By Doug Kelly, CEO of American Edge
Another day, another loss in court for Federal Trade Commission (FTC) Chair Lina Khan. But despite the losses, the FTC’s extreme agenda remains a threat to American economic prosperity and our national security.
On Tuesday, a federal judge denied the FTC’s bid to block Microsoft’s purchase of video game publisher Activision Blizzard. The FTC suffered a similar loss earlier this year when it tried to thwart Meta Platforms’ purchase of a virtual-reality gaming company. In each of these cases, and in others that are ongoing, the FTC tried to block a marriage of businesses that were not head-to-head competitors. Historically these types of vertical mergers have not been challenged by the government because are seen as benefiting consumers.
But Khan’s FTC is not driven by factual analysis nor consumer welfare, which has been the bipartisan standard for the past 40 years. Instead, her FTC is driven by ideology – “big is bad” and doubly-so when it comes to American technology companies – and she advances this ideology in court with highly speculative theories that a proposed merger could possibly-potentially-maybe-at-some-time-in-the-future hurt competition.
However, courtroom judges – who must weigh the facts presented – are repeatedly rejecting the FTC’s claims. In fact, the federal judge in this latest case said the FTC had failed to prove that the Microsoft-Activision deal would substantially limit competition. To the contrary, after Microsoft produced nearly 3 million documents and sat for 15 investigational hearings with the FTC, the judge said the evidence produced in the litigation indicated that the acquisition might make popular Activision games such as “Call of Duty” available to more consumers. The FTC has even lost multiple cases before its own administrative law judge.
But while the FTC may be losing in court, it continues to advance an anti-innovation agenda that threatens our country’s economic prosperity and our national security. Examples abound: the Commission’s proposed overhaul of merger guidelines would bury companies in paperwork, nearly quadrupling the time it takes to prepare a merger filing and adding an estimated $350 million in added costs. Additionally, it is seeking to ban non-compete clauses, upend the franchise model, and possibly invalidate the free ad-supported internet. The FTC’s actions are not only impacting the tech/innovation industry but healthcare and myriad of other vital sectors. Some are asking whether the FTC is undermining the nation’s global economic interests.
On the national security front, Khan and the FTC’s “multi-continent crusade“ against American tech companies could directly help China in its efforts to usurp the U.S. as global technology leader. In fact, as harmful anti-innovation legislation was being debated (and ultimately defeated) in the U.S. Congress, Khan was sending FTC officials to overseas to aid in implementing and enforcing the European Union’s Digital Markets Act (DMA).
This 2022 law targets disproportionately targets larger U.S. tech firms for tough new regulations, including market restrictions, requirements to share data with their tech rivals, $50 billion in added compliance costs, and potential tens of billions in fines. Few Chinese tech firms are impacted by the DMA, meaning the FTC’s strong support of European regulatory efforts against American tech firms could undermine our domestic innovation capabilities and ultimately increase our dependency on technology from China!
The FTC’s repeated losses in court are a clear sign that its extreme agenda is not based on sound economic or legal principles. Even worse, its extreme agenda and international meddling threaten America’s prosperity and its geopolitical leadership. The FTC needs to ditch its ideological sledgehammer and return to its historic role of balancing consumer, business, and market interests. The world is counting on us to get it right, because it matters greatly which county, and which set of values, builds the future.