Last March, Federal Trade Commission (FTC) board member Christine Wilson resigned following publication of an op-ed in The Wall Street Journal detailing FTC Chair Lina Khan’s mismanagement of the agency. The op-ed details possible violations of federal ethics guidelines. Wilson’s resignation left the FTC with only three board members, instead of the five necessary to be considered a full board. More troubling is that all the current commissioners are Democrats who vote in lockstep with Khan. While the presence of two Republicans on the board might not block Khan from wasting taxpayer money on lawsuits with little or no chance of success, a Republican FTC commissioner could issue dissenting opinions explaining the flaws in Khan’s approach. This could be very useful to the efforts of congressional Republicans like House Judiciary Committee Chair Jim Jordan to expose Khan’s mismanagement of the agency and her disregard of its precedents, rules, and the advice of professional staff in pursuit of her radical agenda.
Therefore, it was good news when it was announced that one of President Joe Biden’s nominees for the “Republican seat” on the FTC’s board (who, as is the custom, was suggested to Biden by Senate Republican Leader Mitch McConnell) was former Virginia Solicitor General Andrew Ferguson. He would be one of the nominees voted on before the Senate adjourned for the year. Unfortunately, Missouri Republican Senator Josh Hawley is withholding consent to move the nomination forward because he had questions regarding Ferguson’s position on the use of antitrust law to rein in Big Tech. This is disappointing, but not surprising.
Hawley is one of the—if not the leading—“Khanservatives” in the Senate. Khanservatives are self-identified conservatives whose views on antitrust parallel those of Lina Khan. Hawley has introduced legislation to strengthen federal antitrust laws and has co-sponsored legislation that would, in the name of “protecting” consumers and small business from Big Tech, incentivize Amazon to stop allowing small businesses to participate in Amazon’s popular PRIME program. Hawley claims to be acting as a populist, even though such legislation would cripple one of America’s leading industries, raise prices, reduce the quality and quantity of goods available online, and make American tech companies less competitive in the international market. It is odd that a China hawk like Hawley would support policies that will harm American businesses, and thus benefit Chinese industries.
Hawley’s letter to McConnell contains 18 questions he would like Ferguson to answer before he lifts his hold on the nomination. While some of the questions are reasonable—such as asking him to explain his philosophy of antitrust law and how he developed that philosophy—others seem to be leading questions designed to give Hawley a reason to oppose Ferguson and rally other Khanservaitves and Democrats to defeat his nomination. For example, one of the questions is whether Ferguson believes the consumer welfare standard—which according to Hawley is solely focused on price—encompasses the full concerns of American antitrust law. and whether the consumer welfare standard—which has dominated in antitrust policy for over forty years—is consistent with the purpose of federal antitrust laws.
As the name suggests, the consumer welfare standard judges a business’s actions by how they affect consumers, which is how the market judges a business’s action. Khan and her allies find that the consumer welfare standard does not give the federal government sufficient justification for aggressive and broad use of antitrust laws against businesses who have committed the heinous crime of becoming too big by doing too good a job of serving consumers. Hawley, who recently renounced his prior support for right-to-work laws, wants to know how Ferguson thinks regulators should examine the potential harms of mergers to unions and workers. Expanding antitrust to consider how a merger or an acquisition will affect unions is one of the goals of Khan and her fellow hipster-Brandeisians. This would enable the FTC and the Justice Department’s antitrust division (which is headed by Khan’s fellow hipster-Brandeisian Jonathan Kanter) to force companies to hand over power regarding pay, staffing levels, and working conditions to union bosses. Hawley’s embrace of compulsory unionism is, once again, a case of him supporting bad economics that harm the economy to the detriment not just of consumers and businesses, but of workers themselves.
Hawley parrots the progressive claim that the consumer welfare standard focuses merely on prices. While lower prices are the easiest way to measure the effects of a merger on consumers, concern for consumer welfare requires looking at other factors, such as product quality and customer service. Whether intentional or not, the effect of Hawley’s hold on Ferguson’s Senate confirmation will be to give Lina Khan more time to advance her radical agenda without facing any internal criticism. It could also make it more difficult for Jim Jordan and his Judiciary Committee colleagues to effectively investigate Khan’s job performance.
The worst-case scenario is the Hawley is able to assemble a coalition to block Ferguson’s nomination, as well as that of any other GOP nominee who opposes the Khan-Hawley agenda—forcing Senator McConnell to fill the empty GOP slots on the FTC board with Khanservatives. Hopefully McConnell will stand firm to make sure the Republican seat goes to a free-market conservative, not a big government Khanservative.
