FTC commissioner resigns in protest of agency’s ‘disregard for the rule of law’

Christine Wilson, the lone Republican commissioner of the Federal Trade Commission (FTC), announced her resignation on Tuesday. Op-Ed Published by The Wall Street Journal. Led by chair Lina Khan, Wilson said, the FTC has engaged in ethics violations and political, arbitrary antitrust practices with little regard for congressional mandates or judicial guidance. After Wilson’s departure, only three of the watchdog’s five commissioners will remain, and all will be Democrats.

“Much ink has been spilled about Lina Khan’s efforts to reshape federal antitrust laws as chairman of the Federal Trade Commission,” Wilson began. “His disregard for the rule of law and due process, and the manner in which he was enabled by senior FTC officials, are understated.”

He is a Category 5 single out of the FTC Statement of Policy, issued in November, greatly expanded the FTC’s effective authority. The statement redefined antitrust specifically to enable the FTC to take regulatory action against any current business practice that may harm future economic competition, regardless of whether the practice causes current harm. The policy statement breaks with the modern consensus on antitrust, which prioritizes consumer welfare.

Wilson also criticized Khan’s decision not to recuse himself from the agency’s actions to prevent Meta’s. acquisition Among these are virtual reality startups. Before joining the FTC, Khan publicly argued that Meta should be barred from acquiring another company. “I dissented on the basis of due process, which requires those sitting in judicial power to avoid even the appearance of wrongdoing. The law is clear,” Wilson said, adding that his dissent, which also included ethics-based objections, was redacted. A procedure that “had no other purpose than to save Ms. Khan from embarrassment.”

Wilson is not alone in his concerns. He wrote that the Federal Employee Attitudes Survey conducted in 2020 found that “87% of FTC employees surveyed agreed that the agency’s senior officials maintain high standards of honesty and integrity,” while “today that share stands at 49%.”

I have repeatedly failed to convince Ms. Khan and her supporters to do the right thing, and I refuse to give any further indication of legitimacy to their efforts,” Wilson wrote.

Although he is a Republican, Wilson’s resignation is not partisan. Khan’s FTC, backed by President Joe Biden, is working on a new, economically obsolete antitrust playbook of the past. Report Timothy J. Murris, former FTC chairman and a visiting senior fellow at the American Enterprise Institute.

Today’s radical antitrusters—so-called neo-Brandeisians—lean heavily on the precedents set by the Robinson-Patman Act of 1936 as well as Supreme Court case law in the 1960s and 70s, Morris writes. Both advanced political, not economic, goals and both harmed consumers; Such efforts are based on the theory of smaller, inefficient competitors that big business is inherently bad.

Congress codified the Robinson-Patman Act to protect retail and supply chain incumbents against the competitive efficiency of the chain store model—eg, the Great Atlantic and Pacific Tea Company (A&P). “The main effect of this law on A&P and other chains was to prevent them from obtaining products at lower wholesale prices than their smaller competitors and thus passing savings on to consumers,” Morris noted. “A&P and other supermarket chains lost sales and profits because they raised retail prices to cover higher wholesale prices. The ultimate victim of this law has been millions of ordinary consumers forced to pay higher prices for food and other essentials.”

The Supreme Court’s mid-century consolidated jurisprudence was so haphazard that it led Justice Potter Stewart to call the Court’s “The only consistency was that “government always wins.” In United States v. Vaughn’s Grocery Co (1966), the case in which dissenter Stewart coined that phrase, a majority of the Court blocked the acquisition of Von’s, a small Los Angeles grocery chain shopping bag (their combined market share in the city was a paltry 7.5 percent).

So strong was the populist wave and conviction that ‘big bad’,” Morris writes, “advocates for mergers would desperately argue that their mergers did not lead to efficiencies and cost savings, lest mergers be seen as allowing mergers. Firms tend to gain market share (ie, grow larger) because cost savings will lower prices.”

The next generation of judges, including Obama-era policymakers, rejected those mid-century mistrust overreaches among distrusted officials and academics. the court. Nevertheless, neo-Brandesians like Khan, Biden and numerous Republicans seem determined to revive past antitrust failures.