Dec 20, 2021 - Technology

Six months with Lina Khan's FTC

Photo illustration of FTC Commissioner Lina M. Khan with a podium and a scale

Photo illustration: Sarah Grillo/Axios. Photo: Graeme Jennings-Pool/Getty Images

Lina Khan's first six months leading the Federal Trade Commission has shown she's either shaken up a sleepy bureaucracy or pushed long-standing norms too far, depending on who you ask.

Why it matters: As Biden's first year ends, many are watching Khan's FTC to see whether it really can fundamentally change how the U.S. regulates big companies and how tech should treat consumers.

Entering the role, the 32-year-old, known for her scholarship in antitrust and competition policy, targeted what she sees as monopolistic behavior in Big Tech and beyond. Under her, the agency re-filed its case accusing Facebook of buying up competitors to maintain dominance.

  • It sued to block a $40 billion semiconductor chip merger between Nvidia and Arm, arguing it would stifle competing next-generation technologies.
  • It launched an investigative study into supply change disruptions, targeting retailers like Walmart and Amazon.
  • It reached a settlement agreement with an ad platform that allegedly violated the Children's Online Privacy Act.

The big picture: Khan's tenure so far has seen more table-setting for future actions than major high-profile antitrust cases.

  • Those who want to see Big Tech taken to task hope to see Khan bring major cases that would spin off prior acquisitions and block proposed mergers. And the clock is ticking.
  • "We are really feeling a sense of urgency and are hopeful [Khan] will be doing as much as possible as quickly as possible because of the potential threat of a hostile Republican Congress," Alex Harman, competition policy advocate at Public Citizen, told Axios.

A number of Khan's bureaucratic actions have either elicited cheers or consternation from those who watch the FTC.

  • For the past 20 years, FTC meetings had not been open to the public. Now, anybody can watch and the public can leave comments.
  • Former FTC Commissioner Rohit Chopra cast as many as 20 votes on his last day at the agency, which can be used to split ties at the chamber while Alvaro Bedoya awaits confirmation, per Politico. Some are arguing Chopra's "zombie votes" are being used to push through partisan agenda items they oppose.
  • An Oct. 29 vote changed a rule to require some companies to get FTC's approval for future mergers. Republican Commissioners Christine Wilson and Noah Phillips wrote that it uses "bureaucratic red tape to weight down all transactions ... and to chill M&A activity in the United States."

What they're saying: "She’s acted incredibly quickly to shake things up and effectuate change at the agency," Janis Kestenbaum, a partner at the Perkins Coie law firm and a former legal advisor at the FTC, said during a recent online event. "The degree and speed of change are more pronounced and dramatic than anything we’ve seen in recent decades.” 

  • "There is a sea change in the commission, pre- and post- Chair Khan's appointment," John Davisson, senior counsel at the Electronic Privacy Information Center, told Axios.

The other side: Some industry players and lawmakers, including a few who voted to confirm her, say Khan has already taken things too far.

  • "Congress is beginning to see that she is pushing really hard and may have overplayed her hand," Geoffrey Manne, president of the International Center for Law & Economics, told Axios. "While she has a lot of support from both sides of Congress in a vendetta against tech, she may have misunderstood that as support for an untethered, aggressive agency."

Flashback: Khan was confirmed to the FTC with 21 Republican votes. But President Joe Biden only announced she would chair the agency after her confirmation.

  • "The Republicans that voted for her in the Senate, who thought it would be a free slap at Big Tech, are having buyers' remorse," due to FTC action on mergers and acquisitions, one tech industry adviser told Axios. "People are scared to death even a relatively small or harmless transaction will get caught up in a maze for approvals."

What's next: In a regulatory filing this month, the agency detailed its future plans that include consideration of developing rules around penalties for firms that abuse user data, protecting users from surveillance-based business harm and ensuring algorithmic decision-making isn't discriminatory.

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