One never knows how a confirmation hearing will go, especially for a young outsider nominated to an important position despite challenging the status quo and big business. Lina Khan, just such a person up for the job of FTC Commissioner, had a surprisingly pleasant time during today’s Senate Commerce Committee confirmation hearing — possibly because her unorthodox approach to antitrust makes for good politics these days.
Khan, an associate law professor at Columbia, is best known in the tech community for her incisive essay “Amazon Antitrust’s Paradox,” which laid out the failings of regulatory doctrine that have allowed the retail giant to dominate more and more markets progressively. (She also recently contributed to a House report on tech policy.)
When it was published in 2018, the feeling that Amazon had begun to abuse its position was, though commonplace in some circles, not popular in the Capitol. But the growing sense that laissez-faire or insufficient regulations have created monsters in Amazon, Google, and Facebook (to start) has led to a rare bipartisan agreement that we must find some way, anyway will do, of putting these upstart corporations back in their place.
This, in turn, led to a sense of shared purpose and camaraderie in the confirmation hearing, which was a triple header: Khan joined Bill Nelson, nominated to lead NASA, and Leslie Kiernan, who would join the Commerce Department as General Counsel, for a lovely little three-hour chat.
Khan is one of several in the Biden administration who signal a new approach to take on Big Tech and other businesses that have gotten out of hand. The questions posed to her by Senators from both sides of the aisle seemed genuine and got genuinely satisfactory answers from a confident Khan.
She deftly avoided a few attempts to bait her — including one involving Section 230, wrong Commission, Senator — and her answers primarily reaffirmed her professional opinion that the FTC should be better informed and more preemptive in its approach to regulating these secretive, powerful corporations.
Here is a few snippets representative of the questioning and indicative of her positions on a few significant issues (answers lightly edited for clarity): On the FTC getting involved in the fight between Google, Facebook, and news providers:
“Everything needs to be on the table. Local journalism is in crisis, and I think the current COVID moment has underscored the deep democratic emergency that results when we don’t have reliable sources of local news.” She also cited the increasing concentration of ad markets and the arbitrary nature of, for example, algorithm changes that can have wide-ranging effects on entire industries.
On Clarence Thomas’s troubling suggestion that social media companies should be considered “common carriers”:
“I think it prompted a lot of interesting discussions,” she said diplomatically. “In the Amazon article, I identified two potential pathways forward when considering these dominant digital platforms. One is enforcing competition laws and ensuring that these markets are competitive.” (i.e., using antitrust rules)
“The other is, if we instead recognize that perhaps there are certain economies of scale, network externalities that will lead these markets to stay dominated by a very few numbers of companies, then we need to apply a different set of rules. We have a long legal tradition of thinking about what types of checks can be applied when there’s a lot of concentration, and common carriage is one of those tools.”
“I should clarify that some of these firms are now integrated into so many markets that you may reach for a different set of tools depending on which specific market you’re looking at.” (This was a very polite way of saying common carriage and existing antitrust rules are unsuitable for the job.) On potentially reviewing past mergers the FTC approved:
“The resources of the commission have not kept pace with the increasing size of the economy, as well as the increasing size and complexity of the deals the commission is reviewing.” “There was an assumption that digital markets, in particular, are fast-moving, so we don’t need to be concerned about potential concentration in the markets because any exercise of power will get disciplined by entry and new competition.
Now, of course, we know that you have significant network externalities that make them more sticky in the markets. In hindsight, there’s a growing sense that those merger reviews were a missed opportunity.” (Here, Senator Blackburn (R-TN), in one of the few negative moments, fretted about Khan’s “lack of experience in coming to that position” before asking about a spectrum plan — wrong Commission, Senator.)
On the difficulty of enforcing something like an order against Facebook:
“One of the challenges is the deep information asymmetry between some of these firms and enforcers and regulators. I think 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. So at the very least, ensuring the agencies are doing everything they can to keep pace will be important.”
“In social media, we have these proprietary black-box algorithms that can sometimes make it difficult to know what’s going on. The FTC must use its information gathering capacities to mitigate some of these gaps.”
On extending protections for children and other vulnerable groups online:
Some of these dangers are heightened given how the pandemic has rendered families and children primarily dependent on some of these [education] technologies. So I think we need to be especially vigilant here. The previous rules should be the floor, not the ceiling.
Overall there was little partisan bickering and a lot of feeling from both sides that Khan was, if not technically experienced at the job (not rare with a coveted position like FTC Commissioner), about as competent a nominee as anyone could ask for. Also, her highly considered and pretty strong positions on matters of antitrust and competition could help put Amazon and Google, already in the regulatory doghouse, on the defensive for once.
