U.S. Federal Trade Commission (FTC) Chair Lina Khan is pulling no punches in her crusade against big tech firms, using a mob metaphor to direct her ire at their even larger AI goals this week. Speaking at TechCrunch’s StrictlyVC conference Khan said in Washington, DC, on Tuesday that it is just not the variety of cases brought by the FTC that matters, but their type.
“For me, it was important that we actually focus on where we see the greatest damage,” she explained. “Where do we see actors who are systematically driving these illegal behaviors? It will be more effective to go after the ‘mafia boss’ than the henchman at the bottom.”
Khan has made waves since being appointed FTC chairman by President Joe Biden in 2021. He recently banned non-compete agreements for many employees and attempted to dam several blockbuster mergers and acquisitions.
Earlier this 12 months, it put the brakes on the biggest fashion deal in history: Coach’s $8.5 billion acquisition of Michael Kors. Coach’s parent brand Tapestry was in talks to purchase Capri Holdings, which owns brands resembling Michael Kors, Versace and Jimmy Choo, before the FTC sued, arguing that the acquisition would “direct head-to-head competition.” But Khan has all the time focused on big technology firms with regards to antitrust cases.
Last 12 months, the FTC sued Amazon in a groundbreaking lawsuit It accused the retail giant of using illegal methods to keep up its dominance. That same 12 months, the FTC also sought to dam Microsoft’s purchase of gaming giant Activision Blizzard for around $70 billion, but U.S. District Judge Jacqueline Scott Corley rejected that request since the FTC couldn’t prove that the deal would harm competition.
More recently, Khan and the FTC towards AIand has filed several lawsuits against major tech firms, most notably its recent investigation into Microsoft’s $10 billion investment and ongoing relationship with OpenAI, the $80 billion startup behind ChatGPT. Khan said in January she feared the massive tech giant could “exercise undue influence or gain privileged access that could undermine fair competition” within the AI arms race.
Kahn’s give attention to antitrust cases has angered her critics and a few investors, with Yale professor Jeffery Sonnenfeld calling her a “competition cop” and CNBC’s Jim Cramer claiming she is a “One-woman demolition crew in your portfolio”, but she doesn’t back down.
Speaking at TechCrunch’s StrictlyVC conference this week, Khan argued that coddling firms seen as “national champions” is the mistaken approach.
“We’ve seen that some of the most significant breakthrough innovations historically have come from startups, entrepreneurs and small companies that have been able to just see things differently – to see a gap in the market and really create disruption by taking the big guys out of business or giving them important competitive control,” she said.
The FTC chair pointed to key historical events through which she believes antitrust laws have boosted competition and led to innovation, including the Eisenhower administration’s antitrust lawsuit against AT&T’s Bell Labs in 1956. Bell Labs was forced to license all of its existing telecommunications patents royalty-free after it developed a monopoly out there, a move that significantly increased innovation within the years that followed, in line with Several studies.
“We need to keep these lessons from history in mind as we choose a path again,” Khan said. “We just need to be very cautious of these arguments from national leaders and really trust that open, fair and competitive markets will be the engine of innovation.”
