“the most common area of concern was Khan’s temperament and management style”
Ankush Khardori
December 12, 2023
…“Things have not gone as planned for the movement or the once-rising star, who has suffered a series of conspicuous setbacks at the helm of the FTC this year. A proposed rule banning noncompete agreements has drawn skepticism from well-regarded observers. A legally dubious effort to rewrite the agency’s merger-review policy has drawn widespread criticism, including from former Obama administration officials and former chief economists at the agency. Worst of all, two high-profile lawsuits against tech giants — one against Meta, the other against Microsoft — flopped in the courts.”…
…“To my modest surprise, the most common area of concern was Khan’s temperament and management style — a subject that has generally eluded serious media scrutiny but that has vexed career officials since her arrival. In their telling, Khan’s failings in this area explain a lot about what has happened at the FTC this year, including why the agency has been bringing cases with shaky legal underpinnings, why it’s losing those cases, why experienced officials have been leaving, and why the rest of us should care.”…
…“She ‘came in with a bunch of answers’ and a bunch of targets — big tech companies first and foremost — ‘but no actual strategy’ for how to achieve her objectives within the agency’s legal and resource constraints.”
…“morale at the agency has plummeted, according to survey data and academic researchers, and attrition has been unusually high. ‘People are burned-out and worn-out,’ a former official told me. ‘The workload is insanely heavy. People feel like this management team does not respect us, does not value what we do.’ The same person offered a particularly sharp appraisal of the situation: ‘People genuinely dislike her and what she’s done.’ They added, “It’s not going to get any better until she leaves.”…
…“One former official openly mocked the difficulties of advocating on behalf of Khan’s approach in the courts. ‘What am I going to do?’ the person asked. ‘Go to court and say, ‘This cement merger threatens democracy’? … The whole approach is so incoherent.’”…
…“The FTC also alleged that Amazon’s business practices result in higher prices for consumers — an apparent concession to the reality that the consumer-welfare standard is still alive and well in the courts — but the agency’s proposed theory on this score is counterintuitive. Amazon insists that sellers who use the platform offer customers their lowest-available prices and penalizes those who do not by limiting the prominence of their offerings on the site. This would seem to be a good thing for Amazon shoppers — especially in a time of persistent anxiety about the cost of household goods — but in the FTC’s telling, these are ‘anti-discounting tactics’ that force sellers to raise their prices on other online-shopping sites and platforms. There are economists who support this theory in broad strokes, but it does not appear that any court has ever found a company liable under a theory like this, and there are serious legal and factual questions embedded in the case that will complicate this effort for the FTC.”…
“‘I think a lot of the staff at the agency — and a lot of observers, anybody close to the FTC — are asking a good question,’ one former official told me. ‘‘What is her long game in this?’ And is the long game aligned with the interests of the FTC?’”…
Read the whole piece here.
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