Lina Khan Isn’t Worried About Going Too Far

The new FTC boss says corporations abuse their power. To fight them, she’s consolidating some of her own.

Photo: Dina Litovsky for New York Magazine
Photo: Dina Litovsky for New York Magazine

Lina Khan was an associate professor at Columbia Law, working remotely from Texas, when she found out that President Joe Biden wanted her on the Federal Trade Commission. She was 32, just a handful of years out of law school, and the prospect of being one of five commissioners on the panel was a coup. Then the record skipped. At some point after her confirmation hearing, Khan says, she was “pretty startled” to learn that the administration would tap her to chair the commission — a century-old agency with 1,100 employees, a $384 million budget, and, she’d argue, a set of priorities that went disastrously astray some 40 years ago.

“I think it’s fair to say that my tenure here represents change in a whole host of dimensions,” Khan told me. “And I think change can be hard.” Dressed in a dark-blue blazer, she was sitting in her office at FTC headquarters in Washington, a temporary space that overlooks a 12-foot statue of a muscle-bound behemoth restraining a raging stallion. Man Controlling Trade, it’s called. Khan, who is seven years younger than the certified D.C. wunderkind Pete Buttigieg, is now indisputably the most powerful figure in the anti-monopoly vanguard. She gives a clarifying voice to the idea that super-concentrated corporate power is a threat to ordinary Americans — not just to our economic well-being but to our freedoms.

It’s a throwback to the 1920s Progressive-era notion that a free people need fair markets. When we spoke in mid-October for a tightly scheduled 29 minutes and 37 seconds, Khan was at her most animated discussing those moments when Americans “lack choice and lack power” in nearly any act of commerce. “The chicken farmer that is subject to the whims of the massive chicken processor is going to face analogous contract terms to the author that is subject to a major bookseller,” she said. “The worker at the whims of his boss, and who is bound by a noncompete agreement so he can’t quit and go next door; or the small-business franchisee that’s at the whims of the big franchiser; or even the consumer that wants to switch internet providers, but there’s no other service in their neighborhood” — to Khan, these are all symptoms of markets that have been conquered by oligarchs.

Khan’s central argument is that none of this is inevitable; rather, it’s the product of legal and policy choices made since the Reagan era. By seeking to rewind those choices, she has made enemies out of all the companies that have gained the most from the present system — which is to say, the most formidable corporations in America, including Facebook, Alphabet, and Amazon. “This is a David-and-Goliath story,” says Barry Lynn, the executive director of the Open Markets Institute, who hired Khan for her first job in the field. “And she’s the perfect David.”

In 1903, Theodore Roosevelt created the Bureau of Corporations to ward off monopolies; a little more than a decade later, Woodrow Wilson signed its successor agency, the FTC, into existence as part of a reform push inspired by the breakup of Standard Oil. The commission played an essential role in keeping corporate power in check for decades. Then, in 1978, the Yale Law professor Robert Bork wrote The Antitrust Paradox. The book, to simplify a bit, argued that companies could get as big as they liked as long as people paid low prices — part of a standard that came to be known as “consumer welfare.” It redefined the field, and courts endorsed Bork’s views as settled law for decades.

Eleven years into the Bork era, Khan was born in London to parents with Pakistani roots. “Her family are very sophisticated people,” says Lynn. Khan’s father is a consultant who for a time was the CEO of a major Indian online-gaming company, and her mother has worked in the health-care industry. The family moved to Larchmont in 2000, and Khan graduated from Williams College magna cum laude. She landed in Washington, where Lynn hired her at his think tank to research structural market problems that spanned industries, from airlines to chicken farming to grain futures. Khan had a knack for making her findings accessible, and soon she was writing them up in publications like Washington Monthly, Slate, and Time, where one representative headline read, “Why So Little Candy Variety? Blame the Chocolate Oligopoly.”

Khan considered taking a reporting job at the Wall Street Journal, but, convinced that the hands-off interpretation of antitrust law was key to the consolidation she saw happening in industry after industry, she went to Yale Law School instead. In 2017, in her third year, she published a 96-page journal article with a Bork-tweaking title: “Amazon’s Antitrust Paradox.” It was a direct attack on the prevailing antitrust regime, which, with its focus on prices, was flummoxed by companies like Amazon and Facebook: How could they be harming consumers when they were known for driving costs down, if not providing services for free? Dissecting Amazon’s complex business model, Khan argued that its nearly monopolistic power resulted in all kinds of harm — to distributors, shippers, payment networks, small businesses, and competitors forced to use Amazon’s infrastructure. The paper was the first robust application of a contra-Bork legal framework to the digital age. As a bonus, it was a good read, relatively speaking, with lines like “It is as if Bezos charted the company’s growth by first drawing a map of antitrust laws, and then devising routes to smoothly bypass them.” If law-journal papers can be said to go viral, this one did. The New York Times called it “a runaway best-seller in the world of legal treatises,” whose “popularity has rocked the antitrust establishment, and is making an unlikely celebrity of Ms. Khan in the corridors of Washington.”

Newly famous-for-D.C., Khan took her arguments directly to her natural critics. On Fox News, she laid out a case for treating Amazon the way the country long ago decided to treat railroads: requiring that third-party sellers get equal access to its e-commerce platform. Wouldn’t that be a political decision? the host asked. “I think all decisions are political,” Khan shot back. At a University of Chicago event, the former Obama-administration economist Austan Goolsbee said that abandoning consumer welfare as a North Star was risky and could lead to uncharted territory. Khan observed that the standard does not exist in the text of the law itself. “How did we get it?” she asked. “We got it because judges and a certain set of scholars decided that the idea of ‘competition’ is really too vague.” As she saw things, it was Bork’s book and all that followed that led the economy into the wild, not the other way around.

After graduating from Yale, and now counting senators like Bernie Sanders and Elizabeth Warren among her admirers, Khan returned to Open Markets for a year and then joined the staff of FTC commissioner Rohit Chopra. She moved on to Capitol Hill — where she helped lead a House subcommittee investigation into the tech giants — and then Columbia. A month after Biden took office, with a vacancy at the FTC, Warren contributed an essay about Khan for Time’s “100 Next” list of emerging leaders. “As Google, Apple, Facebook and Amazon face growing scrutiny, we have a huge opportunity to make big, structural change by reviving anti-trust enforcement and fighting monopolies that threaten our economy, our society and our democracy,” Warren wrote. “I can’t wait to see how Lina will continue to shape that debate.” Biden nominated Khan the next month.

Tapping her as chair was a surprising shift for Biden, and he admitted as much in July as he signed an executive order on competition with Khan over his right shoulder. “I’m a proud capitalist. I spent most of my career representing the corporate state of Delaware,” Biden said. “I know America can’t succeed unless American business succeeds. But let me be very clear: Capitalism without competition isn’t capitalism; it’s exploitation.”

Amazon and Facebook greeted Khan’s swearing-in by firing off petitions saying she should recuse herself from any cases involving them because she’d arrived in office having already decided they’d broken the law. When I asked Khan what she made of this, she shrugged. “Yeah, I mean, look, it’s no secret that these companies have a lot on the line here,” she said. “They’re well resourced, and they’re going to marshal every argument that they have, meritorious or meritless.”

Four months into the job, Khan seems more concerned with winning over the FTC’s rank and file. Until recently, she was splitting her time between D.C. and Harlem, working occasionally out of the agency’s regional office in New York, and she still hasn’t met most of the Washington workforce. “In normal times, a chair would just have an ice-cream social and see everybody,” she said. Khan attempted an all-hands Zoom call for FTC employees, but with something like 900 people on the grid, it was, she admits, a bit weird. There have been grumbles that Khan is insular. She tapped three people who worked for her old boss Chopra for important roles: as her chief of staff and as heads of two of the FTC’s three formal bureaus. (Chopra is now running the Consumer Financial Protection Bureau.)

Khan also has to deal with her two Republican commissioners. One of them, Christine Wilson, who has extensive experience at the FTC, having previously worked in roles from law clerk to chief of staff, regularly needles Khan in public meetings about perceived policy failings and mistakes as an administrator. The two have never met in person.

The rash of changes Khan has already made — tossing an Obama-era statement limiting the scope of the “unfair practices” cases the agency can bring; naming herself or an appointee rather than an administrative judge the decision-maker in some procedures; reserving the right to go back and vet already consummated mergers — has coalesced into a narrative: that Khan is something of a consolidator of power herself, taking it away from minority commissioners and staff and rattling the corporate sector in the process. The two Republican members have called it “a disturbing trend of pulling the rug out from under honest businesses and the lawyers who advise them.” Senator Mike Lee, the top Republican on the Senate Antitrust Subcommittee, has called it a “progressive putsch.”

Khan’s allies would agree there’s been an ouster. “What we’ve done is we’ve restored the American tradition from 1776 to 1981,” says Lynn, referring to the year that Bork’s analysis went mainstream. “We’ve driven the radicals out of the temple.”

Khan told me she worries about the “existential stakes of underreaching” — of “neutering the tools” available to the agency, constantly disappointing both Democrats and Republicans in Congress, and having the public forget the FTC even exists. Going too far? Doing too much? “When identifying the top ten threats to this agency,” she said, “that’s not on the list.”

In addition to internal reforms, Khan will soon have to start making difficult decisions about headline cases, such as Amazon’s proposed purchase of MGM Studios for $8.45 billion. Approving the deal risks angering supporters who see her as an Amazon killer. If she fights the acquisition, she risks losing: Compared to Disney (which owns Marvel, Pixar, Star Wars, and other brands) and Netflix, Amazon is hardly a monopolist of streaming video. As a private citizen, Khan used to criticize regulators for being risk averse in bringing cases, arguing that they should pursue ones that might not succeed to show the public and Congress that the “law is broken.” But now she has the FTC’s limited resources to consider and must answer to a Congress with strong opinions on how she spends its money.

Those around Khan say she’s more important than any one case. To them, she’s a vehicle for the courage to stand up to the corporations that have been bullying Americans ever since regulators abdicated their power, and they hope others follow her lead. “It’s going to take a lot more than Lina,” says Matt Stoller, the author of Goliath: The 100-Year War Between Monopoly Power and Democracy (and a former colleague of Khan’s at Open Markets). “This is not a one-person job. It’s not a one-agency job. We are trying to undo 40 years of pro-concentration policy across the entire government. What I’m hoping happens with Lina is the FTC becomes a kind of intellectual and policy center for the government and spreads this movement across the other parts of the government and into the states.” He adds with a laugh, “And of course I’d like her to break up Facebook.”

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Lina Khan Isn’t Worried About Going Too Far