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Monday, November 29, 2021

Amazon and Facebook launch a strange campaign against the FTC chair Lina Khan

One of the biggest threats to tech giants is being derailed before she even gets started. It could work.

Amazon and Facebook have already tried to stop Lina Khan, the top federal trustbuster, from being on the job for only a few weeks. Amazon filed a motion in June to have Lina Khan, the chair of the Federal Trade Commission, be removed from any cases or investigations related to the company. She argued that Khan’s previous work and public statements had shown her bias against Amazon. Amazon’s lawyers claimed that Khan had “made her mind up about many material facts pertinent to Amazon’s Antitrust culpability as much as the ultimate issue of the culpability itself.” According to reports, the FTC is now investigating Amazon’s recent acquisition of MGM, focusing on how it would increase its market share. Facebook then filed its petition just this week. It cited extensively from Amazon’s motion and asked Khan to abstain from any antitrust action against the social networking site.

Khan is an antitrust celebrity. After publishing ” Amazon’s Antitrust Paradox, “a 2017 Yale Law Journal paper entitled ” Amazon’s Antitrust Paradox, “Khan, a Columbia Law professor, became a big deal. This paper generated much buzz in the legal community and raised questions about decades of antitrust law’s shortcomings. Antitrust law focuses on consumer prices but is not as effective in dealing with tech giants. After graduating from Yale Law School, she was appointed as the legal director of the Open Markets Institute. She also helped Massachusetts Senator Elizabeth Warren create an antitrust platform. Khan was a consultant to the House antitrust committee for the report on the alleged monopoly power of Facebook and Google, Amazon, and Apple. Politico Magazine named Khan as one of America’s 50 most influential people in 2018. She was profiled in the Atlantic and New York Times before being confirmed as FTC commissioner and named agency chair. Khan has been celebrated and criticized as an antitrust “hipster,”; a term sometimes used to refer to a growing movement to rethink antitrust laws.

It is pretty unusual for someone to choose such a high-profile route to lead the FTC. Amazon and Facebook seem to be using Khan’s relative celebrity to their advantage. It doesn’t matter what you call Khan, and it seems clear that the companies believe Khan is someone to fear. Could their initial moves against Khan be successful?

Amazon and Facebook complain that Khan’s comments in media and academic publications are evidence she is not impartial. Their main complaint is that Khan has named companies she believes are using monopoly power rather than speaking about antitrust more broadly. Facebook stated in its petition that “She has built her profession, in large part by singling Facebook out as an antitrust violator professed.”

Khan is true to have focused on technology companies. However, it’s not surprising that someone who studies the market concentration in the United States has looked at Amazon and Facebook. Stephen Calkins, a Wayne State University law professor who was previously general counsel to the FTC, said that “the irony is that she was able to spend so much time focused on these companies because they are so substantial and successful.” “Now they’re turning it against her and are hoping that that will resonate with the court.” There would likely be a 2-2 split vote among the remaining Democratic or Republican commissioners to consider the cases. (The FTC did not respond to Amazon or Facebook’s requests.

However, recusal is unlikely for unusual petitions. The FTC’s recusal issues involve the commissioners’ conflicts and activities, not the scholarly work and views they hold. Privacy groups asked Deborah Platt Majoras, former chairperson of the FTC, to resign from the FTC’s 2007 review of Google’s proposal to buy online ad company DoubleClick. Her husband was a partner in Jones Day, which had been advising DoubleClick. Majoras decided not to recuse herself. FTC chairman Michael Pertschuk pulled out of the 1980 investigation into TV ads directed at children because of the interviews and speeches he had given on the topic. After an appeals court had already ruled in his favor, Pertschuk voluntarily withdrew from the case. The discussions and lectures were mainly conducted while he was an FTC official.

Khan must consider Amazon and Facebook’s requests. According to Calkins, Khan probably won’t recuse herself. Khan said that she would not violate ethics laws when scrutinizing Big Tech companies and was open to the possibility of her recusal. Calkins stated that Khan was confident that she wouldn’t recuse herself if she thought she would. Khan’s past work could make it more difficult for the FTC to regulate Amazon and Facebook. This is especially true if FTC decides to handle antitrust cases through an administrative process instead of seeking an antitrust remedy in court. Khan would act as a judge in such an in-house case and have greater control over the proceedings. FTC rules allow Amazon and Facebook to file motions asking the other commissioners for their opinions on Khan’s bias. Khan’s preference would not be as well scrutinized if the FTC decides to use federal courts to resolve their cases. (FTC’s lawsuit against Facebook filed under the Trump administration was already remanded to the commission by a federal court. Now it will have to decide whether to refile or go through its administrative process.

However, it is more likely that Amazon and Facebook don’t expect the petitions will succeed. They filed them mainly to set the scene for possible court cases. The lawyers for the companies would most likely bring up Khan’s prior work in an antitrust case. They’d also need to prove that they had raised these objections before. Calkins stated that “they pretty much need to raise them now to be able to raise them in court.” “The judge might ask her to excuse herself if she was concerned.’ Facebook would then be looking at its navel and feeling dumb.” FTC rules stipulate that defendants must raise these concerns as soon as possible.

Another possibility is that Amazon and Facebook aren’t trying Khan to withdraw from their business. They are more concerned about the perception that Lina Khan may be hopelessly biased.

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