Lina Khan has unfinished business

By Issie Lapowsky | Contributor

In 2021, five months into his time in office, President Joe Biden issued an unspoken warning to Big Tech by tapping Lina Khan, then a 32-year-old associate professor at Columbia Law School, to head the Federal Trade Commission. 

Khan was an outsider in almost every way: She was the youngest person to ever run the FTC. She is also a woman of color in a position mostly held by white men, and is one of the few chairs to run the agency without having spent very much time working there herself. But what really set her apart were her heterodox ideas. As a law student and, later, a scholar, Khan had called for a radical rethinking of antitrust law. Her views accounted for the full range of ways modern monopolies—particularly tech monopolies—screw over consumers. In picking Khan as the country’s chief competition cop, the president’s mandate was clear: He wanted someone to give the lethargic agency a proper shake up. 

Khan understood the assignment. 

Along the way, she has become arguably one of the most celebrated—and vilified—members of the Biden administration. On her watch, the FTC has brought antitrust lawsuits against Meta, Amazon, Microsoft and others. It hasn't shied away from making high-impact reforms, such as banning non-compete agreements, and it has launched investigations into social-media surveillance and AI. It tackled privacy invasions by national retailers and, together with the Department of Justice, helped the Biden administration set records for merger challenges. The department has also introduced stricter guidelines to stave off potentially anti-competitive deals in the future. 

Khan has won over converts in Silicon Valley’s startup circles with her promise to stick up for “little tech.” Yet she’s also attracted the ire of its billionaire class, who have cast her as anti-business. She’s scrambled traditional partisan allegiances, garnering praise from Republican vice presidential candidate JD Vance while being derided by Democratic mega-donor Reid Hoffman. He has requested that, if Vice President Harris becomes president, she replace Khan as head of the FTC. And according to one count, The Wall Street Journal’s op-ed section has published a takedown piece on Khan once every ten days on average. All of this has nudged her once nonconformist views to the forefront of the national conversation about corporate power. 

Sometimes even Khan can’t believe the pace of change. “It's been really striking to see how positions that might have been considered, a decade ago, to be somewhat outsider or niche are now pretty mainstream,” she says in a recent interview with Compiler. “Seeing that evolution and thinking in traditional policymaking is pretty notable.”

Yet that evolution is far from complete. While Khan’s ideas have gained traction, many of her  initiatives are still winding through the courts. Depending on the results of the November election, Khan’s potential signature accomplishments may be phased out before she—or her successor—has had a chance to actually implement them. But one thing is certain: If someone new does take her place next year, they will be walking into an agency whose mission and makeup have been dramatically reshaped.

 The Chicago School and the Consumer Welfare Standard

In the 1970s, a group of University of Chicago scholars introduced a new theory of antitrust law. The so-called Chicago School argued that too much intervention by governments was a surefire way to stifle innovation. The group proposed an approach to antitrust enforcement that focused primarily on whether consolidation within industries led to higher prices for consumers. This legal principle became known as the “consumer welfare standard” and contributed to the half-century of lax antitrust enforcement that followed.

Chair Khan blew all of that up. In today’s economy, companies such as Amazon drive down prices precisely so they can amass power, while online platforms like Facebook offer their services for free. The consumer welfare standard, she argues, fails to account for all the other ways those giants abuse their power against both consumers and smaller players in the market. “It's not an argument about ignoring prices,” Khan explains. “It's just [about making] sure that you have a more well-rounded, sophisticated view of the different ways that companies can acquire power and exercise that power.” 

During her tenure, Khan has been willing to take big swings on legal cases that push this theory forward, even when the possibility of striking out is high. In a case against Facebook, for instance, the FTC accused the company of acquiring WhatsApp and Instagram in “an illegal buy-or-bury scheme,” which harmed consumers, in part, by degrading their privacy. The FTC has argued that the three apps should be broken up. That case is still ongoing, but an early ruling rejected Facebook’s attempt to have it thrown out. The court gave Khan a partial victory, finding that “decreased privacy and data protection” are, in fact, cognizable harms. 

Khan has also taken a tough stance against “vertical mergers,” where major players who aren’t direct competitors, but who each play vital roles in the same supply chain, join forces. So far, the FTC has blocked an attempted merger by chipmaking giants NVIDIA and Arm, and it forced the biotech firm Illumina to divest Grail, a company that makes cancer-screening tests. That victory, which Khan calls a “really important win,” came through the notoriously conservative Fifth Circuit Court of Appeals.

“She’s really had the courage to take some risks,” says Bill Baer, who previously led the antitrust divisions at both the Department of Justice and the FTC. “She’s taken on giants and has had a significant measure of success.” 

But Khan has also swung and missed. The FTC’s attempt to block Meta from acquiring VR game and content studio Within ultimately failed in court. The courts found that the FTC’s case lacked evidence that the acquisition would harm competition in the market. Its case against Microsoft’s acquisition of Activision Blizzard, the video-game studio that produces hit games like Overwatch and Call of Duty, was blocked on similar grounds, but the FTC is now appealing that decision.

Khan’s critics have pounced on these losses as evidence of the failure of her broader arguments. “You have to win cases, and that's a mixed bag, obviously, for this chair,” says Neil Chilson, former acting chief technology officer of the FTC, who worked at the agency under both the Obama and Trump administrations. “A lot of [her ideas] have gotten tested, and they haven't won the day yet.”

Baer, on the other hand, sees this imperfect record as a feature, not a bug, of Khan’s tenure. “If you only bring cases you know you’re going to win, that means you’re leaving a whole lot of anticompetitive behavior out there,” he says. “By being demanding, you may get more concessions and make more progress, even if you don’t get 100% of what you're asking for.”

However, assessing who’s right after just one term in office is often unavailing as the law doesn’t operate on political cycles. The FTC’s cases surrounding Facebook’s acquisition of WhatsApp and Instagram; Microsoft’s acquisition of Activision; and Amazon’s allegedly anti-competitive seller practices all still hang in the balance. 

Another of Khan’s marquee achievements, a rule banning non-compete agreements, was recently blocked from going into effect by a Texas court, which painted the rule as an example of the agency’s overreach. Khan says it’s ludicrous to argue that a ban on non-competes stretches the bounds of the FTC’s authority. “They're called non-competes,” she says. “We enforce the antitrust and competition laws.” Khan plans to fight the ruling in court—“and win,” she adds. 

Whether Khan’s big ideas about Big Tech and unfair competition ultimately win the day will depend in no small part on the outcome of those cases, which even some of her supporters acknowledge face an uphill battle. 

“Khan has been a transformative chair, bringing an energy to the FTC and antitrust enforcement and consumer protection we haven't seen in at least 50 years,” Mark Lemley, director of the Stanford Program in Law, Science and Technology, tells Compiler. “But the forces arrayed against her—and the FTC more generally—are powerful, and courts have been under the sway of Chicago school thinking for 40 years now.”

Tensions rise at the FTC

As Khan has pushed to bring about change in the courts, the agency she runs has had to undergo its own at-times painful changes, too. Between 2020 and 2021, a government survey showed a “marked decrease” in employee satisfaction at the FTC. Between 2021 and 2022, 71 senior attorneys left the agency, according to Bloomberg, marking the biggest staff exodus in 20 years. The following year, Republican commissioner Christine Wilson issued her own highly public resignation, in which she stated that under Khan’s watch “knowledgeable career staff have been scorned and sidelined.” In a Wall Street Journal op-ed, Wilson suggested the problem was more personal than ideological, writing that while many FTC staffers agreed with the ends Khan was trying to achieve, “the data convey the staffers’ discomfort with her means.” 

Baer points to this internal discord as among the greatest challenges Khan has faced. “It was a challenge for Chair Khan and career staff to understand each other, and that’s led to some early job dissatisfaction among very talented career people,” he says.

Of course, some amount of turbulence is to be expected in any workplace undergoing sudden and sweeping transformation. And the latest internal surveys show signs that employees’ views on working at the FTC are back on the upswing. But that doesn’t change the fact that—whether it’s Khan or anyone else leading the agency over the next four years—it’s an agency that’s been substantially more politicized and depleted of longtime talent than it was four years ago. “There's a lot of new blood at the agency,” says Chilson. “And there's a lot of experience that has walked out the door, and it's now on the other side of the table, in many cases.”

But in other, more intentional ways, Khan has remade the agency, too. For one thing, she’s built out a team of technologists inside the FTC whom she credits with helping the agency’s lawyers and economists “look under the hood” at harmful uses of technology, and not just in the tech sector. “We're kind of past the point where you can talk about digital markets or technology markets as being their own segmented thing,” Khan says. She pointed to the FTC’s recent crackdown on Rite-Aid’s use of facial recognition technology as a case where the technology team has had an “outsized impact.” As part of that settlement, the FTC banned Rite-Aid from using facial recognition to surveil customers for five years, the first time the agency has ever issued such a ban.

Khan has also played an instrumental role in bringing some transparency to the FTC’s work. Just weeks after she was sworn in as chair, Khan hosted the agency’s first public meeting, an unprecedented move that has been repeated almost monthly ever since. In recent years, she has crisscrossed the country, hosting listening sessions with everyone from farmers discussing fertilizer mergers to venture capitalists interested in how antitrust scrutiny will impact the path to acquisition for startups. 

Last year, Khan brought her listening tour to the belly of the beast—Silicon Valley—where she pitched herself as a champion of the little guy, bringing cases that check Big Tech’s power precisely so the next big thing can flourish. “These cases are designed to unclog the arteries of competition and ensure that the next set of innovators are not locked out of the market,” she told an audience at Stanford last fall.

“She has really made the FTC accountable by opening it up to all people,” says Nidhi Hegde, managing director at the American Economic Liberties Project think tank. “They are very deliberately asking for input from the public, and are very deliberately sending a message that you do not have to be a lawyer or an economist to tell us how you're being harmed.”

Khan’s use of the bully pulpit has multiplied the impact she’s had as chair, Baer argues. Even as courts grapple with the scope of the FTC’s power and whether its actions fit within that scope, Khan has helped inspire other enforcers across the country to take on this work as well. Baer points to the more than a dozen states that have enacted bans on non-competes since 2016 as evidence of this impact. 

It’s this movement-building ability, Baer says, that truly distinguishes Khan from her predecessors. Even as she’s transformed the FTC, Khan has also helped transform the sleepy backwater of antitrust law into a thriving arena. “She articulated the message in a way that resonated,” Baer says. “By being a spokesperson for these issues—and an effective spokesperson—she’s encouraged the antitrust enforcement movement to be even bolder.”

For all of the criticism, if not outright antipathy, she’s faced as chair, Khan seems comforted by this broad embrace of the once-fringe ideas that landed her the gig in the first place. “Change can be hard. I think that's just baked in,” she says. “But there are also a decent number of signs that things are not going back.”

Issie Lapowsky is an independent journalist focused on technology and national affairs. She was previously a senior writer at WIRED and chief correspondent at Protocol. Her work has appeared in The New York Times, Fast Company, The Atlantic and more.