Lina Khan Is Taking Swings At Big Tech As FTC Chair, And Changing How It Does Business

Updated March 8, 2023 5:24 PM ET.

When Lina Khan became chair of the Federal Trade Commission in 2021, she started fast.

A young law professor and antitrust expert has vowed to shake up a regulator many people don't even know exists: The Federal Trade Commission is essentially a government regulator of companies. Khan promised to destroy corporate monopolies and change the power of Big Tech through strategic litigation.

His approach has been described as "aggressive", "bold" and "radical". House Republicans released a 113-page report on Tuesday detailing the FTC's ongoing investigation into Elon Musk's purchase of Twitter and describing what they called a "leak" of information from the company.

Khan's approach is fundamentally different from that of many previous FTC chairmen, who have focused on consumer protection but not necessarily brought high-profile cases.

Khan relies on the concentration of power. It faced off against Amazon over allegations of payment theft, Meta over antitrust concerns and Google over reports of deceptive advertising.

Now he is gearing up for another major fight in the coming months to ban non-compete clauses, which companies use to prevent workers from taking new jobs with competitors.

Khan hasn't won every round yet, but she can still win the match. Silicon Valley appears to be changing the way it does business to avoid threats from an authoritarian new commission.

Tech mergers and acquisitions slowed in 2022 after a record high in 2021 (though some economic factors also contributed), and some companies are changing their privacy and data collection policies.

By listing the lawsuits, the FTC signaled to the tech giants that it was watching them.

"Silicon Valley is very different than it was three years ago," said Barry Lynn, executive director of the Open Market Institute, where Khan was previously a research fellow and then director of legal policy.

That's largely because, he says, "we now have these law enforcement agencies saying, 'We're coming to you. The business you have been with for 20 years is no longer possible. We no longer consider it legal.

After all, Khan is a hard-working man with a nose-to-the-stone philosophy. While all of her time at the FTC was during the pandemic, she came into the office whenever she could, according to the New York native's profile.

At 33, Khan has already compiled a resume that includes a tenure as a law professor at Columbia University and legal counsel to the House Subcommittee on Antitrust, Trade and Administrative Law.

According to Douglas Farrar, spokesman for the FTC, she gave birth to a son in January and is now on short-term parental leave.

Farrar said Khan's work at the agency includes curbing companies from "anti-competitive business practices" and that they are "now choosing to invest and innovate rather than pursue illegal schemes that they know will quickly lead to real consequences". I will lead

Khan's pursuit of big tech dates back to the early days of his career.

When Khan was studying law, she wrote an article titled "Amazon's Antitrust Paradox," arguing that the tech titan should be brought down. It went viral.

Then, while serving on a House subcommittee, she helped write a 449-page report that proposed curbing the power of Apple, Amazon, Facebook and Google. He says tech companies have become "the kind of monopolies we last saw in the age of oil and railroad tycoons."

Less than a month after joining the FTC, Amazon and Facebook filed petitions with the agency to bar Khan from ruling in antitrust cases involving those companies.

"We live in a time of unprecedented economic consolidation," said Katherine Van Dyke, senior adviser at the Washington Economic Freedom Project. "Lina Khan's methods pose a threat to her and to people who have such economic power."

The Republican recently made a "difficult exit" from the committee

Besides tech companies, Khan has had other enemies, or at least critics, since his confirmation in June 2021.

The voices of his political critics were amplified by the House Republican report released Tuesday into its investigation into Musk's $44 billion purchase of Twitter in October.

A report from the federal government's Firearms Subcommittee, chaired by Jim Jordan, Ohio, claims the FTC is "waging an aggressive campaign of harassment on Twitter." He said the agency sent more than a dozen emails to Twitter over a 10-week period that contained "more than 350 specific requests" and "placed significant pressure on the company's operations."

Additionally, both Republicans on the FTC's five-member panel recently resigned, and one published a fiery opinion piece last month letting the world know he was resigning in protest.

Former Commissioner Kristin Wilson, who was appointed by former President Donald Trump in 2018, wrote in a Wall Street Journal op-ed that she was resigning "in the face of continued lawlessness" and "considers this my loud departure ".

In a statement, Khan and the two Democratic commissioners, Rebecca Slaughter and Alvaro Bedoya, said: "While we often disagree with Commissioner Wilson, we respect her commitment to her beliefs and are grateful for her public service."

Another Republican commissioner, Noah Phillips, resigned in October, well before his term was up.

A small agency fights against big companies

President Joe Biden has made it clear that he intends to take action against Big Tech, and Khan is one of his main weapons. He also appointed Tim Wu, who campaigned for the Facebook fork, to the White House's National Economic Council (Wu has since left). And he appointed Jonathan Kanter to head the Justice Department's antitrust division. Kanter filed a full-scale lawsuit against Google in January for allegedly monopolizing ad revenue.

Since Khan became president, the FTC has fined companies hundreds of millions of dollars and banned mergers in defense, hospitals and technology.

The agency has about 1,100 staff, but Khan says that is too small given the scope of its mandate.

"Often we don't have the resources to fully track some of the biggest companies in the economy that are extremely powerful and extremely wealthy," Khan said in an interview with NPR's All Things Considered in December.

Under Khan, the FTC fined Amazon delivery drivers $60 million in lost wages and defrauded MoneyGram customers of $115 million. In one of the largest lawsuits in FTC history, video game maker Epic Games has been fined $520 million for tricking players into unintended purchases and violating privacy laws.

One of the biggest controversies concerns the right to repair, based on the idea that people should be able to repair their broken devices instead of buying new ones.

The FTC has increased enforcement of companies with recovery limits. Apple, Microsoft, Amazon and Google campaigned to repeal nationwide right-to-repair laws. Any new FTC rule could strengthen those state laws and require companies to offer recovery programs nationwide.

However, these are not all of Khan's victories.

The FTC lost a lawsuit against Facebook's parent company, Meta, in January. Last July, the FTC sued Meta over its acquisition of virtual reality company Within Unlimited. He took a new legal approach, arguing that the deal would disrupt future competition, but the judge ultimately ruled that the acquisition could go ahead.

However, the case could have a chilling effect on business relations in Silicon Valley, as it shows that the commission's goal is to "prevent powerful companies from buying future technologies," said Lynn of the Institut l'Open Market.

"It has a huge impact on behavior," he said.

For the FTC, according to Lynn, the best outcomes are mergers that never happen and acquisitions that companies reject because they don't make sense.

"The cartel case may seem like a loss at times, but it's actually a win on all those other dimensions in terms of indicators, putting in place controls and drawing new light lines that people won't pass them," he said.

Along with a decline in technology mergers and acquisitions in recent years, some companies have closed deals after the FTC filed suit.

US chipmaker Nvidia called off a $40 billion acquisition of British chip designer Arm when the FTC filed a lawsuit, and similarly, arms and aerospace maker Lockheed Martin abandoned plans to buy engine maker Aerojet Rocketdyne for $4.4 billion dollars to sell to buy.

As for the "right to repair," Apple, Samsung, Google, and Microsoft all developed self-repair programs when the Federal Trade Commission announced it was tightening repair restrictions.

Khan's next big fight is overcoming non-compete clauses. Proponents say the agreements benefit businesses and hurt workers by preventing workers from easily changing jobs.

Several big tech companies are making deals — and like Khan's other moves, this stance is already creating buzz.

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