Lina Khan's to-do list on Big Tech
Federal Trade Commission chair Lina Khan has a chance to work her way down her Big Tech to-do list, nearly a year into her tenure, now that she has a Democratic majority in hand.
Driving the news: The Senate voted 51-50 Wednesday afternoon — with Vice President Kamala Harris breaking a tie — to confirm privacy expert Alvaro Bedoya to the FTC.
The big picture: Progressives last year cheered President Biden's appointment of Khan, a prominent critic of Amazon's market power, to lead the agency — but her ability to enact sweeping changes or enforcement actions has been limited so far.
The Democrats' majority at the five-person agency now opens the door for Khan's agenda, expected to include:
1. New privacy and competition rules. Biden called on the FTC to craft rules on data and surveillance, as well as rules barring unfair methods of competition on internet marketplaces, as part of a wide-ranging executive order on competition last summer.
- Khan will now have the votes to propose new rules around unfair competition practices, children's privacy, consumer privacy, and the use of non-compete contracts, along with the use of data and surveillance.
2. Aggressive enforcement on deals. The same executive order said the FTC has the power to to challenge prior mergers, something the FTC itself highlighted when Amazon closed its deal with MGM after running out the clock on the agency's review.
- Agency watchers tell Axios Khan may wait to file a larger case against Amazon that goes beyond its MGM purchase.
- "[Khan] was put in charge of the agency with a strong bipartisan majority to address the market power problems deriving from Big Tech. Core to those problems are their ability to leverage their power into markets through acquisitions," Sarah Miller, executive director of the American Economic Liberties Project, told Axios.
3. More stringent guidelines on mergers. The administration called on the FTC to scrutinize mergers and acquisitions by dominant internet platforms, especially when buying smaller rivals, and Khan will be able to scrutinize and challenge mergers more successfully with Bedoya's vote.
- Separately, the FTC and DOJ are also in the process of drawing up new merger guidelines, which could change the way businesses approach acquisitions.
- "On the antitrust side, item number one is probably the revision of the merger guidelines, together with DOJ," Daniel Francis, the former deputy head of the FTC's Bureau of Competition, told Axios. "In practice, that's the most important document for merger control and review in the country, and everyone is waiting to see what the agencies will change. The new third vote will make all the difference."
What they're saying: Bedoya's arrival means "the urgent work of reining in the unchecked power of increasingly concentrated industries can finally move forward at the FTC," Alex Harman, director of government affairs for competition policy at the Economic Security Project, the anti-monopoly nonprofit founded by former Meta co-founder Chris Hughes, told Axios.
The other side: Critics of Khan's FTC, including the U.S. Chamber of Commerce, said her new Democratic majority marks the end of bipartisanship at the agency.
- "As soon as she has a third vote I expect an unprecedented flood of aggressive, partisan actions that continue to erode the commission's long history of bipartisanship," said Neil Chilson, a senior research fellow for Tech and Innovation at Stand Together and a former FTC adviser.
Between the lines: Democratic commissioner Rebecca Kelly Slaughter, the former acting chairwoman, and Bedoya will have considerable leverage over the agency's work as Khan will need their support to push through her agenda in the face of Republican opposition.
Yes, but: Khan will also need the support of FTC staff, who carry out the work of writing rules and guidelines. A recent survey showed low trust in senior leaders among FTC employees, and Politico reported tensions between FTC leadership and longtime staffers.
- "The FTC has been a gem of an agency, a community of professionals dedicated to protecting consumer," Republican FTC commissioner Christine Wilson tweeted about the survey. "New leadership has marginalized and disrespected staff, resulting in a brain drain that will take a generation to fix."