Facebook is asking that the new head of the Federal Trade Commission step away from decisions on whether to continue the agency's antitrust case against the social network giant, asserting that past public criticism of the company’s market power makes it impossible for her to be impartial.
Facebook Inc. petitioned the agency Wednesday to remove Chair Lina Khan from taking part in decisions on the FTC's antitrust lawsuit against the company. A federal judge recently dismissed the suit by the FTC and one from a coalition of states, saying they didn't provide enough evidence to prove that Facebook is a monopoly in the social networking market. The judge, however, allowed the FTC to revise its complaint and try again.
Khan has been a persistent critic of Amazon, Google and Apple, as well as Facebook.
FTC officials declined comment on Facebook’s motion, which came two weeks after Amazon requested that Khan be removed from taking part in antitrust investigations of that company. The agency could be expected to respond formally at some point. Khan has said she would seek the opinion of FTC ethics monitors if issues arose of potential conflict of interest.
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It's not known how internal FTC rules on conflict of interest might be interpreted in this case. On the face of it, though, “the fact that (Khan) has a point of view and has expressed it forcefully is not a basis for recusal," said Stephen Gillers, a law professor at New York University who is an expert on ethics.
In its petition, Facebook cited a 1966 ruling by a federal court disqualifying the FTC chair at the time from participating in a proceeding against the defendant company because he had earlier investigated many of the same facts concerning the company as a congressional aide.
As counsel to a House Judiciary antitrust panel in 2019 and 2020, Khan played a key role in an extensive bipartisan investigation of the market power of tech giants, including Facebook.
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In the 1966 case, then-FTC chair Paul Rand Dixon likely had access to relevant information through his congressional work. Gillers said that for Khan, who likely helped write the House committee's report on its investigation, the question is did she herself develop facts regarding Facebook in doing so, and in her current role will she be called upon to decide whether those facts are true. In other words, will she be judging the accuracy of her own prior work?
If Khan were to step aside, the FTC's current balance of three Democratic and two Republican commissioners would shift and could deadlock a decision on the Facebook case in a 2-2 tie. The two Republican commissioners voted against bringing the Facebook suit last year.
The requests from Facebook and Amazon come as the four tech giants fall under extreme scrutiny and legislative pressure from the FTC, the Justice Department, European regulators, lawmakers in Washington, and, most recently, from an executive order from the White House.
“When a new commissioner has already drawn factual and legal conclusions and deemed the target a lawbreaker, due process requires that individual to recuse herself from related matters when acting in the capacity of an FTC commissioner,” Facebook said in its petition. “Chair Khan has consistently made public statements not only accusing Facebook of conduct that merits disapproval, but specifically expressing her belief that the conduct meets the elements of an antitrust offense.”
President Joe Biden recently installed Khan as one of five commissioners and head of the FTC, signaling a tough stance toward Big Tech and its market dominance. At 32, she is the youngest chair in the history of the agency, which polices competition and consumer protection in industry generally, as well as digital privacy.
Facebook said it was making the request “to protect the fairness and impartiality" of the agency's antitrust proceedings. “Chair Khan has consistently made well-documented statements about Facebook and antitrust matters that would lead any reasonable observer to conclude that she has prejudged the Facebook antitrust case brought by the FTC," the company said in a statement.
Biden’s sweeping executive order on competition in U.S. industries, issued Friday, includes a new policy of closer scrutiny by regulators of proposed mergers, especially by dominant internet companies. Giant tech companies have snapped up competitors in hundreds of mergers in recent years, waved through by antitrust enforcers in both Republican and Democratic administrations.
The new order also asks the FTC to establish new rules on surveillance by tech giants and their accumulation of users’ data. In addition, the agency is requested to write rules barring unfair practices toward competitors in online marketplaces.
Last month ambitious legislation that could curb the market power of Facebook, Google, Amazon and Apple, and force them to sever their dominant platforms from their other lines of business was approved by a key House committee and sent to the full U.S. House. Some lawmakers and others critical of Facebook have cited its popular Instagram and WhatsApp messaging services as likely candidates to be divested from the core platform.