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She is...
a noted and vocal critic of big tech, also one of the leading academics on antitrust. By the way, she's only 32 years old and she's leading one of the top federal agencies. Even some Republicans were jazzed about her appointment, including Ted Cruz. Ms. Khan.
Since then, the tone around Khan has changed dramatically.
Republican commissioners at the agency have pushed back against what they see as a radical agenda. And just last month, Kahn was questioned by the House Judiciary Committee for her role in pushing for legal action against big tech companies, including Google and Twitter.
Kahn was accused of mismanagement and for politicizing her role as a big tech trust buster. Today, it is the chair of the Federal Trade Commission's turn to step into the alternate universe that is
That is the House Judiciary Committee under MAGA Republican leadership. Emily Birnbaum covers tech lobbying and influence for Bloomberg. I spoke to her in March after an article she'd written identified a growing anti-antitrust movement emerging in the press and in Washington.
I asked her to tell me about how Kahn came to be chosen as chairperson in the first place. Yeah, Lena Kahn rose to prominence in a really unorthodox way, at least for Washington. It was a really popular organization.
article, "Amazon's Antitrust Paradox," that really catapulted her into academic stardom. Basically, in this article, she laid out the case for breaking up Amazon. It kind of broke open a new way of thinking about antitrust using these
centuries-old and decades-old statutes to take on the big tech companies that dominate our economy today. So, Lina Khan was a well-known progressive thinker and academic, but it really came as a surprise, even to a lot of the people who had voted to confirm her, that she ended up being the chair of the FTC. It essentially was...
almost an olive branch by President Joe Biden to progressives who really wanted to see reinvigorated antitrust enforcement under his administration. And Lena Kahn was going to be one of a trio of advocates in the administration who would do that. What are some other reasons why it was, as you said, surprising that Biden chose Lena Kahn to run the FTC?
She is the youngest ever chairwoman of the agency. She is 34 years old now and was 32 when she was confirmed. And overall, I think...
there was this push by activists to install Lena Kahn, but no one ever thought in their wildest dreams it would actually happen. And then the president also brought on Tim Wu to be a White House advisor. He's another person in the same ideological camp as Lena Kahn. They work together at Columbia University. And he also brought on Jonathan Cantor to be the head of
the Justice Department's antitrust division. Jonathan Cantor has made his career off of opposing the big tech companies in lawsuits, and he is another ideologically aligned figure in the administration. You wrote that there was this, let's call it brief moment of sort of bipartisan optimism about what Lena Kahn as commissioner might mean, and that goodwill seems to have dried up. When she was first brought in, 21 Republican senators voted for her,
But on February 28th, the Chamber of Commerce sent an open letter to representatives asking them to rein in the agency's rules on non-compete agreements. There's now fear of Congress cutting off funding to the FTC. And the last time that happened was in the 1970s. So tell me, what happened in the 70s for Congress to cut off funding? So the FTC is really unique.
in that it has a super broad purview over the U.S. economy. Basically, it has authority over consumer protection efforts like deceptive advertising, and it also has jurisdiction over competition in the economy. So that's antitrust issues. So the agency was created during a time when
The administration was trying to crack down on the big oil companies, the railroads, sort of like the golden age of trust busting. And then over the decades, you know, the U.S. has changed a lot in its orientation towards those kind of populist principles. And so in the 1970s, the atmosphere was souring on that kind of big regulatory policy.
So the agency was called the nation's nanny at a certain point. A lot of this anxiety came to a head over this investigation they were doing into advertising towards children. It's interesting. We're having a lot of these debates again today, just in the digital world, but this is broadcast today.
And lawmakers were so frustrated with the agency. They felt you are overstepping your bounds. You know, what gives you the right to basically what they were trying to do, ban advertising towards children. And it became so bad that Congress withheld funding from the agency for a day in 1980 after years of this anxiety brewing. And ultimately, they came to an agreement that
Fine, you know, we'll fund your agency. It's going to be at lower levels. You're going to have less authorities. And we're even going to create this really unorthodox thing, which is we're going to allow Congress to pursue a veto whenever they don't agree with what you're doing. Ultimately, that's not the situation we have today. Courts overruled that as unconstitutional. But it really just goes to show that the FTC can often become the target of deregulatory powers in Washington.
Coming back to the president, you said that tech and business groups, as well as some funded by Charles Koch, are homing in on Khan as one of the primary symbols of what they see as wrong with Biden's agenda. What does the pushback against Khan look like? What are people saying?
One thing that really stands out about it is how personal it's become. It's not just about an agency overstepping its authority. It's also about this woman in particular and how her leadership at the agency is polarizing, it's divisive.
and it needs to be reined in. And we saw how personal these attacks can be when the Republican FTC Commissioner Christine Wilson a couple of weeks ago announced she was resigning in a Wall Street Journal op-ed. She said, I'm always okay with disagreeing on policy, but I really disagree with how Lena Kahn and her allies are leading the agency, how they're breaking with norms, how they're bucking the establishment. It
It wasn't just about, oh, I don't like this agenda. It was also about Lina Khan herself and how she is the embodiment of government overreach. You've said that Lina Khan is a useful political foil and the way she's discussed kind of mirrors that obsessive conservative ire that we've seen previously deployed at Elizabeth Warren and Alexandria Ocasio-Cortez. And you
You heard about this amazing moment when Jim Cramer of CNBC started badmouthing a policy he thought was pushed by Lena Kahn, only to learn that he was actually talking about a lawsuit waged by the Department of Justice. Obviously, the
the one we've been talking about here where the DOJ is trying to come after Google in terms of its ad business. If you work there at Alphabet, you're saying, oh my God, I can't believe she's doing this. And it does not make... Well, it's the DOJ. It's not her, actually. No, okay. I can't be... John, I think Cantor is a much more rigorous thinker than Lena Kahn, the head of the antitrust division. Much more rigorous. I
I was so grateful to see that on screen, actually, because that is the tone and tenor of a lot of the conversation around Lena Kahn and part of the reason why it's so personal. Jonathan Cantor is somewhat of an insider. He's a known quantity. People have worked with him across Washington. He has worked for some of the top law firms. You know, he does...
oppose the big tech companies in lawsuits, but he's very much enmeshed with the Washington establishment, whereas Lena Kahn is more of a quote unquote outsider. And so the way Jim Cramer was talking about, you know, Kahn versus Cantor is very indicative of how she's seen as
Not very rigorous, whereas Jonathan Cantor is seen as, oh, well, you know, he's actually got some good points. You spoke to one lobbyist for your piece who effectively said that they were looking to the AOC playbook and how they were talking about and attacking Lena Kahn.
Yes, this lobbyist said that she's become the target of the conservative ire that has previously been reserved for populist women who are out there saying, you know, let's take on the man, or at least that's how they capture their arguments. So Elizabeth Warren and Alexandria Ocasio-Cortez and Lena Kahn
actually are not necessarily fully aligned in their vision and how they do politics, but they are all women in leadership positions with radical ideas. And so the anger and the frustration that pours out on them often feels, at least to their allies, like it's sexist and with Lena Kahn, you know, racist, as well as potentially ageist, you know, there is so much anger at her
her as a young woman in power. Then there are the TV ads, the Taxpayers Protection Alliance, which receives money from Charles Koch, Google, Amazon, as well as the Competitive Enterprise Institute, a right-wing think tank that has close ties to the oil and gas and tech industries, have put ads like this on TV going after Khan.
Record inflation, rising food, energy and housing prices. In these uncertain times, unelected bureaucrats at the Federal Trade Commission are overreaching their authority with a power grab, crushing innovation with a lack of transparency and by abandoning time-tested legal principles. People at the free market groups and people who are part of the business lobby who are going after her say, this isn't personal. This isn't about Lena Kahn as a
leader, as a political figure. This is more about our concerns about an agency run amok. But then you watch these ads and it's very clear her face and her persona are being put up there for people to see, for people to become concerned about. It's very clear she's become a useful foil and punching bag for those free market pro-business types. It's true that the FTC hasn't
enforced a lot of the laws that have been on the books for quite a while when it comes to corporate consolidation, right? But this is something within the purview of the FTC. It just hasn't really been...
the M.O. of the agency for a while. So is she stepping out of line? Are these complaints about norms and behavior, do they have anything to it? Yeah. I mean, the last couple of decades of antitrust enforcement, critics say, have been really lack
You know, that regulators have been asleep at the wheel, that they haven't been using their full breadth of authorities, especially the judiciary has become much more conservative in their approach to antitrust. So there's this concept called the consumer welfare standard, which says basically that you can only bring antitrust cases against companies when their actions will harm consumers, particularly by increasing prices, right?
So we know that that is not exactly how the biggest companies of our time work. You know, Google, Facebook, they're
They're free. Basically, they make money off of information about us, off of our data. And Lena Kahn and her allies are trying to envision something much broader than just the consumer welfare standard, which is a break with a couple of decades of precedent. But that's exactly what she's trying to do. She's trying to break out of this mold, trying to better adapt to how big corporations operate in the U.S. right now.
So, for instance, a lot of the anger from the business lobby is coalescing around this effort by the FTC to ban non-competes. So non-competes are contracts that basically lock in employees and say, you know, you can't go work at any of our competitors. And they're really popular across industries. They're popular in fast food, popular in salons, popular in journalism even.
Some businesses say, you know, these contracts help us keep people working for us and they help us protect our, you know, trade secrets. But the FTC has said, well, they're withholding something like $300 billion a year from people's wages. Without non-competes, everyone would be making more money. Yeah, non-competes are not popular. One in five Americans are affected by non-competes. They do tend to...
keep workers in exploitative conditions. So the widespread opposition to the non-compete ban is
might be politically popular or interesting, but the lawsuits against it might also have legs. What specifically stands in this proposal's way? It's so broad and sweeping. It touches so much of the economy. There are some who say, you know, maybe the FTC started out really broad and
And right now they're in the public comment period. But they're going to target it a little bit more. Maybe they're just going to go after certain kinds of industries, certain kinds of workers who maybe don't have access to such sensitive information. But this is a new use of the agency's authority over competition in the economy that hasn't really been tested and definitely hasn't been tested for a couple of decades. So this would probably benefit...
a lot of regular people in our country. But the very fact that it would be a big corporate shakeup is just threatening to people. And therefore, it's in the best interest of these lobbying groups to portray Khan as unfit for her office and, you know, misusing her power.
And it also is important to think of the non-compete ban as sort of their first ambitious step in a broader effort to reshape the economy. So after this, the FTC alongside DOJ is expected to release guidelines for how the government looks at mergers and acquisitions, basically going to make it a lot harder for companies to merge and acquire potential competitors.
One really good example that actually counts as one of Lena Kahn's recent losses is Meta Platforms, the parent company of Facebook, recently announced that it was acquiring Within, which is a virtual reality company that makes a popular fitness virtual reality app.
The FTC tried to block that acquisition saying, you know, OK, maybe Meta doesn't have a virtual reality fitness app right now, but they could. So it's about potential effects on competition in the future in emerging markets like artificial intelligence and virtual reality. Basically alleging that buying the company was anti-competitive. Like you can make your own fitness app to compete with this. Why do you just need to buy them out?
Yes, exactly. You know, trying to cut off these kinds of anti-competitive practices that have made the tech companies so big. So we can think about Facebook's acquisition of Instagram and WhatsApp, you know, making it one of the most important communications platforms in the world. And a federal judge looked at the FTC's efforts to block that acquisition and said, you know, I don't think that this
is a good legal argument. They could have challenged it further. They didn't. So Meta is acquiring within. But a lot of the guidelines that are coming out are going to really focus on this exact kind of acquisition. So acquisitions happening in emerging markets,
So cutting off potential anti-competitive conduct before markets even come to fruition. And that could really, you know, according to Lena Kahn and her allies, create competition from the outset. But it also is a very controversial legal position. Let's talk about the crackdown on tech companies collecting personal info. What is the agency doing to sort of stymie or regulate this practice?
This is a rule they announced late last year, but this is the FTC trying to do one of the missions it's actually tasked with, which is protecting user privacy. Congress, for a really long time, has tried to come up with a federal privacy standard. They keep hitting the same roadblocks over and over. It's been years of this gridlock in Congress, so the FTC is maybe going to step in and say, okay,
OK, you guys aren't able to create new laws, but maybe we can come up with protections for consumers using what we have at our disposal. You'd think that Republican members of Congress would be into this given their stated frustrations with big tech. Right. I think that this comes down to the kind of war for the soul of the Republican Party and its relationship with business.
I know that sounds absurd, but it's about are we the libertarians? Are we the Koch network? Are we the party for the free market? Or are we populists? Are we against big companies? Do we think the government has a role to play here?
And I think that Lena Kahn's bipartisan confirmation was a win for the populist wing. You know, Ted Cruz was out there saying, I'm so excited to work with you. And there seems to be this tentative alignment, at least on the issue of big tech,
But as we've watched this alignment kind of crumble, especially over the last couple of months, it's seeming like the Republican Party, when push comes to shove, is still very much in that libertarian, hands-off, anti-regulatory position.
position. So I think Jim Jordan is a really good encapsulation of this. Jim Jordan is the chair of the House Judiciary Committee. He has made a name for himself as a populist who thinks the big tech companies are censoring conservatives and it's time to crack down on them. But actually, he is going to be spending a lot of his time over the next couple of months conducting oversight of Lena Kahn. There isn't great evidence that
social media companies are censoring conservatives, there's lots of evidence that they hoover up our data with little scrutiny. So, I mean, how do you square that circle?
If you ask Jim Jordan or any of the Republicans who are aligned with him, they say, yeah, it's time to take on big tech for sure. Antitrust just isn't the way. Big government isn't the way to do that. You know, let's go through regular process in Congress or maybe let's just let some of these lawsuits play out against the big tech companies. But taking big policy related actions at agencies is not the way.
So basically my big government, but not your big government. Exactly. And ultimately, the winners from this kind of breakdown in partisanship is the big tech companies. You know, they benefit a lot from all of this anger towards Lena Kahn right now. And obviously they're funding a lot of it, too. Given how much...
hype there was about Lena Kahn taking the helm at the FTC. Do you think that she's lived up to it? Do you think that she has delivered what progressives were hoping to see? Or has she just kind of run up against the wall of corporate lobbying and the libertarian strain of the Republican Party?
I think that it's too soon to say. We can say that she has faced a string of losses, as has the Justice Department, as they're facing legal challenges. So, you know, the FTC's effort to block Meta's acquisition of Within failed in court. The FTC's efforts to block gene sequencing company Illumina's acquisition of Grail, a company that sells blood screening tests, failed.
was knocked down by the FTC's internal judge. And I think her most ambitious agenda items have not really gotten off the ground yet. So right now, a lot of the rulemaking, so we can think about the commercial surveillance rulemaking or the non-compete rulemaking, those are still in the public comment period. We don't actually even know what those are going to look like.
So I don't think we can make any definitive conclusions about how successful she has been just yet. When you talk to progressives, they say she's actually already won. So even just her being at an agency, changing procedural things within the agency, she's
to give more power to their agenda, those are wins in and of themselves. Even if they lose in court, even if they're facing this wall of corporate lobbying, they are shifting norms and, if you will, the Overton window around what we imagine the FTC can do. And that is very important as well. You know, the agency that was once very sleepy is definitely awake now. And that is a win in itself. ♪
Emily Birnbaum is a technology and lobbying reporter for Bloomberg. Thanks so much. Thanks so much for having me. It was really fun.