Welcome

Amazon’s Push for Khan’s Recusal Tests Whether Opinions Are Bias

July 2, 2021, 8:31 AM

Amazon.com Inc.'s bid to get FTC Chair Lina Khan removed from the agency’s oversight of the company’s affairs will have to confront a basic principle—agency officials are allowed to have opinions.

Khan’s broad views on Amazon’s business were well-chronicled even before she became the Federal Trade Commission’s chair last week. But that may not be enough for the tech giant to get her removed from the agency’s review. Amazon’s lack of case specifics in its recusal request also could be an issue as the matter drags on, agency watchers say.

“The separation would be the distinction between personal bias against the company and having a view on policy,” said Daniel Crane, an antitrust law professor at the University of Michigan. “You are not required to recuse yourself as a Commissioner because you have a view that a certain kind of behavior should be considered illegal,” he said.

The Seattle-based company’s filing argued that Khan should be barred from handling any of the agency’s antitrust enforcement decisions affecting Amazon.

Khan, who wrote “Amazon’s Antitrust Paradox” as a law review note when she was a law student at Yale University, had called for breaking up the company, according to Amazon’s filing.

Her work on competition and digital markets during her stint at the House Judiciary Committee also shows “clear evidence of her bias against the company,” said Ashley Baker, director of public policy at the Committee for Justice, an advocacy group.

Recusals Rare

But recusal motions aren’t granted often, Baker said. “And in this instance Amazon is seeking broad recusal from matters involving the company, rather than asking for recusal in one specific case,” Baker said.

The FTC is reviewing Amazon’s proposed $8.45 billion acquisition of movie studio Metro-Goldwyn-Mayer. But the company doesn’t cite the deal or any specific matter that would be affected by Khan’s purview.

“There’s no case yet, so it’s a little hard to know exactly what she’d be recused from,” Crane said. “And for all we know, the case the FTC might bring against Amazon might be a different one than the ones she outlined previously in her scholarship.”

The FTC pointed to a rule that says it’s first up to the commissioner to recuse him or herself, according to Bloomberg News. If he or she declines to do so, the full commission votes on the matter without the participation of the commissioner who is subject to the recusal request.

Amazon also can pursue the matter in court if the agency takes any action against the company.

Past Attempts

According to Baker, Amazon’s strongest argument comes from citing Cinderella Career & Finishing School, Inc. v. FTC, in which the U.S. Court of Appeals for the District of Columbia Circuit ruled that the chairman’s refusal to recuse was a violation of due process.

“I think there are certainly some due process concerns raised by Khan’s involvement in cases involving Amazon, but it’s hard to say whether this could be applied more broadly to all matters rather than on a case-by-case basis,” Baker said.

Amazon’s filing may stem from its desire to take preemptive action in the face of possible enforcement actions down the road. “They can thematically say ‘this is a commission with an ideological axe to grind against Amazon,’” Crane said.

In 2009, Intel sought to have former FTC Commissioner J. Thomas Rosch recused from a review concerning the company. Among the FTC’s reasons for its denial was that Intel didn’t raise concerns soon enough, Baker said.

Joshua Wright, who was sworn in as a commissioner in 2013, recused himself from reviews involving Google because of his paid work as a lawyer or law firm working for the tech giant, said Gus Hurwitz, an administrative and antitrust law professor at the University of Nebraska.

That recusal fight had less to do with his opinions and more to do with his financial interest, Hurwitz said. “So, the question of whether or not his scholarly writings were sufficient wasn’t really brought to the fore,” he said.

Whether Khan should be recused also turns on the forum the FTC chooses for any enforcement actions against Amazon, Hurwitz said.

If the FTC files a complaint in its own administrative tribunal, Amazon will have a stronger argument for Khan’s recusal, he said.

“If the FTC is making rules or bringing a court case against Amazon, that’s where I think she’ll be on the strongest grounds,” he said.

—With assistance from David McLaughlin.

To contact the reporter on this story: Siri Bulusu in Washington at sbulusu@bloombergindustry.com; Claire Hao at chao@bloombergindustry.com

To contact the editors responsible for this story: Roger Yu at ryu@bloomberglaw.com; Laura D. Francis at lfrancis@bloomberglaw.com

To read more articles log in.

Learn more about a Bloomberg Law subscription.