Senate GOP Seeks to Turn FTC Nominations Into Referendum on Khan

Senate Republicans took advantage of a nomination hearing for the Federal Trade Commission to take aim at the agency’s embattled chief and nail down commitments on artificial intelligence.

Commissioner Rebecca Kelly Slaughter, who is up for reconfirmation after a five-year term, fended off questions from Republican Sens. Ted Cruz (Texas), Deb Fischer (Nebraska), and Dan Sullivan (Alaska) over the agency’s morale issues and other criticism directed at FTC Chair Lina Khan. Slaughter and two new Republican nominees to the agency testified at a Wednesday nomination hearing before the Senate Committee on Commerce, Science, and Transportation.

“I will note, these questions really should not be directed at you,” Cruz, the panel’s ranking member and a former director of the FTC’s Office of Policy Planning, told Slaughter. “Chair Khan, sitting in this hearing room today, has not testified before this committee since April 21, 2021.”

“I’m going to instead ask you about the conduct that has occurred under her watch,” he said.

The one Democratic and two Republican nominees faced an otherwise light grilling from senators as they outlined their views on artificial intelligence, antitrust enforcement, and the Section 230 legal liability shield for tech companies. If they are confirmed, it would be the first time in nearly a year that the agency has held a full complement of commissioners. Its Democrat-only leadership has left the FTC open to criticism of partisanship.

The timing of next steps for the three nominees is unclear. The looming government shutdown will likely slow their path to confirmation, and a full committee vote hasn’t yet been scheduled.

President Joe Biden nominated Andrew Ferguson and Melissa Holyoak—solicitors general for Virginia and Utah—in July to fill the two empty Republican seats on the FTC. It’s been nearly six months since the agency lost its last Republican commissioner, Christine Wilson, who resigned in March.

Read More: Elizabeth Warren Backs FTC’s Khan in US Merger Crackdown (2)

Embattled Agency

Republicans on the committee highlighted concerns about plummeting staff morale under Khan and the Democratic majority’s redaction of a dissenting statement from Wilson, which contributed to her decision to resign.

Sullivan demanded answers over alleged ethics violations by Khan, who chose not to follow advice from an agency ethics official that she should recuse herself from the FTC’s challenge to Meta Platforms Inc.‘s acquisition of Within Unlimited.

Slaughter defended Khan’s previous testimony on the issue, and all three nominees committed to following high ethics standards.

Khan’s tenure at the FTC has been punctuated by partisan congressional scrutiny. Republicans in both the House and Senate have demanded answers on everything from her ethics guidance to the agency’s record of staff departures and courtroom challenges to mergers.

Section 230, AI

Slaughter and the other nominees also backed legislation from Sen. John Thune (R-S.D.) to remove Section 230 protections for civil enforcement actions brought by the federal government, including the FTC. Section 230 insulates from lawsuits the users and services who host or share content.

“We frequently find ourselves in investigations where we are stymied by the application of 230 in civil enforcement actions,” Slaughter said. “It’s important, where the law has been violated, that there not be a ‘get out of jail free’ clause just for intermediaries, and that they would have to have actual liability.”

The bill—Thune and Sen. Brian Schatz’s (D-Hawaii) bipartisan Internet PACT Act (S. 483)—was referred to the Commerce committee in February, but hasn’t yet received a hearing.

“I don’t think there’s any state litigator in the country who has not had to confront 230 when trying to address the harms that some social media platforms inflict on the citizens of our states,” echoed Ferguson, the Virginia solicitor general. He spent two years as Senate Minority Leader Mitch McConnell’s chief counsel, and worked for both Sen. Chuck Grassley (R-Iowa) and Sen. Lindsey Graham (R-S.C.).

All three nominees, in response to questioning from Thune, also said they’d welcome and encourage congressional action on artificial intelligence.

“If the conduct that AI facilitates violates those laws or rules, I think that the FTC should act,” Ferguson said. “But insofar as we’re contemplating sort of a grand regulatory framework for AI, I think that that’s squarely within the purview of of Congress.”

Holyoak agreed, saying she’d work with Congress on AI regulations if confirmed. She spent eight years at the Competitive Enterprise Institute, a free market think tank, and its Center for Class Action Fairness. At CEI and the Center, she challenged class action settlements over their alleged unfairness to consumers.