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David Meyer

Meta sparked a bitter fight inside the FTC

(Credit: Saul Loeb/AFP/Bloomberg via Getty Images)

And then there were three. The Republicans’ sole commissioner on the Federal Trade Commission (FTC), Christine Wilson, has announced her resignation, leaving just a trio of Democrat commissioners at the U.S.’s top antitrust agency—the other Trump appointee, Noah Phillips, quit in the fall to spend more time with the private sector. The manner of Wilson’s departure could have significant implications for Big Tech.

For those who don’t spend their time tracking the evolution of American antitrust law—You have a life! Go you!—the field is in the throes of one of its periodic revolutions. 

Antitrust is all about judging what constitutes illegal anticompetitive conduct and, for more than four decades, “consumer welfare” has been the U.S.’s primary standard for making that call. Does the conduct in question prevent prices from going as low as possible? If the answer is yes, then it could be an antitrust case.

FTC Chair Lina Khan is one of the figureheads of the progressive pushback against that view, which is associated with Milton Friedman’s conservative Chicago School of market-first economics. She and other “New Brandeisians” wants to take things back to where they were before the late 1970s, when antitrust regulators would look at a variety of things that may constitute unacceptable behavior, like excessive power that can harm society in other ways than simply driving up prices. This stance is fundamentally a reaction to the rise of Big Tech, in which a handful of companies, whose products are often available to consumers for free, have been gaining unprecedented power at breakneck speed.

Wilson is, to put it mildly, no New Brandeisian. However, in Wall Street Journal piece yesterday, she said she was making her “noisy exit” not because of Khan’s ideological stance, but rather her “willful disregard of congressionally imposed limits on agency jurisdiction, her defiance of legal precedent, and her abuse of power to achieve desired outcomes.”

The case at the center of Wilson’s claims involved Meta’s purchase of a virtual-reality startup called Within. At the start of this month, the FTC denied Meta’s attempt to have Khan removed from the case on the basis that—before Khan joined the agency—she had argued the FTC should not allow Meta/Facebook to buy any more companies. Wilson dissented from that decision, but her Democrat colleagues redacted parts of her dissent that she says referenced guidance given to Khan by the FTC’s ethics staff. (For what it’s worth, a Californian judge cleared the takeover and the FTC decided not to appeal.)

“The redactions served no purpose but to protect Ms. Khan from embarrassment,” Wilson wrote yesterday. She also attacked the FTC’s Democrat majority for trying to “condemn essentially any business conduct that three unelected commissioners find distasteful,” and for last month proposing a rule that would ban non-compete clauses, which Wilson said defied the reasoning behind the Supreme Court’s hobbling of the Environmental Protection Agency last year.

Khan and her colleagues had a very brief response: “While we often disagreed with Commissioner Wilson, we respect her devotion to her beliefs and are grateful for her public service. We wish her well in her next endeavor." 

The upshot of all this is that Khan’s FTC is left looking more politicized than ever, and its opponents have a line of attack that could end up undermining the push to make antitrust law more appropriate for the age of Big Tech. The conservative U.S. Chamber of Commerce wasted no time in praising Wilson as “a voice of reason at a Federal Trade Commission often dominated by ideological agendas,” and calling for more oversight of the agency. 

If he wants to lessen the impact of those blows, President Biden really needs to find Republican replacements for Wilson and Phillips—and I hope I’m not the only one who can’t see those names without recalling a certain early-90s nepo-pop sensation—as soon as possible.

Want to send thoughts or suggestions to Data Sheet? Drop me a line here.

David Meyer

Data Sheet’s daily news section was written and curated by Andrea Guzman. 

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