Lina Khan’s Continued Influence on the FTC

As neoconservatism in the White House ascends on the wings of Secretary of State Marco Rubio across international affairs and social media memes, the national conservative flank of the Trump administration is quietly moving forward on domestic policy. The Federal Trade Commission’s (FTC) fealty to a Biden-era regulation governing merger approvals is a prime example.

While the Hart-Scott-Rodino (HSR) Antitrust Improvement Act of 1976 is not a topic of conversation at many American dinner tables, its recent controversies illustrate the odd holdover of ideas previously understood as politically leftist at a now Republican-dominated FTC.

The HSR Act requires companies to file a premerger notification form with the FTC and the Department of Justice’s Antitrust Division when a transaction meets certain thresholds. For 2026, the base triggering amount is $133.9 million in resulting assets, voting securities, or non-corporate interests. The threshold is adjusted annually based on gross national product, but the form itself and the information it required remained mostly unchanged for nearly fifty years until the Biden FTC moved to greatly expand it in 2024.

Then Chair Lina Khan told a Brookings audience that “on the front end, we’re not getting even remotely a fraction of the information that we need to really do a reasonable and sound competition analysis,” considering that the “economy has changed dramatically in the last few decades.”

To make a tedious explanation short, the changes essentially required all premerger filings to include information previously reserved for a second request. The updated rules transformed what was previously required only in cases of particular concern into the new baseline for all initial HSR reporting. That extra information was only requested in a small percentage of transactions under the old regime. From 2011 to 2020, only 3.1 percent of transactions received a second request for additional information, but the new rules sought to treat every proposed transaction as if it were that flagged fraction.

That approach raises cost-benefit concerns for those who believe mergers often create efficiencies that benefit consumers and that increasing compliance costs for all mergers will cause beneficial deals to be abandoned. But that was not the mindset of FTC leadership at the time. When 60 Minutes’ Lesley Stahl asked Chair Khan, “If someone just says, ‘I’m not going to go forward,’ that’s a win?” she replied, “That’s right.”

A Notice of Public Rule Making was opened in 2023 to allow interested parties to comment on the proposed changes. The agency received 720 comments and spent a year paring down some of the most severe changes. The two minority Republican FTC Commissioners, Melissa Holyoak and Andrew Ferguson, were instrumental in scaling back the final HSR rule from its initial proposal.    

Those concessions resulted in a unanimous vote at the FTC to pass the new requirements in late 2024. But even with the improvements, the agency itself projected the new rules would increase the hours needed to prepare a filing by 68 hours and result in approximately $139.3 million in additional annual labor costs. But the FTC estimates were always thought to be an underestimate of actual compliance costs.

Indeed, the costs to businesses attempting to merge acted as a de facto tax increase on those businesses when the new rule went into effect in 2025, under a newly Republican-controlled FTC in the second Trump administration. By that time, the U.S. Chamber of Commerce, Business Roundtable, American Investment Council, and Longview Chamber of Commerce had already begun their legal challenge to the new HSR rule.

Sure enough, in February 2026, a federal court in the Eastern District of Texas struck down the new rules. Judge Jeremy Kernodle found the FTC’s cost-benefit analysis wanting and, in a post-Loper Bright world, the rule doesn’t stand much chance of coming back in its new expanded form. Nevertheless, the FTC is appealing the decision. A three-judge panel recently denied the agency’s request to stay the decision pending litigation, so the old, less onerous HSR rules are currently in effect. All’s well that ends well – at least for now.

The U.S. Chamber of Commerce litigating against a Republican administration is a sign of our strange political times. After the federal district court ruling, an FTC spokesperson called the Chamber of Commerce “a left-wing . . . activist group.” Admittedly, the saga of the HSR is a tale made for policy wonks, but it also highlights some strange ideological bedfellows currently cozying up in Washington’s halls of power.

Proving that the horseshoe theory is in fact “a thing,” a rule championed by Biden-appointed Lina Khan (who recently co-chaired the transition for New York City’s democratic socialist mayor, Zohran Mamdani) was taken up by Republican-appointed FTC Chair Andrew Ferguson.

As the newly installed FTC Chair, Ferguson initially declined to delay the implementation of the new HSR rules or initiate a process to overhaul them. The Wall Street Journal reported that sources claim Ferguson “worked behind the scenes last year to scuttle an effort by Republicans to overturn the rule under the Congressional Review Act.” Now, the agency he leads is appealing the federal court’s decision to vacate the new HSR rules while simultaneously initiating a new rulemaking process to replace them.

Perhaps Ferguson is a true populist believer. Perhaps he is getting direction from a true populist believer higher up the governing food chain. Perhaps it’s both.

Ferguson’s elevation from FTC commissioner to Chair was championed by populist Vice President JD Vance. Relatedly, while still a U.S. Senator, Vance called Khan the “best person” in the Biden administration. He told an antitrust conference, “I guess I look at Lina Khan as one of the few people in the Biden administration who I think is doing a pretty good job.”

More recently, Ferguson was tapped as vice chair of the White House’s new “Task Force to Eliminate Fraud, led by Vance. White House deputy chief of staff Stephen Miller is acting as the group’s senior advisor. Populist birds of a feather, indeed.

As absurdly premature polling on ‘Vance versus Rubio’ in a still mostly inconceivable 2028 presidential primary baits clicks online and provides fodder for cable news pundits, the ‘neocon versus nat-con’ policy battle marches on. As it does, consumer welfare and the U.S. business climate are especially subject to the blows dealt at the FTC.  

Jessica Melugin is director of the Center for Technology and Innovation at the Competitive Enterprise Institute and an Innovators Network Foundation Antitrust and Competition Policy Fellow.