US Federal Trade Commission (FTC) Chairwoman Lina Khan isn’t mincing words in her crusade against big tech companies, this week expressing her anger at their even bigger AI goals using a mafia metaphor. Speaking at StrictlyVC TechCrunch conference On Tuesday in Washington, D.C., Hahn said the number of cases brought by the FTC is not as important as the type of cases.
“It was important to me to make sure that we were really looking at where we see the most harm,” she explained. “Where do we see players who systematically engage in such illegal behavior? Being able to go after the ‘mob boss’ will be more effective than going after the henchman below.”
Khan has made a splash since President Joe Biden named him FTC chairman in 2021, recently banning noncompete agreements for most employees and attempting to block numerous blockbuster mergers and acquisitions.
Earlier this year, she stalled the biggest fashion deal in history: Coach’s $8.5 billion acquisition of Michael Kors. The trainer’s parent brand Tapestry was in talks to buy Capri Holdings, which owns brands including Michael Kors, Versace and Jimmy Choo, before the Federal Trade Commission filed a lawsuit claiming the acquisition would fail.”direct personal competition” But big tech has always been Khan’s focus when it comes to antitrust actions.
Last year, the Federal Trade Commission sued Amazon. landmark lawsuit accusing the retail giant of using illegal methods to maintain its dominance. Also that year, the Federal Trade Commission had hoped to invalidate Microsoft’s roughly $70 billion purchase of gaming giant Activision Blizzard, but was rejected by U.S. District Judge Jacqueline Scott Corley, who said the FTC had not proven the deal would harm competition.
More recently, Khan and the Federal Trade Commission addressed towards AI, filing multiple lawsuits against major tech companies headlined by their recent investigation into Microsoft’s $10 billion investment and ongoing relationship with OpenAI, the $80 billion startup behind ChatGPT. In January, Khan said she feared the big tech giant could “exert undue influence or gain privileged access in ways that could undermine fair competition” in the AI arms race.
Kahn’s focus on antitrust cases has angered her critics and some investors: Yale professor Jeffrey Sonnenfeld called her a “competitive cop” and CNBC’s Jim Cramer said she would be a “competitive cop.”one-woman rescue team for your portfolio“, but she doesn’t back down.
At TechCrunch’s StrictlyVC conference this week, Khan said coddling companies seen as “national champions” is the wrong way to go.
“We’ve seen that some of the most significant disruptive innovations have historically come from startups, entrepreneurs and small people who are able to just look at things differently—see opportunities in the market and really make breakthroughs in ways that cut out the middlemen between the big guys or really provide them with important competitive deterrents,” she said.
The FTC chair cited key moments in history when she believes antitrust laws increased competition and led to innovation, including the Eisenhower administration’s 1956 antitrust suit against AT&T’s Bell Labs. Bell Labs was forced to license all of its existing telecommunications patents royalty-free after establishing a monopoly in the market, a move that markedly increased innovation in subsequent years, according to numerous studies.
“We must remember these lessons of history as we choose our path again,” Khan said. “We just need to be very careful about these arguments from national champions and really believe in open, fair and competitive markets as what will drive innovation.”