By Trey Price, American Consumer Institute
The Federal Trade Commission (FTC) and its Chair, Lina Kahn, are facing increased scrutiny over ethics and agency direction. Ahead of her upcoming testimony before the House Judiciary Committee on July 13th. Khan is accused of dishonesty regarding her testimony where she incorrectly told Congress under oath that she had followed all ethics advice. This false testimony is spurring existing calls for increased FTC oversight.
The false testimony stems from recommendations by the Designated Agency Ethics Official (DAEO) regarding statements Kahn had made about Meta before joining the FTC. Bloomberg News reported that Khan had been advised that her past statements against Meta could constitute an appearance of bias when pursuing actions against the company. This led the DAEO for the FTC to recommend Kahn recuse herself.
Ultimately it was Kahn’s decision since there was no definitive demonstration of any conflict of interest; however, refusing even non-binding ethical recommendations is highly unusual for presidential appointees. Chair Khan released a letter of her own detailing why she didn’t recuse herself, arguing that past statements did not disqualify her from taking part and that since Meta had made several mergers while she worked at the FTC she hasn’t categorically opposed all acquisitions by Meta. Kahn’s decision went against ethics advice and testified in front of the Energy and Commerce Committee anyway and falsely said she had followed all ethics advice.
On June 28th, two Republican heads of Congressional committees sent a public letter to Chair Khan calling out this false testimony under oath. The letter goes on to request all documents related to her testimony to the Energy and Commerce Committee in which she made the false statement as well as communications regarding ethics.
This accusation is the latest in a series of controversies related to Chair Khan’s leadership of the FTC and the agency’s direction. Earlier this year former commissioner Christine Wilson publicly resigned with a letter criticizing Chair Khan and the changes she had made to the FTC. In the letter, Wilson explained that experienced staff members were being disregarded and provided statistics detailing the subsequent collapse in morale and brain drain from the agency. Surveys also say that FTC staff fear reprisals for disagreeing with Khan’s approach and ideology. This change in approach is shown by FTC intervention in cases beyond what would normally be justified by the Consumer Welfare Standard (CWS).
As mentioned in Wilson’s letter, the FTC has historically been a bipartisan agency. Following Wilson’s departure, all commissioners are Democrats pending the approval of two recently nominated Republicans. Chair Khan’s more ideological approach to antitrust enforcement has undermined the institution’s historically bipartisan efforts of consensus building as well as jeopardizing the agency’s core mission of ensuring consumer welfare.
The omission under oath is indicative of larger ethical concerns regarding the integrity of the FTC which has culminated in the exodus and staff and caused the agency to significantly stray from its mission. The agency, under Khan, has become a polarizing influence rather than focusing on its core responsibility to protect consumers. The FTC is in desperate need of more oversight to help avoid situations like this where the entire agency has succumbed to the whim of a motivated partisan as well as help it better fulfill its mandate to the American people in this administration and beyond.
Trey Price is a technology policy analyst for the American Consumer Institute, a nonprofit education and research organization. For more information, visit https://www.theamericanconsumer.org/ or follow us on Twitter @ConsumerPal.