In one of Lina Khan’s biggest embarrassments during her short tenure as Chair of the Federal Trade Commission (FTC), US District Judge Edward Davila prevented her from blocking Meta’s merger with virtual reality startup, Within. This decision surprises few following this case. However, the early, decisive nature of the ruling highlights the immense legal inadequacies with the FTC’s case against Meta.
The meritless nature of the FTC’s case has been well-documented. Even the FTC’s own staff lawyers and economists warned Khan against wasting agency resources on this lawsuit due to their internal determinations that the agency’s arguments has a high likelihood of failing in court. This lawsuit’s questionable history only became more evident when reports unveiled that Meta only found out about the existence of this suit via Twitter. Khan’s stubborn ambition flagrantly violated principles of legal wisdom and ethics that have been absent at the FTC since Khan took over.
Here’s the good news for fans of limited government: the more Khan tries to expand her agency’s power, the more her agency’s power will be curtailed by the other branches of government. Courts are currently adjudicating cases that assess the constitutionality of the FTC’s internal structure, such as Axon v. FTC. Until the courts make final determinations on these issues, Khan can force Meta to go through a similar legal process regarding the merger all over again in front of an administrative law judge. This unjust act of virtual double jeopardy could continue to delay this merger, despite its clear legality. Additionally, Khan still has a week to appeal the case, which would continue to delay a merger that would yield great benefits for the American companies involved and consumers.
Khan should stop this effort that has been riddled with unprofessional and imprudent choices before she subjects herself and the agency to further humiliation. Her political drive, however, will likely interfere with her better judgment in this matter. The FTC further demonstrated their biased proceedings this week when Lina Khan refused to recuse herself from these proceedings. Commission Christine Wilson’s dissent noted “three factually analogous cases” provide the grounds for her recusal on the basis that her serving as an adjudicator in this matter would “violate both due process principles and federal ethics standards.” However, activist FTC commissioners overruled Commissioner Wilson’s grave ethical concerns by allowing Khan to proceed in the case. This troubling, recent ruling further proves that Khan pays irresponsibly insufficient attention to ethical principles while yielding great power as FTC chair.
Congress needs to rein in FTC Chair Khan’s unethical attempt to use the powers of big government to subdue businesses that are too big for her liking. Chair Khan’s major loss in this case could only be the beginning of a series of embarrassments that will totally tarnish the FTC’s reputation as a federal agency if Congress does not hold her problematic actions accountable.