Following Loud and Lousy Exit, FTC Better Off Without Christine Wilson
The parting shots of the outgoing commissioner—who personifies DC's pro-corporate revolving door—only draw attention to her actual conflicts of interest.
Commissioner Christine Wilson's "noisy exit" from the Federal Trade Commission officially has an end date. On March 2, she submitted her official resignation to President Biden announcing she will step down on the last day of the month, and she couldn't help but take some final shots at her apparent nemesis, Chair Lina Khan. Evidently, Wilson still has a bad case of "Lina Khan Derangement Syndrome."
Wilson doubled down on the grandstanding and baseless accusations she lodged in the Wall Street Journal last month, where she claimed Khan has abused government power (the details of which Wilson conveniently claims she cannot disclose), ignored ethics rules (an idea put forth by the very monopolies avoiding regulation), and flaunted the due process rights of Facebook (though both the Commission and a judge determined Khan need not recuse herself). These accusations are, of course, without merit. Wilson can't be outright in stating her real issue with Khan's leadership—the fact that the FTC is now aggressively cracking down on the entrenched monopolies that have flourished under both Wilson's and her predecessor's watch.
Wilson's Record: Deregulation and Corporate Consolidation
No stranger to the revolving door, Wilson joined BigLaw firm Kirkland & Ellis after her first stint in the FTC as Chief of Staff for former Chair Timothy Muris, who established an "economics-driven antitrust" agenda at the FTC. Muris, himself a student of the right-wing jurisprudence crafted by Robert Bork, focused on deregulation and allowing monopolies to flourish so long as they did not directly harm consumers. This approach to antitrust—if it can even be called antitrust—began in the 1980's and led to the widespread adoption of the consumer welfare standard, a notion that mergers should only be challenged if they will cause prices to rise. Many economists and historians have pushed back against the efficacy of this criterion, arguing that it is too narrow in its assessment of economic impact and largely favors big business. As a result of the consumer welfare standard, regulators abandoned the antitrust tradition that took on monopolies like Standard Oil and the railroad industry, leading to the widespread corporate concentration we have today.
A quintessential revolving door figure, Wilson's tenure was only useful to her job prospects once she decided it was time to leave the FTC.
Since the emergence of the consumer welfare standard, 75% of industries are more concentrated and markups have increased from 21% to 61%. One would be hard pressed to claim this has been a benefit to consumers. Muris mentored other key FTC regulators and since leaving the agency, helped to establish a pipeline for would-be antitrust experts entering public service through the Antonin Scalia Law School, which is also home to the monopolist-funded Global Antitrust Institute.
After leaving Kirkland, Wilson went in-house at Delta Air Lines before being appointed FTC commissioner by President Trump in 2018. In a clear summation of her views towards antitrust and regulation, Wilson's White House biography described her as "an advocate of the fundamental principle that competition—not regulation—is the best protection for consumers" and her record reflects this attitude. She doesn't believe in regulation, yet she accepted a job as one of the nation's competition regulators.
Throughout her tenure as commissioner, Wilson routinely voted against taking actions against corporations for anticompetitive behavior and lawsuits to block corporate mergers. In fact, Wilson's opinion of the FTC's regulatory role often differed from even her Republican colleagues on the Commission, making her complaints about Lina Khan's so-called radical approach even less credible. For example, Wilson parted from the rest of the Commission, including Republican Chairman fellow Muris protege Joseph Simons and Republican Commissioner Noah Phillips, in a 2020 enforcement action to block the merger of the two largest coal mining companies in the United States. Again breaking from her Republican colleagues, Wilson was the lone dissenting vote in the FTC's 2020 lawsuit to block Procter & Gamble's killer acquisition of a razor blade competitor.
Throughout her tenure as commissioner, Wilson routinely voted against taking actions against corporations for anticompetitive behavior and lawsuits to block corporate mergers.
In addition to her insistence that anticompetitive mergers be waived through, Wilson has dissented against proposed rules that would make the economy more fair and are popular with the American people. Most recently, Wilson opposed the FTC's proposed rule to ban noncompete clauses, which suppress wages and limit labor mobility. Like most actions taken by Khan's revamped FTC, the ban is broadly popular among employed Americans, but presumably less so with the pharmaceutical companies, wholesale trades, and private equity firms that Wilson represented while at Kirkland & Ellis. In October 2022, Wilson dissented regarding a proposed rule regarding "junk fees" aimed at saving U.S. consumers billions on exploitative charges. President Biden highlighted his administration's crackdown on junk fees during the State of the Union and subsequent polls showed overwhelming bipartisan support for these actions. If Wilson had her way with the FTC's rulemaking capacity, Americans would be stuck making low wages, in jobs they don't like, while simultaneously shelling out extra dollars to corporations for services they don't want.
Wilson's Own Conflicts of Interest
Wilson's record demonstrates a concerted effort to weaken the FTC from within. But she can still do plenty of damage from the outside as she looks to return to the private sector. Like Noah Phillips, who left the FTC to join BigLaw firm Cravath Swaine & Moore to assist in the defense of monopolists like Facebook, Google and Amazon, Wilson is poised to return to the world of BigLaw to defend corporate clients.
The Revolving Door Project has filed a number of Freedom of Information Act requests seeking to bring to light Wilson's post-employment plans. Concerningly, when we sought Noah Phillip's post-employment notification statement back in the fall, the FTC redacted the name of his then-future employer. The FTC FOIA Office cited Commissioner Phillips' "right to privacy," despite the information being expressly relevant to Phillip's status as a public figure. We hope that the FTC does not make the same mistake twice and obscure vital information about Wilson's plans. As Wilson continues her duties at the FTC for the rest of the month, the public deserves to know how her decisions might conflict with her future employment plans and corporate clients those plans entail.
The fact is, regardless of where she lands after the FTC, Commissioner Wilson has already faced potential conflicts of interest during her tenure. The most glaring example came in 2019 when Wilson was part of the majority in a 3-2 vote to allow Bristol-Myers Squibb's acquisition of Celgene. Despite previously receiving compensation from Bristol-Myers Squibb for legal services, Wilson did not recuse herself from the case. This is a cut-and-dry ethics problem. Less clear cut, but equally problematic, are the aforementioned examples of her positions towards junk fees and noncompetes. While these are broad FTC rules that apply to a range of industries, the corporations that previously employed Wilson stand to lose out if these rules are enforced. For example, Wilson was employed by Delta prior to joining the FTC. When Biden announced the administration's initiatives to crack down on junk fees, Delta Air Lines' Chief Legal Officer announced that the company would file a formal comment on the FTC's rule and claimed it would "create quite a bit of confusion for consumers."
Are we expected to believe that Wilson's history with Delta had no impact whatsoever on her position towards junk fees? These "legal and yet still obviously problematic" conflicts of interest highlight the problem with the revolving door and underscore the need for more stringent ethics practices regarding recusals.
A Loud Exit for Lousy Reasons
Wilson's tenure was filled with disingenuous complaints about her Democratic colleagues and projection regarding ethics violations, and her resignation letter is simply more of the same. Wilson claims Khan has "scorned and sidelined" FTC staff because of Khan's 2021 moratorium on speaking engagements by staff. This policy stemmed from the severe understaffing and increased merger caseload, not from a lack of confidence in the staff, as Wilson baselessly alleges. It's a bit surprising that Wilson took issue with this attempt to focus resources and work hours on merger enforcement, given the fact that she goes on to lament the decline in enforcement actions in calendar year 2021.
Wilson's tenure was filled with disingenuous complaints about her Democratic colleagues and projection regarding ethics violations, and her resignation letter is simply more of the same.
Wilson cites this enforcement decline to claim that, under Khan's leadership, the agency is less productive than it should be. Notably, the numbers of mergers doubled in 2021. It's unsurprising that, given the lack of staff to evaluate all of these mergers, the FTC focused on quality over quantity. Furthermore, it can take months for the FTC to initiate action against a merger. For example, Illumina filed its acquisition of Grail in September of 2020, but the FTC didn't file its complaint until March 2021. Of course, Wilson is aware of both factors, but is obfuscating the full context in an attempt to delegitimize Chair Khan's necessarily aggressive approach. Wilson also decided to cite calendar year figures, rather than the standard fiscal year, because those numbers are less favorable to her argument.
It's worth mentioning that Wilson's focus on raw enforcement numbers misses one of the most significant impacts of Khan's leadership — her reputation. Simply having Khan at the helm of the FTC is enough to prevent major corporate mergers because they know Khan will fight to block them. Shell and Exxon recently abandoned a $240 million joint pipeline venture because the FTC issued a second request for information about the merger. A merger between two major New York hospitals was dropped after the FTC began investigating its potential effect on healthcare costs and wages. Having Lina Khan as Chair of the FTC acts as a preventative measure against mergers and acquisitions, often negating the need for enforcement actions.
Conclusion
Christine Wilson leaving the FTC is good news for anyone who cares about effective antitrust enforcement. A quintessential revolving door figure, Wilson's tenure was only useful to her job prospects once she decided it was time to leave the FTC.
Wilson leaving the FTC is good news for anyone who cares about effective antitrust enforcement.
Bork's theory of antitrust, perpetuated by Tim Muris and continued by the likes of Wilson, led to forty years of corporate consolidation and soaring profit margins. Wilson is a "habitual naysayer" according to former DOJ's Antitrust Division Assistant Attorney General Bill Baer, so it's unsurprising that she has dedicated her parting letter to complaining about Lina Khan. It's Wilson's way of setting the foundation for Congressional Republicans to justify investigations into Khan's leadership now that they are in the majority.
In that vein, the Bork-Muris-Wilson tradition has come full circle—the Wall Street Journal recently gave Robert Bork Jr. space to argue that Congress should investigate Khan, citing Wilson throughout the op-ed. We don't yet know where Wilson will land once she officially resigns, but we welcome her departure and eagerly await more information on the identity of her next BigLaw or corporate employer.
