Biden charges administration with Big Tech’s most prominent critics
US President Joe Biden speaks during International Women’s Day in the East Room of the White House in Washington, DC on March 8, 2021.
Mandel Ngan | AFP | Getty Images
Nearly two months into his presidency, how Joe Biden plans to approach the tech sector is finally becoming clear. And that seems very different from the approach under the Obama administration.
The selection of two major Big Tech corporate critics, Lina Khan and Tim Wu, for key roles in the administration seems to indicate that Biden is serious about taking a hard look at giants such as Amazon, Apple, Facebook and Google. The latter two of these companies are already facing federal antitrust lawsuits filed under the previous administration.
Biden’s announced selection of Khan as a nominee for the Federal Trade Commission leaves little doubt that the administration hopes to see robust enforcement of antitrust laws and other regulations in the tech space. Politics reported on Tuesday that the administration is in the final stages of vetting the nominee, citing sources. A White House spokesperson did not immediately respond to CNBC’s request for comment on the report.
Before taking on her current role teaching law students at Columbia University, Khan worked for the House Judiciary Subcommittee on Antitrust, helping compile the nearly 450-page report. accusing the four tech giants of maintaining monopoly power and suggest a major overhaul of antitrust laws and their enforcement.
Khan, 32, rose to prominence in antitrust scholarship after writing “Amazon’s Antitrust Paradoxas a law student at Yale University in 2017. In the article published in the Yale Law Journal, she argued for a broader understanding of how U.S. antitrust laws might apply to a business like Amazon.While courts have for years often relied on the highly controversial “consumer welfare” standard, often tied to the price of consumer goods and services, to assess whether an antitrust violation has instead, Khan argued that the standard is ill-equipped to assess the potential harm caused by online platforms.
Khan wrote that predatory pricing could only be in the interests of the platforms, as they are often rewarded for pursuing growth instead of profits. From the outside, this might appear to benefit consumers by lowering prices, even though it would undermine legitimate competitors who might be shut out of the market. She also argued that platforms can control “critical infrastructure” that competitors depend on, allowing platforms to leverage information against their rivals.
However, Khan’s road to confirmation may not be completely smooth. Sen. Mike Lee of Utah, the top Republican on the Senate Judiciary Subcommittee on Antitrust, said in a statement Tuesday that if the report on Khan’s nomination is true “it is deeply concerning.” Lee criticized Khan’s youth and experience in the statement.
“Ms. Khan no doubt has a promising career ahead of her, but with less than four years of law school, she lacks the experience necessary for such an important role as commissioner of the FTC,” said Lee. “Her views on antitrust enforcement are also very much out of step with a cautious approach to the law. Ms. Khan’s nomination would signal that President Biden intends to put ideology and politics ahead of antitrust enforcement. competent authority, which would be seriously disappointing at a time when it is absolutely essential that we have strong and effective leadership within enforcement agencies.This time is too important for our antitrust officers to learn on the job.
Rep. David Cicilline, DR.I., chairman of the House Judiciary Subcommittee on Antitrust, who worked with Khan during the tech probe, said in a tweet on Tuesday that Khan’s nomination would be “a victory momentous for local businesses, workers, and anyone who has been negatively affected by Big Tech’s domination.”
In addition to Khan’s expected appointment, the administration announced last week that the Columbia University law professor Tim Wu would join the National Economic Council working on technology and competition policy. Wu helped popularize the idea that big tech companies might need to be broken up to reinvigorate competition through his 2018 book, “The Curse of Bigness: Antitrust in the New Gilded Age.” He also coined the term “net neutrality,” which eventually sparked a major debate over whether ISPs should have the ability to slow down or speed up Internet services.
Before those two picks were revealed, tech critics had remained suspicious of how Biden would ultimately select his top tech executives. Progressive groups warned the administration not to select staff or candidates with Big Tech tiesincluding the former Google CEO Eric Schmidt, who was reportedly discussed for a director position.
The fear also stemmed from the Obama administration’s reputation as a tech-friendly White House that has not taken major enforcement action against the tech giants. Even so, many expected Biden’s approach to differ, if only because public sentiment towards the tech sector has shifted dramatically since 2016.
Biden is yet to fill the top antitrust job at the Justice Department and the fifth empty seat at the FTC, assuming his nominee for the Consumer Financial Protection Bureau, who is currently commissioner of the FTC, is confirmed. But the selection of Khan and Wu for key roles appears to send a strong signal to progressives and Big Tech companies that the administration will not back down from strict enforcement.