Biden’s FTC chairwoman targets Amazon, the company that brought her fame.
The FTC Takes on Amazon: Is Chairwoman Lina Khan Going “Rogue”?
The Federal Trade Commission (FTC) is once again setting its sights on a Big Tech giant, but this time, critics are accusing the agency of going “rogue.” Chairwoman Lina Khan has filed a lawsuit against Amazon, alleging that the company deceived millions of consumers into signing up for its Prime program and then made it difficult for them to cancel. Khan, who made history as the youngest person to lead the FTC, has a long-standing history with the online retail giant.
A History of Conflict
Khan gained prominence in the “hipster antitrust” movement while studying law at Yale. Her 2017 paper titled “Amazon’s Antitrust Paradox” argued that the tech giant held monopoly-like powers due to its presence in various business categories. She advocated for a more aggressive regulatory approach, including the possibility of breaking up the company. Critics now claim that she is following this doctrine but straying from the FTC’s mission in doing so.
However, Khan’s supporters argue that her actions are necessary to protect consumers. They believe that antitrust measures should be used to address anticompetitive behavior that harms consumers. On the other hand, critics worry that her approach reflects a broader animosity towards the tech industry as a whole.
The Allegations Against Amazon
In its latest filing, the FTC claims that Amazon violated the FTC Act and the Restore Online Shoppers’ Confidence Act by intentionally deceiving users and making it complicated for them to cancel their Prime subscriptions. Amazon denies these allegations, stating that they are “false on the facts and the law.”
This is not the first time the FTC has clashed with Amazon under Khan’s leadership. The company recently agreed to a $30 million settlement related to privacy violations involving its Alexa and Ring devices. Prior to that, Amazon petitioned the FTC to keep Khan away from any decisions involving the company, claiming that she had already formed a biased opinion of its behavior.
Defying Critics
Despite facing criticism, Khan remains steadfast in her pursuit of holding Amazon accountable. The FTC asserts that she has no conflicts of interest that would require her recusal from Amazon cases. The agency views the tech companies’ calls for her recusal as attempts to intimidate a public servant whose duty is to protect Americans from unfair competition.
The Case’s Merit
Legal experts acknowledge the FTC’s strong argument in the Amazon Prime case. William Kovacic, a law professor at George Washington University and former FTC general counsel, believes that firms should provide accurate information about subscriptions and not create unnecessarily difficult processes for consumers to cancel. The key question will be whether the facts support the FTC’s theory of harm.
A Controversial Figure
Worries about Big Tech extend beyond party lines, with both Democrats and Republicans expressing concerns. Senator Josh Hawley penned a book titled “The Tyranny of Big Tech” in 2021. However, Khan has also faced criticism from Republicans, engaging in disputes with House Oversight Committee Chairman James Comer and Judiciary Committee leader Jim Jordan.
Comer launched an investigation into Khan, questioning whether she has turned the FTC into a “rogue agency.” Jordan accused Khan of taking political actions against Twitter following Elon Musk’s involvement. These actions by the House reflect broader conservative concerns about executive overreach and excessive regulation.
A Targeting of Successful Firms?
American Action Forum President Douglas Holtz-Eakin argues that Khan’s aggressive approach to running the FTC is indicative of her tendency to target successful companies solely based on their size. Critics worry that she rejects evidence-based policy-making and seeks to expand the regulatory state to go after every large company.
As the FTC’s battle with Amazon unfolds, the outcome will have significant implications for the future of antitrust enforcement and the regulation of Big Tech.
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