Lina Khan has some of the biggest companies in the world-shaking in their boots.
The 32-year-old antitrust scholar and law professor in June became the youngest person in history and the most progressive in more than a decade to be appointed as chair of the Federal Trade Commission (FTC).
Khan’s appointment places her at the helm of the federal agency charged with enforcing antitrust law just as it is poised to tackle the giants of the technology industry after years of unchecked power. And big tech isn’t happy about it.
Within weeks of Khan’s appointment, both Facebook and Amazon requested that Khan be recused from the FTC’s antitrust investigations into their companies, arguing that her intense criticism of them in the past meant she would “not be a neutral and impartial evaluator” of antitrust issues.
Khan has forcefully argued for the need to rein in powerful firms like Amazon, Facebook, Apple, and Google, developing an innovative antitrust argument that has revolutionized the way we think about regulating monopolies.
“She understands how these companies are harming workers, innovation, and ultimately democracy and is committed to taking them head-on,” said Stacy Mitchell, co-director of Institute for Local Self-Reliance, an antimonopoly advocacy organization.
“This is a gamechanger”.
‘A meteoric rise’
Before Khan took it on, antitrust law enforcement in the US had atrophied. For decades, it had functioned under the “consumer welfare standard”, which meant that the government would only take action against a company for anti-competitive practices if consumers were hurt by increased prices.
But by the time Khan was a student at Williams and then Yale Law School, tech behemoths had built de facto monopolies by giving away their products for free or at such low prices that no one else could compete.
In the early years of the tech boom, it was widely assumed that the industry would essentially regulate itself, according to Rebecca Allensworth, a professor of antitrust law at Vanderbilt University. That Yahoo’s popularity gave way to Google and Myspace to Facebook appeared to be proof that “competition in tech was intensive without any government involvement”, she said. “But we have seen how that has really changed, as has our understanding of how these companies can abuse the market”.
Slipping through the cracks of these old antitrust standards, tech companies amassed unchecked power, acquiring competitors and scooping up billions of customers. In 2020, Apple became the first American company to be valued at $2tn. That same year, Amazon eclipsed $1tn, joining Microsoft, at $1.6tn, and Google parent Alphabet at $1tn.
In her now-famous 2017 Yale Law Journal article, Khan argued that the rise of these mega-companies proved that modern American antitrust law was broken and that the traditional yardsticks by which regulators determine monopolies need to be re-examined for the digital age.
Keeping prices low has allowed Amazon to amass a large share of the market, giving it a disproportionate impact on the economy, stifling competition, and further perpetuating monopoly, she argued.
“The long-term interests of consumers include product quality, variety, and innovation – factors best promoted through both a robust competitive process and open markets,” she wrote.
She also investigated mergers and examined the impact the resulting tech monopolies have on product quality, suppliers, and company conduct. Even if these companies’ practices resulted in some benefits for consumers, they were harmful to markets and democracy at large, she said.
The immediate impact of her thesis was undeniable, with the New York Times announcing Khan had “singlehandedly reframed decades of monopoly law”. Politico called her “a leader of a new school of antitrust thought”. Christopher Leslie, a professor of antitrust law at the University of California, Irvine, characterized Khan’s rise in recent years as “meteoric”.
“It’s unprecedented to have somebody ascend to such an important leadership role in antitrust enforcement so soon after graduating from law school,” he said. “But it’s also unprecedented to have somebody make such a significant impact on antitrust public policy debates so quickly after graduating”.
Big tech in the hot seat
In 2019, Khan brought her new approach to antitrust to Congress, serving as counsel to the US House judiciary committee’s subcommittee on antitrust, commercial, and administrative law. Spearheading the committee’s investigation into digital markets, she played a large role in the publication of its landmark report: a 451-page treatise on how companies including Google and Amazon abuse their market power for their own benefit.
Khan also served as legal director at the political advocacy group Open Markets Institute and taught antimonopoly law at Columbia until her appointment to the FTC in 2021.
Khan’s appointment marked a break from the “revolving door” between the FTC and the private sector, in which people with years of experience defending companies in Silicon Valley become regulators. Her new role also comes at a time when reining in big tech is one of the only issues that unites a deeply divided Congress.
Massachusetts senator Elizabeth Warren said Khan’s leadership of the FTC was “a huge opportunity to make big, structural change” to fight monopolies and Senator Amy Klobuchar praised Khan as “a pioneer in competition policy” who “will bring a critical perspective to the FTC”. The Republican Ted Cruz told Khan he “looked forward” to working with her on these issues.
Khan has her critics. The former Republican senator Orrin Hatch has condemned her thesis as “hipster antitrust”. Mike Lee of Utah said she “lacks the experience necessary” for the FTC and that her views on US antitrust laws were “wildly out of step with a prudent approach to the law”.
But her appointment coincides with a growing drive among lawmakers to take on the major tech companies, Allensworth said. “Politicians, small businesses, and the academic establishment are clamoring for it,” she added.
Shortly after naming Khan as chair, Joe Biden signed an executive order calling on federal regulators to prioritize action promoting competition in the American economy – including in the tech space. “Let me be very clear: capitalism without competition isn’t capitalism. It’s exploitation,” he said regarding the order, which contained 72 initiatives to limit corporate power.
Biden asked the FTC to better vet mergers and acquisitions and to establish rules on surveillance. He also called for the easing of restrictions on repairing tech devices and data collection on consumers.
‘A different set of rules’
In her first hearing as chair in July, Khan indicated that she was ready to get started, saying the US needs “a different set of rules”.
She cited bad mergers – in the past she had criticized Facebook’s acquisitions of Instagram, Giphy, and WhatsApp as anti-competitive – as potentially fueling large tech monopolies: “In hindsight, there’s a growing sense that some of those merger reviews were a missed opportunity”.
One of Khan’s first tasks as chair is likely to be rewriting an FTC antitrust complaint against Facebook that was dismissed in June after the agency failed to demonstrate that the tech giant maintains a monopoly.
Meanwhile, Apple and others are set to face FTC scrutiny over repair policies that restrict third-party companies from fixing devices. The agency voted unanimously in July to ramp up enforcement of the right to repair.
The attempts by Amazon and Facebook to force Khan’s recusal are signs that big tech won’t go down without a fight. But critics say these efforts amount to intimidation tactics and not much more. Khan does not have any conflicts of interest under federal ethics laws, which typically apply to financial investments or employment history, and the requests are not likely to go far.
This is “a PR move”, said Allensworth. “She has made a lot of very public, extremely influential arguments about exactly how tech suppresses competition and now she’s the chairperson of the largest and most important federal agency to do with competition,” she said.
“They should be worried,” she added.
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