By Gerard Scimeca via The Daily Signal | December 10, 2024
The voters have spoken—they are ready for change. Tired of government overspending, overregulation, and excessive economic intervention, the American people seek real economic reform. Consumers have grown weary of paying the price for overreaching government policies and now hope for meaningful, impactful change.
An immediate priority for the Trump administration should be appointing a new chair to the Federal Trade Commission. Under the current Biden administration and FTC Chair Lina Khan, the agency has continually overstepped its bounds, aggressively intervening in the economy beyond its legal jurisdiction. In response, the American people are now seeking to reassert free market principles and reduce government overreach.
While it’s true that Sen. JD Vance, President Donald Trump’s vice-presidential pick, has expressed support for many of the actions taken by Khan, it’s worth taking a closer look at the commission’s record under her leadership to assess the costs versus the benefits of the agency’s actions.
Since assuming her role in 2021, Khan has spearheaded an ambitious agenda aimed at challenging mergers, launching wide-ranging investigations, and openly calling for a fundamental rewriting of the nation’s competition laws. Her mission has been fueled by a craven power grab, using the FTC as a personal battering ram to advance her own ideological crusade rather than objectively upholding the rule of law. Disregarding the principles of due process and the agency’s intended nonpartisan role, her actions have introduced legal and procedural ambiguity that risks damaging innovation and consumer well-being.
Evidence shows that the FTC under Khan hasn’t truly been effective in achieving tangible outcomes, with some high-profile cases and initiatives stalling or facing setbacks in the courts. This includes cases against Microsoft’s Activision acquisition, Meta’s purchase of Within, and Illumina’s acquisition of Grail, just to name a few.
The recent House Oversight Committee report on the FTC paints an even more concerning picture of Khan’s leadership. According to the report, Khan has “sidelined career FTC staff, collapsed their morale, triggered an exodus of critical employees, and destroyed career staff’s confidence in the honesty and integrity of Commission leadership.” This suggests that Khan has not only abused her power, but also undermined the credibility and integrity of the FTC itself. The damning findings from this report alone warrant removing Khan from her position as chairwoman.
The report also found that Khan has been undermining due process, the rule of law, and ethical standards in pursuit of her ideological agenda at the FTC. It states that Khan has orchestrated sweeping changes to the FTC’s rulemaking practices and policies, enabling the commission to overstep its legally recognized boundaries at the expense of consumers, regulated businesses, and the general public.
This excessive exercise of authority is evident in her rulemaking against so-called “junk fees.” While some minor add-on fees that accompany various consumer purchases may seem unfair on the surface, they can provide customers with more flexible pricing options tailored to their individual needs. Imposing a universal ban would be an overreaction, ignoring the legitimate business reasons for certain fees, such as covering administrative costs, offsetting risks, or offering optional services.
Ironically tens of billions of dollars of “junk fees” are yearly costs passed on to consumers from government mandates themselves, so a sweeping, blanket prohibition against these fees won’t help consumers but actually harm them further by reducing choice, increasing prices, and limiting access to valuable products and services. Regulators should take a more measured, industry-specific approach that balances consumer protection with the need for businesses to remain viable and innovative.
The airline industry showcases the benefits of back-end fees, such as baggage, seat selection, and change/cancellation fees, which give flyers more control over their travel experience by allowing them to pay only for the services they need. Instead of enforcing a rigid ticket pricing structure, these à la carte fees enable budget-conscious passengers to avoid unnecessary add-ons. While “junk fees” often face criticism, it’s important to recognize that in certain situations, they can enhance consumer choice and flexibility. This makes them a practical tool rather than an unjust burden on travelers.
The FTC has lost its way, prioritizing misguided initiatives that risk undermining the very economic competitiveness that has long fueled America’s prosperity. Rather than focusing on its traditional role of addressing demonstrable market abuses, the agency has instead sought to reshape the economy according to Khan’s own ideological preferences. This overreach into areas outside the FTC’s purview threatens to stifle the dynamic innovation and healthy competition essential to a thriving, free-market system. By pursuing novel legal theories and interventionist policies, the FTC risks disrupting the delicate balance that allows businesses to invest, grow, and deliver value to consumers.
Gerard Scimeca is an attorney and chairman of CASE, Consumer Action for a Strong Economy, a free-market oriented consumer advocacy group he co-founded.
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