Amazon filed a motion Wednesday with the Federal Trade Commission to request that Chairwoman Lina Khan recuse herself from any antitrust investigation into the America’s largest online retailer, a transfer that was met with derision by many market observers, lawyers and journalists. Experts on the FTC and antitrust regulation, nonetheless, inform MarketWatch that there’s an affordable likelihood Amazon will in the end succeed.
“This is a serious motion,” former FTC normal counsel Stephen Calkins mentioned in an interview. “Amazon
has retained an actual skilled to submit an affidavit … they usually have set out a prolonged, intensive evaluation setting out their aspect of the argument.”
Khan was confirmed by the Senate to function a commissioner simply over two weeks in the past earlier than being tapped by President Joe Biden to be chairwoman of the fee. She rose to fame in 2017 when she penned a Yale Law Journal article known as “Amazon’s Antitrust Paradox” about how current antitrust regulation is ill-equipped to rein out there energy of Big Tech. Starting in 2019, Khan labored for the House antitrust subcommittee on a report launched final October that mentioned there’s a “clear and compelling need to strengthen antitrust enforcement” with a particular deal with “the challenges offered by the dominance of Apple
and their enterprise practices.”
Amazon argued in its petition that Khan’s public statements and previous affiliation with teams that advocate for aggressive antitrust enforcement makes it clear that she has already “pre-judged” Amazon to be a monopoly engaged in anti-competitive practices, in violation of its constitutional proper to due course of.
Khan “has on numerous occasions argued that Amazon is guilty of antitrust violations and should be broken up,” the corporate wrote in its petition. “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.”
The FTC declined to remark for this text.
Calkins, a regulation professor at Wayne State University in Michigan, mentioned that whereas Amazon has made a believable argument that Khan ought to recuse herself, whether or not she is going to is one other matter. “There have been very few successful efforts like this, so I don’t want to overstate the probability of success.”
The political calculus
One cause that FTC commissioners not often recuse themselves from investigations is that it’s the FTC itself that decides whether or not recusal is critical, Calkins mentioned. If Khan declines to recuse, it will be the accountability of the opposite 4 commissioners to vote on the query. Even if the 2 Republican commissioners — who’re skeptical of the current bipartisan bush for stricter antitrust enforcement in opposition to Big Tech — vote for her recusal, it will doubtless find yourself in a 2-2 tie that will lead to her remaining concerned within the Amazon investigation.
William Kovacic, who additionally served as an FTC normal counsel earlier than his appointment as an FTC commissioner, advised MarketWatch that ideology isn’t the one driving think about how commissioners would possibly vote, noting that it’s a “delicate situation” if you’re requested to take into account sidelining a colleague. Meanwhile, the pending nomination of Commissioner Rohit Chopra to function the top of the Consumer Financial Protection Board could lead to Democrats briefly shedding a majority on the FTC, additional complicating any evaluation of whether or not Khan shall be pressured to recuse.
Khan mentioned throughout her affirmation listening to that she didn’t count on to want to recuse herself from investigations into Big Tech corporations, on condition that she has no monetary ties or earlier affiliation with them. But opposite to her assertion, these will not be the one issues that federal courts keep in mind if Amazon challenges an FTC resolution, absent recusal.
Ultimately the choice could also be made by the federal judiciary. Kovacic pointed to two appellate courtroom choices through which the courtroom voided FTC orders made in the course of the chairmanship of Paul Rand Dixon, who had served as counsel to a U.S. Senate subcommittee on antitrust and monopoly. Dixon was appointed to head the FTC by former President John F. Kennedy.
“He’d been involved in structuring the hearings, he asked a lot of questions, he made substantive comments at the hearings and the allegation the companies made was that this previous experience had created both the fact and appearance of bias, and the court agreed,” Kovacic mentioned, including that Khan’s involvement with the House’s report is considerably comparable.
Handicapping the end result
The lack of current case regulation on FTC recusals makes it tough to predict the end result on this situation, however some antitrust attorneys argue that fundamental frequent sense would dictate that Khan recusing herself makes little sense.
“Recusals are almost always in the context of prior legal work on behalf of one or the other parties,” mentioned Spencer Waller, who makes a speciality of antitrust points at Loyola University Chicago’s School of Law. “The law is easy, but the facts are hard, and what you would do are based on the facts that are not in the public record,” when she wrote about Amazon earlier than getting into authorities. Her earlier expertise doesn’t point out her to have “an irrevocably closed mind,” he added.
Kovacic, a regulation professor at George Washington University in Washington, D.C., additionally famous that nominees for roles just like the FTC chair are extensively vetted by ethics officers each within the White House and the FTC, notably if the nominee goes to be coping with hot-button points like antitrust. If both thought it doubtless that Khan could be pressured to recuse on any circumstances involving Big Tech, the president would have doubtless nominated another person.
“The [antitrust] issue and its significance was also known 6 months ago, it was known in March when the president said ‘I intend to nominate her,’” he mentioned. “I infer from all of that they made a basic judgment that, though the issue might be raised, it would not be a barrier.”