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On September 26, 2023, the Federal Trade Commission (FTC) sued Amazon, Inc. alleging the big tech company to be a monopolist employing a variety of anticompetitive practices. This action arguably represents the largest federal antitrust action since regulators went after Microsoft in the mid-90’s. However, in the background of this high-stakes litigation looms a series of major FTC courtroom loses incurred under the direction of Chair Lina Khan. In fact, it was only two months prior to this filing that the FTC failed to block a proposed $68.7 billion merger between Activision and Microsoft. As such, congresspersons and commentators alike have raised questions about the efficacy of Khan’s strategy.

 

Who is Lina Khan?

Lina Khan was confirmed as FTC Chair on June 15, 2021. Reflecting the general posture of the Biden Administration, commentators expected Khan to employ increased scrutiny against the Big Tech industry. Prior to getting tapped, Khan was a student at Yale Law School where she rose to prominence after publishing her 2017 article, Amazon’s Antitrust Paradox, in the Yale Law Journal. In this article, using Amazon as her case study, Khan argued that the U.S.’s antitrust framework is inadequate in addressing the challenges of market power in the modern economy. After graduating, Khan pursued a career in antitrust, serving as counsel to the U.S. House Judiciary Committee’s Subcommittee on Antitrust, Commercial, and Administrative Law and later entered academia to serve as a professor at Columbia Law School.

 

Lina Khan’s Strategy 

Lina Khan’s strategy is aggressive. Over her tenure, she has brought actions against Meta, Lockheed Martin, Amazon, and many others. Among these actions, her results are mixed. Khan has defended the Commission’s record by pointing towards agency successes such as issuing new merger guidelines, blocking Nvidia’s acquisition of ARM, and various new protections against deceptive practices. In contrast, critics, including Congressional Republicans, have confronted her on the Commission’s losing record–– Khan is currently zero for four in court.

While Khan defends that the Commission will only bring cases where they believe the law has been violated, she also emphasizes that losing some is “okay”. Khan often emphasizes the importance of confronting potential law violators and how these cases—even the losses—develop an “institutional dialogue”. Khan argues that under an enforcement scheme underpinned by century-old law, there is great value to pushing for clarification of these statutes in the modern era.

Khan’s strategy is reminiscent of a specific form of litigation known as strategic or “impact” litigation. Impact litigation, often implemented by human rights organizations, “refers to the strategic process of selecting and pursuing legal actions to achieve far-reaching and lasting effects beyond the particular case involved.” While the label of impact litigation is generally claimed by progressive causes, many kinds of private and ideological organizations have implemented similar strategies to gain power before the courts. For civil rights organizations, impact litigation most notably brought about desegregation and marriage equality; corporations, through similar strategies, have secured a myriad of Constitutional rights such as personhood status and free speech; and conservative activists, through multidecade campaigns, have used the courts to champion causes like enhancing the Second Amendment and restricting abortion. Like Khan, these parties relied on the courts to force a conversation among our institutions—i.e., an “institutional dialogue”—and push the law in their direction. And while these private parties have been successful in their causes, is it appropriate for Khan to be using a public agency in this way?

The difference between Khan and these parties is that the Chair is an unelected government official. This distinction presents an important question: whether an agency official should be using the courts to legislate new policy. I believe Khan is correct in that our institutions do maintain a dialogue amongst each other. The courts communicate directly to Congress when they explain how current law does not substantiate novel FTC legal theories. Should Congress want to empower the FTC in Khan’s vision, Khan is using her power to have the courts provide a roadmap. Alternatively, the Executive Branch’s responsibility is to enforce the laws, not to legislate them. Traditionally, Khan’s role is not to impose issues before Congress—she is an enforcer. Congress will pass new legislation when they decide it is time to take on Big Tech. As such, there are legitimate questions as to whether Khan’s actions are a legitimate use of taxpayer funds.

I am unsure of whether Khan’s strategy is the right one. I am sympathetic to the traditional separation of powers among our branches of government. Today, however, it often feels as if our legislators are ill-equipped to adequately respond to the wide array of markets evolving at an exponential pace. In contrast, the Executive Branch is nimble and powerful, which is what makes it a great enforcer. Yet, at the same time, governing these markets poses significant questions which may benefit from the slow deliberation of our legislators. Your own feelings may reflect your beliefs about how our Executive Branch ought to function. In either case, we will be watching as the Khan and the FTC make their case for reimagining the markets.

 

Suggested Citation: Garry Blum, When Is It Okay To Lose? Reviewing FTC Chair Khan’s Legal Strategy, Cornell J.L. & Pub. Pol’y, The Issue Spotter (November 13, 2023), http://jlpp.org/blogzine/when-is-it-okay-to-lose-reviewing-ftc-chair-khans-legal-strategy/.