Alex Brandon/Associated Press
Big Tech companies Facebook and Amazon are working to undermine Federal Trade Commission chair Lina Khan on the basis of ethics. They have both filed petitions claiming that Khan’s scholarly paper on Amazon demonstrates that she has “prejudged the outcomes of the matters.” Her work so capably highlights the ethical issues that digital platform companies have fostered. Last week four Democratic lawmakers wrote a letter to Andy Jassy, CEO of Amazon, and Mark Zuckerberg, Facebook’s CEO, indicating their support of Khan’s ability to dig into those issues.
In her paper, Khan reframes consumer welfare beyond pricing to include the protection of markets that are truly competitive. She demonstrates in her work an uncanny ability to ask the right questions, a key skill for an FTC commissioner. Khan asks if our current legal framework can account for the realities of dominant firms willing to sacrifice profits for growth, as growth at scale creates network effects that give them market dominance, including the ability to collect data on their competitors.
Khan also asks if there are conflicts of interest inherent in digital platforms, an argument the tech companies are now trying to deftly turn back on her. In case that doesn’t work, Republican lawmaker Gus Bilivaki is willing to try another approach, one used frequently against women, saying she “should still work in a collegial manner,” suggesting she has a personality flaw rather than using the legitimate power of her office.
Undeterred, Khan is doing things a little differently than previous FTC chairs. She’s held two public meetings this far, which the Wall Street Journal noted were the first in decades. Transparency and ethics tend to be positively correlated, unless confidential information is being released inappropriately.
The tech companies are hoping to confuse the public about the difference between bias and expertise. Without a prior engagement in matters for or against tech companies, she has no conflicts based on relationships, no personal or financial ties to these companies or any other digital platform company.
What she does have is a lot of knowledge of the subject matter and how the law might be updated to better serve markets and consumers. For the lawyers in the audience, legal minds and precedent agree. As the lawmakers write, “To argue that federal ethics laws preclude Chair Khan from exercising her expertise is illogical and inconsistent with the plain language of the relevant statutes and the FTC ethics officials’ interpretations of recusal requirements.”
As it turns out, Khan has some things in common with the tech CEOs trying to water down her influence. She is, at 32, relatively young to hold such a position and thus poised to disrupt an industry or create fresh industry norms. Mark Zuckerberg, five years older than Khan, was far younger when he did just that with Facebook’s creation.
Rather than volley theatrically, the companies who have repeatedly said they welcome regulation should act like it. They should work to provide the FTC and congress with as much as possible about their companies and how they make decisions and accept two realities of political life in a capitalist democracy. First, politicians will understandably act in the interests of their constituents. A Pew Center report published in July 2021 indicated over half of Americans support increased regulation of technology companies. Sixty-eight percent feel that technology companies have too much power and influence in the economy and in a refreshing show of bipartisanship, that included majorities in both major political parties. Second, economists and policy makers dating back to Adam Smith have understood that healthy regulation is a market reality. If this weren’t the case, business schools wouldn’t offer a course like Managing in a Regulated Environment, which I took in business school.
I have confidence in people’s abilities to work through dilemmas and resolve them. We should move past some scholars’ arguments about the dangers of revisiting Section 230 of the Telecommunications Act of 1996, attempting to improve it to serve consumers more effectively today now that conditions have changed in the past 25 years. To do so would demonstrate American innovation beyond the technology sector, something we should welcome as a sign of a healthy capitalist democracy.