Challenging Big Tech: Lina Khan’s tough talk warmly received on Capitol Hill

Lina Khan testifying on Capitol Hill Wednesday April 21, 2021. Photo: Graeme Jennings/Pool via REUTERS

WASHINGTON – Lina Khan’s unconventional ideas to take on tech companies’ power were decried as “hipster antitrust” by conservatives when her academic paper about Amazon went practically viral just a few years ago.

But with anti-Silicon Valley sentiment mounting on both sides of the aisle in Congress, President Joe Biden’s nominee to serve on the Federal Trade Commission on Wednesday April 21, 2021, received a relatively warm reception from senators as they weighed her nomination to become the youngest-ever commissioner of that body.

Khan, a law professor and former FTC staffer, signaled in her testimony that she would bring an aggressive approach to regulating tech giants. That would mark a major reversal from the Obama era, when the agency took a largely hands-off approach to big mergers and acquisitions in the tech sector.

Khan told senators that, in the last few years, new evidence has come to light showing there were “missed opportunities” for enforcement actions under the last Democratic administration. She said new findings show the FTC must be “much more vigilant” when it comes to large acquisitions in digital markets. Khan also argued she was particularly concerned about the ways in which large companies use their dominance in one market to give them an upper hand in others, an issue under intense scrutiny by Congress.

Khan‘s nomination signals that the Democratic Party intends to crack down on the tech industry, now that it controls both the White House and Congress. Khan is just one of several tech critics the Biden administration has tapped to serve in senior roles. Tim Wu, who has been critical of the industry, works on competition and technology policy on the National Economic Council; and Vanita Gupta, who has advocated for civil rights change in big tech, was just confirmed to serve in a top role at the Justice Department. Yet it remains to be seen if Biden will bring in more business-friendly Democrats to serve in other key roles, including in the top spot in the DOJ antitrust division.

Democrats – even moderate ones – promoted Khan‘s bona fides for the job.

Democrats painted the 32-year-old’s rise as a powerful immigrant story and noted her academic writings, particularly on Amazon’s power, have already had a major influence on Washington’s approach to antitrust policy. Khan served as counsel for Democrats during the 16-month-long House antitrust investigation into large tech companies’ power that concluded last year, as well as a legal fellow for FTC Commissioner Rohit Chopra, D. She burst onto the scene in 2017, after publishing an article called “Amazon’s Antitrust Paradox” in the Yale Law Journal, which argued for regulators to take a broader approach to considering how a company’s dominance impacts consumers, beyond just prices.

(Amazon CEO Jeff Bezos owns The Washington Post).

Sen. Amy Klobuchar, D-Minn., who chairs the Senate Judiciary antitrust subcommittee, said the country needs Khan at the FTC to address large mergers and other displays of corporate power that have gone unchecked.

“We’re in a competition crisis, and no one has described it better than you have,” Sen. Richard Blumenthal, D-Conn., said.

And a friendly exchange with Sen. Ted Cruz, R-Texas, signaled Khan might be able to work with conservatives also eager to address tech’s power. When it was Cruz’s turn to question Khan, he emphasized his major concerns about the tech industry’s growing clout. Khan told Cruz she was particularly worried about the way companies with ad-based business models potentially violate privacy laws, as well as how large companies use their power to expand into new markets.

Lina Khan testifying in Congress April 21, 2021. Photo by Graeme Jennings. Pool photo via Reuters

“I look forward to working with you, and I think there’s a lot more the commission can do in terms of ensuring transparency from Big Tech, which right now is incredibly opaque,” Cruz said.

Khan faced relatively minor pushback from other committee Republicans. Sen. Marsha Blackburn (R-Tenn.) questioned whether she had enough experience to serve on the commission, and she called on Khan to share in writing what she would have done differently during the Obama era regarding large tech mergers. Sen. Mike Lee, R-Utah, questioned whether Khan would need to recuse herself from the FTC’s investigations of large tech companies, given her previous work on the House probe.

Khan also fielded questions about individual companies and lawmakers’ proposed antitrust bills. She said “everything needs to be on the table” when it comes to addressing news publishers’ concerns about Facebook and Google. She raised particular concerns about the ways a single algorithm change can tank readership for any publisher. She also expressed concern about the concentration of the digital advertising market.

Lawmakers have increasingly homed in on the ways Facebook and Google’s product changes and algorithms can affect the news business, which has become increasingly reliant on tech giants for web traffic. The issue has been front-and-center since the companies used aggressive tactics in Australia to push back on proposed legislation requiring them to pay a fee to publishers for news stories appearing in a search engine or social media. In the United States, lawmakers have introduced legislation allowing publishers to band together to better negotiate with tech giants.

Furthermore, Khan said policymakers need to look closely at app store policies. Because Apple and Google are the only major app store operators in the United States, Khan contended they have wide leeway to set advantageous terms.

“In those cases we need to be especially skeptical and really look closely,” Khan said.

Her comments came just hours before a Senate Judiciary subcommittee chaired by Klobuchar heard testimony from small companies about alleged anti-competitive behavior in Apple and Google’s app stores that stifle smaller players.

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