Policy

Tech is bracing itself as Lina Khan’s FTC agenda takes off

The chair’s second year in office is about to begin, and it’s going to be bumpy for tech companies that think she’s just focused on Amazon.

Lina Khan, centered, stands speaking with Representative Mike Quigley in Congress

One year after taking over as chair of the FTC, Lina Khan is preparing for rulemakings on privacy, the revision of the agency’s views on mergers, more work on kids’ data and the defense of the agency before hostile judges.

Photo: Al Drago/Bloomberg via Getty Images

It’s not just Amazon.

One year after taking over as chair of the FTC, Lina Khan is just getting into the thorniest, farthest-reaching and most resource-intensive portion of her agenda — and most of the items on deck have nothing to do with the widely expected antitrust lawsuit against yet another tech giant.

Although Khan, 33, rocketed to the top ranks of competition law with her criticism of Amazon, she appears to be preparing rulemakings on privacy, the revision of the agency’s views on mergers, more work on kids’ data and the defense of the agency before hostile judges — even as many of those outside the FTC who could face its wrath are making their own preparations.

“The FTC follows and is in charge of the entire economy, basically,” said Matt Wood, vice president of Policy at media group Free Press. “When it comes to the signature issues, a lot of stuff is still in the works.”

Free Press is one of the dozens of consumer groups that have been urging Khan and the FTC to invoke the agency’s power to regulate "unfair or deceptive acts” so it can protect Americans’ data privacy, especially against discriminatory uses of digital information.

That’s an action she’s long signaled she wants to take, but Woods said, to support those and other consumer-focused efforts, outside groups have been trying to bolster Khan’s work to reimagine the FTC’s processes and invoke long-dormant powers.

“Whether that’s people inside the agency, or the advocacy community, or some combination of all of the above, we want to do more,” Wood said. “How do we do it? How do we polish up, and in some cases even dust off, Federal Trade Commission tools that have been rarely used for decades?”

Congress requires that a potential privacy rulemaking, for instance, take more time and labor than most agencies’ regulatory efforts — a condition that has helped ensure the FTC has rarely tried to issue such rules in recent years. So last year, with the support of the other two Democratic commissioners, Khan made internal changes that would speed the effort somewhat. Since then, outside groups have presented petitions to open the rulemaking, along with legal theories about what shape a rule could take.

They’ve had to wait. One of the Democratic commissioners serving when Khan took over, Rohit Chopra, left soon after to become director of the CFPB. As a result, until last month, Khan had been dealing with a 2–2 partisan split that prevented tackling potentially contentious issues, including rulemaking.

She finally appears poised to move forward, though. Khan told Protocol last week, for instance, that she’s thinking about the behavioral ad marketplace, which “creates a certain set of incentives that are not always aligned with people's privacy protections.” She also hinted at the value of limiting certain types of data-collecting and banning discriminatory uses of data — just as Free Press and others have been hoping.

Such far-reaching regulation will almost certainly prompt furious backlash, lawsuits and calls in Congress to rein in an agency that’s already facing an uncertain political future. But in many ways, that’s just a continuation of her tenure so far.

Making enemies

Khan made a name for herself in law school, quickly becoming the most recognizable representative of a loose reform philosophy sometimes branded as “hipster antitrust.” These so-called antitrust hipsters believe contemporary competition enforcers have become too comfortable with consolidation, too limited in measuring harm to the economy and too willing to overlook that Big Tech companies — no matter how low their prices — rake in billions as gatekeepers of digital marketplaces. Khan and others pointed to Amazon as the primary example of their concerns.

After Khan served a stint as a staffer for Chopra and as a lawyer on the House’s landmark investigation into tech giants’ competitive practices, President Biden nominated her to serve as a commissioner on the FTC. She won bipartisan support in the Senate, where some Republicans view antitrust enforcement as a way to punish Big Tech. Yet many on the right were dismayed when Biden, in a surprise move, designated her as the agency’s chair immediately after she was sworn in.

In her first weeks, she led a series of internal changes, hoping to speed up rulemaking and investigations and slow down mergers. Chopra also cast a number of votes on certain matters before his departure, allowing Khan to briefly extend the Democratic majority while she waited for the confirmation of Chopra’s replacement — a practice opponents derided as zombie voting. Some of the commission’s decisions at the time played out at open meetings she instituted, allowing the public to have an unprecedented ability to speak to commissioners. But consumers could also witness as the two Republicans complained that the new chair was silencing dissent, eliminating procedural protections and making a power grab that would harm the U.S. economy.

In April, for instance, Republican commissioner Christine Wilson suggested Khan was an intellectual disciple of Karl Marx, and big business has been almost as critical.

“The FTC’s ongoing lack of transparency and disregard for due process demonstrate that it should not be entrusted to write the rules for the U.S. economy,” said Jordan Crenshaw, vice president of the Technology Engagement Center at the U.S. Chamber of Commerce. “Legitimate businesses deserve due process from an agency that has broad and sweeping authority — an authority that could be abused without the proper people in charge and procedures in place.”

The Chamber, a powerful business lobbying group, has threatened “war” and extensive litigation over Khan’s actions, and it has slammed a potential rulemaking on targeted digital advertising in particular as bad for consumers and potentially lacking legal foundation.

Under Khan, the FTC has also suffered plummeting employee satisfaction and lost key staff.

It would be hard, however, to say her tenure hasn’t already been influential for tech. In the last year, the FTC has moved to bust up repair restrictions on hardware (which resulted in Apple and Samsung making concessions to the “right to repair” movement), ramped up enforcement on dark patterns and educational tech, started to clamp down on influencer campaigns that violate advertising rules, got the agency’s antitrust lawsuit against Meta going again, helped push Nvidia to abandon its planned purchase of Arm and fined Twitter for its use of phone numbers in ad targeting.

The FTC also took up the investigation of Microsoft’s acquisition of Activision Blizzard and, likely because the agency had already been investigating Amazon since before Khan’s tenure, the company’s purchase of MGM.

That latter deal went through, but a showdown between Khan and Amazon, her longtime target, may kick off soon, now that the FTC again has a Democratic majority with the confirmation of Alvaro Bedoya as the fifth commissioner in May.

Offense and defense

In the meantime, plenty of tech companies that aren’t Seattle-based mega-retailers can also see the FTC looking into issues that would greatly affect them. One key area, which could even be bipartisan, is children’s privacy, said Josh Golin, executive director of kids’ media advocacy group Fairplay.

“Based on conversations with the commission and just things that we’re hearing … I think that they’re serious about enforcing against bigger players that will force industry-wide changes,” Golin said.

He added that he hopes to work on a number of matters, such as regulations around kids and ads — an ambition that he said requires his organization to find the latest academic research, delve into kids’ current digital habits and organize other children’s advocates who may not pay as close attention to the FTC.

The process of mobilizing public input through comments, forums and the new open meetings appears to be focusing the agency on new issues. Khan and her counterparts at the Justice Department Antitrust Division, for instance, invited workers to speak about their experiences with consolidation, including in tech. The sessions were part of an effort to revisit guidelines that tell businesses what kinds of deals most concern the enforcers, which are some of the most closely scrutinized documents from the agency. While the inclusion of workers’ concerns in the overhaul has been controversial, Khan told Protocol their stories about wage cuts and shaky schedules had proven particularly captivating to her.

Khan also has a long list of issues she wants to take on outside of tech, including in the health care and pharmacy sectors, and her congressional allies have started to signal their own priorities in tech that are even more extensive.

“Now that the FTC has its fifth commissioner, I trust that they will be moving aggressively,” Rep. Jan Schakowsky, who oversees the House panel on consumer protection, told Protocol in a statement. Schakowsky said she wanted to see action on “Big Tech accountability and data protection, franchise issues and the gig economy, and online income, shopping, and crypto scams, among other things.”

The set of issues is piled so high, in fact, that some, including Golin, concede they don’t think Khan will have the time to address all the things they’re hoping for.

In addition, Khan will need to balance all these demands with looming threats to the FTC itself.

Last year, for instance, the Supreme Court eliminated one of the FTC’s most important tools when it ruled unanimously the agency had spent years overstating its ability to quickly secure money for victims of frauds and other business misconduct. Congress, ever riven by partisanship, has made little progress on restoring the authority. Now the high court is taking up a case that will likely allow defendants in the FTC’s in-house court to force the agency to justify its approach in a full-fledged federal court, said former FTC general counsel Stephen Calkins. At the same time, courts around the U.S. are increasingly taking aim at the FTC’s structure.

Calkins said that — as much as Khan, the business community and consumers will be battling over her wish list — the FTC is also watching over its shoulder for the threats that are coming from courts and hostile lawmakers.

“The FTC is facing unprecedented challenges in the next year or two,” Calkins said. “We’ve really never had a time like this, when the very existence of the FTC as we know it is at risk.”

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