F.T.C.'s Court Loss Raises Fresh Questions About Its Chair's Strategy

F.T.C.'s Court Loss Raises Fresh Questions About Its Chair's Strategy

Lina Khan was appointed chair of the Federal Trade Commission in 2012 on the promise that she would take bold actions against the largest tech companies.

Ms. Khan stated at the time that the F.T.C. had been a weak cop for too long and needed to take on behemoths such as Microsoft, Amazon and Meta in court to curb their increasing power. Even if F.T.C. She added that even if the F.T.C. lost the cases, it would still be a partial win because it would show the need to update antitrust laws for the internet age.

On Tuesday, Khan's agenda suffered its biggest setback yet. Federal judge rejects the F.T.C. The F.T.C. This was after a similar loss in February when a court rejected an F.T.C. The lawsuit sought to stop Meta from purchasing the virtual reality startup Within.

The defeats raise doubts about Ms. Khan’s ability to achieve her ambitious goal, which is to reverse decades of weak enforcement of antitrust laws, as political pressure increases and corporate America's patience wanes. Ms. Khan's critics are more emboldened and are speaking out more loudly to poke holes in her take-it-to-the-courts strategy, saying the losses are not even partial wins -- they're just losses.

Anthony Sabino is a Professor of Business and Law at St. John's University. He said, "I totally disagree with this approach." She's trying change antitrust laws that have been in place for a century overnight. That's not wise.

He said that all these court losses made their threats seem like paper tigers.

Some wondered if Khan was wasting F.T.C. The F.T.C.'s resources are wasted on cases that can't be won. Ashley Baker, director of public policy for Committee for Justice (a conservative think-tank), said that they had crossed the line into being reckless in the cases that they brought.

As she plans further possible actions against tech giants, Ms. Khan is put in the hotseat by the tide of criticism. The F.T.C. The F.T.C.

Now, Ms. Khan must first defend herself. She is expected to face questions on Thursday at a House Judiciary Committee Hearing regarding oversight of the F.T.C. The website of the Republican-led committee says it wants to "examine mismanagement in the F.T.C." The website of the Republican-led panel says it wants to 'examine mismanagement of the F.T.C.

Ms. Khan refused to comment on this article and Douglas Farrar a F.T.C. A spokesman for the F.T.C. also declined to comment about how her court losses would affect her agenda. Mr. Farrar, the FTC's spokesman, said that the agency is 'disappointed' with the outcome of the Microsoft-Activision decision on Tuesday. This merger, he added, poses a clear threat to the open competition for cloud gaming, subscriptions services, and consoles. The F.T.C. The judge's ruling could be appealed.

Ms. Khan became famous in 2017 as a Yale Law student when she wrote a paper in a law review arguing that Amazon was crushing the competition and breaking antitrust laws, despite lower prices for consumers. The paper helped to spark a debate on how to limit tech giants, and modernize antitrust laws.

She repeatedly said that after President Biden appointed Ms. Khan as the F.T.C.'s new leader, the F.T.C. needed to be in court -- whether it won or lost -- to send a strong message to the tech industry that the agency would become a more tough sheriff. She maintained that even if she lost in court, it would slowly reform antitrust theories.

Ms. Khan used this thinking when the F.T.C. Last year, Meta was sued for attempting to buy a small virtual reality company called Within. It was surprising that Meta sued to stop it from buying a small virtual-reality company, Within.

Ms. Khan said that the regulators should stop violating consumer and competition protections in the cutting edge of technology. Not just where companies have already grown to behemoths.

In an interview she gave to The New York Times in January 2022, she stated that 'inaction can be costly'. "And that's really what we're trying to reverse."

A federal judge in early this year rejected the F.T.C. The F.T.C.'s request to block Meta's purchase of Within was rejected by a federal judge early this year. The judge did agree with the F.T.C. The judge agreed with some of the F.T.C.'s arguments including the way the agency defined the tech markets in this case.

The Microsoft-Activision loss was even more painful, in part because the mega-merger has been a test to see if tech deals can still be completed despite increased regulatory scrutiny. Judge Jacqueline Scott Corley of the U.S. District Court for the Northern District of California wrote: "That scrutiny has paidoff." Her ruling was not very favourable to the F.T.C.

The agency claimed that the transaction should not be closed because it could harm the competition. Microsoft could make Activision games exclusive for its Xbox consoles, or it could degrade the gaming experience on consoles such as Sony's PlayStation.

The F.T.C. The FTC's challenge of the merger would probably not win in the internal court. Microsoft, however, was able to convince the judge that it had done enough to protect rivals.

She wrote that the F.T.C.

Eleanor Fox said that it is too early to pass judgment on the strategy of Ms. Khan. She noted that regulators in other parts of the world, including the European Union and Britain, have taken antitrust action against large tech firms.

She said that Ms. Khan is only an exception in the U.S. and not worldwide.