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Is an FTC reset incoming?

Is an FTC reset incoming?

Good morning! This Monday, Lina Khan is much more than an aspiring trustbuster, Microsoft's next-gen Windows launches this week, the chip shortage comes after power tools, and Zume has pivoted from pizza to cardboard.

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The Big Story

Will Lina Khan clean house?

President Biden's decision to name antitrust crusader Lina Khan as chair of the Federal Trade Commission last week sent Big Tech's staunchest defenders into heart palpitations over fears she could oversee a breakup of some of the industry's most successful companies. But if Khan actually wants to see through any of the substantive changes to tech monopolies that she has written so extensively about, experts say she'll have to start by cleaning house.

Khan won't have the powerto unilaterally bring cases against any individual company. That falls to FTC staff. But she will have the power to decide who's on that staff, and some are calling for a major reset.

  • Ashkan Soltani, former chief technologist at the FTC, told me that in addition to its lack of funding and authority, one reason the commission has been relatively inactive on issues related to the tech industry in recent years is the stagnation of the senior staff, some of whom have worked at the agency for a decade or more.
  • "When a new person, whether a commissioner or chair, comes into the FTC, they're essentially given the lay of the land by staff and other commissioners and told what they can and can't do," Soltani said. "They will give you a menu of things that are possible, and the menu doesn't include: You can clean house and change the thinking of your agency."
  • Chris Hoofnagle, faculty director at the Berkeley Center for Law & Technology and author of a book on the FTC, also views this as an important lever for Khan to pull. "The chair gets to pick the senior staff," he said. "So the personalities among the senior staff that have slowed down and hampered the commission could easily disappear."

Khan's bipartisan confirmation to the FTC is as strong a sign as any that she has Congressional backing for her most ambitious ideas. "That's really important," Soltani said. "That essentially would permit her to say: I think Congress is looking for a refresh while they try to figure out how to expand FTC authority and their budget and [create] a new tech regulator."

Such a changing of the guard could have a substantial impact on antitrust enforcement at the FTC. But it could also influence the FTC's stance on online privacy and the way data gets bought, sold, shared and collected online. Khan is not just an aspiring trustbuster. She's a privacy hawk, too.

  • In a December 2019 Harvard Law Review article, Khan and her co-author, Columbia Law professor David E. Pozen, likened the personalized advertising industry to used-car salesmen and environmental polluters.
  • They dismissed as "implausible" the idea that a company like Facebook or Google that makes its money from personalized ads could ever truly put its users' privacy first.
  • "By and large, addictive user behavior is good for business," they wrote. "Divisive and inflammatory content is good for business. Deterioration of privacy and confidentiality norms is good for business."

While Khan wouldn't call herself a privacy scholar per se, Pozen told me, her views on personalized ad models are a natural outgrowth of her views on competition.

  • Khan is most famous for advancing the idea that pricing isn't the only way to measure whether a monopoly is harmful to consumers.
  • There are other harms too, like, say, privacy violations.
  • Some possible remedies to these concerns laid out in the article include reversing key acquisitions that enable abuse of data and holding companies liable for "data spills," among others.

As chair, Khan won't be able to implement all of those changes herself. But she can use the bully pulpit to convey her concerns to Congress and warn the industry about behavior the FTC is looking out for. And she can staff the FTC with people who agree.

— Issie Lapowsky (email | twitter)


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People Are Talking

A surge of young employees has caused some culture conflict at Roku, its CEO Anthony Wood said:

  • "We have a lot of younger employees now, and they are very focused on getting raises. You know, I've been here a year, I should get a raise. And, you might not get a raise. Or you might. It just depends on what we think the rate is for you. Sometimes they understand and adapt, sometimes they don't understand, and they quit and then they post on Glassdoor. So, it's a bit of a cultural mismatch."
The EU isn't just picking fights with American companies, Margrethe Vestager said:
  • "What we have been developing while trying to figure out who should be in the scope and who should be a possible gatekeeper, it has been about the market effects."

Nintendo doesn't believe in the typical gadget upgrade cycle, president of Nintendo of America Doug Bowser said:

  • "It's not technology for technology's sake. It's how specifically can technology enhance a gameplay experience. And then where do you apply that technology? Do you want to apply it on current existing hardware or platforms, or do you want to wait for the next platform?"
Palmer Luckey got into a serious Twitter spat over his work with the government, and the fight against China:
  • "New rule: Anyone who berates the US military on social media needs to have at least one solitary on-the-record statement about China being less than perfect or get written off as a sino-corpo puppet."
Forget looking for office space. Go for that office van life instead, Rock's Kenzo Fong said:
  • "[It costs] way less than getting office space in San Francisco."

Coming this week

Lesbians Who Tech's Pride Summit starts today and runs all week.

Prime Day starts today, which means we're about to get a good look at how spendy people are feeling this summer.

Cannes Lions also starts today. It has become a surprisingly tech-forward conference the last few years.

Microsoft is launching "the next generation of Windows" on Thursday. We'll see what that means.

PagerDuty Summitstarts tomorrow and runs through Friday.

In Other News

  • The Sichuan government ordered 26 cryptocurrency mining companies to shut down, extending China's crackdown on crypto and sending the price of most coins falling as the week began.
  • Baltimore has a very different idea for regulating facial recognition. A new bill would make using the tech illegal for everyone except the police, a stark difference from how most cities are considered facial recognition.
  • Even power tools are feeling the chip shortage. Stanley Black & Decker is spending more time and money on its battery and chip supply chain, particularly in the U.S. and Europe.
  • Smart thermostat owners in Texas are finding temperatures automatically rising, KHOU reported, through a program called "Smart Savers Texas" that many customers opted into years ago to save energy. Presumably when it wasn't so hot out.
  • Germany opened antitrust proceedings against Apple, which means it's now investigating all of the Big Four: Amazon, Apple, Facebook and Google.
  • Remember Zume, the robot pizza company? Well it's back, and it's now in the increasingly sexy business of compostable packaging. It's even able to use its same robots … though the fact that it could so easily pivot to making cardboard maybe doesn't say much about Zume's pizza quality.
  • Don't miss this storyabout the effort to sail a ship autonomously across the Atlantic Ocean, from The Washington Post. Spoiler alert: It didn't go well, but the AI Captain will be back.
  • Is Ring making a dashcam? Looks like it, at least according to leaks of the Ring Auto, a device that would tell you where your car is or alert you to someone trying to break in.

One More Thing

The Colorado exception

In the future, you can work anywhere. Except Colorado, apparently? Because of a new law that requires all Colorado employers to disclose salary ranges for every job, a lot of companies are telling applicants that anyone can apply … as long as you're not in the Rockies.

The new Colorado law was created to bring more pay transparency to the workplace. And in general, comp is still one of the big open questions of the future of work. Do you pay everyone the same, take location into account or something in between? And what does it take, even logistically, to be set up to have employees everywhere? At least for now, there are a lot of "buts" in flexible work.


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