[This post originally appeared at Truth on the Market on Oct. 8, 2025.]

The AI Action Plan unveiled in July by President Donald Trump could mark a turning point for U.S. antitrust policy. By directing the Federal Trade Commission (FTC) to prioritize innovation, the plan offers a historic opportunity to lift onerous regulatory burdens, restore measured enforcement, and repudiate the overreaches of former FTC Chair Lina Khan’s regime.

To seize this moment, the FTC should pursue an alignment strategy to ensure that its guidance, regulations, and enforcement actions reflect the action plan’s pro-innovation vision, rather than the speculative anti-business theories of the past. In practice, the FTC should:

1. publicly repudiate Khan-era guidance and affirm the pro-competitive benefits of common business practices;
2. use its competition-advocacy tools to push states toward pro-innovation laws;
3. withdraw from its misguided cooperation agreement with European and British regulators; and
4. reevaluate ongoing litigation to ensure alignment with precedent and the action plan’s principles.

At the same time, the White House should broaden the plan’s reach to include the U.S. Justice Department (DOJ) and all forms of American innovation.

The Biden Administration’s Misaligned Antitrust Agenda

The AI Action Plan repudiates the excesses of the Khan era, when the commission’s antitrust-enforcement agenda was consistently misaligned with the realities of AI markets. At every turn, the FTC sought to manufacture competitive concerns in a sector defined by record investment, rapid innovation, and fierce global competition—especially from China.

For instance, the agency speculated that investments from large technology companies could raise problems related to access to data, talent, or network effects. It declared open-source AI models problematic because, at some future point, companies could choose to close those models. Acting on these views, the FTC launched a sweeping study of AI markets, partnered with European and British regulators to probe U.S. firms, and targeted ordinary transactions such as investments, hiring, or bundling services—often at the urging of anti-tech lawmakers.

The AI Action Plan Aligns with Innovation

By contrast, the AI Action Plan directs the FTC to realign its mission by embracing the private sector’s role in driving innovation. It requires the agency to review all investigations, orders, and decrees to ensure they do not “unduly burden AI innovation.”

To fully embrace the plan’s letter and spirit, the FTC should go even further. It should repudiate Khan–era guidance and publicly affirm the pro-competitive benefits of common business practices. By doing so, the commission would eliminate uncertainty and solidify this vision for U.S. AI leadership.

Acknowledge competition in AI markets

The agency should repudiate its prior statements expressing competitive concerns about AI markets and publicly recognize that these markets are flush with investment and rivalry, primarily among U.S. and Chinese firms.

Moreover, the FTC should publicly acknowledge that many routine practices spur innovation, including hiring top talent; investing in small companies; bundling multiple products; seeking access to data for training purposes and signing exclusive contracts of reasonable length. By publicly acknowledging these market realities, the agency’s leadership could help to assure the private sector that the FTC will no longer seek to manufacture antitrust claims.

A new paper, for example, highlights the benefits of mergers and acquisitions to AI innovation. Whereas China uses intellectual-property theft and state industrial policy to advance its technologies, America’s innovation ecosystem relies on the robust flow of private capital to encourage investment, new entry, and patent filings.

Use competition advocacy to promote pro-innovation state policies

In 2025 alone, lawmakers introduced more than 1,000 AI-related regulation bills, with nearly 100 becoming law the prior year. In the absence of a federal AI moratorium, the FTC should advocate for laws that promote innovation and resist overly aggressive state lawsuits, preventing a patchwork of conflicting rules that could hobble growth.

Withdraw from joint agreements with foreign regulators

Under the leadership of Khan and former Assistant U.S. Attorney General Jonathan Kanter, respectively, the FTC and DOJ signed the “Joint Statement on Competition in Generative AI Foundation Models and AI Products” with their European counterparts, echoing ideological claims about the dangers of scale and concentration.

The joint statement repeats numerous fallacies about the dangers of data, scale, and concentration, and gives foreign regulators an excuse to target U.S. firms. The agencies should withdraw and renegotiate an agreement consistent with the AI Action Plan.

Reconsider lawsuits against US tech leaders

The FTC has already dropped its case against Microsoft’s Activision acquisition. Next, it should reevaluate its sweeping suits against Amazon, Meta, and others. No company is above scrutiny, but lawsuits that stretch precedent and ignore market realities could jeopardize U.S. AI leadership at a time when private firms are investing tens of billions of dollars in AI infrastructure.

Since the FTC first brought these suits, markets have changed dramatically, output and innovation have skyrocketed, and new companies—including Chinese competitors—have gained global prominence. The FTC should reconsider whether its law-enforcement actions continue to comport with the AI Action Plan, precedent, and the national interest.

Extending this Alignment Strategy to the DOJ and Other Agencies

Similarly, the White House should expand the AI Action Plan’s alignment strategy to cover all FTC activities, the DOJ, and all forms of innovation. For instance, the DOJ is also pursuing aggressive cases against companies that are investing heavily in AI infrastructure. Should these suits result in breakups or significant constraints on lawful business practices, there are serious questions as to whether the firms or their successors would retain the resources, talent, and capacity to absorb the attendant risks that come with investing heavily in AI infrastructure.

Finally, the plan’s logic should extend beyond AI. No agency should “unduly burden” any form of innovation. Expanding the directive to fields like biotech and quantum computing would send a powerful message: the federal government is united behind a single alignment strategy—ensuring American innovation leads the world and secures U.S. technological dominance for the future.

* Asheesh Agarwal is president of Agarwal Strategies LLC and an advisor to the American Edge Project.  See more about Mr. Agarwal here.