April 12, 2024

FTC Chair Lina Khan faced more than three hours of criticism and ridicule from Republicans at a House hearing on Thursday, as bold critics increasingly put pressure on the agency, It is required to combat the growing power of the tech giants.

During the highly partisan hearing, Republicans accused Ms. Khan of “harassing” businesses because of her aggressive agenda of litigation and investigations against tech companies. Lawmakers repeatedly interrupted Ms. Khan and mocked her for the recent failure of the FTC in an antitrust case and the waste of government resources.

“It’s 0-4 right now in the merger trial,” Rep. Kevin Kiley, R-Calif., told a House Judiciary Committee hearing. “Why did you lose so much?”

The heated meeting capped a painful week that had brought the FTC closer to scrutiny. It was Ms Khan’s first public appearance since a judge ruled Tuesday that the agency blocked Microsoft’s attempted $70 billion takeover of Activision Blizzard. It was a major defeat for the FTC in a tech case after another judge ruled in May against the FTC’s attempt to block Meta’s acquisition of virtual reality app maker Within.

Ms. Khan, a legal scholar who has worked to rein in corporate power and empower the FTC with stronger enforcement, has become a lightning rod. Since President Biden appointed her to lead the agency two years ago, she has said the FTC is too complacent and needs to bring more lawsuits against companies, even if it doesn’t always win. Even if she loses in court, the cases expose the need to update antitrust law for the digital age, she said.

Ms. Khan’s aggressive agenda involving industries other than tech has rattled the agency, and two Republican commissioners and several top officials have resigned.Christine Wilson, one of the former Republicans, accused Ms. Khan of abuse of chairmanship. This month, Biden nominated Virginia Solicitor General Andrew Ferguson and Utah Solicitor General Melissa Holyoke to fill the Republican seats.

Ms. Khan, 34, appeared unflappable during Thursday’s hearing. She highlighted the FTC’s challenges in consolidating the pharmaceutical, semiconductor, defense and energy markets. Many of these challenges did not make it to court.

She said she did not bring a case she thought she would lose, but acknowledged the risks of her strategy without mentioning the Microsoft case.

“When we think there is a violation, we fight it, but unfortunately, things don’t always go our way,” Ms Khan said.

Those losses haven’t dampened her focus on the tech industry. On Thursday, the Federal Trade Commission appealed the court’s ruling on the Microsoft-Activision Blizzard deal. Also this week, it launched an investigation into artificial intelligence startup OpenAI, which makes the ChatGPT chatbot, for potentially harming consumers over privacy and security lapses and spreading false information about individuals.

Attorney Megan Gray, a former FTC staffer, said it could take years for Ms Khan’s strategy to bear fruit. “She knows this is a long-term effort, not a Pollyanna new antitrust initiative,” Ms Gray said.

The White House reiterated its support for Ms Khan on Thursday. “Chairman Khan delivered results for families, consumers, workers, small businesses and entrepreneurs,” White House assistant press secretary Michael Kikukawa said in a statement.

In hearings, this week’s court defeat gives Republicans more ammunition in their complaint against the FTC

Rep. Darrell Issa, R-Calif., criticized Ms. Khan’s judgment in pursuing the case to block Microsoft’s acquisition of Activision Blizzard. Regulators rarely prosecute so-called vertical mergers of two companies that do not directly compete. This is the case with console maker Microsoft and video game maker Activision. Issa said Microsoft’s rival Sony has a large market share.

He also criticized the FTC for filing a lawsuit after a judge on the agency’s internal court disagreed with the FTC’s fight to block the merger of pharmaceutical giant Illumina and cancer test maker Grail.

“My question today is you are a bully,” Mr Issa said. “The reality is we’re a global marketplace and for some reason you only think of people you want to follow. I can’t find your logic.”

Republican Rep. Jim Jordan, chairman of the Judiciary Committee, accused the agency of “harassing” the company in its investigation into Twitter’s security practices. Accusing Democrats of censoring Republican views, Jordan praised Twitter owner Elon Musk for loosening restrictions on speech.

“My concern is that when the ownership of Twitter changes, it will be under constant attack,” Jordan said.

Ms. Khan replied: “We at the FTC don’t have a view on who should or shouldn’t own a company. All we care about is whether the company complies with the law.”

Democrats defended Ms Khan.

Rep. Jerrold Nadler of New York, the committee’s ranking Democrat, said the FTC’s role is to investigate whether Twitter violated a consent statute that has been in place for more than a decade. Consent after previous security breach incident.

“Unfortunately, I anticipate today that you will be the target of a series of personal attacks and insane allegations against the work of the FTC under your leadership,” Mr. Nadler said.

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