FTC’s Khan Sheds ‘Artillery Spotter’ With Wilson’s Abrupt Exit

Republican FTC Commissioner Christine Wilson’s resignation in protest of agency chair Lina Khan’s ambitious antitrust agenda leaves Khan without an internal GOP check on her moves.

A trio of Democrats will sit alone on the commission after Wilson departs, with full ability to continue opposing big mergers and anticompetitive activity. The Democrats will be able to press ahead for now without having to worry about minority dissents that question agency actions and serve as roadmaps for legal challenges.

“The position of the dissenting commissioner has been a source of enormous transparency over time,” said William Kovacic, a former Republican FTC chair. “A consequence of her leaving is you don’t have an artillery spotter within the agency—a running, insider account of the operations of the agency and what she sees to be its flaws.”

Wilson’s departure will leave the five-seat commission without either of its minority members after former Republican commissioner Noah Phillips departed last October.

Wilson has not said how soon she plans to leave the commission. It’s unclear when President Joe Biden will nominate replacements, let alone when the Democratic-controlled US Senate would confirm them. Biden has renominated Democratic commissioner Rebecca Kelly Slaughter to a new term.

Among the higher profile issues before the commission is its proposed rule to ban noncompete agreements that employers force employees to sign that has received more than 10,000 comments. Business groups have already promised to challenge the proposal in court.

Another agency effort toward developing rules to restrict how companies can collect and use data about consumers for targeted advertising online is also generating intense interest from privacy advocates and trade groups.

The commission is working with the Justice Department’s antitrust division to update guidelines used to evaluate the competitive impact of mergers and determine whether they should be challenged.

Questioning Authority

Since Democrats took over control of the FTC, especially after Phillips departed, Wilson’s dissents have offered insights into the commission’s internal disputes and dynamics.

In response to the agency’s latest strategic plan, Wilson warned that the FTC’s aggressive agenda could overstep its legal boundaries and invite pushback from Congress and the courts.

Wilson has often questioned whether the agency possesses the authority to pursue various actions, especially on antitrust issues like its proposed ban on noncompete agreements that employers use to discourage their workers from leaving for rival firms.

The FTC’s proposal lacks clear evidence of harms to consumers and competition and could bring unintended consequences for industry, Wilson said at the time.

She also blasted Khan for refusing to recuse herself from the FTC’s in-house lawsuit against Meta Platforms Inc.’s acquisition of VR developer Within Unlimited, after the agency lost a preliminary challenge to the deal in federal court.

In her prior work as an academic and as a congressional aide, Khan criticized Meta’s acquisition strategy in areas including virtual reality, raising questions about the ethics of her participation in the antitrust challenge, Wilson said in her dissent.

The FTC pulled back its in-house challenge to Meta’s deal Feb. 10.

“Commissioner Wilson’s comments give legitimacy to several defense counsel’s arguments in FTC investigations,” said Tony DiResta, a partner at Holland & Knight and a former FTC official, in an email. Her worries about abuses of power, failures to follow precedent, due-process violations, and rulemaking oversteps will likely receive attention from opposing counsel, he said.

“Her comments may also increase the appetite for targets of investigations to litigate, instead of just settling the matter,” DiResta said.

The minority viewpoint often helped improve decisions by avoiding the agency going public with a one-sided view, former Republican commissioner Maureen Ohlhausen said. That can strengthen its enforcement and regulatory actions, she said.

Defendants also can use dissents to help plot strategy, Ohlhausen said.

Ohlhausen dissented against the FTC’s competition case against Qualcomm Inc. in 2017, worrying that the FTC’s complaint failed to allege a central antitrust violation and leaned too heavily on the company’s ability to use its market power to charge higher royalties for chip licensing. Her concerns were later reflected in a US Court of Appeals for the Ninth Circuit decision that vacated a lower court ruling, saying in part that Qualcomm could legally charge royalties—even high ones.

Khan, Slaughter, and the third Democratic commissioner, Alvaro Bedoya, reacted to Wilson’s planned resignation with a brief, joint statement.

“While we often disagreed with Commissioner Wilson, we respect her devotion to her beliefs and are grateful for her public service,” the Democratic trio said. “We wish her well in her next endeavor.”