Lina Khan Has Big Plans For Big Tech — But She Might Not Have the Tools
Last week, Lina Khan, a 32-year-old Columbia Law professor and strong advocate for updating antitrust laws to deal with Big Tech companies, was sworn in as chair of the Federal Trade Commission (FTC). Her confirmation came just days after Congress introduced five antitrust bills specifically targeting Amazon, Google, Apple, and Facebook (the so-called “Big Four”) for alleged anticompetitive practices.
The FTC launched more than 40 antitrust lawsuits during the pandemic, including a landmark case against Facebook over its illegal monopolization of social network services. Khan will be joining an agency juggling a monumental lawsuit with very few resources.
Leaked audio from Mark Zuckerberg in 2019 indicated that Facebook wouldn’t go down easy, with the social media mogul stating, “ I don’t want to have a major lawsuit against our own government… But look, at the end of the day, if someone’s going to try to threaten something that existential, you go to the mat and you fight.”
But the FTC may not be equipped for that fight. Cases taken up by the FTC cost the agency enormously in fees paid to outside consultants and economists, who can charge as much as $1,350 an hour. At the same time, corporate merger filing fees, which traditionally serve as a major cash flow for the agency, have fallen during the pandemic.
According to emails obtained by POLITICO, the lack of funding is also taking its toll on FTC staffing and resources. “[W]e will either need to bring fewer expert intensive cases or significantly decrease our litigation costs (e.g. experts, transcripts, litigation support contractors, etc.),” Executive Director David Robbins said in an October 29, 2020 email.
Robbins said in later emails that the agency would be freezing all hiring, promotions, and end-of-the-year bonuses indefinitely. The FTC may see more funding in 2021 if Congress passes bills like the U.S. Innovation and Competition Act, which would allow the agency to increase their merger filing fees. However, it’s still unclear how much these fees would be raised and when the new payment schedule could be applied.
But even if the FTC had all the funding and staffing it needed, it almost certainly doesn’t have the expertise or the resources to handle the challenges posed by Big Tech companies alone, especially because the FTC has countless other responsibilities. Washington needs a new agency whose only focus is dealing with the challenges—to privacy, competition, and speech—presented by the rise of the tech companies. President Biden and Congress need to stand up a new Digital Commerce Agency.
A New Path Forward
It’s a familiar pattern throughout U.S. history: a disruptive innovation arises and reshapes how people work and live. But at a certain point, the creators of these innovations accrue enough power and influence that they need to assume greater responsibility for the public interest.
The Federal Communications Commission was formed in 1934 as an upgraded Federal Radio Commission, the agency charged with regulating radio communication and broadcasting stations. By the 1930s, communications issues had begun to advance past the occasional interference from unlicensed radio transmitters. The U.S. government needed an agency to regulate burgeoning television network monopolies, most notably the National Broadcasting Company and the Columbia Broadcasting System, which dominated network broadcasting and dampened competition from smaller stations.
A new Digital Commerce Agency would need to have a nimble regulatory apparatus to keep pace with the rapid rate of technological change while adhering to congressionally mandated principles. The creation of an agency dedicated to regulating Big Tech specifically has been floated by the former chair of the Council of Economic Advisers Jason Furman, Brookings, the University of Chicago’s Stigler Center, and Public Knowledge.
Khan’s appointment and new legislation signal a desire from Congress to speed up antitrust enforcement, but it’s going to be near-impossible under the weight of a century-old regulatory structure. If Congress is serious about dealing with the challenges posed by Big Tech companies, it will need to equip an agency with the expertise, technology, and funding necessary to get the job done.
To read more on the history of antitrust regulation in America, and the difficulty of regulating digital platform companies under current regulatory structures, see The New Center’s policy paper, “How Can Washington Take On Big Tech? The Digital Commerce Agency.”