Why the FTC Is Bad for Business

While fraudsters and scammers continue to run wild, the Lina Khan-led Federal Trade Commission (FTC) appears more focused on headline-grabbing antitrust and competition lawsuits than effectively protecting consumers. Khan’s track record raises questions about whose interests she truly prioritizes: her own media profile or the public good.

Despite her high-profile legal challenges, including against Microsoft’s Activision acquisition and Meta’s purchase of Within, Khan has yet to prevail in any of these merger cases. Instead, her frequent media appearances and embrace by antitrust activists suggest a concerning preoccupation with personal prominence over substantive results.

The FTC Has Become Politicized and Disconnected From Its Duty

With the agency continuing to stray from its core mission of consumer protection and now singularly focused on advancing the personal agenda of its chair, the public is left unprotected and vulnerable. Rather than serving as a neutral arbiter safeguarding American interests, the agency has prioritized aggressive antitrust enforcement and unnecessary rulemaking that align with Khan’s own theories. (READ MORE: The Wolves of K Street: A Real Threat to Democracy)

Consequently, the FTC has become increasingly politicized, disconnected from the needs of the very people it was created to serve.

The FTC’s lawsuit against Amazon is a clear example of the agency departing from its core mission of protecting consumers and competition. The very business practices challenged by the FTC have fostered competition and innovation across retail, providing consumers with greater product selection, lower prices, and faster delivery. If the FTC prevails, the likely outcome would be fewer choices, higher prices, slower delivery, and reduced options for small businesses — the opposite of what antitrust laws are supposed to achieve.

The U.S. retail landscape is a highly competitive, dynamic, and lucrative market, with online retailers vying for market share against traditional brick-and-mortar chains, department stores, and hyperstore retailers. According to the National Retail Federation’s 2023 data, Amazon accounts for less than 5 percent of the $7 trillion U.S. retail industry, while Walmart commands a 6 percent share with $533 billion in sales — over $280 billion more than Amazon. The FTC’s notion of sellers having “no choice” but to rely on Amazon is an exaggeration and shows the blatant disregard for how marketplace competition works.

Misguided Regulation, Like ‘Junk Fees,’ Could Stifle Innovation

Lina Khan is using both lawsuits and regulatory rulemaking, including a rule targeting “junk fees,” to divert public attention away from the agency’s own shortcomings. This misguided attempt to regulate the free market could ultimately stifle innovation and harm consumers.

These back-end fees, often maligned as “hidden charges,” serve a vital purpose for businesses of every size. For a larger sector like airlines, ancillary fees for baggage, seat selection, and other add-ons allow them to offer more affordable base fares, making air travel accessible to a broader range of consumers. Similarly, small businesses rely on these flexible pricing models to offset the razor-thin margins they operate on, enabling them to stay competitive and provide goods and services at lower prices while also providing benefits to employees. (READ MORE: Trump Shouldn’t Cozy Up To Wall Street)

By banning these fees outright, the FTC risks disrupting established business models, forcing companies to raise prices across the board and reducing consumer choice. Rather than a blanket prohibition, a more nuanced, market-based approach that ensures transparency and fairness would be a far more effective solution.

It’s time for the FTC to be held accountable for its missteps. The agency’s lack of focus on consumer protection is alarming and demands urgent reconsideration of its priorities. Recent FTC decisions and actions have raised serious doubts about its commitment to serving the public interest. (READ MORE: The ‘Panic-demic’ Is Over; Time to Go Back to the Office)

The FTC must reevaluate its leadership and policies to ensure it remains dedicated to safeguarding consumers from unfair and deceptive business practices, rather than pursuing the personal agenda of Chair Lina Khan.

Charles Sauer (@CharlesSauer ) is the president of the Market Institute. He has previously worked on Capitol Hill, for a governor, and for an academic think tank.

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