Lina Khan’s guerrilla should have been the beginning of her end

Democratic candidates are crisscrossing the country to drum up support ahead of the November election. Joining Sen. Bernie Sanders, Democratic Rep. Ruben Gallego and Rep. Raj Krishnamoorthi at campaign events will be unlikely star and purportedly independent federal employee, Federal Trade Commission (FTC) Chair Lina Khan.

Khan is scheduled to travel to Austin, Chicago and Arizona to campaign for Democratic candidates, tout his antitrust efforts at the FTC, such as his efforts to break up Amazon, and weigh in on why voters should demand more.

The head of an independent government agency publicly tying her fate to Democrats’ electoral prospects is not normal, and Khan’s plans have caught the attention of key lawmakers. In the short term that expired last week, Lina Khan went from being a DC darling to a political pariah. Interestingly, both political parties found common ground in condemning Khan’s regulatory actions as head of the FTC. Her partisan journey is a sign of desperation and Congress must check the politicization of the FTC by reaffirming Lina Khan’s position in the event she is asked to remain in office.

Khan’s overreaching has hampered the economy, hurt consumers and negatively impacted Central America. From a crackdown on so-called “junk fees” to anti-growth merger policies that hamper consumer businesses, Khan’s agenda has rightly faced growing bipartisan opposition.

Its unilateral actions have sent shockwaves through the industry, creating an atmosphere of uncertainty that stifles innovation and investment. Instead of focusing on protecting consumers and promoting fair competition, the organization opted for overzealous regulation that the former commissioner called “a disregard for the rule of law and due process.” A company that turns profits is guilty until proven innocent under the leadership of Lina Khan.

As a result, instead of investing in new technologies and innovations, companies were forced to strengthen their legal departments for fear of FTC financial penalties. The consumer welfare index, which has been the backbone of antitrust law for almost a generation, has been jettisoned in favor of an extremely active legal movement that views every corporate board as an adversary.

Instead of thoroughly examining the law to make legal changes, the commission rushed the case to trial and lost three of the most important merger cases involving popular consumer and patient products. This string of losses includes Microsoft’s acquisition of Activision Blizzard, Meta’s acquisition of Within, and Illumina’s acquisition of Grail.

Khan and many of her ideological allies fail to realize that mergers are the natural cycle of competitive free enterprise. Many mergers play a key role in keeping businesses afloat, preserving jobs and supporting the local economy, such as Nippon Steel’s proposed acquisition of US Steel, which would help keep thousands of jobs in America’s heartland. Or the failed Frontier-Spirit merger, which now threatens the future of the entire airline. Spirit Airlines, one of the top travel options for budget-conscious consumers, is currently exploring Chapter 11 bankruptcy.

To counter these losses, the agency is currently trying to revise its merger review policy, even facing opposition from former Obama administration officials and former FTC chief economists. This all stems from an ideological stance that aims to eliminate big players rather than sound economic or political reasoning.

Additionally, the FTC is concerned about the proposed final rule prohibiting non-compete agreements. The U.S. Chamber of Commerce was able to freeze the order after a court order was issued, arguing that the FTC exceeded its authority by issuing the regulation.

Another of Lina Khan’s overzealous initiatives is to crack down on so-called “junk fees,” or final fees commonly found in consumer services and transactions. They can cover a wide range of fees – from hotel fees and airline baggage fees to overdraft fees and cable TV installation costs. Seeking greater transparency and consumer protection is noble, but Khan’s assertive approach has resulted in a raft of new regulations that will only cost consumers more.

This regulatory tightening has left many companies scrambling to comply, resulting in fewer options for consumers, higher overall costs, and an overall sense of disorder and uncertainty. This has undoubtedly caused confusion and frustration for both businesses and the consumers they serve.

Both sides of the argument are rightly concerned about Lina Khan’s leadership at the FTC and the agency’s overall effectiveness. Consumers even more so. Its misguided priorities threaten the competitiveness that drives our nation’s economy and rewards consumers every day.

In today’s economic climate, prioritizing innovation, job creation and growth is critical, and the FTC’s initiatives must reflect these goals. The FTC needs to refocus its actions and avoid overstepping its bounds. American consumers and businesses alike benefit from having an effective and focused competition watchdog, but as Lina Khan ends her tenure at the FTC, it is nowhere to be found.

Yaël Ossowski is deputy director of the Consumer Choice Center.