Policy

Khan, Biden's pick for the FTC, rides tech skepticism to warm hearing

Promising to get tough on tech companies may be good for a nomination.

Federal Trade Commission building

President Biden has nominated progressive favorite Lina Khan to the Federal Trade Commission.

Photo: Bloomberg/Getty Images

Tech critic and progressive favorite Lina Khan, whom President Joe Biden has nominated to the Federal Trade Commission, received a surprisingly warm bipartisan welcome as she promised tough enforcement on a sector that increasingly receives scorn from all sides.

"Given the intent of this committee — from left to right, from liberal to conservative — in taking on antitrust and privacy issues, I can't think of a more qualified person to be considered for the FTC," Democratic Sen. Amy Klobuchar, who chairs the antitrust subcommittee, said when introducing Khan.

Khan, currently a law professor at Columbia University, helped ignite the so-called "hipster antitrust" movement when she published a blockbuster 2016 paper in the Yale Law Journal while still a law student, and progressive activists have cheered her nomination.

Multiple Republicans on the Senate Commerce Committee also seemed open to her nomination during a Wednesday hearing. Sen. Ted Cruz, who has voiced loud displeasure with many other Biden nominees, said he looked forward to working with Khan. Sen. Roger Wicker, the panel's top Republican, compared Khan's work on Amazon to recent writings by conservative Supreme Court Justice Clarence Thomas that urged strict regulation of social media companies.

Khan's reception at the hearing is just the latest event showing that many Republicans who are skeptical of Big Tech find common ground with some progressives when it comes to taking on the sector. Khan received multiple questions from Republicans about whether the FTC has any role in policing social media companies' moderation practices, which conservatives allege are biased against them.

She stopped short of saying the FTC should get involved in punishing companies for editorial decisions, which could present free speech concerns. Khan did agree, however, that the agency should gather information on social networks' practices. She added that "common carrier" regulations of the type Thomas floated might be appropriate in some markets, and she frequently asserted that the companies present both competition and privacy concerns.

"It seems like these are growing, increasingly bipartisan concerns," Khan told Cruz.

The FTC and a coalition of 48 states are currently suing Facebook for alleged anticompetitive behavior, particularly with acquisitions. Facebook says that the deals in question were designed to improve users' experience.

Not every Republican agreed with Khan. Some members, particularly Sen. Mike Lee, balked at Khan's progressive calls for new antitrust laws and broader legal thinking about what kinds of business actions could be illegal.

"It seems to me that our laws could meet the need if only enforcers brought the appropriate facts and the appropriate evidence," said Lee, the top Republican on the antitrust panel.

The 'hipster antitrust' movement

Groups such as the Open Markets Institute, where Khan was previously legal director, are looking to boost antitrust enforcement, especially in merger cases. They also want to roll back some court precedents they believe have made antitrust enforcement too narrow and expand competition law beyond a focus on the prices consumers pay to include measures such as product quality, firm conduct and effect on suppliers.

The emphasis on consumer pricing has been the key metric antitrust enforcers have used since the late 1970s, following work by conservative Robert Bork. Many tech critics, though, have said this approach, known as the consumer welfare standard, is insufficient for today's tech companies — Facebook, Google and other tech firms, after all, technically don't charge their users anything, and instead make their massive profits from advertising.

"In my academic capacity, I have critiqued the consumer welfare standard," Khan told Lee. "I've questioned whether it really is a good proxy for competitiveness especially in the context of digital markets."

Lee responded that innovation, product quality and consumer choice are also dimensions of the consumer welfare standard. He has previously said Khan, 32, is too inexperienced for the job and that "her views on antitrust enforcement are also wildly out of step with a prudent approach to the law." Lee's colleague, Sen. Marsha Blackburn, also said she had concerns about Khan's experience and background.

Lee also asked whether Khan's previous work on a House subcommittee might require recusal from cases involving Big Tech companies. Khan helped author the House Antitrust Committee's blockbuster report into Facebook, Google, Apple and Amazon, which concluded that the legal status quo allowed the companies to dominate much of the online economy and urged several reforms.

Khan said that she had none of the financial or personal connections that generally prompt recusal under ethics laws, and said that she would work with agency ethics officials on how to handle specific cases.

Khan spent much of her time assuring lawmakers that, if confirmed, she would urge the FTC to be a stronger, quicker enforcer of the law against tech than agencies have recently been.

"It's clear that, in some instances, the agencies have been a little slow to catch up to the underlying business realities and the empirical realities of how these markets work," Khan said. "At the very least, ensuring that the agencies are doing everything they can to keep pace is going to be important."

Democrats control the Senate and the Commerce Committee, although the panel has an equal number of members from both sides. If the committee advances her nomination, she would need approval from the full Senate to join the FTC.

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