Federal Trade Commission is sending shockwaves through Wall Street and Silicon Valley
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Just before Halloween in 2013, Lina Khan wandered through the vast selection of sweets at her local Safeway supermarket and came away with a disturbing revelation. The roughly 40 brands of candy on the shelves offered only a mirage of consumer choice; they were actually owned by just two or three confectioners. Khan, a junior policy analyst at the time, was so dismayed that she wrote about it in Time magazine. “If we want a healthier, more diverse market — and more variety in our Halloween buckets — we could start by reviving some of our antitrust laws.”
Khan’s critique of corporate power has gone far beyond Big Candy. She has explored concentration issues and monopolistic behaviour in sectors ranging from airlines to poultry and metals, drawing similar conclusions. And she started to train her attention on the excessive market influence of Big Tech, eventually becoming one of its most vocal and prominent critics. So when Khan, who is just 32, was this week tapped by US president Joe Biden to be chair of the Federal Trade Commission, the top competition regulator, it sent shockwaves through Washington, Wall Street, and Silicon Valley. The prevailing expectation is that she will now seek to usher in a new era of antitrust enforcement in America. “Now she’s in charge, and she’s to be feared,” says Robert Kaminski, a managing director at Capital Alpha Partners, a policy research group in Washington. “She’s got the hammer and all she sees are nails,” he adds. Khan was born and grew up in London, to parents from Pakistan; the family moved to the US when she was 11. The first hint of her interest in unfair corporate behavior came early.
A Starbucks coffee shop across the street from her high school in Mamaroneck, in the northeastern suburbs of New York City, was stopping teenagers from sitting down because they were too rowdy. A furore ensued, which Khan chronicled in her school’s newspaper and which was subsequently picked up by the New York Times. Khan would go on to attend Williams College, where she studied political theory. After graduating, she arrived in Washington, with a job at the New America Foundation, a center-left think-tank, that allowed her to research entrepreneurialism and competition. “Where we once had a lot of independent businesses, a lot of local businesses, a lot of variety,” she said in 2012, “we now actually just see a handful of companies that control almost every industry.”
Khan eventually landed at Yale Law School, and in January 2017 she published in the Yale Law Review the article that would catapult her to fame: “Amazon’s Antitrust Paradox”. The piece went viral. “You can almost think of it as the first article in what quickly became a kind of renaissance of antitrust revisionism,” says Robert Hockett, a professor of corporate law at Cornell University. At the heart of Khan’s philosophy is the idea that companies, including Amazon, have benefited from lax antitrust scrutiny for decades, a period during which low consumer prices became the dominant factor in setting competition policy. She envisions a different antitrust regime, similar to that which existed earlier in the 20th century when US authorities did not hesitate to break up monopolies. Amazon declined to comment on her appointment.
“What she’s doing is really just returning antitrust and market policy to the status quo ante, of the 20s through the 60s, even the 70s,” says David Singh Grewal, a law professor at the University of California at Berkeley. People who know Khan — who is married to a cardiologist — describe her as unassuming and even somewhat reserved. “She really maintains a private life that’s private,” says Grewal. “It’s easy to think of her as the face of ‘millennial’, sometimes called ‘hipster,’ antitrust, but she’s so different from the personality-driven social media phenomenon rising around her.” After getting her law degree, Khan became a professor at Columbia and also worked with the Open Markets Institute, an anti-monopoly think-tank in Washington.
On Capitol Hill, she helped craft the House judiciary antitrust subcommittee’s probe into Big Tech. Many Republicans are still wary. “Her views on antitrust enforcement are also wildly out of step with a prudent approach to the law,” said Mike Lee, the Utah Senator, in March. But Khan’s standing soared in Democratic circles, reaching beyond traditional Big Tech critics such as Elizabeth Warren and Bernie Sanders to include more mainstream politicians like Biden. Even so, while she was expected to gain a place on the FTC as a commissioner, few predicted that she would be chosen to actually lead the agency. “She has really managed to soar high so quickly.
And I would attribute it to the fact that she’s just been incredibly visionary”, says Kate Judge, a professor at Columbia University law school. Sarah Miller, executive director of the American Economic Liberties Project, calls Khan the “Simone Biles” of antitrust, referring to the record-breaking US Olympic gymnast. “Demonstrating that America has this massive concentration crisis . . . played a part in making folks in way more traditional Democratic circles realize that a full turning of the page was necessary . . . And that she was the obvious one to help lead that.”
Source: The Financial Times https://www.ft.com/content/57cd6686-d1ee-4321-ae35-a8e1fc7f0813