FTC Chair Lina Khan Defends M&A Crackdown

Federal Trade Commission Chairwoman Lina Khan said in an interview aired Sunday that corporations drive inflation and defended her agency’s role in cracking down on mergers and acquisitions.

Khan was questioned by Lesley Stahl on CBS News’ “60 Minutes,” who attended a town hall hosted by Khan and Rep. Alexandria Ocasio-Cortez, D-N.Y., where the FTC chairwoman said, “Too often, fewer and fewer companies control more and more of the market. And that means companies can start to cheat you, raise prices, steal from you.”

“So there’s no question that the pandemic and the war have led to a spike in prices. Interestingly, even as some of those supply chain pressures have eased, prices haven’t come down as much,” Khan told Stahl about the cause of inflation. “There’s a lot of discussion about what’s driving inflation, and we’ve even seen some executives brag on earnings calls that inflation is great for their bottom line.”

Khan also said that it was proposed mergers and acquisitions, Entities subject to FTC regulatory oversight must maintain a competitive marketplace even as they create efficiencies that result in lower prices for consumers.

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“Even if these benefits occur, if the company is not controlled by competitors, it will have no incentive to exceed them benefits for the consumer because these consumers may have nowhere to go,” Khan said.

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Stahl noted that the FTC supervision and investigation proposed mergers can sometimes create a chilling effect that causes companies to withdraw from the transaction.

“Sometimes, you know, companies decide they’re going to abandon a merger,” Khan said. Stahl asked if abandoning a merger in the midst of an FTC review was a victory, to which Khan replied, “That’s true.”

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Khan added that it was “important to stop and keep some context,” explaining: “Of all the thousands of deals that are proposed each year, the FTC and DOJ combined investigate maybe 2% or 3%.”

The Chairwoman was asked if she ever worried that the power of the FTC and its Chairman could “lead to the destabilization of essentially the entire economy.”

“Of course we have to worry,” Khan said. “But we also have to worry about the destabilizing effect of companies believing they are above the law and can be reckless, taking huge risks in a way that could collapse the economyand then they can get away with just a slap on the wrist, and that also causes destabilization.”

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FTC is in the face of lawsuits accusing it of exceeding its authority, which Stahl noted could result in the courts limiting the agency’s powers.

She asked Khan if that potential outcome was troubling, and the chairwoman responded, “I think one of the challenges that agencies may face is limiting their own authority and powers by actually not using the powers that Congress has granted them.”

Stahl asked Khan if he would remain in his position as head of the FTC if Vice President Kamala Harris wins the election, given that some of its biggest donors have publicly called for Khan to be removed from power.

“My goal is not to listen to what the CEOs are saying on TV. It’s important in these jobs to really stay focused and block out a lot of the noise,” Khan said. “There’s so much work to be done and it’s a great honor to be in this position. And it would be an honor to have that opportunity to continue.”

Source of original article: FTC Chair Lina Khan Defends M&A Crackdown