Taking on Big Tech: What the Federal Trade Commission can do – The Christian Science Monitor

Just weeks into Lina Khans tenure at the helm of a newly activist Federal Trade Commission, tensions over her approach are on full display. Amazon has accused Ms. Khan of undue bias and asked her to recuse herself from any FTC investigations involving the company, while opponents to Big Tech have praised hertougher posturetoward companies that have amassed vast market power.

Frictions have only grown after President Joe Biden signed anexecutive orderon July 9 calling for actions including new rules from the FTC to stem an erosion of marketplace competition.Ms. Khan is a leading proponent of reviving antitrust activism during the current era of Big Tech giants and consolidation in industries from banking to hospital companies.

Is it possible to rein in the vast marketplace clout of Big Tech firms like Amazon using antitrust rules? Lina Khan is a believer that the Federal Trade Commission, which she now chairs, can revive a powerful watchdog role.

Yet Ms. Khan and her allies face hurdles. On June 29, a U.S. district judgedismissed two FTC lawsuitsagainst Facebook, citing lack of evidence that the platform is a monopoly. Next up:The commission is taking a skeptical eye toward Amazons proposed acquisition of MGM Studios.

[Ms. Khans arrival] is a real philosophical change,says Matt Stoller, director of research at the American Economic Liberties Project.Its one of those moments in history where things turn in a significant way.

Just weeks into Lina Khans tenure at the helm of a newly activist Federal Trade Commission, tensions over her approach are on full display.

Is this progressive scholar aninnovative reformerwholl finally bring near-monopolies like Facebook to heel, or is she a proponent ofquestionable overreachat the agency?

Amazonhas accusedMs. Khan of undue bias and asked her to recuse herself from any FTC investigations involving the company, while opponents to Big Tech have praised hertougher posturetoward companies that have amassed vast market power.

Is it possible to rein in the vast marketplace clout of Big Tech firms like Amazon using antitrust rules? Lina Khan is a believer that the Federal Trade Commission, which she now chairs, can revive a powerful watchdog role.

Frictions have only grown after President Joe Biden signed anexecutive orderon July 9 calling for actions including by the FTC to stem an erosion of marketplace competition.

[Ms. Khans arrival] is a real philosophical change. Its one of those moments in history where things turn in a significant way, says Matt Stoller, director of research at the American Economic Liberties Project.

The FTC was established in 1914 in the aftermath of the breakups of companies like Standard Oil and American Tobacco, which were declared illegal monopolies by the Supreme Court. The independent agency was set up as a central government arbiter on fair commerce, with the power to both investigate questionable trade practices and also to regulate them.

Amazon CEO Jeff Bezos speaks during a House Judiciary subcommittee hearing on antitrust on July 29, 2020.

Although the FTC was initially weak, with critics accusing it of fostering monopoly power instead of fighting it, its authority and activism expanded under President Franklin Roosevelts New Deal.

By the 1980s, however, backlash to the FTCs authority had built, resulting in the emergence of a new consumer welfare theory that held that corporate mergers should only be prevented when it is clear that consumers would be harmed as a result. This now-dominant view has faced rising skepticism in the current era of Big Tech giants and consolidation in industries from banking to hospital companies.

Ms. Khan, who came to fame by publishing a 96-page treatise on how Amazon has marched toward monopoly by singing the tune of contemporary antitrust, wants to return the FTC to where it was at its height. She wrote as much in the paper, where she criticized the current approach to antitrust and called for restoring traditional antitrust and competition policy principles.

To that end, she has the support of two fellow commissioners Rebecca Slaughter and Rohit Chopra, both Democrats granting her a 3-2 majority to implement her reforms. The FTC has broad, economy-wide authority. It can write fair competition rules across many different sectors, and it just hasnt done it. People rightfully dont care about it, because why would you? It doesnt do anything, says Mr. Stoller. I suspect that will change under Lina.

So far, she has done exactly that. In the FTCs first public meeting in decades, Ms. Khan put forward a set of policies aimed at correcting the agencys longstanding failure to investigate and pursue unfair methods of competition, including administrative changes that would allow the agency to more easily propose rules and conduct investigations, as well as the implementation of penalties for companies that lie about their products being made in America. Each passed in a party-line vote.

Now comes President Bidens July 9 executive order, which seeks to expand the FTCs purview over labor rules, consumer rights, and mergers. Among other things, the order asks the commission to curb the use of noncompete clauses in hiring which prevent workers from leaving for another job in the same industry and to set rules on tech firms use of customer data. Standing proud behind him as he signed the order was none other than Ms. Khan.

It may take time for the dust to clear on that question. As Congress weighs its own possible efforts to rein in Big Tech, the FTC appears to be moving ahead with Ms. Khans ambitious strategies. The commission is taking a skeptical eye toward Amazons proposed acquisition of MGM Studios a merger that might have easily cleared antitrust hurdles in the past.

Yet Ms. Khan and her allies face a number of challenges ahead that could dampen the FTCs ability to influence Big Tech. Already, on June 29, U.S. District Judge James Boasberg dismissed two antitrust lawsuits brought by the FTC against Facebook, saying that the FTC failed to provide enough evidence that the platform was a monopoly.

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It is almost as if the agency expects the Court to simply nod to the conventional wisdom that Facebook is a monopolist, Mr. Boasberg added, indicating skepticism toward Ms. Khans more intuitionistic approach to antitrust.

For Mr. Stoller, the case is indicative of the structural opposition that the FTC will face as it pursues Big Tech. The judiciary is not going to be friendly to her way of doing things, he says. But the FTC has other ways of [promoting competition], too.

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Taking on Big Tech: What the Federal Trade Commission can do - The Christian Science Monitor