Lina Khan’s last-minute moves spark strong rebuke from Trump’s FTC chair

Simone Del Rosario:
It’s a new era in Washington and we’re not just talking about a change in the Oval Office.
David Rubenstein:
Hope springs eternal in the business community, of course, because I think many people in the business community were not happy with the FTC chair.
But on the whole, I think business CEOs are probably looking forward to new regime in Washington.
Simone Del Rosario:
Federal Trade Commission Chair Lina Khan is out the door as President Donald Trump takes over the oval. But she leaves with a flurry of actions taken in her final weeks.
Like President Joe Biden, Khan faced her share of criticism for squeezing things through with days to spare.
Her toughest critic is her replacement, FTC commissioner Andrew Ferguson, who wrote loud dissents to many of her final moves.
Now her final act was a mostly unanimous one. The Commission fined video game Genshin Impact $20 million and banned it from selling loot boxes to teens under 16 without parental consent. A loot box is when players use real money to get a randomized in-game item. It’s common in many modern games and is often compared to gambling.
The commission also got out of the way of a pair of major energy mergers. Last week, the commission cleared Exxon’s $60 billion merger with Pioneer Natural Resources and Chevron’s $53 billion deal for Hess. But did prohibit CEOs of Pioneer and Hess from serving on their respective resulting boards. Ferguson joined Republican Commissioner Melissa Holyoak in her dissent, which referred to the majority’s actions as a pre-inauguration swan song.
Meanwhile, the FTC sued Pepsi on Friday for price discrimination. The commission claims the company gave lower pricing to an unnamed retailer while hiking prices for others. According to a number of reports, that unnamed company is Walmart. Khan said, “When firms like Pepsi give massive retailers a leg up, it tilts the playing field against small firms and ultimately inflates prices for American consumers.”
Ferguson dissented, writing, “In a cynical attempt to tie the hands of the incoming Trump Administration, the Democratic majority launches a major lawsuit on little more than a hunch.”
He also said this next lawsuit lacked evidence. The FTC, along with Illinois and Minnesota, sued John Deere. The lawsuit claims the company prevents farmers from repairing their own equipment or using independent shops.
Ferguson said the lawsuit was “taken in haste to beat President Trump into office.”
Just in time for tax season, the FTC fined H&R Block $7 million for making “deceptive claims about ‘free’ tax filing.”
And it released the second interim report into pharmacy benefit managers. In this one, the FTC accuses the “Big 3” of raising prices on generic drugs by thousands of percent from 2017 to 2022.
Ferguson concurred with the decision but took issue with the timing … “After having already issued one rare interim report, what’s one more? Were it up to me, I would have preferred the Commission take the time needed to complete its work and issue a final report when it is ready to do so.”
It’s been a busy four years at the FTC under Lina Khan’s leadership. Khan is barely old enough to run for president herself, yet in a short period of time, experts say she’s made her mark on the agency.
Bill Kovacic:
She brought forward the question of which interests should be protected in the enforcement of the antitrust laws. What’s the correct role of antitrust law in safeguarding the interests of small and medium enterprises? Shouldn’t antitrust be attuned to the effect of transactions or behavior in markets for labor? Shouldn’t antitrust have a greater concern about social and political values that go beyond traditional efficiency concerns regarding price, quantity and innovation. That change in the debate, I think, is going to endure, and it’s reflected in part by exactly the voices that we hear from the Republican party that has said competition policy is more than simply a better price, better quality, more innovation.
Simone Del Rosario:
Ferguson is expected to lighten the regulatory burden on big mergers, something Wall Street is waiting on.
Bill Kovacic:
I expect a more permissive approach towards mergers than the Biden enforcement agencies have taken, and that was the one of the big irritants that even the Democratic donors expressed concern about is, is that the deal making environment has been made so much more difficult.
Simone Del Rosario:
Trump picked Ferguson for his “proven record of standing up to Big Tech censorship,” while Ferguson wrote in a post, “…we will end Big Tech’s vendetta against competition and free speech.”
Paul Meeks:
I think he’s going to probably come pretty aggressively after Meta and some of the other social media companies that have, at least in his mind, in Trump’s mind, purported bias against conservatives and social media. So I expect that, and this will be no friend of Mark Zuckerberg
Simone Del Rosario:
But in the weeks since naming Ferguson, tech billionaires like Jeff Bezos, Mark Zuckerburg and Apple’s Tim Cook have all cozied up to Trump.
They even attended the President’s inauguration in Washington on Monday.
That should have little impact on the FTC’s actions, according to Khan.
Lina Khan:
“The FTC is an independent agency, and, you know, we’ve worked closely with government partners when appropriate, but we enforce the law without fear or favor, and based on the facts.”
Simone Del Rosario:
Despite early indications of his Big Tech intentions, Ferguson is still expected to have a lighter touch.
Wedbush securities analyst Dan Ives wrote in December, “He will clearly roll back Khan’s head scratching anti-tech agenda including ending efforts to regulate AI and abandoning a brutal standard for any merger of any size for the tech world.”
Because Ferguson is already a Senate-confirmed commissioner, he can immediately ascend to the chair. Khan can stay on as commissioner until Trump’s pick for commissioner, Mark Meador, is confirmed.
Bill Kovacic:
“So the the speed with which she departs the commission will depend on her own personal preferences. Does she want to stay as part of a loyal opposition maintaining a three vote block that could operate to retard a roll back of her program? On a personal level, it’s not enjoyable to go through that kind of demotion.”