Facebook Joins Amazon in Calling for FTC Chair to Step Aside on Antitrust Cases


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Lina Khan, nominee for Commissioner of the Federal Trade Commission (FTC)


Saul Loeb-Pool/Getty Images


Facebook

petitioned for Federal Trade Commission Chair Lina Khan to recuse herself from involvement in the stalled antitrust case against the company, arguing Khan’s history of criticizing the company and others would deny it due process.

Facebook made the request Wednesday, weeks after

Amazon.com

(ticker: AMZN) asked for Khan to recuse herself from its pending acquisition of film production and distribution company MGM Holdings and any other antitrust matters involving the tech giant.

Facebook said in the petition that Khan has already concluded Facebook violated antitrust laws based on years of journal articles written by her, public statements, now-deleted

Twitter

posts, and her work on the 16-month congressional investigation into tech companies.

“For the entirety of her professional career, Chair Khan has consistently and very publicly concluded that Facebook is guilty of violating the antitrust laws,” Facebook wrote.

The FTC declined to comment.

Last year, the FTC voted 3-2 to sue Facebook, seeking to break off Instagram and WhatsApp from the company, among other things. Should Khan recuse herself from involvement in the litigation that resulted, it’s likely the commission wouldn’t have enough votes to proceed with the case. Two Democrats and two Republicans serve on the commission with Khan.

Last Month, Facebook attorneys notched a courtroom victory when a federal judge dismissed the FTC’s lawsuit. But the judge gave the FTC—now under Khan’s leadership—a chance to rethink its arguments and amend its suit. Any amended Facebook litigation will likely be subject to a vote in the coming weeks and months. Facebook chief executive
Mark Zuckerberg
has described breakup attempts as an existential threat to the business.

Installing Khan as FTC chair last month is part of a wider push by the Biden administration to reign in corporate power. The president signed an executive order last week that instructed the FTC to develop a new policy for internet platform mergers that appeared to target Facebook specifically. The Biden administration’s efforts target Big Tech and a host of other industries such as agriculture, healthcare, and transportation.

Khan has been an outspoken critic of Big Tech companies. In a 2019 paper published in the Columbia Law Review, Khan argues that platforms, including Facebook, have become too powerful. In a 2017 article for the Yale Law Journal, Khan argues that Amazon poses anticompetitive concerns but has “escaped antitrust scrutiny.”

In its petition, Facebook said it was incorporating Amazon’s arguments and the ethics analysis offered by Amazon’s expert, professor Thomas Morgan. The chief difference is that Amazon hasn’t yet acquired MGM, whereas Facebook bought Instagram and WhatsApp years ago.

To succeed in either petition, the tech companies must show that a disinterested observer could determine that the FTC chair had already come to a factual and legal conclusion before any proceeding. According to The Wall Street Journal, disqualification requests haven’t seen great success in recent years.

Facebook shares fell 1.1% to $348.36 in Wednesday trading. The social media company’s stock has advanced 28% so far this year. The

S&P 500 index

has gained 17% over the same period.

Write to Max A. Cherney at max.cherney@barrons.com

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