Lina Khan Pitches Ideas For Regulating Big Tech In Nomination Hearing

April 21, 2021 – The Senate Commerce, Science and Transportation Committee held a hearing Wednesday to consider the nominations of Lina Khan as a commissioner at the Federal Trade Commission, former Sen. Bill Nelson for administrator of NASA and Leslie Kiernan as general counsel for the Department of Commerce.

Khan’s nomination signals a strong stance on antitrust, especially in the tech industry, for the Biden administration, as Khan has been a vocal critic of the concentration of market power for companies like Google, Facebook and Amazon. Previous to her current position as a professor at Columbia Law School, she worked on the House antitrust subcommittee in publishing a report against anti-competitive behavior in big tech, and authored the article “Amazon’s Antitrust Paradox.”

“Given the interest of this committee, from left to right, from liberal to conservative, in taking on antitrust and privacy issues, I can’t think of a more qualified person to be considered for the FTC,” said Sen. Amy Klobuchar, D-Minnesota, in introducing Khan to the committee hearing.

“Lina Khan is, in short, an out-of-the-box thinker, a pioneer in competition in policy, who is already a noted expert in her field. Her deep understanding of how markets influence our lives, and how the law should function, is exactly what we need at the FTC.”

In response to various questions from senators on the committee, Khan spoke on her experience as a journalist and other work that allowed her to document competition and abusive business practices, she said.

“This work taught me the importance of fair competition and the critical role that the antitrust laws play in encouraging business dynamism and promoting widespread prosperity,” she said.

In response to a question about regulating social media companies, Khan identified two options. “One is, enforcing competition laws and ensuring that these markets are competitive,” she said. “The other is, if we instead recognize that perhaps there are certain economies of scale, network externalities, that instead are going to lead these markets to stay dominated by a very few number of companies, then we need to apply a different set of rules.”

Agencies need to be on same information wavelength

She also spoke on what she called “asymmetries” of information and market power between tech companies and federal agencies and regulators. The FTC needs to use their information collection capacity to mitigate some of these information gaps, she said. Social media has black boxes and proprietary algorithms that can sometimes make it difficult to know what is going on, she said.

Khan responded to a question about what she would have done differently to handle the tech mergers during the Obama administration. Evidence has come to light since those mergers happened that suggest missed opportunities the FTC could have taken, she said. The decisions made then was partly due to information asymmetries, and also because of the assumption that digital markets move really quickly, so the market would regulate itself with new entrants and technology, she said.

But we now know these markets have significant network externalities and other reinforcing advantages of data in ways that make them more “sticky,” and we know now to be more vigilant, she said.

On conflicts of interest

She also responded to a question about possible conflicts of interest as a FTC commissioner given her previous work on antitrust in the tech industry, saying that “I would be approaching these issues with an eye to the underlying facts and empirics and following the evidence where it goes.”

On a specific question for recusing herself, she said there are “a set of recusals required in federal ethics laws where you are making categorical determinations before taking office. With regards to prejudgment, those are really resolved on a case-by-case basis.”

For Nelson’s nomination as the NASA administrator, who was a former senator that served on that committee, he received universal applause across both political aisles. “Everybody here knows Senator Nelson, you know his character, you know his integrity, you served alongside him, so that is not a question that needs to be answered at all,” said Sen. Marco Rubio, R-Florida. “I think this is an inspired choice, I can’t think of a better American alive to serve in this role.”

The committee did not vote on the nominations, setting that action for a later date.