Lina Khan asks NY to outlaw unfair business practices

In one of her last acts as the chair of the Federal Trade Commission, Lina Khan penned a letter to Gov. Kathy Hochul and legislative leaders urging them to outlaw “unfair and abusive” business practices in the wake of the Trump administration. 

In a letter dated Jan. 19 – one day before President Donald Trump’s inauguration – Khan applauded recent actions by the state to increase consumer protections. But she warned about uncertainty in the field with the new administration, expressing the need for the state to pass a new law. “Given potential changes in how federal enforcers approach consumer protection in the coming years, equipping state enforcers with this additional authority is especially critical,” Khan wrote.

Hochul included a measure to ban unfair and abusive business practices in her budget last year, which would build on the state’s existing laws against deceptive practices. State lawmakers have also introduced the Consumer and Small Business Protection Act, which is slightly broader and permits class action lawsuits against businesses that engage in unfair, abusive or deceptive practices. The budget measure ultimately did not make it into the final version of last year’s state budget, and the Consumer and Small Business Protection Act has not passed yet.

The bill, which lawmakers reintroduced this year, would adopt the “unfairness authority” that the FTC has at the federal level, which Khan wrote in her letter is critical. “The flexibility that unfairness authority affords has been crucial to the Commission’s efforts to protect the American people in an ever-evolving economy over almost a century,” she wrote. Khan credited it in particular with FTC action to protect consumers from unscrupulous tech practices employed by businesses, such as Rite Aid’s use of artificial intelligence-based face recognition that often misidentified shoplifters. 

In her letter, Khan also referenced an issue close to the governor’s heart: child online safety. Hochul has lauded landmark laws approved last year meant to protect children’s privacy online and restrict the use of algorithmic feeds when minors use social media. Khan wrote that the unfairness authority is “integral to protecting children and teens online,” citing a recent case where the FTC punished a company for promoting anonymous messaging apps to children.

This is at least the second such letter that the FTC has sent to Hochul and leaders. Last February, the then-heads of the commission’s Bureau of Consumer Protection and Office of Policy Planning wrote a similar letter as state leaders considered including consumer protections in last year’s budget.

Khan was one of President Joe Biden’s most controversial nominees; as FTC chair, she aggressively challenged proposed mergers and launched investigations into the business practices of large tech companies like Amazon and Microsoft. Her novel interpretation of antitrust law endeared her to progressives while infuriating pro-business conservatives. On Monday, Trump named a new FTC chair to replace Khan, and Khan subsequently announced that she planned to resign from the commission in the coming weeks.

Read Khan’s full letter to state leaders: