Chamber of Commerce accuses FTC of 'going rogue' under Lina Khan's leadership

The Chamber of Commerce is targeting Federal Trade Commission Chairwoman Lina Khan, accusing her in a series of letters on Friday morning of overstepping her power, posing a "grave threat" to U.S. businesses and economic growth. 

In three letters to the FTC, the Chamber objected to several actions taken by the agency in recent months that President and CEO Suzanne Clark slammed as "deeply concerning." 

"The Chamber is putting the FTC on notice that we will use every tool at our disposal, including litigation, to stop its abuse of power, to stand up for due process, and to protect the free enterprise system and America’s vibrant economy," Clark said in a statement. "And we will work with policymakers on Capitol Hill to hold the commission accountable." 

But the FTC fired back against the criticism, suggesting the Chamber was challenging the agency because it was "ramping up efforts to combat corporate crime" 

"We are not going to back down because corporate lobbyists are making threats," Peter Kaplan, the FTC deputy director of public affairs, said in a statement to FOX Business. "We will continue to do our job and stand up for consumers, honest businesses, workers, and entrepreneurs who deserve a fair marketplace."

In one of the letters sent Friday, the Chamber criticized two warnings the FTC issued to 1,800 companies warning their conduct is possibly illegal and that they face severe penalties as a result. One warned business owners about fake reviews and other forms of deceptive endorsements, and the other warned against making advertisements for moneymaking opportunities that mislead consumers about potential earnings. 

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Although the warnings received bipartisan support from the five-member FTC, the Chamber said it represented an attempt to "circumvent procedural safeguards."

Another letter addressed to Khan attacked the Chamber for its use of an arcane practice known as "zombie votes." Although Democrats no longer wield majority control of the FTC, Khan is able to utilize as many as 20 votes that former Democratic Commissioner Rohit Chopra cast by email on Oct. 8 –  his last day at the agency, according to Politico. Although Chopra has since departed the agency, his votes remain active. 

Because the rest of Chopra’s still-undisclosed votes remain active, the FTC allows them to take effect if at least two other commissioners cast votes agreeing with him. The maneuver means Chopra can be the deciding vote for Democratic initiatives until as late as December, despite the agency’s current 2-2 partisan split, Politico reported. The two Republicans on the FTC have decried this practice. 

"Allowing [Chopra] to continue exercising the voting powers of his former office – particularly with respect to contested matters – is not only bad government, it is patently unlawful," the Chamber wrote on Friday. "It is troubling that the Commission has concealed from public scrutiny the voting rules at the heart of this controversy."

The FTC has said the move is consistent with established FTC procedures.

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Finally, the Chamber – in a third letter addressed to Khan and dozens of other agencies – pointed to an executive order from President Biden in July that established a White House Competition Council, with the intent of creating a more dynamic economy in which competition among companies leads to increased transparency, more choice and potential savings for customers.

The Chamber suggested that any policies created by the council could be challenged in court because they have been developed under the influence of the White House, rather than under the guidance of an expert agency’s "reasoned decision-making."

"American companies are facing historic challenges with inflation, strained supply chains and worker shortages, while the FTC is going rogue and engaging in regulatory overreach that is accelerating uncertainty and threatening our fragile economic recovery," Clark said.

Khan, who was nominated by President Biden and confirmed by the Senate in June, is a well-known scholar who has pushed for stricter regulation of Big Tech. In her role as FTC chief, Khan is tasked with steering the direction of the agency and enforcing competition laws.

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She previously served as counsel to a House Judiciary Committee panel whose sweeping 16-month investigation of Apple, Amazon, Facebook and Google concluded the tech giants abused their market power by charging exorbitant fees, imposing oppressive contract terms and extracting data from people and businesses that rely on them. 

Khan suggested "structural separations" of the companies. Lawmakers across the political aisle are now pursuing a series of sweeping new antitrust bills that could break up some of the biggest tech giants.

The FTC is an independent agency that operates beyond the purview of the White House. It has the power the open investigations into potential anti-competitive and antitrust behavior by companies.