Lina Khan was pleased with her progress. Appearing before the Economic Club of New York in July 2023, she outlined her vision as the chairman of the Federal Trade Commission under Joe Biden and its success so far. Never mind the fact that, just days earlier, a federal court had delivered her agency yet another high-profile setback.

The FTC was “firing on all cylinders,” she declared, “using all of our tools to promote free and fair competition in the modern economy.” Energized by Biden’s executive order on “promoting competition,” and dedicated to “revising the overly simplistic theories of markets that had underpinned” decades of FTC policy, Khan told her audience that “we are scrutinizing mergers and blocking deals that”—by her view—“may threaten competition.”

It was a strange moment for celebration. Two weeks earlier, a Biden-appointed federal trial judge issued a decision utterly rejecting the Khan FTC’s most prominent anti-merger case. Reviewing the FTC’s arguments for blocking Microsoft’s acquisition of the Activision video-game company, Judge Jacqueline Scott Corley found the agency’s case uncompelling. “In sum,” the judge concluded bluntly, “the FTC has not raised serious questions regarding whether the proposed merger is likely to substantially lessen competition in the console, library subscription services, or cloud gaming markets.”

Nor was this Khan’s first judicial setback. In February 2023, after a seven-day trial, a federal judge in Chicago rejected the FTC’s effort to block Meta’s (formerly Facebook’s) acquisition of Within, a virtual-reality start-up. The FTC contended that the deal would reduce competition. But Judge Edward Davila concluded repeatedly that the agency had failed to prove the case with actual facts. The FTC eventually declined to appeal its loss and dropped the Meta case altogether.

Yet even after that loss, some observers quickly declared victory for the FTC. “The ruling is a blow to the agency but may further the commission’s overall enforcement agenda,” the Hollywood Reporter asserted. Indeed, that is how Khan herself has attempted to reframe the agency’s loss. “While I was disappointed by the outcome,” she wrote to Congress in November, “the court laid out a roadmap for future merger cases alleging digital markets or concerns related to the elimination of potential competition.”

Make no mistake: The FTC has lost its two most significant courtroom cases so far, and its broader agenda has attracted a blizzard of criticism—and not just from conservative activists. Leading administrative-law scholars point out that her proposed regulations are illegal. The Chamber of Progress, a Democratic-founded “center-left tech policy industry coalition,” warns that the Khan FTC’s “court losses are making their threats look more like a paper tiger.”

The agency itself seems in disarray. In Khan’s first year, the FTC suffered an astonishing drop in workplace morale, according to an Office of Personnel Management survey that also found less than half of the FTC’s employees believing that the agency’s “senior leaders maintain high standards of honesty and integrity.” FTC lawyers are leaving the agency at a record pace. The FTC’s governing board is made up of five people, three Democrats and two Republicans—and both Republicans have vamoosed. Such things seem not to trouble Lina Khan. Early in her tenure, Khan attempted to move her agenda forward by counting the “zombie vote” of a recent Democratic commissioner who had already left the FTC to become head of the Consumer Financial Protection Bureau.

This approach would be reckless anytime, but all the more so when the Supreme Court is more than a decade into an era of increasingly vocal skepticism of regulatory agencies’ unprecedented power grabs, dubious or dishonest explanations, and shameless procedural irregularities. And that’s just the Supreme Court—the lower courts are even more skeptical.

Khan herself attracts fawning press coverage. “The Next Generation of Law Students Is Obsessed With Lina Khan,” Politico tells us. But if she were, say, a Republican-appointed head of the Environmental Protection Agency, then her agency’s courtroom losses and internal chaos would invite speculation that she might be intentionally destroying the agency itself.

And she may be running out of time. If Biden loses the next presidential election, Khan’s entire antitrust agenda may simply be wiped off the slate by the next administration.

Given all of this, one might simply shrug off Lina Khan’s tenure as a brief moment in history, and her ideology as simply the latest political-intellectual trend—“hipster antitrust,” as it’s often called. Like most trends, it might be safely ignored until it disappears.

That would be a great mistake. Lina Khan’s legacy in antitrust might be short-lived. But her broader legacy may prove to be much more significant. For nearly a century, debates around the administrative state focused on agencies imposing too many rules. In the new administrative state, by contrast, the problem might not be too much law but too little. By pulling down long-standing rules, overstepping legal bounds, and leveraging the threat of legal uncertainty, Lina Khan is teaching powerful regulators to rule beyond mere rules.

RISE

“Robert Moses was the optimist of optimists, the reformer of reformers, the idealist of idealists.”
—Robert Caro, THE POWER BROKER, p. 5

“When she walked in that door, she had no idea what this entailed or what she would be become.” That is how Barry Lynn described Lina Khan’s arrival at the Open Markets Program he ran at the New America Foundation. “She was just a fantastically smart person who was very curious,” he told the New Yorker in 2021. Barely a decade after Lynn hired Khan in 2011, President Biden would make her the nation’s top antitrust cop.

“I first started this work as a journalist and policy analyst,” she told the Senate Commerce Committee at her April 2021 confirmation hearing, “where my job was to document the state of competition across industries and to uncover the abusive business practices that excessive concentration can enable.”

As the New Yorker recounted, under Lynn’s tutelage she researched consolidation in book publishing, candy, poultry, and other industries. “It’s incredible, once you start studying industry structure and how much consolidation there has been across industries—in airlines, contact-lens solution, funeral caskets,” she recalled. “Every nook and cranny of our economy has consolidated. I was discovering this new world.” 

During her job interview, Lynn warned that “there will be things that you discover here that will outrage you.” The more that she studied, and the longer that she felt “on the margins of the policy conversation,” the more she agreed with his instinct: “Barry, I think I’m starting to feel angry,” she told him one day. Khan entered politics more directly by joining the radical activist Zephyr Teachout’s quixotic 2014 campaign for New York governor, as its policy director.

She considered a career in journalism—the Wall Street Journal reportedly offered her a job on the commodities beat—but eventually she went to law school. More specifically, she went to Yale Law School to study antitrust in the very place where Robert Bork had written his landmark work, The Antitrust Paradox (1978).

Bork’s book galvanized a generations-long effort to impose some intellectual and legal order on the mid-20th century’s morass of antitrust policies—hence Bork’s subtitle, “a policy at war with itself.” In the wake of The Antitrust Paradox, Bork and other like-minded law-and-economics reformers succeeded in transforming antitrust law within the Reagan administration and the federal courts.

Khan would dedicate her own Yale years to writing a similarly galvanizing work: “Amazon’s Antitrust Paradox,” a long article in the Yale Law Journal. Focusing on Amazon’s power between producers and consumers, Khan framed the situation as a case study in the need to jettison Bork’s own theory of antitrust. If anything, the intellectual and political impact of her article was even more immediate than that of Bork’s book. Just two years after its publication, the Financial Times was able to write that her essay’s “reframing of the problem [of antitrust] was revelatory, and is now at the core of a number of Big Tech antitrust actions on both sides of the Atlantic.”

And the article’s immediate prominence made Khan a central figure in the new progressive antitrust movement. It came to be known as “Neo-Brandeisian” antitrust, among those who invoked the Supreme Court jurist Louis Brandeis as their inspiration. Their critics would give it a different name: “hipster antitrust.”

While at Yale she kept ties with New America’s Open Markets Program, even joining Lynn for a key meeting with Senator Elizabeth Warren on the need to pursue antitrust action against Big Tech companies. Upon graduation in 2017, Khan returned to help relaunch the program as a newly independent think tank, the “Open Markets Institute.” As its director of legal policy, she continued her research and advocacy for a year until she was hired by Rohit Chopra, the FTC’s leading progressive commissioner (remember, even though Donald Trump was president, there are always seats for members of both parties on the FTC board), to be a senior adviser within the agency. Three months later, the Columbia Law School would make her an academic fellow, where she would join the leading Neo-Brandeisian intellectual, Tim Wu.

But soon she would be on the move again. After the 2018 midterm elections returned control of Congress to the Democrats, the House Judiciary Committee’s antitrust subcommittee hired Khan to conduct its extensive investigation into the Big Tech companies—the investigation that climaxed with the companies’ leaders being summoned to testify in televised hearings, and ended with the Democratic staff publishing a mammoth report on “competition in digital markets.”

Columbia Law would re-hire Khan again in 2020, this time as an assistant professor. The school’s press release credited her as “co-author” of the House antitrust report and described the incredible popularity of her antitrust seminar among law students. It trumpeted Bloomberg Businessweek’s assessment of Wu and Khan as leading an entirely “new school” of antitrust thought.

REFORM

“The reader was assured that Moses was interested only in the people’s welfare and that those who opposed him were ‘obstructionists’ and ‘politicians.’ ”
—THE POWER BROKER, p. 569

If she was a hipster, the old fogies she was attempting to succeed made up the 20th century’s “Chicago School”—the generation of scholars who re-grounded regulatory theory and policy in terms of competitive markets and constrained regulators. Its intellectual leaders included Bork, Ronald Coase, Richard Posner, Frank Easterbrook, Douglas Ginsburg, and Henry Manne, among many others. And its greatest victories were in the reform of antitrust law.

American antitrust law rests on a foundation of statutes that Congress wrote in the broadest possible terms, for the sake of major, laudable goals. The Sherman Antitrust Act of 1890 outlawed contracts and combinations “in restraint of trade,” as well as monopolization. The Clayton Act of 1914 outlawed unfair price discrimination. The Federal Trade Commission Act of 1914 created the FTC to administer the antitrust laws through a more deliberate and bipartisan multi-member commission.

The goals of these early laws seemed nothing less than a quasi-constitutional effort to preserve America’s Republican ethos against the distorted political and social effects of a new kind of economic oligarchy. The legislative debates around the Sherman Act are replete with concerns like those voiced by Massachusetts’s Senator George Hoar: “The complaint which has come from all parts and all classes of the country of these great monopolies, which are becoming not only in some cases an actual injury to the comfort of ordinary life, but are a menace to republican institutions themselves, has induced Congress to take the matter up.”

But when Congress translated those broad and laudable aims into open-ended legislative text, it effectively concentrated political power in a different class of elites—regulators and judges, who would wield enormous power and discretion over American markets and businesses. By the mid-20th century, judges and regulators alike treated the malleable antitrust statutes as empowering them but not encumbering them. And their unmoored, unconstrained policy judgments seemed increasingly questionable as a matter of economic theory, too.

“From its inception … antitrust has vacillated between the policy of preserving competition and the policy of preserving competitors from their more energetic and efficient rivals,” Robert Bork and a co-author wrote in a 1965 law-review essay titled, bluntly, “The Crisis in Antitrust.” Bork urged judges and regulators to re-anchor antitrust policy in “the preservation of competition” rather than the protection of small business. Centering antitrust analysis around competition—or, more concretely, on the efficiencies that market competition ideally produces—would make much better economic policy sense.

And, no less important, such an approach would promote judicial and executive self-restraint and the rule of law. “Coexistence of the social-policy argument with the pro-competitive rules would introduce so vague a factor that prediction of the courts’ behavior would become little more than a guessing game,” Bork and his co-author emphasized. “When the person whose conduct is to be judged is in doubt concerning which of two completely contradictory policies will be applied, the system hardly deserves the name of law.” As Bork added in a subsequent reply to critics, the contrary approach to antitrust policy—relying more on broad policy discretion and placing much more difficult burdens of proof on companies—“would cause the trial process to degenerate into industry studies and economic extravaganzas that would clearly make the law largely unenforceable as well as unpredictable,” and would “require the law to make its decisions on the basis of factors that are literally unknowable.”

Bork continued to elaborate these arguments, alongside his Chicago-minded compatriots, until he left Yale in 1973 to become the solicitor general. When he returned to Yale (and the American Enterprise Institute) after 1976, he expanded his antitrust arguments into his landmark book, The Antitrust Paradox. It argued that antitrust’s goal should be the promotion of competition; its measure should be economic efficiency; and its hallmark should be “consumer welfare.” And his work was transformative, convincing entire generations of regulators and judges alike.

Lina Khan views Bork’s effect in less charitable terms. He and his colleagues “embedded at the core of antitrust law a radically different descriptive and normative account of power,” she would write in 2018. “The shift was not so much a matter of adopting more technical rules as it was of ushering in a new ideology.” A year earlier, she had put it even more contemptously: “With the inauguration of Ronald Reagan in 1981, the federal antitrust agencies executed a coup against prevailing antitrust thinking.”

Her most famous article, “Amazon’s Antitrust Paradox,” suggested that the company’s success was proof of the Chicago School’s inefficacy. An antitrust law that “assesses competition largely with an eye to the short-term interests of consumers, not producers or the health of the market as a whole,” and that “views low consumer prices, alone, to be evidence of sound competition,” cannot and will not prevent Amazon from destroying the competition with unsustainably low prices, or from buying up would-be competitors, or from leveraging power in one sector to another, or from exploiting the treasure trove of data that consumers give it. (She would freely admit, “Customers, meanwhile, universally seem to love the company,” but that was not the point, apparently.)

She would reiterate such arguments in subsequent articles about online-platform companies and other industries. So would her fellow Neo-Brandeisians—especially Tim Wu, in his thoughtful and punchy manifesto, The Curse of Bigness (2018), and in a Neo-Brandeisian mission statement (“The Utah Statement”) that she, Wu, and others would publish in 2019.

But throughout their work, the point was not simply inefficacy but rather illegitimacy, by which they meant that the Chicago School had abandoned or mischaracterized the antitrust laws’ original purposes. Consumer welfare is not synonymous with competition, she would argue, and so antitrust policy should be vastly more ambitious, asserting the power to determine the proper “structure” of industries. As she wrote in the Amazon article:

Antitrust law and competition policy should promote not welfare but competitive markets. By refocusing attention back on process and structure, this approach would be faithful to the legislative history of major antitrust laws. It would also promote actual competition—unlike the present framework, which is overseeing concentrations of power that risk precluding real competition.

And she did not shy from the sheer breadth of discretion and power that her approach would vest in the hands of regulators or trial judges:

In practice, adopting this approach would involve assessing a range of factors that give insight into the neutrality of the competitive process and the openness of the market. These factors include: (1) entry barriers, (2) conflicts of interest, (3) the emergence of gatekeepers or bottlenecks, (4) the use of and control over data, and (5) the dynamics of bargaining power. An approach that took these factors seriously would involve an assessment of how a market is structured and whether a single firm had acquired sufficient power to distort competitive outcomes.

If Robert Bork were still available for comment, he might well agree with all of that—namely, that Khan’s antitrust theory relies on regulators and judges to carry out vastly open-ended and unpredictable judgments, which gives the regulated parties no real certainty as to how they will be regulated and judged. These would be the kinds of “decisions on the basis of factors that are literally unknowable” that he had decried in 1965. But Bork’s bug was Khan’s feature. She would put much greater trust in unconstrained regulators. And, astonishingly soon, she became one herself.

RULE

“Now, for the first time, when Moses had an idea, he had a good chance of seeing it implemented. If something was wrong and he knew—just knew—exactly how to make it right, there was a real chance that it would be made right.”
—THE POWER BROKER, p. 139

Just two months after his inauguration, President Biden announced his intent to nominate Khan to be one of the FTC’s commissioners. (Tim Wu already had joined the Biden White House, as “special assistant to the president for technology and competition policy.”) And although she was by then already well known, her nomination was a relatively low-key affair—after all, she would be just one of three Democrats on a five-member commission.

The Senate Commerce Committee, therefore, combined her confirmation hearing with consideration of Biden’s nominees to be NASA administrator and Commerce Department general counsel. Several senators asked about her approach to antitrust—especially Senator Mike Lee, who pressed her to explain why her long-standing criticism of tech companies, and her role in the House investigation, wouldn’t require her to recuse herself from the FTC’s nominally independent and even-handed enforcement actions against those same companies. (“If it were to arise, I would seek the guidance of the relevant ethics officials at the agency and proceed accordingly,” she assured him.)

“If confirmed,” she told the senators, “I look forward to working with my fellow commissioners, the career staff, this committee, and the broader public to pursue the agency’s mission with vigor and a deep commitment to serving the American public.”

As Representative Nancy Pelosi once said, sometimes Congress has to pass a law to know what’s in it. Evidently it works the same way with FTC nominations: The Senate had to confirm a nominee to find out what powers she would have. On June 15, 2021, the Senate confirmed her nomination to be one of five commissioners, by a vote of 69 to 28. And then, just a few hours later, President Biden announced that Khan would not just be the FTC’s newest commissioner but the agency’s chairman. She was 32 years old.

The post-confirmation surprise was seemingly unprecedented. “If you walk back through the modern or earlier history of the FTC,” former FTC chairman William Kovacic told Axios, “I can’t remember an instance where the White House has named an individual to be a commissioner, then once that person was confirmed by the Senate, designated that person to be the chair.” All at once, Khan found herself vested with enormous power over the entire Federal Trade Commission and its staff—and, therefore, over the companies in the FTC’s regulatory shadow, too.

Senator Lee would quip, “It is ironic that this kind of deception was used to install leadership at the federal agency tasked with fighting deception and fraud.” But it was even more ironic than that. The scholar who had denounced a Reagan-administration “coup against prevailing antitrust thinking” was suddenly seizing the opportunity to roll back 40 years of antitrust law and theory.

And Chairman Khan’s agenda truly was, first and foremost, an agenda of rollbacks. In July 2021, she and her Democratic colleagues abruptly terminated the FTC’s 25-year-old policy statement governing how the FTC reviewed mergers, which suddenly subjected companies to far heavier obligations to get the agency’s approval before undertaking a merger. That same month, they also axed the FTC’s 2015 Statement of Enforcement Principles Regarding “Unfair Methods of Competition.”

This was just the beginning of a quick succession of FTC actions repealing prior FTC guidance and taking aim at the “consumer welfare” theory underlying much of it. As Khan would declare in a September 2021 memo to agency staff on her “Vision and Priorities,” the agency needed “to take a holistic approach to identifying harms, recognizing that antitrust and consumer protection violations harm workers and independent businesses as well as consumers,” targeting “power asymmetries” and “tackling the most significant harms across markets, including those directed at marginalized communities.”

In the two years that followed, Chairman Khan gave a succession of speeches declaring and reiterating broad policy goals. Within the agency—and with the support of her Democratic colleagues—she took strong steps concentrating power within the chairman’s own office, asserting more control over FTC staff, and reducing public transparency around the antitrust agency’s work. (Per Senator Lee, irony abounds.)

And, again, her work to repeal often-long-standing agency policies sent distinct warnings to industries under the agency’s jurisdiction. Her Republican colleagues warned often, and loudly, that the agency was creating immense regulatory uncertainty. FTC Commissioner Christine Wilson would warn that the agency was “chill[ing] harmful and beneficial deals alike,” and “abandon[ing] consumers in pursuit of prevailing but mercurial political winds.” Her fellow Republican commissioner, Noah Phillips, warned that the FTC was intentionally exacerbating regulatory uncertainty, as a kind of “tax” on mergers and acquisitions; and these “gratuitous taxes on M&A are regressive,” he emphasized, “hitting smaller companies the hardest.”

From the start, Khan and her Democratic colleagues signaled their intention to write new policies in place of the ones they were repealing—despite warnings from a variety of antitrust and administrative-law experts that the new generation of rules exceeded statutory limits on agency powers and procedures. But as that time-consuming process played out—indeed, the FTC’s and Justice Department’s newly revised joint Merger Guidelines were finally published only in late December 2023—the agency also launched a series of high-profile actions targeting some of the nation’s most significant (and long-Khan-criticized) companies.

In July 2022, the FTC’s Democratic commissioners launched its lawsuit against Meta/Facebook to block its acquisition of Within, the virtual-reality startup. “This is an illegal acquisition,” the FTC announced in its press release, “and we will pursue all appropriate relief.”1

Five months later, it followed with the lawsuit against Microsoft, to block its acquisition of Activision Blizzard. “Microsoft has already shown that it can and will withhold content from its gaming rivals,” the press release read; “we seek to stop Microsoft from gaining control over a leading independent game studio and using it to harm competition in multiple dynamic and fast-growing gaming markets.”

Other suits would follow. And eventually, in September 2023, the Khan FTC would finally bring the one everyone had awaited: FTC v. Amazon, challenging many of the company’s activities and urging the federal trial court in Seattle to “put an end to Amazon’s illegal course of conduct, pry loose Amazon’s monopolistic control, deny Amazon the fruits of its unlawful practices, and restore the lost promise of competition.”

Under other circumstances, her long-awaited attack on Amazon might have been the apex of her tenure atop the FTC. But by late 2023, the key question about the case was not Khan’s prospects for success, but her record of failure. As noted, federal trial courts had already dealt her defeats in the Meta and Microsoft cases, wholly rejecting the FTC’s characterization of the facts at hand. Two years into her tenure, Khan was facing a rising chorus of skepticism, and not just among her arch-critics.

After the Microsoft-Activision loss, the New York Times reported that the agency’s defeats “raise questions about Ms. Khan’s ability to carry out her ambitious goal of reversing decades of weak antitrust enforcement, as political pressure mounts and patience wanes for the 34-year-old academic.” The Financial Times called it “a sharp setback to the regulator’s ambitious effort to toughen antitrust enforcement under chair Lina Khan.” By the end of 2023, a legal writer for New York would publish a stunning, lengthy criticism of Khan’s tenure—her management abilities, her “legally dubious effort to rewrite the agency’s merger-review policy,” and her record of “bringing cases with shaky legal underpinning”—warning that if her FTC leadership “turns out to be a failure, it could deal an existential blow to the movement that she has devoted her career to.”

Khan surely would dispute that criticism, as she often does. “In federal court, we have lost two merger cases” out of “between 13 and 20, depending on how you count,” she said during the Q&A portion of her July 2023 visit to the Economic Club of New York. “In the scheme of our merger enforcement program, losing two is OK.” (Her similarly energetic counterpart at the Securities & Exchange Commission, Chairman Gary Gensler, takes a similar approach: “If you’re winning all your cases,” he told the Wall Street Journal last year, “you’re not bringing enough cases.”) Indeed, Politico reported in late December 2023 that “Khan has spent parts of 2023 on something of a goodwill tour with highly targeted audiences.”

To be fair, the FTC has wins under Khan, too. In December 2023, the Fifth Circuit largely upheld the FTC’s attempt to undo Illumina Inc.’s acquisition of another biotech company, spurring Illumina to concede defeat. The FTC began that case before Khan’s appointment—indeed, the FTC’s members voted unanimously to bring the lawsuit—but it won the case under Khan.

But when she shrugs off losses in her most prominent cases, one should not mistake such shrugging for mere hubris. Lina Khan is right to recognize that the FTC’s real power isn’t simply measured by courtroom wins and losses. Its real power is much harder to quantify—or contain.

RENOUNCE

“To realize a dream of unprecedented scope, Robert Moses, by use of the law, had armed himself with unprecedented powers—and then, finding that these powers were still inadequate, he had deliberately gone beyond them, beyond the law.”
—THE POWER BROKER, p. 192

“In many ways, it feels like we’re just getting started,” Lina Khan told Politico last year. “We’ve blocked close to 20 mergers either in court or deals that are abandoned.” A year earlier, she told Axios that she was not interested in the agency’s traditional approach of working with companies to fix allegedly problematic aspects of a merger and then letting the reformed deal go through.

“That is not work that the agency should have to do,” she said. “That’s something that really should be fixed on the front end by parties being on clear notice about what are lawful and unlawful deals.” Except, as her many critics and her former Republican colleagues note, the FTC isn’t always in the business of giving such “clear notice” to companies of what the new rules are—much less anchoring those new rules in clear legislative text.

Her true point is not about clear notice; it’s about companies figuring out a form of self-deterrence in the face of a strident new regulatory agenda. As Politico noted in its 2023 profile of Khan and her counterpart at the Justice Department’s Antitrust Division, Jonathan Kanter, the duo “pointed to abandoned mergers as one key indicator of success; as enforcement steps up, big companies are shying away from major deals after years of record mergers and acquisitions.”

Khan knows that bringing long-shot cases can send messages, even when the law is not on the agency’s side. “I’m certainly not somebody who thinks that success is marked by a 100 percent court record,” she told a University of Chicago audience in 2022.

If the antitrust agencies look at the market, think that there’s a law violation, think that, you know, the current law might make it difficult to reach, there’s huge benefit to still trying—especially trying with some of the bigger companies, some of the more high-profile cases, because if you don’t try, the message that sends out to the world is that the enforcers don’t think there’s a problem in the market.

And she followed this with a sentence that gives the game away: “If you try, even if you lose, that creates the message for Congress to know, hey here are these law enforcers, they recognize there’s a problem here, the current law is not adequate for them to reach it, and so let’s change the law.”

Aside from this peculiar notion that unelected officials should be providing direction to the elected Congress, the more important message from Khan here was for companies and investors. The current FTC is telling them that the M&A process will be much more lengthy, arduous, unpredictable, and costly.

This is the “M&A tax” that former Commissioner Noah Phillips highlighted during his own tenure alongside Chairman Khan. The FTC, he warned, is “broadcasting hostility to M&A that has a positive branding effect for enforcers and may also have some deterrent effect for M&A.” It can “sow uncertainty and run up the cost of getting deals done, taxing M&A and making the market for corporate control less efficient.” Most ominous, “these strategies can be accomplished without courts,” because the whole point is to stop mergers passive-aggressively, by deterring companies from doing anything in the first place.

And, Phillips added, because this approach succeeds not by blocking mergers that have been proposed but rather by deterring mergers from being proposed in the first place, the resulting absence of public cases “shields enforcers from political accountability.” Just as it is impossible to identify the jobs that are “saved” by a new federal spending program, it is impossible to identify the mergers that were never proposed because of costly regulatory uncertainty.

Khan might well concede that the agency’s deterrence strategy will deter not just “bad mergers” but also good ones. As an academic, her articles about Amazon and Internet platforms repeatedly argued that Chicago-style antitrust policy worried too much about “false positives” (i.e., bad mergers that wouldn’t be stopped) and too little about “false negatives.” In 2019, for example, she complained that “the assumption that false positives are highly costly, while false negatives are rare, has tilted the balance in favor of underenforcement.” (In 2011, Tim Wu made similar arguments in an article titled, simply, “Agency Threats.”)

But it is one thing to theorize, as an academic, that “false positives” and “false negatives” both have their ups and downs. It is quite another thing to bring the weight of government down on people and companies (or to threaten to do so passive-aggressively) as a Senate-confirmed officer appointed by a president who bears the constitutional duty to “take Care that the laws are faithfully executed.” The clever academic wins acclaim and maybe tenure. The constitutionally appointed official flouts the rule of law, using her power as means to ends of her own devising.

And that was Robert Bork’s entire point. For all of Lina Khan’s academic and political criticism of Bork’s “consumer welfare” standard and her assertions that regulators need to worry more about “false negatives” than “false positives,” she never grapples seriously with Bork’s explicit point: that when Congress has written antitrust laws in such completely open-ended terms, then the first line of constitutional defense against executive ambition and judicial creativity is for the executives and judges to constrain themselves by using clear standards and a constitutional spirit of self-restraint.

Khan herself seems to recognize that the antitrust laws were written so broadly that they raise real constitutional concerns. In her 2020 article, she candidly describes the Sherman Act of 1890 as a matter of “standardless delegation,” citing a 2007 law-review article by then-lawyer Andrew Oldham. He is now one of the nation’s most prominent young conservative federal judges on the U.S. Court of Appeals for the Fifth Circuit. Oldham was making the constitutional argument that the Sherman Act violates the Nondelegation Doctrine, according to which Congress cannot abdicate its lawmaking powers to another entity. Khan uses his argument in the reverse: She sees the Act’s standardless discretion not as a danger but as an opportunity.

Daniel Crane, another leading antitrust scholar, notes that, “ultimately, Bork argued that the antitrust statutes reflected a smorgasbord of incongruous goals and purposes and that the courts’ proper function was to sort through them and render as rational, consistent, and coherent a reading as possible.” It “was thus predicated in substantial part on the same themes of judicial restraint that animated his work in constitutional law.”

Indeed it was. Furthermore, at the same moment that Lina Khan is keen to launch long-shot enforcement actions not just for the sake of winning them but also for sending messages, the federal judiciary is moving decidedly in Bork’s direction.

And not just in the obvious ways. Bork’s early writings starkly foreshadow the Court’s approach to administrative law, especially the “Major Questions Doctrine” that the Supreme Court and lower courts have elaborated in recent years. This doctrine casts significant doubts on agencies’ sudden “discovery” of unprecedented new powers in old and vague statutes.

“An important function of the courts, performed in a variety of ways, is to help keep the legislative process responsible by ensuring, so far as possible, that major policy decisions by the legislature are deliberately and openly made,” Robert Bork wrote in 1967, in words indistinguishable from recent opinions by Chief Justice Roberts and several of his colleagues.

And, Bork continued in the same article, “the judicial process itself must be responsible. That requires the decision of cases upon criteria which are judicially administrable, give fair warning to those required to obey the law, permit sufficient predictability so that desirable conduct is not needlessly inhibited, and permit rational explanation of the application of the criteria so that judicial performance may be evaluated and controlled.”

One can scarcely offer a better summary of the Supreme Court’s modern regulatory jurisprudence, exemplified in the past decade’s increasingly skeptical run of decisions against Biden and Trump agencies alike.

And, quite possibly, the next decade of cases.

WRECKAGE

“Disregard for law, of course, implies regard for that which the law is a barrier against: naked force, power sufficient to bend society or individuals, if not protected by law, to its will. And this, too, became noticeable in the character of Robert Moses.”
—THE POWER BROKER, pp. 276–277

This year marks the 50th anniversary of Robert Caro’s The Power Broker. Perhaps the calendar will inspire scores of TV pundits to take Caro’s immense book down from their Zoom-background bookcases and give it a closer look. Maybe they will discover that Robert Moses was actually a New Deal reformer who, inspired by his era’s political zeitgeist and supremely confident in his own ideas and virtues, managed to impose his vision faster than either the rule of law or democratic processes could stop him.

In the end, of course, Moses did manage to wreck himself, his reputation, and his would-be successors. Still, a reformer can wreak a lot of progress before the rule of law can get its own shoes on.

Lina Khan’s ambitions may well sow the seeds for her own agency’s wreckage. By her own words, she seems to approach cases in the spirit of nothing ventured, nothing gained. But the FTC actually has much to lose, too. By pushing the agency’s powers to unprecedented lengths, by unprecedented means, the agency may well give rise to cases that eventually construe statutes more narrowly than courts previously have had the occasion (or reason) to do. The FTC may well leave the Khan era with even less power than before.

The cautionary tale is her long-ago predecessor, Chairman Michael Pertschuk, who upon his appointment by President Carter attempted to turbocharge the agency’s regulatory agenda; Congress reacted by enacting significant limits on the agency’s rulemaking powers. Khan herself now bristles against the limits that the Pertschuk FTC’s ambitions triggered. Future FTC chairs might bristle against the legal legacy of the Khan FTC.

The FTC’s ambitions and antics may even give rise to a case in which the Supreme Court finally declares—apropos now–Judge Oldham’s 2007 law-review article—that the Sherman Act is unconstitutional because it delegates complete legislative power to regulators. Robert Bork’s theory of antitrust saved the agency from such a fate. Lina Khan tempts those fates.

And more than the FTC’s power is at stake. So is the FTC’s independence from presidential control. In 1935, when FDR attempted to assert direct control over the FTC by firing a Republican commissioner, the Supreme Court upheld the statutes that Congress enacted to limit presidential control of the agency. The president is entitled to control purely “executive” agencies, the Court explained, but he has less claim of constitutional authority over “predominantly quasi-judicial and quasi-legislative” agencies like the bipartisan, multi-
member FTC.

From the moment the court decided that case, critics mocked it as utterly political and unprincipled. At first, the critics were FDR’s New Dealers; since the 1970s, they have been conservative legal scholars, judges, and justices. In the past decade, the Supreme Court issued a series of decisions striking down other forms of agency independence and, in the eyes of many, casting an increasingly skeptical eye on agency “independence” in general, including the FTC itself. (“The Court’s conclusion that the FTC did not exercise executive power has not withstood the test of time,” Chief Justice Roberts quipped in a footnote to the Court’s 2020 decision striking down the Consumer Financial Protection Bureau’s independence.)

Lina Khan’s term is set to expire in late 2024, but the law allows her to keep her seat until a successor is appointed. If a Republican is inaugurated president in 2025, one of his first actions in office might well be to fire her or another holdover Democratic commissioner and invite a lawsuit over whether that 1935 case still protects FTC commissioners from presidential termination. After years of highly political and activist litigation in coordination with President Biden’s White House and Justice Department, it will be laughable for the FTC to defend itself as just a sleepy, nonpolitical, “quasi-legislative, quasi-judicial” commission.

The issue might reach the Court even without a president firing a commissioner. Walmart, defending itself against a 2022 FTC lawsuit in the federal trial court in Chicago, cleverly argues that the FTC is constitutionally prohibited from bringing any such enforcement actions because only an executive agency can bring such cases—not an independent, non-executive, “quasi-legislative/judicial” agency like the FTC. That case, still pending in the trial court, might turn out to be the one that relitigates the 1935 case itself.

So might the new lawsuit that Meta filed against the FTC in late November 2023, which brings the whole panoply of constitutional arguments against the agency. It argues that the FTC’s statutes violate the constitutional nondelegation doctrine; that its independence violates the president’s constitutional powers; that its proceedings violate the Fifth Amendment’s right to due process and the Seventh Amendment’s right to trial by jury; and more. Lina Khan became FTC Chairman because of her articles about Facebook and other tech companies. Now Facebook itself has filed the case that may well negate the FTC’s powers, or independence, or both.

Those are all possibilities. But there is another possibility, and perhaps a more likely one: namely, that Lina Khan is teaching a new generation of regulators how to wield real power—not by writing rules but by renouncing them. Not by the certainty of clear and enforceable regulations but by the regulatory uncertainty sown by unclear regulatory policies that succeed in lieu of their actual enforcement.

Modern administrative law is well geared for the textbook regulatory situation: agency makes a rule, regulated party files a lawsuit, court reaches a decision. But the standards and procedures of administrative law are not well geared to grapple with a passive-aggressive regulatory agency that succeeds by weaponizing regulatory uncertainty to deter people and companies from acting in the first place.

And for agencies empowered to grant or withhold permits, licenses, and other ex ante approvals, the power of regulatory uncertainty is immense. From the FTC’s power over mergers, to the SEC’s power over new securities (as we are seeing in the debates over cryptocurrencies), to the Federal Energy Regulatory Commission’s power over energy infrastructure, such agencies can accomplish much more—and with much less judicial review or political accountability—through regulatory uncertainty and deterrence than through the traditional forms of agency action.

The next presidential administration could erase the Khan FTC’s policy statements just as quickly as she and her colleagues erased their predecessors’ own work. But Lina Khan’s legacy is not actually in antitrust. It is about the character of regulatory self-restraint under the rule of law.

Progressives might worry that Lina Khan is breaking the FTC. All of us should worry that she is breaking something much more important.


1 Khan cast the FTC’s decisive vote to sue Meta, but the FTC’s top ethics officer soon concluded that Khan’s past statements and advocacy against Facebook required her recusal from further involvement in the matter. “From a federal ethics perspective,” the official wrote in a memo that was later uncovered, “I have strong reservations with Chair Khan participating as an adjudicator in this proceeding where—fairly recently, before joining the Commission—she repeatedly called for the FTC to block any future acquisition by Facebook.”

Photo: Graeme Jennings/Pool via AP

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