The new FTC majority offers Lina Khan the chance to promote an aggressive agenda

WASHINGTON – Confirmation of a third Democrat to the Federal Trade Commission on Wednesday opened a partisan stalemate at the agency. This is good news for Lina Khanpresident of the agency and Democrat.

It is also a test.

With the FTC’s new Democratic majority – arrived with the confirmation of Alvaro Bedoya, who becomes fifth commissioner, in a post that had been vacant since October – Ms. Khan’s allies and critics are watching to see if she carries out plans to address the power enterprises. This could include filing an antitrust lawsuit against Amazon, setting up online privacy rules, and harnessing little-used agency powers to clip the wings of companies like Meta, Apple, and Google.

As Congress remains stalled and midterm elections draw closer, agencies like the FTC and the Justice Department are arguably the best hope left for activists and politicians who want the government to limit corporate power. President Biden, who promised to crack down, last year ordered the FTC and other federal agencies to take steps to limit concentration.

Under the leadership of Ms. Khan, 33, who became president in June, the FTC has already attempted to crack down on mergers by threatening to challenge the deals after they close. The commission said it will punish companies which make it difficult for users to repair their products. And it solved a case with the company once known as Weight Watchers on a diet app that collected data from young children.

But Ms. Khan’s new Democratic majority is essential to a broader “realization of her vision,” said William E. Kovacic, former president of the FTC, “And time is ticking.”

In a statement, Ms. Khan said she was “thrilled” to work with Mr. Bedoya and the other commissioners. She didn’t address how the new FTC majority would affect her plans.

The FTC’s previous split between two Republicans and two Democrats led to a dead end. In February, the commission failed to reach an agreement to go on with a study of pharmacy benefit managers’ practices.

Sarah Miller, the executive director of the American Economic Liberties Project, a progressive group that wants greater antitrust enforcement, described the two FTC Republicans, Noah Phillips and Christine Wilson, as “libertarian residents” who have “somehow pulled the brake “to the lady. Khan’s ability to carry out his agenda.

Mr. Phillips said in an email that he supports the commission’s “long tradition of bipartisan work to advance the interests of American consumers.” But he won’t support Ms. Khan’s agenda when it “exceeds our legal authority,” raises prices for consumers, or harms innovation, he said.

Mrs. Wilson pointed to three speeches she has given in the past year criticizing Mrs. Khan’s philosophy. In a speech last month, Ms Wilson said that Ms Khan and her allies were drawing on the principles of Marxism.

Senator Chuck Schumer of New York, the leader of the Democratic majority, said Wednesday’s vote confirmed that Bedoya is “critical to freeing the FTC.”

Now Ms. Khan could acquire the ability to pursue a lawsuit against Amazon. she wrote a student law review article in 2017 criticizing the dominance of the company. The FTC has begun investigating the retail giant under the Trump administration; some state attorneys general they also led company investigations.

Ms. Khan may be filing a lawsuit contesting Amazon’s recent purchase of Metro-Goldwyn-Mayer film studio. When the $ 8.5 billion transaction closed in March, an FTC spokesperson noted that the agency “can challenge a deal at any time if it determines that it violates the law.”

Ms. Khan could put her mark on other deals. The agency is looking into Microsoft’s $ 70 billion purchase of video game publisher Activision Blizzard Other sent a request to companies this year for more information.

An executive order from Mr. Biden last year encourage a more aggressive antitrust policy pushed the FTC and the Justice Department to update the guidelines they use to approve deals, which could lead to tighter scrutiny. Ms. Khan is likely to need the support of the committee’s other two Democrats, Mr. Bedoya and Rebecca Kelly Slaughter, to pass aggressive new guidelines or challenge large mergers.

Mrs. Khan he also said wants to increase the agency’s powers by taking into account the regulations governing privacy and the way algorithms make decisions. He said the FTC has underutilized its role as a regulatory body and that regulations would strengthen its mandate to protect consumers.

“As our economy continues to digitize further, market-wide rules could help provide clear warning and make enforcement more effective and efficient,” he said at a privacy conference last month.

The FTC could also respond to requests from progressive activist groups who want the agency to ban data-driven advertising business models and ban non-compete agreements that prevent workers from taking a job with a competitor of their current employer. Work.

But former FTC officials said Ms. Khan faced challenges, even with the Democratic majority. Creating privacy regulations could take years, said Daniel Kaufman, former deputy head of the agency’s consumer protection office. Companies are likely to challenge rules outside the FTC’s mandate in court to protect consumers from deceptive and unfair practices.

“The FTC’s rule-processing capabilities aren’t designed to address behavioral advertising, so I’ve told my clients that the agency might kick off something with a lot of press, but it’s not clear where it’s going to go,” Mr. Kaufman, a partner of the law firm BakerHostetler said.

Ms. Khan’s efforts will certainly continue to face opposition from Mr. Phillips and Mrs. Wilson. Mr. Phillips said he has reservations about the agency becoming a beefier regulator. in January, He said Congress, not the FTC, should be setting new privacy rules.

Ms. Wilson recently released screenshots from an internal survey showing satisfaction among the FTC’s professional staff has declined. “The new leadership has marginalized and disrespected staff, causing a brain drain that will take a generation to resolve,” she said.

To overcome their opposition, Ms. Khan will have to keep her majority intact. This draws on Mr. Bedoya, a privacy expert who has focused on the civil rights dangers of new technologies, and Ms. Slaughter, a former senior staff member of Senator Schumer.

Ms. Slaughter said in a statement that Mr. Bedoya’s privacy experience would be useful to the FTC. You did not comment on the agency’s Democratic majority.

Mr. Bedoya was in awe of his plans, saying only that he was “thrilled” to work with his new FTC colleagues.