Lina’s Lingering Legacy?

Cite this Article
Daniel J. Gilman, Lina’s Lingering Legacy?, Truth on the Market (January 24, 2025), https://truthonthemarket.com/2025/01/24/linas-lingering-legacy/

First and foremost, a belated Happy New Year, tout le monde

I have just flown home from France and boy are my arms fatigués. I was in Paris for meetings and, especially, for the International Center for Law & Economics’ (ICLE) conference (co-sponsored by European University Institute’s Department of Law, IE Law School Madrid, and the Vrije Universiteit Amsterdam’s Law & Technology Institute) “Substance over Slogans: Strengthening the Foundations of Antitrust.” We had a truly excellent and varied lineup, including notable participants from academia, government agencies, and legal professionals from the United States, UK, Europe, and Asia. Leading lights and a broad range of views were on hand—if not quite so broad as to include advocates of the “neo-Brandeisian” approach to antitrust. 

From my point of view, the neo-Brandeis lacuna was salutary. We’ve been treated to a great deal of press and federally sponsored marketing the past few years (including considerable puffery) about an antitrust revolution that has, to me, seemed to be oversold, under-evidenced, and under-accomplished. New York University’s Daniel Francis has an interesting essay in ProMarket that distinguishes two threads of Biden administration antitrust enforcement: an “evolutionary” approach that “built directly on the work of the Trump and Obama administration enforcers,” with some success, and a much ballyhooed “revolutionary” program that, he concludes, “has been mainly visible in rhetoric and in some agency actions outside of litigation” but that “has not succeeded”:

As the Biden administration comes to an end, not only is antitrust’s welfare paradigm intact: it has not even been seriously challenged. Protecting consumers, workers, and other market participants from concrete economic harms remains the most appealing way to understand the antitrust project. In fact, in the end, no coherent alternative vision was ever really offered.

That seems fair. At the very least, it seems a far more accurate assessment than Tim Wu’s recent swan-commercial in The Atlantic, which seeks to convince . . . readers of The Atlantic, I guess (perhaps himself included) that the revolution was not just a success but very likely a durable one: 

Anyone who works in government has a favorite metaphor for major policy change. Some talk about glaciers being redirected; I prefer the image of turning a battleship. The point is that it isn’t easy and may not happen at all, but if it does, the effects are lasting and hard to undo.

I suppose it’s true that battleships are hard to turn and that many never will (indeed, the last of them was decommissioned in 1992). And “progressive” antitrust is not over and done. But it has not yet seemed much of a revolution accompli, its popular press notwithstanding.  We shall see what enforcers, courts, and the larger antitrust community do in the coming years. In the meantime, it seems timely and especially useful to consider the established foundations, as they might be applied going forward in jurisdictions around the globe. That’s what we did in Paris. For those who missed it, ICLE will be posting a video of the proceedings. Stay tuned for that.   

Transparency Über Alles

One more bit of ground-clearing. There’s been a good deal of discussion on the topic of author disclosures of late. I understand that there are some conditions under which real conflicts of interest might be unknown, to someone’s detriment, as well as conditions under which there might be reasonable concerns about potential conflicts of interest. But some risks are greater (or lesser) than others, and some concerns are more (or less) reasonable. I have no idea what disclosure policy might be optimal or, for that matter, any conviction that a single policy is optimal across contexts. 

I fear, however, that some might believe that my own recent disclosures have been inadequate. I have been transparent about my employment at the International Center for Law & Economics. I receive a salary from ICLE. But I have not, heretofore, disclosed another possible source of bias. While my profile on the ICLE website notes my prior employment at the Federal Trade Commission (FTC), it does not disclose any details of my status as a federal retiree. In fact, I regularly receive valuable payments – both cash payments and in-kind payments—from the U.S. government.

In my research and writing on policy matters, I try to “call ‘em as I see ‘em.” I really do. I have not noticed that my work has been biased in favor of the government or, in particular, the FTC. Then again, bias is not always a conscious matter. With apologies for any undue prior omissions, I want to acknowledge that I receive financial and other benefits from the United States, an antitrust enforcer and regulator, in addition to my compensation from ICLE, a privately supported, nonprofit, nonpartisan research center.

Back to the Agency Beat

Things change. Jonathan Kanter has left the building at the U.S. Justice Department (DOJ) Antitrust Division, turning over the reins to division veteran Doha Mekki about a month ago. It’s been widely publicized that Gail Slater has been tapped to lead the antitrust division, but she needs a formal nomination and Senate confirmation to take the helm, and that means a bit of a lag before she takes charge. As I noted in my final post of 2024, she was a colleague of mine at the FTC, where I found her to be smart, thoughtful, and collegial, but that’s not to say that I know her plans or those of the incoming administration. 

Lina Khan has not yet left the FTC, although she did “step down” (read: was deprived of her position as chair) with President Donald Trump’s Inauguration Day designation of Commissioner Andrew Ferguson as chairman. For the moment, we have a Republican chair, a second Republican commissioner, and three Democratic commissioners. But just for the moment, as Khan has announced her departure, with a departure-by date of Jan. 31, if not a date certain. There are exit formalities to be observed, people to thank, files to delete, etc. She still gets a vote, for now, but she is no longer first among equals. 

In my year-end post, I had some observations on Kanter’s farewell remarks. Those remarks included, as I said:

the expected and appropriate thanks to the staff and a review of DOJ accomplishments, and there have been such, through the expected and at least partly appropriate lens of permissible puffery.

Then again, the rest seemed to me:

an odd mix of contentious—and, in some ways, distorted—legal and social history

We’ve had much the same from Khan, who published a list of FTC accomplishments from her tenure as chair—including, as an introduction, a “Letter from FTC Chair Lina M. Khan.” In her letter, we are assured that:

Since joining the agency in 2021, I have focused on ensuring the FTC is reinvigorating its full set of tools and authorities to deliver meaningful and material gains for American consumers, workers, and honest businesses.

Again, the thanks to staff are expected and appropriate, and a bit of puffery is understandable. Then again, there’s the spin on what was accomplished, the spin inherent in ignoring the conspicuous agency setbacks, and the question of whether a mixed record and no real acceleration of enforcement output—compare, for example, the assessments offered by the Sheppard Mullin’s Antitrust Law Blog and the Progressive Policy Institute—indicates that anything was “reinvigorated” relative to the antitrust-enforcement record of prior administrations, whether using the FTC’s “full set of tools and authorities,” or the full set and then some.   

Part of what’s unclear is what will happen to the various initiatives that have been launched during the administration’s 11th hour. Let’s skip right over the DOJ’s absolutely ludicrous proposed remedy (that is, the initial proposed final judgment) in the Google Search case. I detailed some of the many puzzles therein here, and I was hardly alone. See, e.g., Tom Lenard and Scott Wallsten in the Wall Street Journal and the articles contributed by former DOJ Chief Counsel for Economics Greg Werden and former FTC Office of Policy Planning Director Bilal Sayyed to a collection I was privileged to organize recently for Concurrences. I would hope to see the DOJ proposal modified in short order—but, then, we don’t yet have new leadership at the antitrust division. 

At the FTC, we saw a flood of commission actions—a few conventional ones and a spate of matters that seemed conspicuously rushed. Ferguson and Commissioner Melissa Holyoak both issued dissenting statements on the subject of the FTC’s closed Jan. 16 commission meeting. Ferguson described the meeting as an attempt by the outgoing administration to “ram its unpopular agenda through in its final hours.” Reading between the lines (but mostly, reading the lines), he seemed displeased:

Today, the Commission held a closed-door meeting and approved various enforcement matters, including matters that have not had the benefit of the careful deliberation that Congress intended when it tasked the enforcement of the FTC Act to a five-member body with no more than three members of the same political party. 

And he suggested, in no uncertain terms, a coming change of course:

But sauce for the goose is sauce for the gander. Given the zeal with which my Democrat colleagues have rammed through their agenda in the final hours of the Biden-Harris Administration, none of them should be surprised or outraged when the incoming majority implements President Trump’s vision with equal vigor.

I’d have focused less on the politics and more on the policy specifics. Then again, nobody asked me. And the real question is what will change, and when. Holyoak’s dissent gives us an accounting of the various twilight matters:

Since January 1, 2025, the Commission has voted on more than thirty matters, including seven proposed settlements, five federal court or administrative complaints, three notices or advance notices of proposed rulemaking, one final rule, eight final administrative consent orders, three reports for ongoing 6(b) studies, two enforcement policy or guidance statements, one potential 6(b) study, and several administrative matters.

I spent 16 years at the commission. Whatever anyone (say, e.g., Lina Khan, Jonathan Kanter, or Tim Wu) would have you believe about responsibilities shirked and powers left fallow, the staff tended to be conscientious, very busy, and very good at their jobs. Sometimes the docket was crowded, no doubt. But 30 matters is . . . a lot. As in, forgive my language, but holy shit you did not have more than 30 matters all ready to roll and queued up by the staff just begging for the commission’s attention and vote. No way, no how.  

And that may explain, for example, what looks to be a dubious Robinson-Patman Act complaint against Pepsi that the commission reported filing Jan. 17 (“looks to be” based on the FTC’s own description of the matter—they’ve not yet posted an actual complaint). Ferguson’s dissent is crystal clear on what he thinks of the matter:

The gaping holes in the evidence that Commission staff collected in its limited investigation make it impossible to determine whether the defendant, PepsiCo, Inc. (“Pepsi”), has broken the law. The Commission majority sues Pepsi nonetheless. The paucity of evidence is not a problem for the majority, because the law is beside the point.

And here’s Holyoak, who calls the case against Pepsi:

the worst case I have seen in my time at the Commission. Today’s Complaint against Pepsi is wholly deficient, not only because the pleadings fail to state a claim, but because the Majority rushed the case out the door before it had evidence to support the allegations. I am astounded that the Majority has such little regard for our staff that it is willing to send them to court like a lamb to the slaughter. And if by some chance the Complaint survives a motion to dismiss, the gaping holes in the supporting evidence will quickly become manifest. The Commission is not a plaintiffs’ law firm whose goal is to survive a motion to dismiss to get a quick settlement payout. We are an agency of the United States of America. And we must have “reason to believe” the law has been violated. We must do better than this. I dissent.

Whether the actual complaint will look more plausible, I cannot say without reading it. But I have my doubts. And, to be clear, I do not blame the staff. 

A change in administrations does not commonly bring a halt to law-enforcement matters that are already underway, whether a complaint has been filed in federal court or in the agency’s internal Part 3 process. But that may be due, in part, to a prior stability in the way the agency conceived and brought cases. It was not static over the decades, but nor was it revolutionary or rushed. And one wonders whether dissents (versus concurrences) by Ferguson and Holyoak provide a provisional map to matters that might be back-burnered or even dropped in the near future. 

On the research side, we might look at the dissenting statement (by Ferguson, joined by Holyoak) about the not-really-a-report on “Surveillance Pricing 6(b) Study: Research Summaries: A Staff Perspective.” Or one might read the “staff perspective” itself. It’s not a heavy lift. It’s 10 pages end to end, and some of the material is redacted. And a good chunk of what we’re able to read—most of the first page, more material on pages two and three, and then repeated reminders—is about the fact that, as the staff says: “There are limitations to this document.” So, for example, we’re told that:

The summaries do not represent the full breadth of information, degree of nuance, or level of detail with which staff are currently working. The details in this document are not fully representative of the products, data, or industries that could play a role in surveillance pricing. 

And we’re reminded that we’re not being presented with findings, as:

The format of this work aims to highlight initial observations and communicates that there is much more work to do and share. This document does not reflect or suggest any assessment as to whether anyone has engaged in illegal conduct. 

That is useful, if something we might have surmised from no publication at all. The staff carefully explains, with examples, that:

Many fields have a normalized version of a “pre-publication” that enables efficient dissemination of information, distributes broader access to critical work and thinking, encourages feedback and collaboration, and fosters open access to knowledge.

True enough, in abstract. But in toto, as one wag (nope, not me) put it, it reads as if it were written by a hostage. Note to staff: blink twice. 

There are very able economists, policy staff, and enforcers at the agency. There are people at the FTC—not a few—who know how to conduct a 6(b) study. This is not that.  

What else will change? Well, I don’t know, apart from the chairman’s statement that there will be changes. There are reasons to avoid a see-saw in agency policy with every change in administration. For one thing, sudden and drastic change is a challenge for compliance, the courts, and staff; for another it does little to enhance an agency’s reputation as an expert agency, and not merely a political one, which may be of special concern in the wake of the U.S. Supreme Court’s decisions in Loper Bright, West Virginia v. EPA, etc. And maybe, following the memory of a very real Herb Simon and a fictional Dr. Peter Venkman, this is one of those things that’s more of a guideline than a rule; and a better guideline when there’s not so much dross to be cleared away.

It is hard to imagine much support for ongoing appeals in defense of the FTC’s stayed (vacated, really) noncompete rule, which was passed on a party-line vote over dissents from both Ferguson and Holyoak (specifically, a dissent by Holyoak, joined by Ferguson, and another dissent by Ferguson, joined by Holyoak). Both argued, among other things, that the FTC lacked the authority to adopt such a rule. 

And whatever one thinks of the surveillance pricing “research summaries,” it’s hard to imagine proposed rulemaking along the sweeping lines described in the FTC’s 2022 advance notice of proposed rulemaking (ANPR) on “Commercial Surveillance and Data Security.” It’s been a minute, so I’ll remind folks of ICLE’s formal comments on the ANPR, which I drafted with my ICLE colleagues Geoff Manne and Kristian Stout. 

But what might be done and when across those 30-plus last-minute matters, and the rightly controversial merger guidelines, and the rightly (and perhaps even more) controversial Section 5 policy statement . . . well, we may be several months shy of a new FTC majority and/or a new assistant U.S. attorney general for antitrust. And, in any case, we’ll have to wait and see.