Biden’s FTC nomination signals crackdown on Big Tech

Democrats and Republicans can't agree on a lot these days. A bill declaring water is wet would likely get a straight partisan vote. But one thing that does seem to unite the parties is the notion that Big Tech -- a term that generally refers to Amazon, Apple, Google and Facebook but which can also include other technology giants -- is too powerful. The parties may not see eye to eye on the particulars or the best solutions, but they do seem in accord that Big Tech's outsized power is bad for society.

President Joe Biden's nomination of antitrust scholar Lina Khan to join the Federal Trade Commission is the latest shot across the bow for the tech powerhouses. It also signals he will not follow in the approach favored by his former boss, President Barack Obama. Obama was a fan of making alliances with the tech titans, but Khan is a well-known critic of the monopoly power of Big Tech.

In 2017, while still a student at Yale University, Khan wrote a piece for the Yale Law Journal called "Amazon's Antitrust Paradox," which gained widespread notoriety.

In it, she argues that current antitrust thinking, which examines monopoly power in the context of the output and prices the monopolist charges, cannot properly account for e-commerce titans like Amazon. In other words, one of the hallmarks of a traditional monopoly is either overcharging for products or services because of the lack of competition or severely restricting output, or both. But, under that kind of analysis, Amazon would not be viewed as a monopoly because Amazon owes much of its success to undercutting other retailers on price. Indeed, in its first several years of business, Amazon took on massive losses while trying to gain market share by pricing at or below cost. And, that strategy shows no signs of abating.

Khan was also instrumental in helping draft the massive Majority Report published last year by the House Judiciary Subcommittee on Antitrust. That report examined the conduct of the big four tech companies, Amazon, Apple, Facebook and Google, and pronounced them to be "the kind of monopolies we last saw in the era of oil barons and railroad tycoons." A separate Minority Report written by Sen. Ken Buck (R-Colo.) likewise attacked those companies for using "their monopoly power to act as gatekeepers to the marketplace, undermine potential competition, and pick winners and losers, all while simultaneously cozying up to unfriendly nations like China in order to further expand their global footprint."

Still, Khan's appointment is not without controversy. First, she is young -- only 32 -- and relatively inexperienced. I think it is fair to say most of us would be in way over our heads if we were tapped to help steer a major governmental organization at that age. Second, her views on antitrust stray from the orthodox, as noted above. And this has generated some concern that her imprint could extend beyond the tech sector into other areas where the proper scope of antitrust law remains controversial. Finally, and unsurprisingly, her appointment has stirred up the animus of Big Tech, who have described her views as "radical."

Nevertheless, Khan seems like a good choice for the job. The antitrust issues raised by Big Tech are novel and thorny. Pointing out the problems of Big Tech's global dominance isn't that hard, but coming up with viable solutions will be. It will be good to have fresh and creative thinking, and Khan appears to offer plenty of both. 