Facebook Seeks FTC Chair Lina Khan Recusal in Antitrust Case

Facebook Inc. sought the recusal of Federal Trade Commission Chair Lina Khan from the agency’s deliberations on whether to file a new antitrust case against the company, arguing she couldn’t be impartial because of her long history of criticizing it and other big-tech firms.

“For the entirety of her professional career, Chair Khan has consistently and very publicly concluded that Facebook is guilty of violating the antitrust laws,” the company said Wednesday in a formal recusal petition filed with the FTC.

 Lina Khan Recusal in Antitrust Case

“When a new commissioner has already drawn factual and legal conclusions and deemed the target a lawbreaker, due process requires that individual to recuse herself,” Facebook said in the petition. An FTC spokeswoman declined to comment. Ms. Khan has said previously that she would consult with FTC ethics officials if recusal questions arose.

Lina Khan Recusal
Lina Khan Recusal

Facebook’s request comes two weeks after a similar recusal petition was filed by Amazon.com Inc., which is facing multiple investigations at the FTC.

It is the latest sign that giant technology companies are favoring aggression over a conciliatory approach with Ms. Khan, who built her career advocating for bold antitrust action to rein in the dominant players in Silicon Valley.

President Biden installed Ms. Khan as the head of the FTC last month, part of a growing administration effort to restrain corporate power.

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The FTC soon must decide whether to file a new antitrust lawsuit against Facebook after a judge threw out the FTC’s previous complaint as legally insufficient. Because of the approaching deadlines in the case—the judge’s June 28 ruling gave the FTC 30 days to file an amended lawsuit—it could force Ms. Khan to confront the recusal issue on an accelerated timeline.

The Amazon request also remains pending, though it doesn’t face the same potential time sensitivities. Ms. Khan has been a prolific writer about antitrust issues, especially as they related to big tech companies. She previously worked for a progressive antitrust advocacy group that opposed Facebook’s acquisition of nascent competitors and was a key staffer on a congressional antitrust panel that conducted a 16-month investigation of large online platforms and last year recommended that lawmakers take steps to rein them in.

The FTC’s vote on a new Facebook lawsuit is likely to be a divided one. Democrats hold a 3-2 commission majority; if Ms. Khan sat out, there likely wouldn’t be a majority to sue Facebook again. The commission’s two Republican commissioners voted against the first lawsuit the FTC filed against Facebook in December.

The FTC, along with 46 states, had alleged Facebook was engaged in illegal monopolization, including by buying up other companies such as WhatsApp and Instagram to prevent them from challenging Facebook’s market position. The company denied the allegations, saying it competed fairly and achieved success because its services are popular with consumers.

In last month’s ruling, U.S. District Judge James Boasberg in Washington dismissed the FTC’s case at the outset of pretrial proceedings, saying the FTC didn’t plead enough allegations to support monopolization claims against Facebook. He also said the FTC didn’t have a valid challenge to Facebook’s policy of refusing to grant interoperability permissions to competing apps. The judge gave the commission 30 days to file a new lawsuit that attempts to make more detailed allegations.

Under the governing legal standards for recusal, a company seeking a commissioner’s disqualification on the grounds of prejudgment must show that a disinterested observer could conclude that the commissioner had already judged both the facts and the law in advance of a proceeding.

Ms. Khan gets to decide in the first instance how to address Facebook’s request for her disqualification. Past FTC practices show that, at least in some circumstances, the whole commission can weigh in.

The Facebook request comes in a less typical context than some other recusal motions. The FTC will likely be voting on whether to file a new lawsuit in federal court, where a judge would be the ultimate arbiter, as opposed to bringing a case in its in-house legal system, where commissioners effectively serve as judges.

Disqualification requests haven’t seen much success in modern times, but there are older court rulings that vacated FTC enforcement actions on the grounds that a commissioner should have been disqualified.

One 1966 court ruling said an FTC chairman shouldn’t have participated in a pharmaceutical-industry matter because he had investigated it as a congressional staffer. In a 1970 case, another court said the same chairman shouldn’t have participated in a false-advertising case because a speech he had given while chairman created the appearance that he had prejudged the issue.

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