina Khan, Chair of the Federal Trade Commission (FTC), laid out her vision and policy priorities in a Wednesday memo to staff. It was recently published.| AFP | Getty Images

Federal Trade Commission Chair Lina Khan laid out her policy priorities and vision in a memo to staff dated Wednesday and recently made public.

The document is an outline of the goals she has for her agency. It’s overseen by five commissioners, who are responsible for approving policy statements and enforcement actions. This agency, which is part of the Department of Justice Antitrust Division, enforces antitrust laws and protects consumers against unfair business practices.

Khan outlined five principles of her plan:

  1. A “holistic approach to identifying harms.” Khan suggested that both consumers and workers can also be hurt by antitrust or consumer protection violations. In order to establish a violation, antitrust law has often focused heavily upon consumer harm. It is commonly interpreted as whether or not prices rise. Khan argues in academic writing that a wider approach could be used to assess the harm caused by digital platforms. These platforms often offer rapid growth and charge consumers no or very low fees.
  2. It is important to focus on root causes and not just one-off consequences. Khan stated that employees should examine the ways in which certain business models and conflicts of interests can cause firms to violate the law.
  3. Integrate more “analytical tools and skillsets” for more empirical assessments of business practices.
  4. Act quickly to reduce harm and be “forward-looking”. Khan stated that this meant paying particular attention to the “next generation technologies, innovation, and new industries across all sectors.”
  5. Democratizing the FTC by making sure it’s “in tune with the real problems that Americans are facing in their daily lives.”

Khan then laid out three specific policy priorities based on those goals:

  1. Addressing consolidation across industries by revising merger guidelines for businesses and deterring deals that are illegal on their face and have overwhelmed commission resources. The agency has seen such an influx in transactions that it’s begun telling some businesses to merge at their own risk even when it hasn’t finished reviewing their deals.
  2. We are going after the “dominant intermediaries” and extractive business model. Khan said that businesses that centralize profits and control, while outsourcing risk, liability, or costs, warrant special scrutiny. Such models can lead to abuse.
  3. Examining the ways contracts may lead to deceptive or unfair practices. Khan included non-competes as well as repair restrictions in her memo.

Khan advised her staff to not think of consumer protection and the competition sections of the agency separately and instead “apply an integrated approach.” Khan suggested the expansion of the agency’s “regional footprint”, so that some employees can live in those areas with the greatest impact, and to allow for more diverse talent. To strengthen its work, she said that FTC needs to hire more experts and technologists from other fields.

Khan’s time at FTC was marked by enthusiasm among progressives, who consider her a new voice for an agency that is often criticized for its slow enforcement of laws against the tech industry.

Khan was a leader in antitrust enforcement, and she sparked the movement with her Yale Law Journal article “Amazon’s Antitrust Paradox” from 2017. The article, which Khan wrote while still a law student, argued a popular antitrust framework focused on consumer welfare was inadequate to assess dominant tech firms like Amazon.

However, her tenure at the helm was also marked by fierce opposition from two Republicans. The newly opened meetings of the commission saw Commissioners Noah Joshua Phillips, Christine Wilson and others criticize the delay in allowing public comments to be made. They also expressed concerns that some votes had been rushed.

Subscribe to CNBC on YouTube.

WATCH: Andy Jassy set to inherit Amazon’s antitrust scrutiny, regulatory risk

[ad_2]