Federal Trade Commission (FTC) Chair Lina Khan will reportedly meet with representatives from Amazon (AMZN) next week in what could be the last face-to-face between the parties before the commission files an antitrust suit against the e-commerce giant.
Khan, who became chair in 2021 at 32 years old, has made taking on Big Tech the cornerstone of her tenure at the FTC. She has confronted many of the industry’s biggest names, with major lawsuits against Facebook parent Meta (META) and Microsoft (MSFT).
Not all of them have produced victories, resulting in some political blowback in Washington and skepticism that her strategy is to lose so Congress will change antitrust laws.
Khan, now 34, rose to prominence after publishing a 2017 article in the Yale Law Journal titled “Amazon’s Antitrust Paradox.”
The article argued modern antitrust laws weren’t equipped to tackle the tech industry’s anticompetitive behavior because they were too focused on pricing as a means of determining consumer harms.
Those laws, she argued, needed to be rethought to bring Big Tech companies to heel. Now she is attempting to rein in these companies as chair.
“Love or hate her, [Khan] has a very clear vision of what the role of the FTC is and what the role of the chair is,” former Federal Communications Commission Chair Harold Furchtgott-Roth told Yahoo Finance. “And that vision is a very aggressive and ambitious one and she’s taking every step possible to make that vision become a reality.”
The FTC declined to comment.
The US scrutiny of Big Tech
Khan isn’t the only government official going after the nation’s biggest tech companies.
The Department of Justice and a collection of state attorneys general are suing Alphabet’s (GOOG, GOOGL) Google in two consolidated cases launched during President Trump’s administration, alleging the company abuses its market power across search and search advertising to squeeze competition.
Those cases go to trial next month before the US District Court of the District of Columbia, which has dismissed some of the claims.
Google said “we look forward to showing at trial that promoting and distributing our services is both legal and pro-competitive.”
Khan is juggling cases against several other giants. In one case against Facebook-owning Meta, the FTC under Khan tried to block Meta’s acquisition of virtual reality fitness company Within.
Her agency is also trying to force the social media juggernaut to split apart Facebook, Instagram, and WhatsApp, in a separate case filed before Khan took over as chair.
Another target: Microsoft. Khan has fought to prevent the Windows maker from completing its acquisition of “Call of Duty” developer Activision Blizzard (ATVI).
But Khan’s biggest test will be her challenge against Amazon. The suit, according to Politico, will likely focus on Amazon’s e-commerce business and whether it puts unfair pressure on sellers who use its marketplace.
These arguments echo complaints made by the state of California and Washington DC, which argued that Amazon’s pressure on these sellers forced them to hike prices outside of the Amazon platform.
Amazon has denied those claims, saying sellers set their own prices and that Amazon makes no effort to prevent them from offering lower prices elsewhere. The case filed by Washington DC was thrown out by a judge last year, and the California case is ongoing.
If FTC does decide to sue Amazon, it would be Khan’s second case against the company. A separate lawsuit the commission filed in July accuses Amazon of tricking consumers into signing up for its Prime service and purposely making it difficult to cancel those subscriptions.
Amazon declined to comment.
Pushback in Washington
Khan’s efforts, however, haven’t always been successful. In July, a federal judge blocked the commission’s request for an injunction seeking to keep Microsoft from completing the deal. The FTC has since pulled out of its in-house suit, and will likely negotiate with Microsoft over potential concessions for the deal.
The commission also failed in its battle to prevent Meta from being able to purchase VR company Within.
During a July hearing before the House Judiciary Committee, some Republicans pounced on Khan’s failures, calling her a “bully” and arguing that her leadership of the agency had been a “disaster.”
But at least one expert says that the FTC is moving in the right direction despite recent misses.
“I think the FTC is doing the right thing in trying to rein in mergers and challenging self-preferencing rules,” Stanford Law School Professor Mark A. Lemley told Yahoo Finance.
“I think they have run up against 40 years of entrenched (and outdated) attitudes that disfavor antitrust law, which has led to them losing cases in the courts that they clearly should have won,” Lemley added. “It’s not obvious to me how we can change that judicial resistance without legislation.”
Khan’s prior losses against tech firms also have little to do with the FTC’s chances in any potential case against Amazon, explained NYU School of Law professor Eleanor Fox.
“I know the press makes a huge deal of losing the first case and losing the second case, but the fact is…it was just lost because of proof of fact,” Fox said. “And it really doesn’t say a lot about what will happen next time in a big case.”
Khan’s potential tussle with Amazon would be among the most important battles between the Biden Administration and Big Tech. Whether it actually plays out at all could depend on Khan’s showdown with the company next week.
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