Biden issues warning to Big Tech as his team examines antitrust academics
PRESIDENT Joe Biden’s plan to place two progressive antitrust experts in senior positions signals an aggressive approach to tackling corporate consolidation and monopoly power, especially that wielded by tech giants like Google and Facebook, Alphabet Inc., Inc.
Biden’s team is selecting Lina Khan, a professor at Columbia Law School specializing in antitrust law, to sit on the Federal Trade Commission (FTC), according to people familiar with the matter. Last week, he appointed another Columbia law professor, Timothy Wu, to join the National Economic Council as a special assistant on technology and competition policy.
Together, Khan and Wu could push the Biden administration to broaden an ongoing assault on the tech industry that began under former President Donald Trump. Mr. Wu is able to influence legislation that could disrupt the business practices of tech and other big companies. If confirmed, Khan would likely pressure the FTC to continue an investigation into Amazon.com, Inc. started under Trump and draft rules that strengthen regulation of the tech industry.
In addition, they would be able to influence how competition policy is applied to industries across the economy. Many antitrust experts are pushing for a comprehensive overhaul of competition policy as it is increasingly recognized that the United States has failed to tackle the power of dominant companies in many industries, including airlines, mobile and internet services, and agriculture.
Khan and Wu have both been strong advocates for vigorous antitrust enforcement against U.S. tech companies. They are part of a group of antitrust thinkers who argue that the current game plan to control mergers and anti-competitive behavior is insufficient and want to bring antitrust policy back to its beginning.eroots of the century – when regulators tackled monopolies in railways and oil.
“This is a major milestone,” said William Kovacic, professor at George Washington University Law School and former FTC commissioner. “This is another sign of the tremendous success that proponents of transformation have had in changing the debate and changing the context for policy making. Just extraordinary. I don’t even think they expected this to happen five years ago.
While Wu and Khan will be influential, Biden has yet to nominate people for the most important antitrust positions – the chairman of the FTC and the head of the Justice Department’s antitrust division, who will oversee the case. against Google last year and decide whether to file additional lawsuits against tech companies. The division is investigating Apple, Inc.’s app store practices.
Mr Kovacic said the choice of who will head the Justice Department’s antitrust division is crucial. “Is he more of a traditionalist? Or is there going to be a deliberate effort here to create debate, create tension? ” he said.
In her early 30s, Ms. Khan previously held influential positions as an advisor to regulators and lawmakers, having burst onto the antitrust scene with a groundbreaking Amazon analysis released in 2017. This paper introduced the giant of online retailing as a harmful monopoly that is destroying small businesses.
In her article, Ms. Khan meticulously built a case that Amazon is using practices that should cause an overhaul of antitrust law enforcement in the United States.
“The company has positioned itself at the center of e-commerce and now serves as a critical infrastructure for a host of other businesses that depend on it,” she wrote. “There are anti-competitive issues in the structure and conduct of the business, but they have escaped antitrust scrutiny. “
The FBI conducts a background check on Ms Khan, which is common for political candidates, according to a person familiar with the matter. The White House and Ms Khan did not respond to requests for comment. Politico earlier announced Ms Khan’s proposed appointment.
Khan and Wu’s appointments come as internet platforms face a toll in Washington that could transform the industry. The FTC is already looking to dismantle Facebook, and M / s. Khan could be instrumental in shaping a potential case against Amazon. Mr. Wu will likely have his say on legislation that could put safeguards on how tech companies operate. Lawmakers are considering antitrust law reforms that would make it harder for tech companies to buy from competitors, and are developing proposals to impose rules to protect user privacy and change liability protections that companies have. appreciate.
“It’s not good for platforms,” said Herb Hovenkamp, professor of antitrust law at the University of Pennsylvania. “There will clearly be no slacking off from the Trump administration to the Biden administration.”
The American Economic Liberties Project, an anti-monopoly group closely aligned with Ms Khan’s point of view, said Mr Biden must appoint aggressive enforcement officers at the Justice Department and the other open headquarters of the FTC.
“The Biden-Harris administration must turn the page on the ideology and policies that have brought us to the brink,” Sarah Miller, executive director of the group, said in a statement.
Ms Khan is said to occupy one of five seats on the FTC, which is chaired by interim president Rebecca Kelly Slaughter. While implementing decisions require a majority vote, the president of the agency wields significant power.
Khan and Wu are advocating a new vision of antitrust law enforcement that disrupts the framework the United States has used to assess antitrust damage for decades. Often referred to as “the new Brandeis school” after former Supreme Court justice Louis Brandeis, proponents of this approach want to overhaul merger analysis by focusing not only on price increases, but also on wages. stagnants, innovation, income inequality and privacy rights.
“With the appointment of Lina Khan, the Biden administration has signaled that antitrust enforcement and significant changes in competition policy will be a high priority,” said Charlotte Slaiman, director of competition policy at Public Knowledge . “Khan has already had an incredible impact, pushing the competition policy discussion in the right direction with his work. “
Advocates of the tech industry have criticized Khan’s ongoing selection. The Information Technology and Innovation Foundation, which is funded by companies such as Google, Facebook and Amazon, said Ms. Khan’s “antitrust populism threatens to derail traditional antitrust enforcement.”
“His writings and opinions reveal a strong preference for smaller, less efficient and less innovative competitors at the expense of objective and principled enforcement of antitrust laws,” said Aurélien Portuese, director of antitrust policy and innovation of the ITIF, in a press release. “In an era of intense competition with China’s growing economic and technological might, the self-inflicted harm of Khan’s brand of anti-trust populism will hurt American businesses and consumers for the benefit of foreign rivals.
Republican Senator Mike Lee of Utah, who sits on the Judicial Commission antitrust panel, called Ms. Khan’s likely appointment “deeply concerning” and described his views on antitrust laws “extremely out of step with a cautious approach to the law ”.
“Ms. Khan’s appointment would signal that President Biden intends to put ideology and politics ahead of competent antitrust enforcement,” Lee said in a statement.
The nominations underline that Mr. Biden is abandoning the Obama administration’s antitrust playbook, which has taken a largely passive approach to enforcement in the tech industry.
While Barack Obama’s Justice Department has shut down several high-profile mergers, it has approved others that have been criticized as worsening competition, such as the merger of American Airlines Group, Inc. and US Airways. The Obama FTC approved Facebook’s Instagram and WhatsApp acquisitions and shut down a Google investigation into its search operations in 2013 without any action.
Khan was recently assistant to FTC commissioner Rohit Chopra and worked for the New America Foundation and its spin-off, the Open Markets Institute. She was also an advisor to the House Judiciary Committee’s antitrust committee, which conducted a 16-month investigation of tech companies that determined that the biggest internet platforms had all abused their power as gatekeepers to the digital economy. The panel, led by Rhode Island Democrat David Cicillin, is preparing to introduce legislation to reform antitrust laws.
The committee’s report recommended a series of sweeping antitrust reforms, including a move that would bar a dominant tech platform from competing with companies that depend on it – much like banking laws once prohibited. large lenders to acquire insurers, real estate companies, and other non-bank companies. The committee also recommended restrictions on acquisitions by dominant companies. – Bloomberg