Lina Khan has argued for years that the time has come to rein in some of the world’s largest tech companies. On Tuesday, she made one of her most high-profile moves when the agency she chairs, the Federal Trade Commission (FTC), filed a sweeping antitrust lawsuit against Amazon.
Khan, 34, was appointed as chair of the FTC in 2021, becoming the youngest person in history and the most progressive in more than a decade to be appointed to the position.
Within weeks, Facebook and Amazon requested she be recused from the agency’s antitrust investigations into their companies, arguing that her intense criticism in the past meant she would “not be a neutral and impartial evaluator” of antitrust issues.
Khan, a scholar and law professor, had long worked on the topic of antitrust, and had become one of the most prominent voices arguing for a renewed approach to fighting monopoly power.
In a now-famous 2017 Yale Law Journal article, Khan, then 29, argued that US antitrust law was fundamentally broken, allowing for the rise of tech behemoths like Apple, Google and Amazon.
For decades, antitrust law in the US had functioned under the “consumer welfare standard”, meaning the government would only take action against a company over anti-competitive practices if consumers were hurt by increased prices.
That approach, Khan and others said, allowed tech companies to build de facto monopolies by giving away their products for free or at such low prices that no one else could compete.
In the case of Amazon, she argued, keeping prices low has allowed the company to amass a large share of the market and stifle competition.
“[Amazon] has evaded government scrutiny in part through fervently devoting its business strategy and rhetoric to reducing prices for consumers,” she wrote.
In 2019, Khan brought her new approach to antitrust to Congress, playing a large role in the publication of a landmark report on how companies including Google and Amazon abuse their market power for their own benefit.
‘A different set of rules’ to take on big tech
Khan’s appointment at the FTC in 2021 coincided with growing push in Washington to to take on the major tech companies, one of the few topics that Republicans and Democrats can find consensus on.
In her first hearing as chair in July 2021, Khan indicated that she was ready to get started, saying the US needs “a different set of rules”.
Since then, the agency has taken repeated aim at Amazon.
The FTC has accused it of enrolling millions of consumers into its paid subscription Amazon Prime service without their consent and making it difficult for them to cancel.
On 31 May, the agency announced a $5.8m settlement with Amazon’s Ring doorbell camera unit after the agency said cameras had been used for spying on some customers.
Amazon also agreed in May to pay $25m to settle FTC allegations it violated children’s privacy rights by failing to delete recordings by virtual assistant Alexa.
On Tuesday, the FTC asked a judge “to put an end to Amazon’s illegal course of conduct, pry loose Amazon‘s monopolistic control, deny Amazon the fruits of its unlawful practices, and restore the lost promise of competition”.
Khan said on Tuesday that Amazon “has used a set of punitive and coercive tactics to unlawfully maintain its monopolies”. She argued that the company is “exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform”.
Amazon has vehemently denied the accusations. Its general counsel David Zapolsky said that the company’s practices have benefited consumers, spurred competition and led to innovation in retail. The FTC, he argued, had a “fundamental misunderstanding of retail” and rejects any coercion in making sellers or consumers buy its products.
Under Khan, the FTC has aggressively targeted the dominant position of other major tech companies, not always successfully.
The agency failed to block Microsoft’s takeover of the video game maker Activision Blizzard and Meta’s acquisition of the virtual reality startup Within Unlimited. The agency is in the middle of a protracted lawsuit against Facebook parent Meta, which it alleges has engaged in monopolistic behavior.
Amazon was also sued by the state of California and the District of Columbia over its treatment of third-party sellers. The District of Columbia lawsuit was thrown out by a federal judge earlier last year and is currently under appeal.
