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Enlarge / Lina M. Khan testifies during the Senate Commerce, Science and Transportation Committee hearing on Capitol Hill on April 21, 2021, in Washington, DC.
President Joe Biden appointed Lina Khan to chair the Federal Trade Commission just hours after she was confirmed in the Senate as one of the agency’s five commissioners. It’s an unusual move — newly appointed delegates to the presidency are rarely promoted immediately — and it likely indicates that the Biden administration will take a hard-line approach to antitrust enforcement, particularly when it comes to Big Tech platform companies such as Google, Amazon, Facebook and Apple .
Although Khan is sure to take a tougher view on the platforms, it is unlikely that the FTC will start dismantling Big Tech tomorrow. “Lena Khan has driven the academic conversation about technology, and now she has to push the agenda at the Federal Trade Commission,” Shane Greenstein, a professor at Harvard Business School, told Ars. “A lot of the day-to-day business at the FTC has nothing to do with technology, and a lot of the agenda is not up to the chairman. It comes from consumer complaints, merger proposals, etc. It will be interesting to see how you manage that — and with Congress Divided. This just has to be a challenge.”
While it may have a rocky path ahead, Khan’s 69-28 vote was relatively straightforward by modern standards. Her candidacy had been expected since early March, but her promotion to the chair came as a surprise. “If I go back to recent or past history of the Federal Trade Commission, I can’t remember a case where the White House appointed an individual to be a commissioner and then once the Senate confirmed that person, appointed that person to be the chair,” said William Kovacic, the former chair of the Federal Trade Commission, for Axios. fast rise
As a law student four years ago, Khan published an influential paper that reformulated the debate on anticompetitive behavior, particularly among big tech companies. In the paper titled “The Amazon Antitrust Paradox,” Khan said that using prices as a primary measure of anti-competitive behavior was an insufficient measure of market power among some companies, particularly big tech companies and their platforms.
She said the stakes are double. First, the economics of platform markets creates incentives for a company to pursue growth over earnings, a strategy that has been rewarded by investors. Under these circumstances, predatory pricing becomes highly rational — even when existing dogma treats it as irrational, and therefore implausible, Khan wrote. “Second, since online platforms act as important intermediaries, integration across lines of business puts these platforms in control of the underlying infrastructure that their competitors rely on.” These two attributes of today’s platforms also allow major tech companies to collect data on competitors, putting competitors in non-competitive positions.
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As president, Khan will control the agency’s agenda and staff. Her investigations will not have unlimited scope – she will have to impose laws on books, of course. But these laws could change — and soon.
Proposed Legislation Last week, members of both parties in the House of Representatives introduced five bills that, if passed, would mark the sweeping reform of US antitrust law since the trust-busting era of the late 19th and early 20th centuries. Earlier this year, Senator Amy Klobuchar (D-Minnesota) and Senator Josh Hawley (R-Mis) proposed very different legislation addressing antitrust reform. Klobuchar’s bill would bolster resources to enforce antitrust laws, expand the scope of illegal behavior, and shift the burden of proof in merger cases to companies. Hawley’s bill was less accurate, focusing primarily on market capitalization as an alternative to market dominance.
Among recent bills, those that could have an immediate effect would sharply raise merger filing fees, which go toward funding the Federal Trade Commission and the Department of Justice to enforce antitrust actions.
The rest of the House bills focus on platforms and their potential for anti-competitive behavior. You can see Khan’s influence in those bills. The Ultimate Platform Monopoly Act would prevent large platforms from owning or operating lines of business, such as app stores or ad exchanges, that would lead platforms to prefer their own services over those of competitors. Another law, the US Online Choice and Innovation Act, would similarly prevent platforms from favoring their own products and services, but would also make it illegal to use private data to the detriment of competitors.
Even if these laws are not passed, they may still push antitrust enforcement in the direction that lawmakers are moving. “Historically, there has always been this dance between Congress, the legislature, and agencies in the executive branch where some of what lawmakers do threaten to change the legislation, and some of it actually changes the legislation,” Greenstein said. “And some of what they do is hold hearings to try to persuade agencies to move in the direction that the legislation would have gone had it been passed — thus eliminating the need to do it in the first place.
“In antitrust, this dance is more than 100 years old,” he added.
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