Donald Trump is coming. Here's what that means for Lina Khan and the FTC
With President-elect Donald Trump returning to the White House, a changing of the guard at the Federal Trade Commission (FTC), a usually uncontroversial agency, is set to take place within a handful of months.
The FTC is charged with enforcing civil antitrust law and promoting consumer protection, which put it at the forefront of President Joe Biden’s pro-consumer agenda focused on junk fees and corporate dominance. With Chair Lina Khan at the head, the independent agency has aggressively pursued a number of high-profile cases, drawing criticism from corporate America and Republicans in Congress.
Under Khan, the FTC has killed mergers at Nvidia, Sanofi, Illumina, Lockheed Martin, and HCA Healthcare. It’s also attempting to block Microsoft’s $69 billion deal with Activision Blizzard and Kroger and Albertsons’ $25 billion merger, while its case alleging Meta holds an illegal monopoly was just allowed to move forward to trial. The agency also prevented Rite Aid from using facial recognition software and sued the three largest pharmacy benefit managers (PBMs) for allegedly artificially inflating the price of insulin, which they have disputed.
But now, a new administration is taking over.
According to Alden Abbott, who served as the FTC’s general counsel for part of the first Trump administration and held other positions earlier in his career, transitioning between administrations has generally been “fairly smooth.” Arguably, he said, the last tough transition was when Ronald Reagan took office and promoted deregulation, but the Biden administration went for its own shakeup.
“Lina Khan very much wanted to change things at the FTC to sort of go away from this consumer welfare standard” that had previously been at the heart of antitrust analysis, said Abbott, now a senior research fellow at the conservative Mercatus Center. He added that Khan wanted to focus on helping labor groups, protecting environmental interests, and helping small businesses compete.
Khan’s term officially expired in September, although she can stay in her position until the Senate confirms her replacement as commissioner. She would likely be replaced as chair in the interim by one of the two Republicans on the commission: Andrew Ferguson, formerly chief counsel for Sen. Mitch McConnell of Kentucky, or Melissa Holyoak, Utah’s former solicitor general.
If Khan does resign after Trump is inaugurated, as some expect, the commission will be led by two Democratic and two Republican commissioners until a fifth member is confirmed. Under Biden, it took Khan six months to be appointed, and an acting chair led the FTC for more than a year of Trump’s prior administration.
Lacking a tie-breaking vote could delay action at the FTC, such as when the commission was divided over 7-Eleven’s $21 billion purchase of Speedway stores in 2021. But that shouldn’t be a major problem.
“There have been periods of time where you only have four commissioners, two Democrats and two Republicans. Theoretically, they could do nothing,” said BakerHostetler partner Daniel Kaufman, who spent more than 23 years at the FTC’s Bureau of Consumer Protection. “Traditionally, the commissioners as a body work together when they’re an even number to make sure they’re moving forward on matters.”
Khan’s replacement will be vetted by Gail Slater, an aide to Vice President-elect JD Vance, who has put together a shortlist of candidates for top antitrust positions, Bloomberg News reported. Slater, a former Roku and Fox Corp. executive, is herself a candidate for a top antitrust job.
Potential candidates include Mark Meador, a partner at antitrust law firm Kressin Meador and a former FTC and Justice Department antitrust official, as well as Todd Zywicki, a professor of law at George Mason University, according to Bloomberg. Alex Okuliar, a partner at Morrison Foerster who helped lead the Trump administration’s antitrust inquiry into Google, is also a contender.
What’s on the agenda
Corporations largely expect the next administration to be friendlier than the Biden administration, which offered strict oversight and expressed concerns over consolidation in the media industry, among others. Wells Fargo said last week that a Trump White House would be a “regulatory game changer” for the banking sector, while Warner Bros. Discovery CEO David Zaslav expressed optimism on an earnings call.
Charter Communications said Wednesday it would acquire Liberty Broadband, with an estimated closing time of 2027. A day earlier, Liberty’s John Malone said that “consolidation is really the right direction” for the industry, arguing that it doesn’t reduce competition.
Several pending deals are also undergoing antitrust reviews, including Capital One’s bid to buy Discover for $35.3 billion and Synopsys’ attempt to acquire Ansys for $35 billion. Struggling chipmaker Intel is also potentially exploring a merger with Qualcomm, while a deal between rivals PGA Tour and LIV Golf is being ironed out.
Big Tech is likely to still be in the crosshairs of the next FTC, given Vance and other’s opposition to several major companies.
As recently as March, Vance called for Google to be broken up, calling it “one of the most dangerous companies in the world,” although Trump has been more skeptical. Abbott said he wouldn’t expect to see support for “massive, structural breakups” but more of an emphasis on conduct remedies. Under Khan, the FTC aggressively pursued litigation to halt mergers rather than settlement agreements.
Trump’s chosen pick for attorney general, controversial former Florida Rep. Matt Gaetz, has been a consistent critic of tech companies, often cheering on Khan’s efforts and calling himself a “Khanservative.” In Congress, he worked with both Democrats and Republicans to try to pass legislation making it easier to break up tech giants and prevent them from buying rivals.
“As the Republican Party becomes more working class, we’re less captive to the neolibertarian view that everything big business does to people is OK,” Gaetz told The Wall Street Journal in March. Republicans “can’t be whores for big business and be the voice of the working class at the same time,” he added.
Some proposed rules still hang in the balance ahead of Trump’s takeover, including a rule that would ban junk fees, while some established rules are prime targets for being undone. That includes the negative option rule, Kaufman said, which has already drawn lawsuits.
The FTC’s ban on noncompete agreements is also particularly vulnerable.
It has been opposed by Congressional Republicans and major business groups, including the U.S. Chamber of Commerce. The FTC is currently attempting to appeal two federal district court rulings against the ban. A Trump administration could drop those cases or seek to amend or repeal the rule, wrote Greg Care, a partner at Brown Goldstein & Levy, on Nov. 7.
