Internal emails show FTC’s Lina Khan is trying to win by losing

Critics of progressive antitrust have long wondered if Federal Trade Commission (FTC) Chair Lina Khan’s extraordinary losing streak in high-profile antitrust cases is the result of deliberate strategy rather than mere incompetence. Last summer, Rep. Kevin Kiley (R-Calif.) pointedly asked Lina Khan in a hearing: “Are you losing on purpose?”

At that point, Khan had racked up a remarkable four-case losing streak in antitrust merger cases. Courts most recently rejected her bid to stop Microsoft’s acquisition of Activision, and Meta’s acquisition of Within, a popular health-oriented gaming company and its app. The FTC lost these cases because it was weak on the facts, could not demonstrate competitive harms to consumers, extrapolated into possible but far from certain future effects and were based on novel antitrust theories that courts did not recognize.

But there may be method to this seeming madness. At a conference in 2022, Khan remarked that if “there’s a law violation” and agencies “think that current law might make it difficult to reach, there’s a huge benefit to still trying.” Khan added that any courtroom losses would signal to Congress that lawmakers need to update antitrust law.

So is the FTC Chair thinking that if she racks up losses against Big Tech companies, it will force Congress to pass progressive antitrust laws? An investigative report published by the House Judiciary Committee last Thursday provides evidence that she does. This report backs up its title — “Abuse of Power, Waste of Resources, and Fear: What Internal Documents and Testimony from Career Employees Show about the FTC under Chair Lina Khan” — with startlingly candid internal emails and testimony from senior agency employees.

The Federal Trade Commission has long been known for its cultivation of quality experts in economics and the law, whose deliberations are made through disciplined processes that determine when to investigate a merger or a practice, and when to file an antitrust lawsuit. I won’t rehash them all here, but collectively FTC’s current internal dysfunction explains why an annual OPM poll of federal employees shows morale and respect for the “honesty and integrity” of FTC leadership plunging from the highest level among federal agencies to the lowest levels under Khan.

The emails in the report describe an arrogant and aloof chair who consolidated all power within her office but doesn’t communicate often enough or effectively enough to even make use of that power. It documents what former Republican FTC Commissioner Christine Wilson has charged — that Khan keeps the other commissioners out of the loop, withholding information and surprising them with decisions. What is most startling is that Khan doesn’t seem to be concerned that her agency is dysfunctional and widely seen as failing.

In fact, losing appears to be her strategy.

The committee report states: “Career FTC staff members expressed concern that Chair Khan did not want the FTC to be successful and purposefully put staff in a position to complete poor work product, and even brought losing cases on purpose. Plainly stated, one manager wrote to another manager that ‘I’m not sure being successful (or doing things well) is a shared goal, as the chair wants to show that we can’t meet our mission mandate without legislative change.’”

Summing up one exchange, the House investigators concluded: “In other words, it was apparent to staff that the chair did not share staff’s goal of completing quality work and winning cases because the chair wants to force Congress to enact legislative change instead of winning cases in litigation.”

An FTC manager wrote to the agency’s chief of staff: “I also continue to get a sense that outside influences…have an undue impact on our priorities, investigation management, and enforcement decisions. While public perception of the commission’s performance is vital to institutional legitimacy and I recognize the need to explain to the public what we’re doing (or more accurately, what we’ve done), we should never make an enforcement-related decision for the sake of PR.”

But PR is what it is all about. Khan’s strategy seems to be to give ammunition to the likes of Sens. Amy Klobuchar (D-Minn.) and Elizabeth Warren (D-Mass.), and Republicans such as Josh Hawley (R-Mo.), to sell their colleagues on the notion that antitrust law is too weak, too broken, to be effective. Time for hipster antitrust 2.0!

Khan’s plan to win by losing may turn out to be a poor strategy. Given the external failure and internal turmoil at the FTC, it is more likely that Khan will simply lose by losing.

Robert H. Bork, Jr. is the president of the Antitrust Education Project.