Feature / December 9, 2023

Lina Khan’s Anti-Monopoly Power

Beginning in the 1970s, the Federal Trade Commission gave up on its mission to protect consumers and competition. Then Khan took charge of the agency, and turned it on its head.

Bryce Covert
Illustration by Tim Robinson.

The inaugural Anti-Monopoly Summit, convened in May in Washington, D.C., by the left-leaning nonprofit American Economic Liberties Project, was sold out; latecomers had to stand along the walls. The video that kicked off the event was the stuff of political campaign rallies. Loud, upbeat music played over footage of President Joe Biden signing executive orders aimed at promoting competition. Other members of his administration appeared too; prominently featured among them was Lina Khan, the Federal Trade Commission’s youngest-ever chair. Just six years earlier, Khan was a law school student writing controversial papers that took on corporate behemoths.

The members of what has been called the neo-Brandeisian movement—named for Louis Brandeis, the ardent anti-monopolist Supreme Court justice—were feeling victorious. In the span of just a handful of years, their arguments about the urgent need to revive antitrust enforcement to ensure a fairer and more robust economy had worked their way up from the pages of law journals and lefty publications to the halls of federal power. And there is perhaps no more striking example of that movement’s meteoric rise than Khan’s appointment shortly after Biden took office. “If everybody in the anti-monopoly group had had to pick someone to lead the FTC, we would have picked Lina,” says Stacy Mitchell, a co–executive director of the advocacy group the Institute for Local Self-Reliance. “To the surprise of everyone, especially reformers, one of the converts [to their movement] was Joe Biden.”

Khan was both a member of the audience and a keynote speaker at the summit. Wearing the kelly green blazer she often dons for public events, with little makeup and her dark hair pulled back haphazardly, she appeared relaxed onstage as she talked about her work at the FTC. One of her priorities, she said, was to ensure that antitrust policies are pursued “in a way that’s benefiting everybody.” That doesn’t just mean concern for whether consumers face higher prices, which has been the sole focus of antitrust enforcers for the past 50 years, she said, but also whether entrepreneurs can start new businesses and whether workers are receiving good wages and benefits.

Biden’s decision to elevate Khan to the chair of the FTC “put her in a very unique position to propel this agenda forward in ways that no one else could,” says Darren Bush, an antitrust expert and professor at the University of Houston Law Center. From her current post, Khan has reclaimed the agency’s existing powers to propose new rules that could net workers hundreds of billions of dollars in increased wages; revamped its scrutiny of mergers with the aim of unleashing a crackdown; and even gone after Amazon. But she has also become the movement’s lightning rod. As of May, The Wall Street Journal had run 76 editorials, op-eds, and letters to the editor criticizing Khan during her two-year tenure; other Biden officials who have pushed similar policies, such as former special assistant to the president for competition and tech policy Tim Wu and Department of Justice Antitrust Division Assistant Attorney General Jonathan Kanter, have not received the same treatment. And Khan’s time is limited: Her term expires next September, and although she can continue to serve until someone is confirmed to take her spot, under a Republican president she stands little chance of remaining as chair.

Senator Amy Klobuchar, who spoke at the May conference, rattled off a list of anti-monopoly bills she has pending. “We have to stop admiring the problem,” she implored. Despite the sense of triumph, there was also a question hanging over the conference: Can this movement generate enough concrete change to permanently reanimate an agency—and a political agenda—that has been moribund for decades?

Khan, pictured with Assistant Attorney General Doha Mekki at right, held a series of “listening sessions” to hear from ordinary people about the impact of mergers on their lives.
Listening in: Khan, pictured with Assistant Attorney General Doha Mekki at right, held a series of “listening sessions” to hear from ordinary people about the impact of mergers on their lives.

Born in London, Lina Khan moved to the United States with her family when she was 11, and she retains no trace of a British accent. Her parents are from Pakistan; her father works as a consultant, at one point for a large Indian online gaming company, and her mother worked in healthcare and information services. Khan and her two brothers went to public school in a suburb of New York City. At age 15, she wrote a story for her school’s paper about a nearby Starbucks that wasn’t allowing students to sit down, which got picked up by The New York Times.

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When I sit down on a plush, blue leather couch across from her in her cavernous FTC office in October, Khan tells me she was radicalized by the 2008 financial crisis. At the time, she was a sophomore at Williams College, studying political theory. It “struck me as a very sharp illustration of how policymaking gone awry can really be catastrophic for people’s lives,” she says. She graduated in 2010 into an economy still mired in the aftereffects of the Great Recession.

Khan got hooked on antitrust “accidentally,” she tells me. Drawn to journalism, she landed at New America, a D.C. think tank, joining a group that was working on industry consolidation and antitrust enforcement well before those issues were on the national agenda. “My job was really to document the consolidation and document what the effects of it had been,” she says. So she dove deep into specific markets, including book publishing, commodities like grain and silver, and the airline industry. Her work instilled in her a deep sense of not only how much consolidation had occurred in the economy over the past 40 years, but also how policy choices had allowed it to happen.

After her stint at New America, Khan chose to attend Yale Law School rather than take a job as a commodities reporter at The Wall Street Journal. “It was a close call,” she says. But she worried that beat reporting would force her to stray from antitrust. She “already had her own voice and her own commitments in law school,” David Singh Grewal, a professor at the UC Berkeley School of Law who taught Khan at Yale, said in a statement he shared with reporters.

It was during Khan’s time at Yale that the revived antitrust movement started gaining traction. Americans’ wages were barely growing despite low unemployment, and scholars made the case that “monopsony” power was one reason why. Monopsony—in contrast to its cousin, monopoly—impacts workers rather than consumers: A company has monopsony power when it squeezes out competitors and leaves so few other employment opportunities that workers get locked into their jobs and can’t demand better treatment. Then, in 2016, Senator Elizabeth Warren gave energy to the movement with a keynote speech on antitrust at a New America conference. She would later make it a core part of her 2020 presidential campaign.

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It was also during her time at Yale that Khan became famous, or infamous, depending on whom you ask. At age 27, she published “Amazon’s Antitrust Paradox,” an unusually digestible law school paper that argued that even though Amazon held prices down, it was still engaging in monopolistic behavior by elbowing out competitors and swallowing up market share. It “quickly and somewhat unexpectedly became about as famous as any [student academic paper] has ever become,” Grewal said in his statement. The inspiration for the paper had come to Khan while she was at New America. As part of her research into consolidation in different industries, she talked to small and medium-size businesses that sold their products on Amazon, as well as to investors, analysts, and others. It was “hundreds and hundreds of hours of those conversations,” Khan says, that showed her how Amazon “was walking headfirst into the shortcomings of our current antitrust regime.”

Rohit Chopra, now the director of the Consumer Financial Protection Bureau, was also a speaker at the anti-monopoly summit. In 2018, he had come to the FTC with three other new commissioners and found an agency that “had fallen into deep decay and disarray over four decades,” Chopra said in his remarks. “The agency had largely lost its credibility as a regulator and enforcer.” He soon hired Khan to work with him at the FTC as a legal fellow to uncover the agency’s past and “lay out a new vision.” With her help, Chopra published an official comment that September describing how to restore the agency’s enforcement authority simply by reasserting the powers Congress originally vested in it—powers that had been ignored for decades.

In 2019, after leaving the FTC to teach at Columbia Law School, Khan was hired by David Cicilline, then a member of Congress from Rhode Island and the chair of the House subcommittee on antitrust, to work with him on what would become a landmark investigation into Big Tech. Khan contributed to a 400-page report laying out how large technology companies like Google, Amazon, Apple, and Facebook had crushed their competitors, which led to a bipartisan package of bills. “She understood deep in her bones that what she was doing was not just some sort of theoretical, esoteric argument,” Cicilline says.

The FTC’s headquarters in D.C.’s Federal Triangle is a majestic building adorned with enormous columns, in view of both the Capitol and the Washington Monument. Its location in the center of power is a vestige of the cachet Congress intended for the agency. “The FTC, as originally designed, was supposed to be the overseer of policy,” says Bush, the antitrust expert. It was created in 1914, although its predecessor, the Bureau of Corporations, was formed in 1903, at a time when antitrust issues were very much in the public consciousness. Brandeis was on the Supreme Court; Theodore Roosevelt, famous for busting corporate “trusts,” was in the White House, followed by Woodrow Wilson, who continued that mission. A look around Khan’s office confirms that public sentiment. The walls are lined with anti-monopoly political cartoons from the early 20th century; the one hanging over the couch she sat on when we spoke depicts trusts as pirates forcing Uncle Sam to walk the plank. An early version of Monopoly—a game developed by the feminist and anti-capitalist Elizabeth Magie Phillips in the early 1900s to demonstrate the evils of concentrated wealth—sat on the coffee table between us.

“Monopoly was part of the everyday political discourse of Americans,” says Mitchell. But starting in the 1970s, the concept got less notice from politicians and the press. Mitchell suggests that, paradoxically, the success of the antitrust movement meant monopolies became less of a problem for the public; she also faults the FTC for “reced[ing] into the bureaucratic shadows” as its enforcement actions became more technical. The growing public apathy allowed President Ronald Reagan’s administration to put out policies reflecting the views of the conservative legal scholar Robert Bork, who argued that mergers and acquisitions would benefit the economy so long as they didn’t lead to higher prices for consumers.

Khan is determined to throw the FTC’s doors back open and reclaim the tools it once employed, and she now has the power to do so. The other commissioners vote on which cases to bring and which rules to propagate, but the chair has “tremendous influence” on the agency’s policies and priorities, says Spencer Weber Waller, the director of the Institute for Consumer Antitrust Studies at Loyola University Chicago School of Law.

Khan is unlike any of the chairs who have preceded her at the FTC, at least in recent history. At 34, she is not only the youngest person to chair the agency but also the first person of South Asian descent. She’s the fourth woman to hold the position on a non-acting basis. She also represents an ideological break with the recent past. Previous heads came from private law firms and expected to return to private practice afterward. “That revolving door creates a lot of incentives to not disrupt” how things work, Bush says. Under both Republican and Democratic administrations, the FTC frequently waved big mergers through, allowing American industries to become more and more concentrated. In 2015, under President Barack Obama, the FTC announced that it was going to essentially kneecap its own enforcement actions against unfair competition by narrowly employing the stand-alone authority that Congress had granted it to act outside of specific antitrust laws. Khan and her fellow commissioners rescinded that statement a few weeks into her tenure.

Rohit Chopra, now head of the Consumer Financial Protection Bureau, recruited Khan to the FTC to “lay out a new vision” for the agency.
Movement makers: Rohit Chopra, now head of the Consumer Financial Protection Bureau, recruited Khan to the FTC to “lay out a new vision” for the agency.(Samuel Corum / SIPA USA)

Not only is Khan reviving the FTC’s powers, but she is working hard to shed the agency’s technocratic past and invite the public in. She regularly holds open commission meetings in which anyone can speak directly to the commissioners and has opened public dockets that allow Americans to submit comments about the unfair business practices they’re experiencing. She has also held a series of listening sessions, something that was infrequent under many previous chairs. At a recent session in Colorado about the proposed merger between the Kroger and Albertsons grocery chains, she heard from workers who had suffered under other such deals. “They promised us we would keep our jobs. That we would have better benefits, a pension for retirement,” said Christine Martinez, who worked at a grocery store that was sold as part of the Safeway-Albertsons merger. Two months later, she said, “I was told our stores were closing.” When Khan asked the audience if anyone there supported the merger and wanted to speak, the only response was laughter.

“We hear from everybody, from gig drivers to hotel franchise owners to parents who have lost their children because they had to ration insulin,” Khan says. She joined striking Hollywood workers in July, connecting their complaints to consolidation in the industry.

Meanwhile, there has been an equally energetic backlash. The Wall Street Journal has run an average of one piece against her every 10 days. In January, it said she had gone from “aspiring renegade to establishment phony” emblematic of D.C.’s “nonstop mendacity and cynicism.” In February, it accused her of abusing her power and engaging in “bias and lack of transparency,” concluding that “the deck is stacked against business under Ms. Khan.” In March, it called her “a Machiavellian who muddies transparent processes and trashes precedent.” Many people I spoke with said it’s hard not to tie the relentless attack to who Khan is—a woman, especially a young woman of color. One of the things fueling the criticism of her, Bush says, “is the unspoken fact that she is a minority woman.” Jonathan Kanter, the assistant AG, doesn’t attract the same level of vitriol, even though the two frequently appear together at events and speak from the same playbook.

It’s hard to square the venom hurled at Khan with what she’s like in person. Elizabeth Warren first met her when she invited Khan and others to dinner in her Senate office while Khan was still a law student who had just published her paper on Amazon. “The conversation was terrific,” Warren recalls: Khan was the first person to explain to her “how something could appear to be free to the consumer and yet cause significant injury both to the consumer and to competition.” Despite the waves she is making, Spencer Weber Waller says, Khan “is a conservative person in terms of her decision-making style. She’s deliberate, she’s very precise, she wants a lot of information.”

Assistant Attorney General Jonathan Kanter, another member of the “neo-Brandeisians,” has attracted less vitriol than Khan has.
Comrade in arms: Assistant Attorney General Jonathan Kanter, another member of the “neo-Brandeisians,” has attracted less vitriol than Khan has.(Valerie Plesch / Bloomberg via Getty Images)

Khan insists that she’s not inventing new powers for the FTC; instead, she’s “adhering to the rule of law.” In addition to the Sherman Act (1890), which cracks down on monopolies and anticompetitive interstate trade practices, and the Clayton Act (1914), which prohibits anticompetitive mergers and acquisitions, the FTC enforces the Federal Trade Commission Act (1914), which gives the agency broad authority to go after companies that engage in “unfair methods of competition.” While the agency is limited in the remedies it can seek—it can issue cease-and-desist orders, but not fines or criminal penalties—it has “a broad range of powers” to regulate corporations, Waller says, including the ability to make rules that give enforcement more teeth. “The FTC should have quite strong powers to enforce against unfair methods of competition and to call them illegal,” says Eleanor Fox, a professor emerita at New York University School of Law. Yet the FTC’s focus since the 1970s has been on “efficiency” and consumer welfare, neither of which is based in the laws governing the agency.

Khan is looking back to what those earlier laws actually say. “We are fully activating the tools and the laws that Congress charged us with administering,” she told the audience at the anti-monopoly summit. That’s been true throughout the past year, which has seen the agency take a series of significant actions. The first was a rule proposed in January that would ban noncompete clauses, which prohibit workers from taking jobs at similar businesses. In proposing the new rule, the FTC employed the stand-alone power that Khan’s predecessors swore off in 2015. The agency estimates that if the rule were enacted, it would raise wages by nearly $300 billion a year by allowing workers to move more freely between jobs for better pay and benefits.

The proposed rule, which is relatively easy to read, has gotten over 26,000 comments, many of them from workers who have been stifled by an inability to switch jobs. John Ludlow, a urologist working under a noncompete clause, wrote: “If I left my practice I would have to take my children out of their school, move them away from their friends and established extracurricular activities, solely due to the restrictive covenant in place that is remarkably onerous.” Eve Ramsey, a home health aide, signed a contract with an agency that had a six-month noncompete clause because she needed the work. If she were to get an offer of better pay at another agency, she is “barred from moving to the higher paying company,” Ramsey wrote in a comment. It’s “unfair. It stacks the system even more against working people.”

Khan didn’t stop there. The FTC and the Department of Justice have long maintained a document, known as the “merger guidelines,” that gives companies a road map of sorts regarding what kinds of deals will be blocked or approved. In the 1960s, the guidelines created “these bright lines,” Mitchell says—for example, an acquisition by a company with a certain level of market share would routinely be blocked. In the 1980s, under Reagan, the agency did a 180 and issued new guidelines that reflected the assumption that mergers would be denied only if they were likely to raise prices. Subsequent revisions, even under Democrats, went further down that road.

In July, Khan and Kanter released a proposed update outlining the ways they plan to crack down on consolidation and anticompetitive mergers. It lays out 13 ways that the FTC and the Justice Department could determine whether a merger violates existing laws about economic competition, and it names not just consumers as possible victims of an anticompetitive merger but workers too. If an employer is so big that it can “reduce or freeze wages” or “cut benefits [or make schedules] much less predictable” through market share, Khan said at a webinar shortly after the guidelines were released, that would make it anticompetitive. The revision highlights the ways that technology companies try to squash rivals by buying up potential future competitors and using their scale to overwhelm competition. It also calls out vertical mergers of companies that don’t compete directly but operate in the same supply chain as well as companies that engage in multiple acquisitions. The changes are meant to discourage companies from pursuing these kinds of deals while shifting the way future FTC commissioners, as well as judges, view what kinds of mergers are permissible.

The FTC has targeted a variety of mergers under Khan. In a recent case against an anesthesiology practice in Texas, it took the unusual step of suing a private equity firm that employed what it called a “roll-up scheme” by buying other practices in the state, alleging that they were working together to consolidate the industry and drive up prices. The FTC has also attempted to block a number of mergers, such as the ones proposed between the pharmaceutical companies Amgen and Horizon Therapeutics as well as the medical technology companies Illumina and Grail.

In September, Khan took aim at her white whale: Amazon. The FTC, along with 17 state attorneys general, charged the company with breaking antitrust laws by using its monopoly power to “inflate prices, degrade quality, and stifle innovation for consumers and businesses.” Rather than claim that Amazon is breaking laws by unfairly holding prices down, as Khan argued in her law school article, the suit contends that the company uses its size to increase prices and keep competitors out of the market. The argument is based on “a framework that’s more traditional than radical,” says Fox. That’s a benefit, she adds: “If they prove the allegations, they should win, even under our very conservative law.”

Some have criticized this approach. But Khan says that writing a paper as a student is very different from bringing a lawsuit as a government official. At the FTC, she was able to issue subpoenas to peek under Amazon’s hood. She also notes that monopolies go through “a life cycle.” A new company trying to gain market share rapidly may use different tactics to squash competition than the ones it deploys as a full-blown monopoly. Had the agency brought a lawsuit against Amazon earlier, she argues, it would have probably looked very different. Regardless, the FTC’s job is to “ensure that markets are working fairly and competitively,” Khan tells me, especially when it comes to companies that have “become too big to care.”

In this political cartoon published in 1904, “Standard Oil” wraps its many tentacles around industries, the US Capitol, and the White House.
Power of the press: In this political cartoon published in 1904, “Standard Oil” wraps its many tentacles around industries, the US Capitol, and the White House.(Joseph Keppler / Puck)

Will the changes Khan has made at the FTC endure beyond her term as chair? “We’re not going back to the pre-Lina status quo,” Warren says with a laugh. “Full stop. Lina has reminded everyone that the emperor has no clothes in antitrust law.” Everyday people can see themselves in what she’s doing: She’s taken on “real-life stuff that makes a difference,” Waller says. Mitchell notes that a number of trade associations, from farmers to pharmacists, are now spending time and resources lobbying on antitrust issues. Some of the people watching what Khan is doing will also be inspired to go to law school and pursue her way of thinking on antitrust; once low in terms of enrollment, such courses are now filling up.

But even if the public has changed its mind, the judiciary hasn’t yet. In January, a judge ruled against the FTC in its lawsuit to prevent Meta, the owner of Facebook, from buying the virtual-reality app maker Within, and in July a judge barred the agency from delaying Microsoft’s acquisition of the video game maker Activision Blizzard. “Anything the Federal Trade Commission does, if it’s an order or a judgment, can be appealed to the courts,” Fox says. And while judges will typically heed the merger guidelines that Khan and Kanter updated, it will take time for them to be fully embraced; some judges may resist them completely. Biden has been nominating new judges at a rapid clip, but the Senate hasn’t been able to confirm them at the same pace. Then there’s the current Supreme Court, the most pro-business court in the country’s history. Any of Khan’s reforms that end up there stand little chance.

In a functioning system, the FTC’s court losses would prompt lawmakers to act. That’s what happened after the Justice Department lost a case to block a steel merger in 1948; two years later, Congress passed an amendment to the Clayton Act that applied it to vertical as well as horizontal mergers. Lawmakers could clarify that antitrust laws aren’t focused solely on consumer prices and that market efficiency alone isn’t grounds for a legal merger. They could set some thresholds for industry concentration and empower agencies to go after new forms of monopoly behavior.

One reason some in the movement remain optimistic is that antitrust is not championed only by Democrats. Khan received 21 Republican votes when she was confirmed to the FTC. Antitrust legislation aimed at consolidation in tech was introduced in 2021 on a bipartisan basis. Republican senators Josh Hawley and J.D. Vance have embraced the antitrust cause. Still, on the right and the left, the number of lawmakers committed to these issues is small. Warren lambasted Republicans as “terrible” on the issue, even if a “handful” have gotten on board. Equally as troubling, she notes, “Democrats are only somewhat better.”

Khan herself is thinking about what the FTC’s future will be once she is no longer chair. One part of ensuring things are done differently, she says, is the work she’s overseen to update the agency’s enforcement mechanisms. Another is ensuring that the public understands how much economic consolidation affects their lives. “People are recognizing the ways in which outsized, unchecked corporate private power can harm not just our economy but also our liberty,” she says. “That means that whoever has the fortune and privilege to be in these positions going forward will also be held accountable.”

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Bryce Covert

Bryce Covert is a contributing writer at The Nation and was a 2023 Reporter in Residence at Omidyar Network.

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