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Biden's New FTC Head Could Make Big Tech Sweat 


FILE - Lina Khan, nominated for a spot on the Federal Trade Commission, speaks at her confirmation hearing, April 21, 2021, on Capitol Hill. Khan was sworn in as FTC chair June 15, hours after the Senate confirmed her nomination as a commissioner.

U.S. President Joe Biden's unexpected decision to name a staunch antitrust advocate to lead the Federal Trade Commission has thrilled supporters of stronger regulation of the tech industry and has prompted predictions of regulatory overreach from representatives of some of the country's largest internet companies.

Lina Khan, 32, a professor at Columbia Law School prior to her nomination, is known for advocating a hard-nosed approach to the regulation of large technology firms like Amazon, Facebook, Google and Apple. She was nominated to fill an open seat on the FTC in March, and on Tuesday she was confirmed in a bipartisan 69-28 vote in the Senate.

Shortly afterward, the news that she would be not just a commission member but its leader was announced by Minnesota Democratic Senator Amy Klobuchar at a Senate hearing.

Her confirmation may signal an unexpectedly aggressive stance toward big tech firms from a presidential administration that had not seemed to make reining in the giants of Silicon Valley a major priority.

Early run-in with big tech

Khan was born in London to Pakistani immigrant parents. The family moved to the United States when she was 11 and settled in New York City. Khan went to Williams College in Massachusetts, where she edited the school newspaper and completed her thesis on the political theorist Hannah Arendt.

Khan's first run-in with the might of big tech firms came when she was barely out of college and working for the Open Markets Program at the New America Foundation, a left-of-center think tank. The program's focus was on the anti-competitive behavior of big businesses, such as Google, which happened to be a major financial supporter of the New America Foundation.

FILE - This March 19, 2018, photo shows a Google app.
FILE - This March 19, 2018, photo shows a Google app.

In 2017, after the Open Markets Program expressed its approval of the European Union's decision to slap Google with a $2.7 billion fine for the way it ranked its own shopping services in internet search results, the company's chief executive reached out to the head of New America to express his displeasure.

What happened afterward is disputed by the various parties involved, but within about two months, the Open Markets team was formally separated from the foundation.

Going after big tech companies

Khan made a name for herself in the world of antitrust law with a 2017 article in The Yale Law Journal called "Amazon's Anti-Trust Paradox." The piece argued that typical antitrust doctrine in the U.S., which considers "consumer welfare" when determining whether a company is engaging in anti-competitive behavior, is inadequate in today's world. A consumer products giant like Amazon can keep prices low — the biggest determinant of consumer welfare — even as it uses its dominance of a technology platform to disadvantage its competitors.

Two years later, Khan followed up with an article in the Columbia Law Review advocating the application of "structural separations" to tech firms. The idea is that a system in which a company operates a platform on which goods and services are sold while simultaneously selling goods and services on that platform creates "a conflict of interest that platforms can exploit to further entrench their dominance, thwart competition and stifle innovation."

A prime example, offered in the paper, was Apple's decision to block the popular music streaming service Spotify from its app store at the same time that it was trying to roll out a competing service called Apple Music.

House report

Khan went on to help lead a major investigation into competition in digital markets by the majority staff of the House Judiciary Committee, which was issued in October of last year. The report included sweeping proposals for the application of antitrust law to the tech industry — including Khan's favored concept of structural separation — and infuriated advocates for the tech industry.

FILE - This combination of photos shows logos for social media platforms Facebook and Twitter.
FILE - This combination of photos shows logos for social media platforms Facebook and Twitter.

Khan's participation in the House Judiciary report figured strongly in the negative reaction that news of her appointment as FTC chair generated from the industry. NetChoice, a group that represents giant companies like Google, Facebook, Amazon, Twitter and more, quickly released a statement indicating its dismay with the decision.

"Lina Khan's antitrust activism detracts from the Federal Trade Commission's reputation as an impartial body that enforces the law in a nondiscriminatory fashion," said Carl Szabo, the group's vice president and general counsel.

Khan's work on the House Judiciary report "casts doubt on her ability to fairly and neutrally apply our antitrust laws as they stand today," Szabo said.

Cheers from the left

During his campaign for the Democratic presidential nomination, Biden competed against other candidates, like Massachusetts Senator Elizabeth Warren, who specifically called on the government to "break up" large technology firms. During the campaign, Biden never went as far as Warren, which made the elevation of Khan to lead the FTC all the more surprising.

"Lina brings deep knowledge and expertise to this role and will be a fearless champion for consumers," Warren said in a statement Tuesday. "Giant tech companies like Google, Apple, Facebook and Amazon deserve the growing scrutiny they are facing, and consolidation is choking off competition across American industries. With Chair Khan at the helm, we have a huge opportunity to make big, structural change by reviving antitrust enforcement and fighting monopolies that threaten our economy, our society and our democracy."

Even the New America Foundation — now New America — which separated with Khan and the Open Markets team under questionable circumstances in 2017, applauded her nomination to run the FTC.

In a statement Tuesday, Joshua Stager, deputy director of broadband and competition policy at the foundation's Open Technology Institute, called Khan a "proven thought leader who has helped jolt antitrust enforcement out of stagnant 1970s thinking. After years of sluggish enforcement — particularly in digital markets — the FTC needs a fresh perspective. We look forward to working with Commissioner Khan."

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