The Federal Trade Commission investigated the UFC twice during the Obama administration, yet never brought any enforcement action. Recently, former FTC Chair Lina Khan suggested that this decision may have been a costly missed opportunity.
In a conversation with combat sports journalist Luke Thomas, Khan discussed about the situation. The investigations centered on Section 5 of the Federal Trade Commission Act, which Khan explained “basically prohibits two things: one is unfair methods of competition which is a term of art but it basically means you know underhanded ways of competing in the market. And then it also prohibits unfair or deceptive practices.”
The first investigation concluded in 2012 after UFC acquired rival promotion Strikeforce, while a second probe ended in 2015. Both times, the FTC closed its investigations without finding violations of Section 5 of the Federal Trade Commission Act, which prohibits “unfair methods of competition” and deceptive practices in the marketplace.
Khan, who served as FTC Chair during the Biden administration and became known for her aggressive approach to antitrust enforcement, acknowledged the unusual nature of investigating the same entity twice within just a few years.
“If you are investigating the same entity twice, it does raise questions,” she noted, adding that she wasn’t present during those investigations but found the pattern concerning.
The consequences of inaction became apparent years later. Fighters eventually filed private lawsuits against UFC, leading to a historic settlement. However, Khan pointed out it represented only “a fraction” of the expected damages and took a decade to achieve.
Evidence presented in those cases indicated that fighters had their wages suppressed, faced anti-competitive practices, and witnessed UFC buying up rivals simply to eliminate market competition.
Khan didn’t shy from acknowledging the FTC’s apparent failure to act. “It wouldn’t be the first time that this had happened,” Khan said, drawing parallels to the FTC’s 2012-2013 investigation into Google that resulted in no action, only for the Justice Department to bring a successful case years later.
She emphasized the significant downsides of delayed enforcement: “All the harm that’s been suffered in the interim, whether people are really going to be compensated for that. But also all of the lost opportunity, the lost innovation that could have happened.”
Khan suggested that earlier FTC investigators may have lacked the proper framework for addressing labor market issues. “For the last few decades, the antitrust enforcers hadn’t focused on the effects on workers and labor markets as much at all,” she explained. Her FTC made worker protection a priority, attempting to ban non-compete clauses and blocking mergers that would harm employees.
Now, UFC’s parent company TKO is lobbying Congress to amend the Muhammad Ali Boxing Reform Act, seeking exemptions that would apply specifically to mixed martial arts. Khan expressed alarm about conflicts of interest. “Some of what’s being suggested with this new bill would basically create new entities that would again be able to have those conflicts,” she warned, calling the prospect “pretty pretty troubling.”
