The FTC Can Begin to Repair What It Has Broken – Our Trust

It is no secret that the business community has serious concerns with the ideological agenda being pushed by Federal Trade Commission Chair Lina Khan and her fellow Commissioners. Policy differences that stem from strongly held views are fair game for those in government to be criticized over—but faith in our democratic institutions requires a commitment to transparency and the rule of law. That is especially true when an administrative agency has the power to serve as prosecutor, judge, and jury all at the same time, as the FTC does.

The FTC can not only sue companies for what it feels are violations of the law, but also prosecute them in an internal court, where the Commissioners set the rules and render judgment. This construction is exceptionally ripe for abuse, and it is why strong adherence to ethical standards is essential. It is bad enough when a prosecutor is biased against you; it is a denial of justice when that biased prosecutor also gets to decide the case.

For possibly the first time in the more than 100-year history of the Federal Trade Commission, a Commissioner blatantly ignored the recusal recommendation made by the agency’s ethics official. This specific incident had to do with the FTC’s 3-2 decision last year to pursue a complaint within its own administrative court to block an acquisition being pursued by Meta.

From the facts that have now come to light, Chair Khan received counsel from the FTC’s ethics official that she recuse herself from the case based on statements she made that Meta not be allowed to pursue future acquisitions. Chair Khan declined to follow that advice without providing any explanation to the parties or the public. When then-Commissioner Christine Wilson sought to bring this to light, the Democratic appointed Commissioners refused to allow her to include her concerns in official FTC records—an act that ultimately led to her decision to resign. While the FTC ultimately dropped the case against Meta, the questions raised by this episode and the concern that it could easily repeat itself remain.

The U.S. Chamber of Commerce submitted a formal petition for rulemaking with the FTC on Wednesday, Sept. 13, requesting changes to how the agency handles recusal petitions. These proposed changes would leave the discretion of Commissioners unchanged when considering recusal petitions but would require that they seek written ethics counsel. If they decline to follow the ethics counsel guidance, they would need to disclose in writing the rationale for their decision, all of which would become part of the public record. If the matter comes to a vote before the FTC, the other Commissioners would also need to explain their rationale for allowing a Commissioner to sit in judgment against the advice of ethics counsel. 

There are open questions about whether any agency, especially one like the FTC, should be able to bring cases in administrative courts that the agency itself controls. It is absolutely the case that the agency should be prohibited from bringing cases in its own courts if it cannot assure a fair adjudicatory process free from bias.  

The modest changes sought by the U.S. Chamber would ensure that potential conflicts of interest are fully brought to light, helping preserve the rights of those who are being prosecuted by the FTC. If current and future commissioners can’t agree to basic principles of transparency and accountability, it’s time they reconsider their positions as public servants.  

About the authors

Sean Heather

Sean Heather is Senior Vice President for International Regulatory Affairs and Antitrust.

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