Jun 16, 2021 - Technology

New FTC chair already rocking boats

Lina Khan, chair of the Federal Trade Commission, appears before Congress

Photo: Saul Loeb-Pool/Getty Images

By naming tech critic Lina Khan to chair the Federal Trade Commission Tuesday, the White House made clear it is dead serious about antitrust enforcement and other measures to rein in Google, Facebook, Apple and Amazon.

The intrigue: By naming Khan FTC chair just hours after the Senate confirmed her appointment as one of five commissioners at the agency, the White House took both the industry and many D.C. insiders by surprise.

Why it matters: Specific moves to clip the wings of tech giants over issues like monopolistic behavior and privacy practices are more likely to come from leadership at the FTC and the Department of Justice than from Congress.

  • The FTC is widely seen as the likeliest leading edge of any major regulatory moves.
  • Putting a firebrand like Khan in the FTC's driver seat will rally tech's opponents and provoke some late-night counter-strategy sessions in Silicon Valley offices.

Khan, 32, is a Columbia Law professor known for her argument that Amazon's retail business should be separated from its selling platform and for advocating broad updates of antitrust law to deal with digital-age problems.

What they're saying:

  • "The difference between being a mere commissioner and being chair is the difference between going to the moon and going to Mars," said William Kovacic, former FTC chairman. "Mars is a much bigger deal."
  • Khan has "immense legal prowess" and is "an out of the box thinker...who can take on the biggest companies the world has ever known," Sen. Amy Klobuchar (D-Minn.) chair of the Senate Judiciary antitrust subcommittee, told Axios. She noted that Khan will be overseeing the FTC's open case on Facebook's acquisitions of WhatsApp and Instagram.
  • Sen. Elizabeth Warren (D-Mass.) said Khan's appointment provides "a huge opportunity to make big, structural change by reviving antitrust enforcement and fighting monopolies that threaten our economy, our society, and our democracy."
  • "Congress created the FTC to safeguard fair competition and protect consumers, workers, and honest businesses from unfair & deceptive practices," Khan tweeted Tuesday. "I look forward to upholding this mission with vigor and serving the American public."

The other side: "In a time of increased global competition, antitrust populism will cause lasting self-inflicted damage that benefits foreign, less meritorious rivals," said Aurelien Portuese, director of antitrust and innovation policy at tech-funded think tank the Information and Technology Innovation Foundation.

Rebecca Slaughter, who had been acting FTC chairwoman, will remain at the agency as a Democratic commissioner.

  • Biden has one more Democratic commissioner to name to the agency, as soon as current Democratic commissioner Rohit Chopra receives Senate confirmation to lead the Consumer Financial Protection Bureau.
  • "I am grateful to the dedicated staff of the Commission whose steady work during my tenure as Acting Chairwoman has resulted in numerous unanimous, bipartisan agreements, and aided millions of Americans during an unprecedented global pandemic," Slaughter told Axios in a statement.
  • Slaughter was only informed that the White House would be naming Khan as chair on Tuesday, a source familiar with the matter told Axios.

Between the lines: Presidents can elevate FTC commissioners to be chair at any time. But when presidents have nominated new FTC commissioners to serve as chair, they've usually made their intentions clear in advance.

  • It's an unusual move for the White House, Kovacic said: "If you walk back through the modern or earlier history of the FTC, I can't remember an instance where the White House has named an individual to be a commissioner, then once that person was confirmed by the Senate, designated that person to be the chair."
  • "The confirmation proceeding [would have probably been] more contentious, if Khan was identified as the prospective chair," he added.

The bottom line: If Khan pursues a wide-ranging regulatory agenda, as she is expected to, and quickly gets another Democratic commissioner confirmed, the FTC can move to pursue aggressive cases and enforcement, especially with the support of Congress.

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