FTC Nominee Lina Khan Fires a Warning Shot at Big Tech - "Potential Criminal Activity" - and Senators from Both Parties Love It
The Senate Commerce Committee holds a nominating hearing for the most important scholar on antitrust since Robert Bork. She warns of potential criminal activity in the adtech world.
Welcome to BIG, a newsletter on the politics of monopoly power. If you’d like to sign up to receive issues over email, you can do so here.
Today was Lina Khan’s nominating hearing for her slot as a commissioner at the Federal Trade Commission, which is one of America’s antitrust enforcement agencies. Khan is known as a rock star of antitrust, and for good reason. She helped lead the 16-month investigation of big tech firms by the House Antitrust Subcommittee, and before that she wrote one of the most important law review articles in recent history, Amazon’s Antitrust Paradox.
That piece, as Senator Amy Klobuchar noted while introducing Khan, went viral, and helped reframe how we understand antitrust and competition law. To have Khan as a nominee for an enforcement slot is therefore quite significant. Her testimony today was crisp and effective, with none of the filler-style chatter you hear from most bureaucrats (words like ‘stakeholder’ and ‘engagement’ come to mind). She was on a panel with other nominees for other agencies, like Bill Nelson to be the head of NASA. And she was so impressive that reporters covering other beats took notice.
There were a couple of notable takeaways.
In response to a question from Senator Maria Cantwell on the decline of local news and its relationship with Google and Facebook, Khan warned of ‘potential criminal activity’ in online advertising markets. She was referencing the Texas Attorney General suit against Google, which found price-fixing in how Google and Facebook organize auctions for advertising space. The FTC doesn’t have authority to pursue criminal suits, but it was still an eyebrow raising moment.
Senator Amy Klobuchar asked Khan about app stores, because there’s a hearing in the afternoon on the monopoly power of Google and Apple. Khan seemed to argue there are dominant gatekeepers, and that it’s clear "certain terms and conditions appear to lack any beneficial justifications." We’ve already seen action in states, but it seems like app stores are one of the first places we’ll see real movement on policy to break monopoly power.
The only opposition to Khan came from Republican Senator Marsha Blackburn, who dismissed her as inexperienced, and from Republican Senator Mike Lee, who asked whether she’d have to recuse herself from big tech cases on the basis that she pre-judged them. Lee was basically defending the status quo.
Other than Blackburn and Lee, both Republicans and Democrats seemed to appreciate Khan’s approach. Republican Senator Roger Wicker, for instance, asked for her views on Clarence Thomas’ opinions on big tech and common carriage. They went back and forth on the problem of big tech, and you wouldn’t know which was a Democrat and which was a Republican. Here’s conservative organizer Rachel Bovard.Republican Senator Roger Wicker asking progressive Biden nominee Lina Khan about her overlap with Justice Clarence Thomas on common carrier status for Big Tech is amazing. The bipartisan consensus against Big Tech is real. And growing.
And here’s a reporter for Morning Consult.still thinking about how Ted Cruz told Lina Khan during her nomination hearing that he looks forward to working with her on Big Tech issues
The most important thing to know about Lina Khan is that she is at heart an investigative journalist. When she was 15, she did a story on Starbucks for her school newspaper, and it got picked up by the New York Times. Before she became a lawyer, she did investigations on everything from the rise of big chocolate to airlines to poultry to banks to Monsanto’s appetite for data.
Her law review piece on Amazon came out of research she did on the economy as a news gatherer, and the investigation of big tech for the Antitrust Subcommittee was basically just high-quality journalism. Khan has what is necessary in a great enforcer and regulator, which is a sense of curiosity about how the world works. She starts with empirical reality, asking what’s happening in business and how it is shaped by the law.
Khan will be just one of five votes, so she won’t be able to run the commission herself. But her nomination is a huge deal. The FTC used to be an afterthought agency, a place to stack cronies with a nice cushy job flying off to Europe to attend privacy conferences, with the need to occasionally vote to permit a massive mega-merger. If nothing else, Khan’s nomination shows that is no longer the case.
Thanks for reading. Send me tips on weird monopolies, stories I’ve missed, or comments by clicking on the title of this newsletter. And if you liked this issue of BIG, you can sign up here for more issues of BIG, a newsletter on how to restore fair commerce, innovation and democracy. If you really liked it, read my book, Goliath: The 100-Year War Between Monopoly Power and Democracy.