Lina Khan rattles Big Tech

The Big Story

The wrath of Khan

Petitions by Facebook and Amazon asking FTC chair Lina Khan to recuse herself from actions against them appear to be doomed for the time being. But they could still be potent weapons.

Khan's the closest thing the antitrust world has to a celebrity, a noted tech critic whom President Joe Biden named as the FTC chair in June.

• The two digital giants haven't been too happy that the person heading up the agency has worked as extensively as she has in academia, think tanks and Congress and will bring the companies under scrutiny.
• So they've argued, formally, that she's prejudged the facts against them and should recuse herself from those matters.
• The agency is not only probing Amazon's competitive conduct and its proposed acquisition of MGM, but will likely soon refile its complaint in its landmark case seeking to break up Facebook.

It's unlikely Khan would recuse herself from these matters, according to experts who spoke with Protocol. She herself suggested in her confirmation hearing that she wouldn't be pulling her punches, and her resume is in some ways similar to her fellow commissioners who aren't the subject of such motions.

• The issues don't end there, though. For one thing, the petitions could complicate FTC efforts to use its most reliable tactic: its ability to bring a case against Amazon in, or reroute the Facebook lawsuit to, an in-house administrative forum where it more or less has a home-field advantage.

But recusal petitions by the companies would automatically prompt a vote by the remaining commissioners if Khan declined to recuse herself from in-house process, under federal regulations. Right now, a party line vote would result in a 2-2 tie, and the motion for recusal would fail, leaving her free to participate in the matter.

• But Biden has named one of the commission's other Democrats, Rohit Chopra, to take over another agency.
• Once he's confirmed by the Senate and leaves the FTC, the two Republican commissioners who voted against bringing the Facebook suit could overrule the one remaining Democrat, or Khan would have to wait for the confirmation of an as-yet unnamed Democrat to the vacant seat.

The companies have other options down the line, too. The decision of the judge from the internal court can also be appealed, eventually into regular old federal court, where the FTC has found itself losing plenty of late.

• And if that isn't enough to worry those who want the agency clamping down on Big Tech, Khan and the other Democrats have also been clearing the way to issue rules that govern entire sectors, with Amazon and Facebook squarely in its sights.
• The recusal rules there are the same as in the FTC's in-house court. "Simply by filing these, they are creating additional distractions and concerns for the agency," said Stephen Calkins, a former FTC general counsel.

So what are courts actually going to say? Amazon and Facebook are doing a lot to tie Khan's history to that of JFK-era Chair Paul Rand Dixon, who apparently faced recusal questions a lot.

• Questions included whether his work on a Senate antitrust subcommittee's investigation poisoned a later FTC order to one of the same companies.
• If that sounds familiar, it should, because of Khan's work on the House antitrust subcommittee's probe of competition in Big Tech, which found widespread anti-competitive behavior by companies including Amazon and Facebook.

Khan, who's also been a teacher and journalist, has been pretty public and pretty pointed, but it's important to note the commissioners don't always lose these fights in court, rare though they are. That's mostly because the very policy expertise that got the commissioners their jobs doesn't, and to most observers shouldn't, form the basis for them to check out once there.

— Ben Brody (email | twitter)

For more, read the full story at Protocol.com.

A MESSAGE FROM ANT GROUP

According to a Nielsen Report, 94% of Chinese tourists said they would pay with their phones if the method becomes more widely adopted overseas; 93% said using that method would likely increase their spending. To meet them where they are, more and more U.S. companies — both here and in China — are embracing Alipay.

Learn more

People Are Talking

Facebook diversity head Maxine Williams isn't too concerned about the company's female departures:

• "We have long retention, and the experience of being at Facebook gives people the opportunity to do so many other things. I think it's really cool that two of those three left to become CEO of something."

Pitbull wants big companies like Amazon to act on protests in Cuba:

• "People we're so proud of, people such as Jeff Bezos — Cuban American — graduated from a high school in Miami, built one of the biggest companies in the world, the richest man in the world, he's somebody that can really get involved and really help us."

On Protocol | Enterprise: John Zissimos left Google for Okta because he thinks it's time for single sign-on to come to everyone:

• "The entire brand is built around that one word. They've done a lot of work to lay that out, but the next five years is going to be about taking that to the mainstream."

Federal Reserve chair Jerome Powell thinks stablecoins need regulation:

• "If we're going to have something that looks just like a money-market fund, or a bank deposit, or a narrow bank — and it's growing really fast — we really ought to have appropriate regulation. And today we don't."

TSMC thinks the chip supply shortage will continue a bit longer, but its CEO, C.C. Wei, is optimistic:

• "TSMC has actively taken steps throughout the first half of this year and will continue to do so through the rest of the year to address the chip supply challenges."

Making Moves

Aurora is getting SPAC'd. The self-driving car startup is merging with Reinvent Y and will be valued at around $11 billion in the deal.

Intel might buy GlobalFoundries for around $30 billion, The Wall Street Journal reported. The chip manufacturer, which was spun out from AMD in 2008, would immediately boost Intel's burgeoning foundry business.

Oliver Daemen will go to space with Jeff Bezos. He's the son of Somerset Capital Partners CEO Joes Daemen, and is replacing the original auction winner who's apparently too busy that day. At 18 years old, Daemen will be the youngest person to reach space.

Paytm filed for an IPO. It's looking to raise $2.2 billion, and is reportedly targeting a valuation as high as $30 billion.

David Caponio is joining Launcher Space as head of product and business development. He also worked on customer and provider services at SpaceX and Virgin Orbit.

In Other News

• Biden wants an attack on cyberattacks. With oversight from a new ransomware task force, officials are laying out a few ways to prevent hacks, including cash rewards to help find cyber criminals and partnerships with online cyber insurance companies.
• Israel-based Candiru is behind more than 100 hacks on journalists and activists, according to a Microsoft and Citizen Lab report. The cyber gang sold spyware that allows clients to hack into Google and Microsoft systems, exposing passwords among other things.
• On Protocol | Policy: Facebook's election study is delayed. The researchers looking into the company's effect on the 2020 election won't release the findings until the first half of 2022, after initially planning to release them around now.
• Square is building a business unit for bitcoin. The service, which doesn't have a name yet (we think?), will focus on helping people create financial services focused on crypto.
• Love it or hate it, Clippy is back. The digital office assistant that died over a decade ago is one of Microsoft 365's many revamped emoji.
• Valve is getting into the console game. The Steam Deck (picture a Switch, only chunkier) is shipping later this year starting at $399, and brings yet another player to the super hot mobile-gaming space.
• Tech workers can't stay away from the Bay. Employees swore they'd leave San Francisco and never return, saying they wanted cheaper homes and better weather, but office reopenings — and the itch to reclaim Silicon Valley — are sending them back.
• Netflix fired three execs for bad-mouthing their bosses on Slack, according to the Hollywood Reporter. They thought their messages were private, but, it turns out, nothing is private when it comes to your work Slack.
• On Protocol: Zoom gave its employees gigantic pandemic bonuses. Since the company's share prices skyrocketed over the past year, those share handouts are now worth about $171,000 to each employee.

One More Thing

Talk emoji to me

Tomorrow is World Emoji Day. If you use Slack (or iMessage, or WhatsApp, or have texted anyone in your life), or just want to celebrate emojis, you probably should know how to properly use one. There's an art to using emoji properly; just think about how you're supposed to use the upside-down smile 🙃.

Fred Benenson's "How to Speak Emoji" can help you use them effectively, whether you're talking to a friend or co-worker. It includes a dictionary on what emojis actually mean, as well as a collection of phrases you could say using the appropriate emojis. So brush up on your skills, let us know what your favorite emoji usage is and have a good weekend. 👋

A MESSAGE FROM ANT GROUP

According to a Nielsen Report, 94% of Chinese tourists said they would pay with their phones if the method becomes more widely adopted overseas; 93% said using that method would likely increase their spending. To meet them where they are, more and more U.S. companies — both here and in China — are embracing Alipay.

Learn more

Refer Five Friends, Get A Mug

Are you tired of explaining the tech news of the day to your co-workers every morning? Let us do the heavy lifting and refer them to Source Code.

Send them your referral link via Slack, text, email, or carrier pigeon and we'll send you your very own Protocol mug after you refer five friends!

Your referral link:*|RH_REFLINK|*

Share on Twitter — Share on LinkedIn — Share via email