By Robert Portillo, Staff Writer
Photo courtesy of Unsplash.com
The Federal Trade Commission’s (“FTC”) mission is “protecting the public from deceptive or unfair business practices and from unfair methods of competition through law enforcement, advocacy, research, and education.”[1] However, the way that mission is carried out varies over time as economic and social conditions change, new political parties take office, and maybe most crucially, who sits at the head of the table.
The current chairwoman of the FTC, Lina Khan, is attempting to move away from the Chicago School’s focus on consumer welfare that has dominated antitrust policy since the Reagan Administration.[2] Khan became the youngest FTC chair ever to be sworn in when she took the job at 32 years-old in 2021.[3] She became a national figure in antitrust policy following her 2017 article, “Amazon’s Antitrust Paradox,” published in the Yale Law Journal during her third year at the school.[4] The article argued that a narrow view of high prices as the main indicator of monopoly power failed to account for how corporations like Amazon weaponize lower prices against smaller retailers on their path to controlling critical infrastructure of the digital economy.[5] This view fell in line with the New Brandeis movement of antitrust, a school of thought that Khan is a recognized proponent of.[6] Khan herself set out the core tenants of this school of thought in a 2018 article in the Journal of European Competition Law and Practice.[7] Those tenants include but are not limited to; the assertion that the Madisonian concept of self-governance hinges on the ability of the citizens to check private concentrations of economic power; the Chicago School’s focus on consumer welfare fails to recognize harms imposed on workers, suppliers, and innovators; and the political economy is structed by law and policy alone, not so called “natural forces” of the market.[8]
The transition from academic theory to real world implementation proved difficult for Khan and the FTC.[9] Notably, the Commission failed to block the merger of Meta and virtual reality start-up Within[10] and failed to block Microsoft’s acquisition of Activision Blizzard.[11] However, these rulings have not been complete failures in the eyes of Khan who argued losing may still help broadly if it encourages Congress to revamp laws in response to new competitive harms. [12] Khan also said that the FTC’s current stance on mergers and acquisitions may have a deterrent effect on the front end as business leaders indicated executives have been more apprehensive as of late in their pursuit of deals that pose antitrust risks.[13]
Despite losses in the court room, proponents of Khan say her tenure created a durable change in how people talk about competition.[14] “All of a sudden, the upholders of the status quo look old and tired to me. There’s truly a generational change happening.” said William Koviac, former chair of the FTC during the George W. Bush Administration. Opponents on the other hand have called her policies radical and partisan, and claimed such policies will do more harm than good for small businesses.[15]
Khan’s term will run in September of 2024[16] and any future she has at the FTC beyond that point lie in circumstances outside her control. But, even if she must relinquish her position as chair when that time comes, it is evident her presence has ushered in a new wave of political discourse surrounding antitrust policy.
[1] https://www.ftc.gov/about-ftc/mission
[2] https://www.newyorker.com/magazine/2021/12/06/lina-khans-battle-to-rein-in-big-tech
[3] https://www.law.georgetown.edu/news/ftc-chair-lina-khan-discusses-the-promises-of-antitrust-at-georgetown-law/
[4] Id.
[5] https://www.washingtonpost.com/technology/2023/09/27/lina-khan-amazon-antitrust-paradox/
[6] https://www.newyorker.com/magazine/2021/12/06/lina-khans-battle-to-rein-in-big-tech
[7] https://academic.oup.com/jeclap/article/9/3/131/4915966
[8] Id.
[9] https://www.nytimes.com/2023/07/11/technology/lina-khan-ftc-strategy.html
[10] Id.
[11] Id.
[12] https://www.cnn.com/2023/10/16/tech/lina-khan-risk-takers/index.html
[13] Id.
[14] Id.
[15] https://www.cbsnews.com/sanfrancisco/news/ftc-chair-lina-khan-house-republicans-ethics-antitrust/
[16] https://www.cnn.com/2023/10/16/tech/lina-khan-risk-takers/index.html
