Amazon seeks recusal of FTC Chair Lina Khan, a longtime company critic

Lina Khan Photo Twitter @linakhanFTC

Amazon moved to bar the head of the Federal Trade Commission from overseeing antitrust matters regarding the e-commerce giant, citing her long-running criticism of the company.

New FTC Chair Lina Khan is unable to oversee matters regarding Amazon with “an open mind,” the company alleged in a filing to the commission. It asked that Khan recuse herself from issues involving the company.

Khan’s public criticism of Amazon started when she was a Yale University law student, where she wrote a 2017 paper, “Amazon’s Antitrust Paradox,” that argued a new antitrust standard needed to be applied to the company. She subsequently served as legal director for the Open Markets Institute, an advocacy group that has called for Amazon’s breakup. And Khan worked as counsel for the House Judiciary antitrust subcommittee, investigating anti-competitive behavior from Amazon and other tech giants.

Amazon spokesman Jack Evans said the company has “the utmost respect” for Khan but believes her past work critical of Amazon’s tactics “reflect preconceived views about the company.”

“Chair Khan’s body of work and public statements demonstrate that she has prejudged the outcome of matters the FTC may examine during her term and, under established law, preclude her from participating in such matters,” Evans said.

(Amazon chief executive Jeff Bezos owns The Washington Post.)

The FTC declined to comment. But Khan noted in her confirmation hearing before the Senate that she had “none of the financial conflicts or personal ties that are the basis of recusal under federal ethics laws.”

“I would be approaching these issues with an eye to the underlying facts and the empirics and really be following the evidence,” she said in response to Sen. Mike Lee, R-Utah, asking if her work on an extensive House investigation into the monopoly power of Facebook, Apple, Google and Amazon would be a basis for recusal.

Khan said if a request for recusal were to arise, she would confer with ethics officials at the agency on a case-by-case basis.

In its petition, Amazon said that Khan’s past work as a legal scholar, as well as her work with the Open Markets Institute, suggests she has already made up her mind on Amazon’s antitrust culpability.

Khan “has on numerous occasions argued that Amazon is guilty of antitrust violations and should be broken up,” the petition says. “These statements convey to any reasonable observer the clear impression that she has already made up her mind about many material facts relevant to Amazon’s antitrust culpability as well as about the ultimate issue of culpability itself.”

Khan became a prominent figure in the antitrust reform scene when she was still a law student at Yale. Her searing 24,000-word article argues that U.S. antitrust law isn’t equipped to deal with tech giants such as Amazon and their modern version of power. The article suggested a way to look at antitrust that went beyond examining just near-term effects on consumer pricing, which has been a key component of U.S. antitrust law for decades.

Instead, Khan’s paper explored how Amazon may be benefiting consumers in the near term but also how its control over competitors was causing far-reaching ripples throughout the industry.

The logo of Amazon is seen on the door of an Amazon Books retail store in New York City, U.S., February 14, 2019. REUTERS/Brendan McDermid/File Photo

The motion seeking Khan’s recusal comes as the FTC is considering Amazon’s proposed $8.45 billion acquisition of MGM Holdings, the parent of the MGM movie studio. Moreover, the FTC, along with the Justice Department, is in the midst of a sweeping review of possible antitrust conduct by tech giants, including Amazon.

The five-member FTC is currently split, with three Democrats and two Republicans. While Amazon has drawn bipartisan criticism for its conduct, it’s possible that one vote could tip the balance on specific matters before the agency.

Recusal motions at the agency are rare, but there are significant examples regarding the FTC chair, said William Kovacic, a former Republican FTC chair and a professor at George Washington University Law School. In the 1970s, then-FTC Chairman Michael Pertschuk withdrew from an inquiry into TV advertising aimed at children, a tactic about which he was critical. In the 1960s, a court disqualified then-FTC chairman Paul Rand Dixon from a case because he had served as chief counsel and staff director of a Senate subcommittee investigating the same issues.

Kovacic pointed out that Khan would have had to go through several ethics reviews before being nominated. It’s unlikely she was surprised by the request, he said.

“These are very tricky issues of degree,” he said in an interview. “But the expertise and knowledge that you would want to see applied day in and day out in the work of the agency can only come from your past work and thinking about these issues, about which you’re going to inform views.”

Still, the petition is one more thing to deal with.

“For the target of the recusal motion, the motions are an unwanted distraction from the pursuit of the agency’s program,” Kovacic said in an earlier email. “This is especially true for the chair.”

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