FTC Chair Accused Of Misleading Congress On Questions Of Bias, Ethics

By J.J. Brannock (The Center Square)

Two House Committees announced plans to investigate Lina Khan, chair of the Federal Trade Commission, for potentially misleading Congress after a recently published memo shows she allegedly ignored advice and chose to sit in on a review of a Meta merger despite a potential bias.

The Committee on the Judiciary and the Committee on Energy and Commerce Chairs, Jim Jordan, R-Ohio, and Cathy McMorris Rodgers, R-Wash., sent a letter to Khan this week announcing that they are conducting oversight on her adherence to federal ethics guidance.

In an April hearing Khan testified in, the Energy and Commerce subcommittee questioned the FTC’s work to protect American consumers from deceptive or unfair business practices.

When asked by Rodgers if there were any instances she had not followed the Designated Agency Ethics Official of the FTC, Khan initially responded with “no” before expanding on her answer and saying, “I have consulted with the DAEO and have taken actions that are consistent with the legal statements the DAEO has made.”

This week’s letter from the committees then mention a memorandum written by the DAEO’s Lorielle Pankey concerning a petition filed by Meta, parent company of Facebook, requesting Khan be recused from the FTC’s review of Meta’s proposed merger with Within Unlimited.

In the memorandum, Pankey recommended that Khan “elect to recuse from participating in Meta/Within as adjudicator to avoid an appearance of partiality.”

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Before being appointed to the FTC, Khan “wrote extensively” regarding Facebook, criticizing its substantial power.

One example listed in the memo was a 2017 letter to Acting FTC Chair Maureen Ohlhausen, which said “recent events reveal that Facebook has become too big and complex for any executive team to manage responsibly […] the most obvious immediate step to address Facebook’s current power is to prohibit mergers between Facebook, other potentially competitive social networks, or other new and promising products and services.”

Khan signed the letter and spoke out in interviews voicing the same sentiment.

“Several of Chair Khan’s statements […] create an appearance of bias sufficient for the FTC’s [DAEO] to recommend Chair Khan recuse from participating as an adjudicator in Meta/Within,” Pankey wrote.

Despite this suggestion, Khan declined to recuse herself, which was approved by the FTC’s Democratic majority.

“Meta has made multiple acquisitions since I joined the FTC that the agency did not oppose or challenge,” Khan wrote in a memo regarding her refusal to recuse. “It is difficult to square this basic reality with Meta’s claim that I have predetermined that all acquisitions by Meta are unlawful and should be blocked.”

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The Energy and Commerce and Judiciary Committee chairs wrote that Khan had misled Congress by not mentioning the previously unpublished memo from the DAEO.

“The recent disclosure of the DAEO’s memorandum suggests that your response to Chair Rodgers during the recent subcommittee hearing omitted an important recommendation by the DAEO and raises serious questions about your commitment to the fair and impartial administration of the FTC’s authorities,” the letter said.

The committee requested all documents and communications relating to the DAEO’s recommendation, Khan’s ethics analysis, and her testimony at the April subcommittee hearing be presented to the committees for examination.

Khan was asked to produce the information by July 12.

Syndicated with permission from The Center Square.