Amazon and Facebook’s Strange Campaign Against FTC Chair Lina Khan

The Industry

The tech giants are trying to derail one of their biggest threats before she gets started. Could it work?

The chief antitrust hipster.
Graeme Jennings-Pool/Getty Images

The foremost trustbuster in the federal government has been on the job for just a few weeks, and Amazon and Facebook are already trying to kneecap her. In late June, Amazon filed a motion to have Federal Trade Commission chair Lina Khan recuse herself from cases and investigations relating to the company, arguing that her previous work and public statements have shown her to be biased against the ecommerce giant. Amazon’s lawyers maintained that Khan “has already made up her mind about many material facts relevant to Amazon’s antitrust culpability as well as about the ultimate issue of culpability itself.” The FTC has reportedly begun investigating Amazon’s recently announced acquisition of MGM, with particular focus on how the deal would augment the company’s market power. Then, just this week, Facebook filed its own petition, which quoted liberally from Amazon’s motion, also requesting that Khan abstain from participating in any decisions regarding antitrust actions against the social networking company.

As much as someone can be, Khan is an antitrust celebrity. The 32-year-old Columbia Law professor first came to prominence after publishing a 2017 Yale Law Journal paper titled “Amazon’s Antitrust Paradox,” which generated a lot of buzz and discussion in the legal community about decades of arguable shortcomings in antitrust law, which generally focuses on consumer prices these days, for dealing with mammoth tech companies. Following her graduation from Yale Law School, she became a legal director at the Open Markets Institute and helped Massachusetts Sen. Elizabeth Warren devise an anti-trust platform. Khan consulted the House antitrust subcommittee for its report concerning the alleged monopoly powers of Facebook, Google, Amazon, and Apple. Politico Magazine named Khan one of the 50 most influential people shaping America’s political discourse in 2018, and she was the subject of profiles in the Atlantic and the New York Times before being confirmed as an FTC commissioner, and then named the agency’s chair, last month. She’s been both hailed and derided as an antitrust “hipster,” a term that has sometimes been applied to a growing movement to rethink antitrust law.

It’s fairly unusual for someone to take such a high-profile path to leading the FTC, and Facebook and Amazon seem to be trying to use Khan’s relative stardom against her. Whatever you call her, it’s clear the companies have decided that Khan is someone to fear. But could their early moves against her actually work?

In their complaints, Amazon and Facebook point to Khan’s academic publications and commentary in the media as evidence that she cannot be impartial. The thrust of their recusal requests is that she’s actually named names of companies that she thinks are wielding monopoly powers instead of speaking more broadly about antitrust. As Facebook argued in its petition, “She has built her career, in large part, by singling out Facebook as a professed antitrust violator.”

It’s true that Khan has focused on technology companies, but it’s hardly suspect that someone who studies market concentration in the United States has examined Amazon and Facebook. “The irony is that it’s because these companies are so very big and successful that she was able to spend so much of her career focused on a handful of companies,” said Stephen Calkins, a law professor at Wayne State University who previously served as general counsel of the FTC. “Now they’re turning that against her and are obviously hoping that that will resonate in the court.” If Khan does end up removing herself, there would very likely be a 2-2 split vote between the remaining Democratic and Republican commissioners when considering the cases. (The FTC declined to comment on either Facebook or Amazon’s requests.)

The unusual petitions are unlikely to actually result in a recusal, however. Recusal issues at the FTC generally involve commissioners’ personal conflicts and activities while serving in an official capacity—not the scholarly work they’ve done and the views they hold. For instance, privacy groups called on former FTC chairwoman Deborah Platt Majoras to remove herself from the FTC’s review of Google’s proposal in 2007 to buy the online ad company DoubleClick because her husband was a partner at the law firm Jones Day, which had been advising DoubleClick. Majoras ultimately decided not to recuse herself. In 1980, FTC chairman Michael Pertschuk actually went ahead and withdrew from the agency’s investigation of TV advertising directed at children, because of interviews and speeches he’d done on the subject. However, he voluntarily recused himself after an appeals court already had ruled that he could take part in the case, and the interviews and speeches in question primarily took place while he was an FTC official.

It’s Khan herself who must consider Facebook and Amazon’s requests, and according to Calkins, she probably won’t voluntarily recuse herself. When asked about the possibility of recusal during her confirmation hearing, Khan asserted that she wouldn’t run afoul of ethics laws in scrutinizing Big Tech companies. “I’m confident that if she was thinking she would recuse herself, she would have told the White House not to nominate her,” Calkins said. There are scenarios in which Khan’s previous work could be more of a liability for the FTC’s potential regulation of Facebook and Amazon, particularly if FTC decides to handle either antitrust case through an administrative law process, as opposed to pursuing an antitrust remedy in court. In such an in-house case, Khan would oversee the case essentially as a judge and have more power over the proceedings. Yet FTC rules would allow Facebook and Amazon in an administrative law setting to file a motion pushing the other commissioners to vote on whether they believe that Khan is too biased. If the FTC instead decides to go through federal courts to adjudicate their cases, where an actual judge would be presiding, there wouldn’t be as much scrutiny on Khan’s alleged bias. (Already, the FTC’s lawsuit against Facebook, filed under the Trump administration, was kicked back to the commission by a federal judge, and it will now need to decide whether to refile it or opt for its own administrative process.)

It’s more than likely, though, that Facebook and Amazon aren’t really expecting the petitions to succeed and mainly filed them to set the stage for potential court cases. If there were an antitrust trial, the companies’ lawyers would almost certainly bring up Khan’s previous work, and they’d need to show that they’d already raised such objections. “They pretty much have to raise them now so that they could raise them in court,” said Calkins. “The judge might say, ‘Well, if you were concerned about this, why didn’t you ask her to recuse herself?’ And then Facebook would be sitting there looking at its navel and feeling stupid.” FTC rules also dictate that, for administrative law processes, defendants have to raise such concerns as soon as they are aware of them.

There’s another, related possibility: that, as my former colleague Will Oremus pointed out, Facebook and Amazon aren’t really trying to get Khan to recuse herself at all, but are more concerned with the public perceiving that Lina Khan is hopelessly biased.

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Aaron Mak