Reportedly, FTC Chair Lena Khan will meet with representatives from Amazon (AMZN) next week in what may be the last face-to-face meeting between the two parties before the commission files an antitrust lawsuit against the e-commerce giant.
Khan, who became chair in 2021 at the age of 32, has made taking over big tech companies a cornerstone of her tenure on the Federal Trade Commission. It has faced many of the biggest names in the industry, with major lawsuits against Facebook’s parent company Meta (META) and Microsoft (MSFT).
Not all of them resulted in wins, leading to some policy setbacks in Washington and doubts that its strategy is to lose until Congress changes antitrust laws.
Khan, now 34, rose to prominence after publishing a 2017 article in the Yale Law Journal titled “The Amazon Antitrust Paradox. “
The article argued that modern antitrust laws were not equipped to deal with anticompetitive behavior in the technology industry because they were too focused on pricing as a means of determining consumer harms.
She argued that those laws need to be rethought in order to push Big Tech to control. Now she’s trying to rein in these companies as president.
“Love her 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 FCC chair Harold Vohrchtgott Roth told Yahoo Finance. “This vision is very aggressive and ambitious and they are taking every possible step to make that vision a reality.”
The Federal Trade Commission declined to comment.
American scrutiny of large technology companies
Khan is not the only government official going after the country’s biggest tech companies.
The Department of Justice and a group of state attorneys general have sued Alphabet (GOOG, GOOGL) over Google in two consolidated cases launched during President Trump’s administration, alleging that the company abuses its market power via search and search advertising to squeeze competition.
Those cases will go to trial next month in the US District Court for the District of Columbia, which has dismissed some of the claims.
“We look forward to showing at trial that the promotion and distribution of our services is legal and pro-competitive,” Google said.
Khan juggles cases against several other giants. In one case against Facebook owner Meta, the Federal Trade Commission, led by Khan, attempted to block Meta’s acquisition of virtual reality fitness company Inside.
Her agency is also trying to force social media into a split of Facebook, Instagram and WhatsApp, in a separate case that was filed before Khan took over as president.
Another target: Microsoft. Khan fought to stop the Windows maker from completing the acquisition of “Call of Duty” developer Activision Blizzard (ATVI).
But Khan’s biggest test will be her challenge to Amazon. the suit, According to Politicowill likely focus on Amazon’s e-commerce business and whether it places unfair pressure on sellers who use its marketplace.
These arguments mirror complaints made by the states of California and Washington, D.C., which argued that Amazon’s pressure on these sellers forced them to raise prices outside of Amazon’s platform.
Amazon denied the allegations, saying that sellers set their own prices and that Amazon makes no effort to prevent them from offering lower prices elsewhere. The case brought by Washington, D.C., was dismissed by a judge last year, and the California case is still ongoing.
If the FTC decides to sue Amazon, it will be Khan’s second case against the company. A separate lawsuit filed by the commission in July accuses Amazon of deceiving consumers into signing up for its Prime service and making it difficult to knowingly cancel those subscriptions.
Amazon declined to comment.
opposition in Washington
However, Khan’s efforts were not always successful. In July, a federal judge blocked the commission’s request for an injunction seeking to block Microsoft from completing the deal. The FTC has since withdrawn from its internal lawsuit, and is likely to negotiate potential concessions to the deal with Microsoft.
The committee also failed in its fight to stop Meta from buying VR Inside.
During a July hearing before the House Judiciary Committee, some Republicans criticized Khan’s failures, calling her “bullying” and claiming that her leadership of the agency was a “disaster.”
But at least one expert says the FTC is moving in the right direction despite recent failures.
Mark A. Lemley, a professor at Stanford Law School, told Yahoo Finance: “I think the FTC is doing the right thing in trying to rein in mergers and challenge the rules of self-preference.”
“I think they’ve been confronted with 40 years of entrenched (and outdated) attitudes that don’t favor antitrust law, which has resulted in losing court cases that they clearly should have won,” Lemley added. “It is not clear to me how we can change that judicial resistance without legislation.”
Eleanor Fox, a New York University School of Law professor, explained that Khan’s past losses against tech companies are unrelated to the FTC’s chances in any potential case against Amazon.
“I know the press does a great deal of losing the first case and losing the second, but the truth is… it’s only lost because of the establishment of the truth,” Fox said. “And that really doesn’t say much about what will happen next time in a big case.”
Khan’s potential conflict with Amazon will be among the most important battles between the Biden administration and Big Tech. Whether it actually runs at all may depend on Khan’s confrontation with the company next week.
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