When President Biden appointed Lina Khan as chairwoman of the Federal Trade Commission in June 2021, there was talk of a revolution. She was only 32 years old, had risen to prominence in antitrust circles as a strident critic of Amazon, and had worked for the progressive Open Markets Institute before joining the FTC. Biden was not initially expected to make her the commission’s chairwoman. “With Chair Khan at the helm, we have a huge opportunity to make big structural change by reviving antitrust enforcement and fighting monopolies that threaten our economy, our society and our democracy,” said Senator Elizabeth Warren (D., Mass.) after Khan’s confirmation.

But those big structural changes have yet to materialize, and the commission Khan leads is crumbling. The most recent evidence of the agency’s decline was the resignation of commissioner Christine Wilson, the FTC’s only Republican.

Wilson’s resignation letter noted Biden’s campaign promise to reduce partisan divisiveness and questioned whether his choice of Khan to lead the FTC fulfilled it. Initially, Biden chose Rebecca Slaughter as acting chairwoman, and she served from January to June of 2021. “Acting Chair Slaughter operated in keeping with the best traditions of the agency — transparency, robust lines of communication with all Commissioners, constructive debate on policy issues, and respect for the agency’s experienced and knowledgeable staff,” Wilson wrote.

Slaughter is a Democrat, and she and Wilson have different policy views. This isn’t about policy, though. Under Khan’s leadership, “knowledgeable career staff have been scorned and sidelined,” Wilson wrote.

In an op-ed in the Wall Street Journal, Wilson was even more direct. She wrote of Khan’s “disregard for the rule of law and due process” and said that she and her staff had “spent countless hours seeking to uncover [Khan’s] abuses of government power.” Khan had overturned decades of internal agency practice by consolidating power in her office, and the Democratic majority had used its redaction powers to reduce transparency in agency opinions, Wilson wrote. She also argued that, under existing precedent, Khan’s criticism of Meta prior to her appointment as chairwoman necessitated her recusal from a case involving the company, but Khan participated anyway.

Wilson’s departure from office on March 31 leaves the five-member commission with three Democrats and two vacancies. Biden will have to appoint Republicans to fill the spots (no more than three commissioners are allowed by law to be of the same political party), but it might be more difficult than usual to find willing candidates.

Joshua Wright is a professor at George Mason University’s Antonin Scalia Law School. He has had four separate stints at the FTC: twice as an intern, once as a scholar in residence, and once, from 2013 to 2015, as a commissioner. Wright was a member of the FTC’s Republican minority during his time as commissioner, so it’s no surprise that he disagrees with Khan’s agenda on the merits. Even so, he finds it hard to see anything that Khan’s supporters should be celebrating.

“We’re close to two years into Khan’s tenure as chair, and if I were to ask you, ‘What’s on the scoreboard for Chair Khan and the Biden FTC?’ — I don’t know how well they’re faring,” Wright tells National Review. “If I were a supporter of their agenda, I think I’d be disappointed.”

It’s not just current and former commissioners such as Wilson and Wright who are distraught over the agency’s direction, but the rank and file as well.

The FTC has always ranked high among government agencies for job satisfaction. In 2020, the last full year of Republican Joseph Simons’s chairmanship, 87 percent of FTC employees agreed that “senior leaders maintain high standards of honesty and integrity,” 83 percent agreed that they “have a high level of respect” for the FTC’s leadership, and 80 percent agreed that leadership generated “high levels of motivation and commitment in the workforce.” Those numbers plummeted in 2021, to 53 percent, 49 percent, and 42 percent, respectively.

Then came a staff exodus. Bloomberg reported that 99 senior-level attorneys left the agency in 2021 and 2022, and only 27 were planned retirements. Wright rejects the argument that these are departures of conservatives unwilling to work under a Democratic appointee. (“I promise you there are not 100 right-winger, Chicago-school guys inside the FTC.”) Campaign-donation records for FTC employees show what you’d expect for a federal agency: Ninety-seven percent of their support was directed to Democrats in 2020 and 2022.

And yet the survey numbers for 2022 were even worse than they were for 2021. “The Year Two survey results being worse than Year One, after the people most likely to be disgruntled left in Year One — that suggests to me that there is something really serious and troubling going on,” Wright says. “I don’t mean anything nefarious. I mean that there is a really serious disconnect between staff and leadership on what to do and how to do it.”

“The people who know how to litigate cases are leaving, and we’re asking about why they’re losing cases. Occam’s razor suggests what the explanation is here,” Wright says. “Talented people are leaving, and it’s not because they don’t believe in the agency’s mission.”

Wright has a very high opinion of the FTC’s professional staff, and he still recommends that his students work there. “I have students from George Mason all the time who select the FTC over offers from large, fancy D.C. and New York law firms that would pay them substantially more,” he says. “It’s a place where people want to get the law and the facts right.”

Under Khan’s direction, getting the law and the facts right has not been a point of emphasis. “In the litigated cases we have, small as that number may be, we are getting losses that reject the FTC action, not on theory but on facts and evidence,” Wright says.

Theory hasn’t helped, either. Timothy Muris, chairman of the FTC from 2001 to 2004, has argued that the Khan FTC is turning back the clock by re-embracing theories of antitrust that scholars have rejected for a generation. “Big is again bad,” he wrote in a January 2023 paper for the American Enterprise Institute. “Bad, not because it harms consumers, . . . but bad in some overarching political sense and for its own sake.”

According to the consumer-welfare standard, antitrust actions should be judged by their effects on product prices and quality, not their effects on market structure. Under that standard, big is not necessarily bad. The consumer-welfare standard was pioneered by Robert Bork in his 1978 book The Antitrust Paradox. Bork is known as a firebrand conservative, largely as a result of his failed Supreme Court nomination in 1987, but he is best known among legal scholars for his work on antitrust. The consumer-welfare standard has become the widely accepted basis of antitrust law in the U.S. and has influenced judges of all political stripes.

Khan and a small group of other neo-Brandeisian progressives, however, do not endorse the consumer-welfare standard and want it to be replaced with rules that are older and have been discarded. Muris, the former FTC chairman, wrote that Khan wishes to restore the Robinson-Patman Act and 1960s merger rules.

The Robinson-Patman Act, passed in 1936 to attack chain stores that charged low prices, was based on the theory that they would drive small companies out of business and increase market concentration. By the 1970s, it was dismissed as pseudo-economics and, on the advice of the FTC, regularly disregarded by the courts. The FTC has always had considerable discretion in the enforcement of antitrust laws. Numerous studies by legal scholars and economists found that Robinson-Patman enforcement had harmed consumers and failed to achieve its misbegotten goal of destroying chain stores.

The 1960s merger rules were incoherent and motivated by populist political concerns, not economic or legal analysis. “Lawyers defending mergers [in the 1960s] would desperately argue their merger did not lead to efficiencies and cost savings, lest the merger be viewed as one that allowed the merged firms to gain market share (i.e., get bigger) because cost savings would reduce prices,” Muris wrote in his American Enterprise Institute paper. “This episode of merger law is one that scholars until recently condemned nearly universally.” Justice Potter Stewart, dissenting from one antitrust case under those rules, wrote that the only consistency in the doctrine was that “the government always wins.”

The Khan FTC has redefined the meaning of “unfair methods of competition,” a phrase found in Section Five of the Federal Trade Commission Act. Business conduct will be judged no longer by the consumer-welfare standard but rather by whether it “goes beyond competition on the merits,” according to a November 2022 guidance document. Business practices that meet this standard include those that “may be coercive, exploitative, collusive, abusive, deceptive, predatory, or involve the use of economic power of a similar nature” and “tend to negatively affect competitive conditions.” The problems with these criteria are that their terms aren’t defined in the document, and they cast aside decades of precedent on what characterizes unfair competition. The guidance document essentially replaces that precedent with “I know it when I see it.”

“One of the things that the consumer-welfare standard has done for antitrust discourse is that it is the common language of understanding,” Wright says. “You could get me and Edith Ramirez” — the Democratic chairwoman of the FTC with whom Wright served — “in a room, and she’d say, ‘Josh, why won’t you vote with us on this case?’ And I’d say, ‘This is the way I interpret the evidence.’ And she would disagree. But we could answer the question of what evidence we’d need to see to flip our votes, in both directions. In a world where they replace that with ‘I know it when I see it,’ it really is a core politicization of the antitrust-decision-making process.”

“Guidelines don’t mean anything unless you can persuade Article III judges that they do,” Wright continues. “The reason the old guidelines were successful is that the FTC and its talented staff put a lot of time and effort into coming up with cases that were consistent with the language of the statute but also made economic sense.”

The Khan FTC isn’t doing that. As Wilson noted in her resignation letter, merger enforcement plummeted in 2021, with the FTC taking only 15 such actions, compared with 31 in 2020. Consumer-protection actions fell off a cliff as well, from 79 in 2020 to 32 in 2021. With court losses for the FTC piling up under a leadership that rejects the precedents that courts have used for decades, it’s easy to see why the commission’s staff might be demoralized.

“An antitrust revolution is really hard if you can’t persuade judges, and you can’t win a revolution by losing cases,” Wright says. “Article III courts don’t have a dog in the fight. They don’t read Chicago school vs. the neo-Brandeisians every day. They decide one antitrust case a year, and they want an approach that comports with the law, economics, and common sense that helps them decide cases. That’s a hard project, and one that the FTC landed on after decades and decades of refinement.”

It’s the undoing of those decades of refinement that has pushed the FTC into chaos. Control of the FTC regularly flips between Republicans and Democrats, but stark political differences in the past haven’t resulted in this level of disarray and failure. Khan is running into a wall because she wants to politicize the process of antitrust itself rather than following the evidence of consumer harm wherever it may lead.