Now Facebook wants FTC Chair Khan recused from antitrust case

Facebook Inc wants US Federal Trade Commission Chair Lina Khan to be recused from participating in decisions about the FTC’s monopoly lawsuit against the company, saying her past criticism of Facebook means she’s biased.

United States President Joe Biden named Lina Khan chair of the Federal Trade Commission in June after she was confirmed by the Senate, and in doing so put one of the most prominent critics of big business in charge of the agency, which shares antitrust enforcement duties with the US Department of Justice [File: Graeme Jennings/Washington Examiner/Bloomberg]

Facebook Inc. wants Federal Trade Commission Chair Lina Khan to be recused from participating in decisions about the agency’s monopoly lawsuit against the company, saying her past criticism of Facebook means she’s biased.

On Wednesday, Facebook filed a petition with the FTC, asking that she be barred from any involvement in the antitrust case, citing her academic writings and her work on a House committee that investigated tech companies, including Facebook.

“For the entirety of her professional career, Chair Khan has consistently and very publicly concluded that Facebook is guilty of violating the antitrust laws,” Facebook said. Her statements “convey to any disinterested observer that Chair Khan, well before becoming a commissioner, had already decided the material facts relevant to Facebook’s liability.”

The petition comes as the FTC must decide by the end of the month whether to refile its antitrust complaint against Facebook, which seeks to break up the company by splitting off Instagram and WhatsApp. A judge in June dismissed the case, saying the agency hadn’t fully explained its claim that Facebook has a monopoly in social media. He gave the FTC 30 days to fix the error and refile.

Facebook’s request mirrors one made by Amazon.com Inc., which argued that Khan’s criticism of the online retailer made clear she has already judged that the company has violated antitrust laws.

The FTC didn’t immediately comment on Facebook’s petition.

President Joe Biden named Khan chair of the agency in June after she was confirmed by the Senate. The move put one of the most prominent critics of big business in charge of the agency, which shares antitrust enforcement duties with the Justice Department.

‘Foreclosed Competitors’

In its petition, Facebook pointed to an academic paper Khan wrote for the Columbia Law Review titled “The Separation of Platforms and Commerce.” The paper outlines how Facebook, Amazon, Apple Inc. and Google have integrated across multiple business lines to become what she described as gatekeepers of the digital economy.

Khan wrote that Facebook “has both foreclosed competitors from its platform and appropriated their business information and functionality.”

Khan was also one of the authors of a House antitrust report last year that accused the four tech giants of abusing their dominance and recommended a host of reforms to antitrust laws that lawmakers are now pursuing.

After Amazon filed its petition for recusal, the FTC pointed to a rule that says it’s first up to a commissioner to recuse himself or herself. If he or she declines to do so, the full commission votes on the matter without the participation of the commissioner who’s subject to the recusal request.

Khan leads a three-vote Democratic majority on the five-member commission. If she decides not to recuse herself and the matter goes to a vote, it would fall to the two Republicans and two Democrats. One of the Democrats — Rohit Chopra — has been nominated by Biden to run the Consumer Financial Protection Bureau, but he hasn’t been confirmed by the Senate.

During Khan’s Senate confirmation hearing in April, Republican Senator Mike Lee of Utah asked her whether she should recuse herself from investigations related to the tech companies given her work on the House antitrust panel.

Lee cited a federal appeals court decision that said a former FTC chairman shouldn’t have participated in a case before the commission because he had investigated the same issue as a lawyer for the Senate antitrust subcommittee. Facebook cited the case in its petition.

The court decision “is particularly relevant because the due process violation in that case is nearly identical to the due process violation the commission would commit here in the absence of Chair Khan’s recusal,” Facebook said.

Ethics Laws

Khan told Lee that she had none of the financial conflicts that are the basis for recusal under federal ethics laws.

“If it were to arise I would seek the guidance of the relevant ethics officials at the agency and proceed accordingly,” she said.

Before joining the House antitrust committee, Khan worked as legal director at the Open Markets Institute, an anti-monopoly organization in Washington. During her tenure, Facebook said Open Markets helped organize a campaign called Freedom from Facebook — now called Freedom From Facebook and Google — that advocates for breaking up the two companies.

In a 2017 letter, Khan and other Open Markets staff urged the FTC to block acquisitions by Facebook while investigating the company’s conduct in social networking and online advertising.

“Our request comes amid growing evidence that Facebook is using its increasing market power in ways that stifle innovation, undermine privacy, and divert readers and advertising revenue away from trustworthy sources of news and information,” they said.

(Updates with Facebook’s petition in eighth paragraph)

Source: Bloomberg

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