Lina Khan: Pakistani-American Law Professor Behind Biden's Pro-competition Executive Order
US President Joseph R. Biden has signed a sweeping executive order to promote competition in a wide range of industries from big tech to telecommunications, transportation, banking and healthcare. This order has come within weeks of the appointment of young Pakistani-American law professor Lina Khan as the United States Federal Trade Commission (FTC) chairperson. Lina Khan, 32, is the youngest FTC chairperson in American history. She now holds one of the most powerful positions in the US government.
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| Biden Handing Pen to Lina Khan After Signing Executive Order |
Biden's executive order includes 72 initiatives for federal agencies, targeting issues such as excessive early termination fees charged by internet companies, which hinder users from switching service providers. It calls for the end of noncompete agreements that block workers from moving to rival employers, according to Nikkei Asia. “Capitalism without competition isn’t capitalism. It’s exploitation,” Mr. Biden said before signing the order. “Without healthy competition, big players can change and charge whatever they want, and treat you however they want. And for too many Americans that means accepting a bad deal for things that you can’t go without.”
Lina's 2017 seminal paper entitled "Amazon's Anti-trust Paradox" broke new ground in the application of anti-trust law against powerful technology monopolies like Amazon, Apple, Facebook, Google and Twitter. Traditionally, the US anti-trust actions have been focused on keeping consumer prices low. This narrow focus has helped big technology companies companies like Amazon, with its low prices, or Google and Facebook with their “free” services, to avoid anti-trust scrutiny.
Lina was born in London in 1989 to Pakistani parents who migrated to the United States when she was 11. She graduated from Williams College with a BA degree and then studied law at Yale University. She is now an associate professor at Columbia Law School in New York City.
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| Anti-Trust Scholar Lina Khan |
US tech companies are facing increasing scrutiny in Washington over their growing size and power. In October 2019, an investigation by the House Judiciary Committee issued a 449-page report. It accused the big technology companies of charging high fees, forcing smaller customers into unfavorable contracts and of using "killer acquisitions" to constrain competitors. "To put it simply, companies that once were scrappy, underdog startups that challenged the status quo have become the kinds of monopolies we last saw in the era of oil barons and railroad tycoons," it said. The appointment of Lina Khan as FTC commissioner sends a clear signal to the US tech giants that the Biden administration means business.
Lina Khan acknowledges the popularity of the convenience and the free services offered by the large technology giants like Amazon, Facebook and Google but she worries about the longer-term implications of their anti-competitive behavior. “As consumers, as users, we love these tech companies,” she said. “But as citizens, as workers, and as entrepreneurs, we recognize that their power is troubling. We need a new framework, a new vocabulary for how to assess and address their dominance", she told the New York Times.
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FTC chair’s court loss against Microsoft marks another setback in her fight to block mergers
https://www.wsj.com/articles/lina-khan-is-taking-on-the-worlds-biggest-tech-companiesand-losing-9d8d003e
WASHINGTON—Federal Trade Commission Chair Lina Khan is taking on the world’s biggest technology companies—and losing.
Khan failed Tuesday in her latest effort to block a big-tech deal when a federal judge denied her agency’s bid to block Microsoft MSFT 1.42%increase; green up pointing triangle from closing its purchase of videogame publisher Activision Blizzard ATVI -1.09%decrease; red down pointing triangle. The FTC suffered a similar setback earlier this year when it tried to thwart Meta Platforms’ purchase of a virtual-reality gaming company.
Khan, who gained prominence as a critic of Amazon.com, entered office in 2021 vowing to stiffen antitrust enforcement. Past enforcers were too cautious about bringing tough cases, she has said, and failed to confront the rise of companies such as Facebook owner Meta that gained monopoly-like power in digital industries, she said.
“I’m certainly not someone who thinks success is marked by a 100% court record,” Khan said last year in remarks at the University of Chicago. “If you just never bring those hard cases, I think there is severe cost to that, that can lead to stagnation and stasis.”
Khan is set to testify Thursday before the House Judiciary Committee, whose Republican leadership is investigating her agency’s oversight of Twitter and her adherence to federal ethics rules. Republicans say the FTC is harassing Twitter over data-security practices and because Khan and other progressives unhappy with Elon Musk’s acquisition of the company.
Khan is also expected to be grilled on her antitrust record, including the case against Microsoft, and her decisions to not recuse herself from cases involving Amazon and Facebook owner Meta, both companies she publicly criticized.
Under the Biden administration, antitrust agencies have challenged more mergers than in previous years, including some that historically the government wouldn’t have tried to block. Microsoft and Activision aren’t head-to-head competitors, making the case against the deal less straightforward and more dependent on the FTC’s prediction that the combined company would abuse its power to hurt competition in the future.
In her opinion issued Tuesday, U.S. District Judge Jacqueline Scott Corley wrote that the FTC failed to show evidence backing up its claim that Microsoft was likely to withhold Activision’s blockbuster games from competitors such as Sony. The judge found instead that Microsoft had made commitments to share Activision’s content, which would expand consumers’ access to its biggest game franchise, Call of Duty.
Douglas Farrar, an FTC spokesman, said the merger posed a “clear threat” to competition and suggested the agency could soon announce an appeal. “In the coming days we’ll be announcing our next step to continue our fight to preserve competition and protect consumers,” he said.
Antitrust attorneys say the FTC’s case against Microsoft resembles an earlier attempt to block a gargantuan media deal: AT&T’s acquisition of Time Warner.
Both cases were examples of vertical mergers, a type of deal that courts generally regard as beneficial to consumers. When a vertical deal looked problematic, the government often sought a company’s commitment to maintain the status quo regarding competition. The Justice Department’s 2017 lawsuit to block AT&T-Time Warner’s deal was the first litigated vertical-merger challenge in 40 years.
Both cases also involved claims that the buyer would harm competition by making must-have entertainment exclusive to its own platform or devices. That didn’t work for the Justice Department, which lost the A&T case at a district court and on appeal.