Federal Trade Commission Chair Lina Khan fended off Republican attacks over her adherence to ethics laws and aggressive antitrust enforcement at a heated congressional hearing Thursday, during which she was labeled a “bully” and told her leadership was “a disaster.”
(Bloomberg) — Federal Trade Commission Chair Lina Khan fended off Republican attacks over her adherence to ethics laws and aggressive antitrust enforcement at a heated congressional hearing Thursday, during which she was labeled a “bully” and told her leadership was “a disaster.”
Kahn calmly defended her participation in a case involving Meta Platforms Inc. despite a recommendation from the agency’s top ethics officer, explaining that she had no financial stake in that company or any others that the FTC is investigating.
“There was no ethics violation created by my participation,” Khan told the House Judiciary Committee, adding she consulted with ethics officials and followed the recommended framework in making her decision. “I have not a penny in financial stock.”
Republicans alleged that Khan gave “misleading testimony” before Congress in April over her participation in the case, a contention she denied outright.
The hearing into oversight of the FTC took a contentious turn right at the start when Chair Jim Jordan, an Ohio Republican, called her stewardship of the FTC “a disaster” and questioned whether the agency’s curbs on Twitter Inc.’s privacy practices were politically motivated since Elon Musk bought the platform last March. Jordan and Washington Representative Cathy McMorris Rodgers sent Khan a letter Wednesday accusing her of creating a “toxic” environment at the FTC and under-enforcement of merger and privacy laws.
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Khan got strong support from the White House.
“Chair Khan has delivered results for families, consumers, workers, small businesses, and entrepreneurs,” spokesman Michael Kikukawa said in an email. Those results include “everything from protecting our kids from unlawful use of their personal data, to making it cheaper and easier for consumers to repair items they own, to moving to ban non-competes that hurt workers, to stopping bad mergers like a semiconductor megamerger that would’ve stifled innovation.”
Thursday’s hearing was a rough homecoming for Khan, demonstrating the sharp turn the House has taken on antitrust issues since Republicans took over the chamber in January. Before her tenure at the FTC, Khan served as a staffer for the panel in 2019 and 2020, working on a bipartisan investigation into major tech platforms.
Democrats and some Republicans who had worked with Khan on that probe criticized the focus on ethics. Representative Ken Buck, a Colorado Republican, said that members of Congress aren’t barred from buying individual stocks even as they pass legislation that could impact their investments.
“We can’t pass a stock ban, but we can call you into Congress and suggest that somehow you shouldn’t be involved in cases involving some of these companies because you wrote a law review article,” Buck said.
Democratic Representative Glenn Ivey of Maryland also took aim at the GOP’s focus on the FTC’s Twitter probe, where Jordan and others alleged the agency had sent overbroad requests for information and interviews. Ivey read from some of the panel’s own requests to the federal agencies and companies that mirrored the FTC’s requests to Twitter.
“If we’re gonna throw rocks, lets make sure we’re not in a glass house,” he said. “We should be very careful we’re using the power of this committee and the House in a respectful way, just like we’re asking the FTC to.”
Khan also defended the agency’s decision to appeal a ruling in favor of Microsoft Corp.’s acquisition of Activision Blizzard Inc. Republicans criticized the FTC’s record of merger losses, asking if she was “losing on purpose” to influence Congress to pass antitrust legislation.
“We fight hard when we believe there is a law violation,” she said. “When we get an adverse ruling, our teams look closely at the text of opinion and see if there are errors on matters of law that warrant an appeal.”
Khan declined to comment on whether the FTC was looking into OpenAI in response to questions about the agency opening a probe into the startup’s popular ChatGPT chat bot.
“Some of the concerns we’re seeing in this AI space with ChatGPT and some of these other services are being fed a huge trove of data,” she said. “There are no checks on what type of data are being inserted into these companies.”
The FTC has had complaints about chatbots disclosing sensitive personal information as well as making libelous and defamatory statements, she said.
“That’s the kind of fraud and deception we are concerned about,” she said.
–With assistance from Daniel Papscun.
(Updates with comments on OpenAI in 15th paragraph.)
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