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    Explained | The significance of Lina Khan's appointment as FTC Chair

    Explained | The significance of Lina Khan's appointment as FTC Chair

    Explained | The significance of Lina Khan's appointment as FTC Chair
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    By Yashi Gupta   IST (Published)


    Appointing Lina Khan as the FTC Chair, the White House has sent a clear signal to the Big Techs: We are serious about antitrust enforcement and other measures to rein in Google, Apple, Facebook, and Amazon.

    Hours after the US Senate confirmed Lina Khan's appointment to the Federal Trade Commission (FTC), US President Joe Biden tapped her to lead the agency. Now, reports suggest she is already challenging the status quo.
    "Congress created the FTC to safeguard fair competition and protect consumers, workers, and honest businesses from unfair and deceptive practices," Khan said on Twitter on Tuesday after her appointment. "I look forward to upholding this mission with vigor and serving the American public," she added.
    The FTC has a broad consumer protection mission. It targets scams and other unfair practices in the industry that can harm consumers. It also peruses proposed corporate mergers and other business practices to judge whether they suppress competition.
    According to an Axios report, the White House took both the industry and even some DC insiders by surprise by elevating Khan to chair the agency.
    While US presidents can elevate FTC commissioners any time, they usually make their intentions clear in advance.
    "If you walk back through the modern or earlier history of the FTC, I can’t remember an instance where the White House has named an individual to be a commissioner, then once that person was confirmed by the Senate, designated that person to be the chair," William Kovaic, the former FTC Chairman told Axios.
    Who is Lina Khan?
    Lina Khan is a 32-year-old law professor at Columbia University. She teaches antitrust at the University and advocates updates to antitrust law to deal with digital-age problems.
    She is known for her argument that suggested Amazon’s retail business be separated from its selling platform.
    After joining FTC, she would be overseeing the agency's case on Facebook’s acquisition of WhatsApp and Instagram.
    She believes FTC’s current approach has done too little to restrain corporate dominance in the market. She has argued in favour of blocking mergers while attacking monopolistic practices.
    Several Republican candidates voted to confirm Khan's appointment as a Commissioner to send a message to the Big Techs, but they may not have done so, had they known she would be promoted to the role of Chair.
    Khan will replace acting Commissioner Rebecca Kelly Slaughter and become the youngest FTC Chair in history.
    What does her appointment mean?
    Appointing Khan as the Chair, the White House has sent a clear signal to the Big Techs: We are serious about antitrust enforcement and other measures to rein in Google, Apple, Facebook, and Amazon.
    Being the head, Khan can pursue aggressive enforcement of the US antitrust and consumer protection laws. She has already helped define the new ways to apply antitrust laws to Big Techs. But her roles were temporary before.
    Earlier she helped with the antitrust investigation into Amazon, Apple, Facebook, and Google, helping compile the report that found each company held a monopoly.
    Her report suggested reforms to reinvigorate competition in the digital sector, some of which informed recent proposals to clip Big Tech wings.
    Khan specifically worked on the Google section of the report, and now the company's status remains sued on antitrust grounds.
    Now Khan has the power to investigate and even sue such companies. The moves to rein in tech giants over their monopolistic or privacy practices are more likely to come from the FTC and the Department of Justice now, rather than from Congress (Last week, the US House of Representatives introduced four bills aimed at reining the power of Big Tech, with one of them encouraging break-up.).
    As Chair not only would she have the power to vote on consumer protection, but also on the competition. Meaning, she will liable for the answers to questions like whether companies have effectively secured consumers' data.
    The tech critics often praise Khan who wants FTC to move ahead from consumer welfare to the broader principles. FTC's consumer welfare point of view judges monopolistic behaviour by analysing whether consumer prices are rising.
    Khan would also have a say on whether to reopen the past cases on tech companies.
    Under Joe Biden, FTC has been a threat to the Big Techs. Under the leadership of Rebecca Kelly, FTC has enforced the existing rules and drafted new ones fairly quickly. While the previous heads focused on consumer protection issues, Khan may move to slaughter like Kelly.
    What does it mean for India?
    Khan has become FTC Chair at a time when India’s antitrust movement is gathering heat. India's watchdog is expediting a restarted probe into allegations of anti-competitive behaviour at Amazon and Flipkart.
    In January 2020, the Competition Commission of India (CCI) had initiated a probe into the two e-commerce giants. The basis of the probe was complaints alleging that platforms promoted select sellers on their platforms. The complaints also highlighted the issue of deep discounts that stifle competition.
    In 2018, the commerce ministry had barred Amazon and Flipkart from selling products from entities they partially or fully owned. Supporting the decision, Khan had said: “The idea is you can either run the marketplace, or sell your goods on the marketplace, but not both.”
    The rule, according to her, solved the problem that Amazon’s merchants usually face: “Amazon spots the best-selling product on its platform and produces an Amazon-branded version, demoting them in search listings and eating their sales…”
    Now that her appointment is confirmed, experts say India's watchdog will monitor Khan's policies of dealing with Big Techs.
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