Cutting wages after a merger? FTC’s Lina Khan says you might be in trouble.

Lina Khan said she’s been focused on stories of workers who had their pay cut or schedules thrown into disarray by consolidation.

FTC Chair Lina Khan

FTC Chair Lina Khan is eyeing mergers.

Photo: Tom Williams/CQ-Roll Call, Inc via Getty Images

Companies need to think more about how their mergers and acquisitions affect working conditions, according to FTC Chair Lina Khan.

In an interview with Protocol, Khan explained that her recent efforts to collect information on the results of consolidation, including in tech, have highlighted how M&A “can really degrade working conditions for people,” and she suggested U.S. antitrust enforcers will do more to take labor issues into account when analyzing deals.

Khan said she was particularly concerned with reduced wages or shaky schedules. She spoke after a series of listening sessions by the FTC and Justice Department antitrust section, which aimed to hear from workers, and signaled interest in trying to block deals that competition enforcers might have previously ignored because they didn’t raise prices.

One goal of the FTC and DOJ forum, Khan said, is to provide a space for everyday workers to detail their lived experiences with mergers and acquisitions. “There have been a few areas where we’ve heard particularly salient stories that compel us to make sure our merger guidelines are addressing those problems,” Khan said.

This isn’t the first time Khan has referenced labor as a metric for scrutinizing deals. In a January interview with CNBC, Khan said both the FTC and the Department of Justice are focused on protecting workers caught up in mergers. It’s not a question of whether labor is important, she said, but of how to incorporate worker protections in the FTC’s merger guidelines.

“Both agencies have been looking at the ways in which mergers in particular may lessen competition for labor and have downstream effects on workers in ways that are harmful,” Khan told CNBC. “That needs to be on our radar.” She made clear to Protocol, however, that wages and schedules had emerged as key themes as she’d heard from workers in recent months.

Khan also urged Congress to pass antitrust legislation further protecting gig workers’ right to organize in September of last year.

2022 has been a big year for M&A, starting with Microsoft buying Activision Blizzard in January for $68.7 billion. The deal was reportedly influenced by rampant workplace issues within Activision Blizzard, including misconduct allegations that led employees to call for CEO Bobby Kotick’s resignation. The never-ending Elon Musk-Twitter saga has also prompted speculation as to how such a controversial acquisition might impact Twitter employees.

It’s unclear how much mergers help or harm workers: It depends on the particular deal, and who you ask. Khan acknowledged this herself in her interview with CNBC, noting that in some cases, unions think mergers act in workers’ best interests. But previously, some M&A activity has clearly been viewed as cutting prices — and thus, good for competition — because it would eliminate jobs. Khan also referenced retrospective studies that revealed detrimental effects of mergers.

Khan and the head of DOJ’s antitrust section, Jonathan Kanter, have been pushing to hear more from workers and others in the economy, while relying less on price in analyzing competition. That’s prompted criticism from conservatives and antitrust traditionalists that the two enforcers, who are known as reformers, are abandoning the economic grounding of competition law and using it to pursue a left-wing agenda outside of the text of the statute.

As part of their efforts, Khan and Kanter have been taking in comments on revamping guidelines that tell the public and the business community what kinds of deals the enforcers tend to scrutinize more heavily and which they tend to let pass through without much investigation.


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