Lina Khan is the newly appointed Chair of the Federal Trade Commission. Khan was sworn in on 15th June 2021, her selection as Chair is not only noteworthy as, at the age of just 32, she is the youngest Commissioner in history to take on the role, but she is a controversial, progressive figure, who intends to bring about significant change and transformation to antitrust law. More specifically, she is taking on the ambitious task of seeking to introduce greater regulation of the Big Tech Giants. Khan is not only an inspirational female figure through taking on one of the most powerful and influential consumer protection roles in the US but through the way in which she aims to transform and challenge the existing status quo.
The role of Chair of the Federal Trade Commission is concerned with the enforcement of antitrust law and policy. Traditionally, antitrust law and competition regulation is concerned with protecting the consumer from companies increasing their prices. Regulators seek to achieve this through ensuring that there is sufficient competition in the market through merger control, as well as the identification and putting a stop to anti competitive practices. These practices are usually defined as either an abuse of dominance through generally increasing prices, ripping off consumers or surreptitiously forming cartels to elevate prices. Big Tech does not neatly compartmentalise into either of these categories. Khan claims that current legislation is inadequate to regulate the Big Tech giants. Khan challenges the very definition of antitrust. Current legislation focuses on price increases and the harm to the consumer. However, many Tech giants operate differently. They do not behave in the same way as a typical monopoly. It is very common for companies such as Google and Facebook to not charge their consumer at all. This means that they are often able to sidestep traditional antitrust laws. Khan aims to redefine what is meant by antitrust regulation through focusing more holistically on the impact of Amazon, Facebook and Google on the market and their competitors rather than solely the impact on the consumer in terms of price. It is often claimed in defence to anti competitive practices in relation to tech that they promote efficiencies and advance consumer needs. However, Khan retorts that “Even when services are good for consumers, they can hurt a whole set of other interests- be it workers, be it business formation, be it democracy at large.”
Khan was born in London to Pakistani parents and moved to the US at the age of 11. She studied law at Williams College and then went on to study at Yale Law Study. While she was studying at Yale, Khan published an article, ‘Amazon’s Antitrust paradox’ which initially highlighted her criticism of the lack of competition and small number of companies that dominate the Big Tech market. In many ways, her transition from an academic highly critical of the lack of regulation of Big Tech to the Chair of the Federal Trade Commission is an unusual one. Her role as the face of the FTC entails the representation of the agency at congressional hearings, on panels and speeches against lawyers defending their clients against the allegations of the FTC. The role is widely considered a neutral enforcement role, however, it is clear that Khan seeks to strive for policy change. In addition, US antitrust enforcement has previously been considered rather light touch and far less interventionist in comparison with the approach of the European Commission. Whilst Khan’s proposals will not entirely overturn this approach, it will align and unify the US with the European Commission’s commitment to devise better strategies to regulate the technology market. Whilst many welcome Khan’s approach as the new era of antitrust or even have even coined it “hipster antitrust”, a modern approach to modern technological companies, her approach actually seems to resemble an approach similar to what existed in the US in the early 20th century whereby the state was far more interventionist in terms of market regulation.
The US Federal Trade Commission has already launched investigations into Amazon. The investigation is looking into Amazon’s recent acquisition of movie studio MGM for $8.4 billion. It is by far not the only company that amazon has recently acquired with the most high profile further examples including its acquisition of WholeFoods, which the FCT previously approved, as well as shares in Deliveroo. Whilst the investigation is only in the early stages, Khan has certainly unsettled Big Tech with Amazon calling for her resignation, citing her previous work and criticism of Big Tech companies. This was supported by Facebook who are unnerved by Khan’s talk of greater scrutiny of merges such as the likes of Facebook’s acquisition of instagram and WhatsApp. Khan does have more powers at her disposal, the FTC has acquired further powers to both reject, challenge and call for modification the terms of mergers and acquisitions.
Lina Khan is not only inspirational in her ambitious goal of taking on Big Tech and striving for change for US competition regulation, but she is undeterred by the significant obstacles that lie in her way. In order to influence policy, Khan must persuade at least 2 of the other 4 commissions to support her and she must get her ambitious policies past the Supreme Court judges. This could prove challenging in light of Donald Trump previously appointing over 200 judges, of whom will likely be more willing to support businesses and economic growth rather than regulations and consumer protection. If there was not already a big enough mountain to claim, competition litigation is a notoriously complex and lengthy process, with the tech giants likely to appoint top lawyers to defend them. This is certainly just the beginning of a long road ahead. Nevertheless, Khan’s appointment has certainly ruffled the feathers of the Big Tech companies. She is an inspiration in the ambitious and revolutionary step to challenge significant corporate power, influence and the Big Tech companies that once seemed almost untouchable by the regulator.
Financial Times- https://www.ft.com/content/943450a4-dbdc-48aa-a160-a86c3692c734