FTC Chair Lina Khan on AI regulation, startup acquisitions, and more [audio]
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Users shouldn't ever have to be locked into an app. Like they shouldn't have been locked into just Ma Bell telephones. Carterphone should apply here.
What tools that Lina listed did you like most? M&A (Mergers & acquisitions) was the main focus seemingly but she did go through other tools. https://www.youtube.com/watch?v=9CWbc6pekd8#t=37m3s
There doesn't seem to be much granting users the right or ability to either use their own clients, nor can they effectively switch away & keep their connections.
These networks are treating themselves like AT&T/MaBell, and have outlawed all the Carterphones. We're locked in, in a horrific way.
I will say I was somewhat disappointed with the questions asked since many of them centered around AI and the recent Biden EO rather than actual examples of potential monopoly power such as the app store.
Amazon, Meta and Alphabet are at the top of the list for lobbying spend
Khan is fighting the best fight she can. The problem is she's woefully inexperienced in so many domains critical to the job.
I'm increasingly convinced her hire was a deceitful compromise to placate the base, because she says the right things, as well as corporate interests, because she can't follow through on them. I've seen two big law firms tell companies to pursue risky mergers; while there is a higher chance they'll be challenged, there is a much higher chance those challenges will fail.
The US has two anti-trust authorities. FTC and DOJ antitrust division. US vs Google is DOJ case.
Just co-opt the lingo of a movement and forward your career. A walking talking self-promotion shop.
Microsoft is a bigger company than Sony, so they get framed as the baddie. Argue that the merger may hurt Sony, even though Sony has much more market share in console gaming. What is a court supposed to do with that when they are expecting to hear something about consumer harm?
She talks big talk, and yet has zero results.
Her arguments in court are also bad.
The best example of her failure was the blizzard acquisition where she spent most of her time talking about Sony, and not consumer welfare.
That's what I mean though - the consumer welfare standard is terrible and essentially designed to kill antitrust enforcement in the US. It takes time to change the tide - the consumer welfare standard took 20 years to become fully accepted as the proper standard for enforcement (or non-enforcement, as it were). She needs to keep banging the drum for competitive markets - it's not sufficient for Microsoft to promise to not act anticompetitively - they should not be allowed to have that power at all. "Consumer welfare" (whatever that actually means in this case) is irrelevant.
The above standard also has the benefit of being enforceable, unlike the current, nebulous standard that is too easy to satisfy.
Making bad arguments in court isn't the way to make effective anti-trust change.
You can't just will your ideas into existence. Either make a new law, or make arguments in court that will actually work.
Or I guess keep wasting time, not being effective. Thats what she's chosen I guess.
> "Consumer welfare" (whatever that actually means in this case)
Its actually very well defined by the courts. It has been the fundamental basis for anti-trust law for decades.
Its mostly about whatever causes lower prices.
The fact that it is well defined, I think is part of the reason why some people don't like it. Because they can't get around the very straightforward measurement of if prices are going down or not.
Robert Bork would be shocked to hear you say that. Show me the act of Congress that established the consumer welfare standard.
Its not hard to imagine that arguing “market concentration is bad as a rule” will eventually find a friendly judge if you try a few times. The laws, as written, support that very line of argument.
> The fact that it is well defined, I think is part of the reason why some people don't like it. Because they can't get around the very straightforward measurement of if prices are going down or not.
Some people don’t like it because the math very rarely works as described, acquiring companies often lie, and we have ample proof that it has substantially increased market concentration, avoiding which is entire point of antitrust laws.
I think that's the first time I’ve heard a hypothetical negative response by Bork invoked as if it constitute an argument against the position supposed to trigger that hypothetical response.
I don't need to. Because this is how the courts are interpreting the law.
Make a new one if you don't like it, because bad arguments in court don't change anything.
> will eventually find a friendly judge
Someone might be able to find a single one, somewhere in the entire USA.
But the interpretations of a single judge means very little.
If a single judge deviates from the current court standard in a significant way, then the ruling would almost certainly of be overturned upon appeal.
One judge changes very little. and I don't think the 6-3 conservative majority supreme court is going to change anytime soon.
Her arguments comport with the law and its actual intent, how is that a bad argument? I just don’t find your appeal to authority all that compelling, since the consumer welfare standard is a court-created fiction itself, no one “created a new law” to make the courts do that, why would she be held to a different standard than Bork?
No it doesn't.
Because that's not what the courts say.
And the court system isn't changing anytime soon.
> I just don’t find your appeal to authority
The courts are quite literally the authority. By definition. They decide.
If you don't like it then change the law, get a new court system (hint: this is not very likely), or overthrow the government in a literal revolution.
Those are your only 3 options.
Complaining about it, or even worse, wasting the court's time with arguments that aren't going to work is worthless and instead a harmful waste of resources.
> is a court-created fiction itself
All laws are fiction created by people.
"The law" is just another way of saying "words written on a piece of paper".
The words on the piece of paper are indeed nothing more than fiction.
What matters, instead, is how those words are interpreted, used, and enforced by people. Nothing more.
Welcome to living in a society.
> how is that a bad argument?
It is a bad argument because it failed in the court system and will continue to fail. It will fail for decades to come.
It will keep failing until the law changes, the courts change their mind (unlikely... 6-3 conservative majority in the supreme court, for decades to come) or the actual revolution happens.
Her appointment in this case is politically charged. People don't usually go straight from academia to one of the highest seats in the executive unless they are put there by the incumbent administration to be an attack dog/push a very specific view of the world. She gives off opportunistic "during a gold rush, sell shovels" vibes, just on the regulatory side.
Broadband infrastructure monopolies (and their predecessors, the telephone and utility monopolies) have passed court muster for decades because the primary moat is the intense capital requirements to enter the industry, not the minimal anticompetitive behavior the utilities engage in once they've established themselves. To put it bluntly: even Google, at its zenith, failed in this market because it wasn't willing to put in the capital necessary to properly compete. The newest competitors, like Starry, and SpaceX Starlink, have each spent billions on infrastructure to acquire single-digit percentages of the market.
People don't usually go straight from academia to one of the highest seats in the executive
The FTC is not one of the highest seats in the executive...Not even close. Even the lowly Secretary of Veterans Affairs, considered a throwaway position, is a higher executive seat than the FTC. The FTC has been regarded as a toothless agency for decades; if anything, appointing an inexperienced academic is proof of its lowly regard.
She seems wildly inexperienced.... Clearly smart and motivated, but wildly out of her depth. No wonder they failed to prevent the Microsoft + Activision Blizzard merger. Lawyers with decades of experience on her ran around her in circles
How did she get that job? Who did she know? Was she set up to fail? What the actual hell is this?
I am incredibly disappointed in this corrupt bs. Like this can't be all just because she wrote that thesis on Amazon. No way that justifies her position.
I don't care about her ideological positions or wtv, but has she actually succeeded in any anti trust case? I have been rage clicking through her history, and while her academic record is impressive, I see nothing successful during her tenure at the ftc.
The real what the fuck moment, for me, was when Khan did "not even provide an estimated actual figure or range for Facebook's market share at any point over the past ten years" [1].
That's the judge! In his opinion! How do you claim monopoly without bothering to calculate market share!
[1] https://casetext.com/case/fed-trade-commn-v-facebook-inc#p4
For many “in the know” in this area, Khan has repeatedly made a fool out of herself, despite those who wish to push a glowing narrative. As many have already pointed out, she’s simply not that effective, and at some point you have to admit that even if you agree with what she’s trying to do (as many of us here do). One of the reasons here, which you mentioned, is the remarkably low staff morale at the FTC which she has caused[1].
Prejudice like this has been happening across the board under Biden, and the vast majority of the picks are, to say the least, underwhelming (Khan isn't really that bad relatively speaking.) Bottom line is: if you or anyone reading think this is crap, you need to get yourself (and others) politically active.
[0] https://www.pewresearch.org/short-reads/2022/08/09/biden-has... [1] see, for example: https://www.washingtonpost.com/technology/2022/07/13/ftc-lin...
I am all about academics. I think intelligentsia is undervalued in America. But not all skills in academia transfer to industry/gov, and you need new ones too that can only be built with experience. She is people's boss ffs. Would you want your boss in government to be someone that has never had a leadership position in government????
I don't know what's worse her having too little experience or too much.
She wrote a paper that provides a new legal basis for antitrust enforcement in the U.S. that allows for different theories from the currently prevailing "consumer harm" doctrine.
Who did she know?
Her paper on antitrust was a huge deal in the legal world. It would be more accurate to ask, "who knew her?" and the answer would be pretty much everybody in the legal community.
What the actual hell is this?
It was an attempt to block a merger. Which was slightly more successful than the last FTC action against Microsoft...which led to them unbundling IE for a few years. And that failure was back when the FTC was full of experienced lawyers coming off decades of actively pursuing antitrust cases.
Like I don't care about her ideological positions or wtv, but has she actually succeeded in any anti trust case? Cuz I have been rage clicking through her history, and while her academic record is impressive, I see nothing successful during her tenure at the ftc.
The FTC hasn't had a successful major antitrust case in decades...
That is my point. This is nearly purely all academic experience. No experience in managing such a large system like the FTC. How is she supposed to manage people?
> Her paper on antitrust was a huge deal in the legal world. It would be more accurate to ask, "who knew her?" and the answer would be pretty much everybody in the legal community.
From what I understand talking to Columbia Law school grads in anti trust, it was just riding a populist wave. I don't know too much so I will take your word for it.
> The FTC hasn't had a successful major antitrust case in decades...
No, but they have done deals, something Lina Khan said she should consider more when she was getting roasted at that congressional hearing.
On the other points: I don't know enough about this space to talk on the other points which is why I was asking those questions.
The FTC has continued doing deals the entire time. They're just not covered in the tech news because they don't affect tech.
If anything, the fact that her cases are failing left and right is casting a lot of doubt on the validity of her ideas on antitrust. The lesson is that a popular academic legal paper does not translate into success in real courts.
Her academic background is not at fault here.
The FTC hasn't had any success at antitrust the past several decades despite being led by experienced lawyers due to a judicial change in antitrust doctrine. There are plenty of people commenting on this thread that weren't even born the last time the FTC had a major antitrust victory.
Or maybe because there wasn't actually a good case to block the merger? Neither Activision-Blizzard nor Microsoft are anywhere near monopolies in gaming. Believe it or not "big tech is bad" is not a sufficient case for blocking a merger, actual consumer harm or threat of it has to be demonstrated.
I'm less convinced this is an issue of Kahn and her team's inexperience, so much as that the FTC is being expected (or maybe directed by the executive) to take on cases that don't have any merit to placate public opinion. "Big tech bad" is a popular meme these days, and the FTC is pursuing cases accordingly even if those cases are on very shaky ground.
One, we have evidence of gross incompetence. See my other comment [1]. (Also, contrast her with the DoJ.)
Two, then pick better cases. Khan has been a public green light to anticompetitive mergers across the economy because she's playing the role of a public partisan hack instead of a law enforcer.
I was arguing that we have evidence she is grossly incompetent in general.
> she was pressured or directed to bring a case against Facebook anyway
The FTC is an independent agency [1]. If she was successfully pressured, she was acting incompetently (or even corruptly).
[1] https://en.m.wikipedia.org/wiki/Independent_agencies_of_the_...
Sure, but it's still an independent agency. If she's being pressured, that's between incompetent and corrupt.
* The president made promises on the campaign trail to take on "big tech".
* The president appoints an FTC chair with the stated goal of opening cases against "big tech", and said FTC chair affirms these promises when she takes office (you can look it up this is true).
* The FTC chair feels she's executing the mandate of the voters by taking on more ambitious (read: worse) cases against "big tech".
This looks a lot more like democracy working as intended, even if I disagree with it. I think Kahn is right to feel pressure to bring cases against "big tech" given that the president who appointed her promised this course of action, and also because she herself affirmed these promises when she took office.
The issue is that it would require legislation to deliver on these promises. Like it or not "tech company has too much influence" is not grounds for breaking up a company or blocking mergers. What Biden and Kahn promised to do is just fundamentally not what the law allows the FTC to do. Even a highly competent FTC chair would have failed to block Activision merging with Microsoft.
This isn't corruption or incompetence. It's a story of being given an impossible task.
It’s absolutely democracy. Khan is a populist appointment. She is also a handout to corporate interests.
A competent FTC would have extracted concessions instead of bombing, time and again, in court. That or pursued antitrust in the rest of the economy. Khan didn’t. I’m personally fine with that—I’ve made a lot of money on the ensuing M&A. But it’s surprising to see people still not seeing the wool pulled over their eyes on this one.
OK, then she shouldn't have taken the case and wasted time!!!! Exactly my point. I am confused as to how she got the job when she seems wildly out of her depth.