“There’s a growing recognition that the way our economy has been structured has not always been to serve people,” Khan went on. “Frankly, I think this is a generational issue as well.” She noted that coming of age during the financial crisis had helped people understand that the way the economy functions is not just the result of metaphysical forces. “It’s very concrete policy and legal choices that are made, that determine these outcomes,” she said. “This is a really historic moment, and we’re trying to do everything we can to meet it.”
Amazon taught a generation of consumers that they could order anything online, from packs of mints to swimming pools, and expect it to be delivered almost overnight. According to some estimates, the company controls close to fifty per cent of all e-commerce retail sales in the U.S. and occupies roughly two hundred and twenty-eight million square feet of warehouse space. It makes movies and publishes books; delivers groceries; provides home-security systems and the cloud-computing services that many other companies rely on. Amazon’s founder, Jeff Bezos, wants to colonize the moon. During the Presidency of Barack Obama, Amazon’s relentless expansion was largely encouraged by the government. The country was emerging from a devastating recession, and Obama saw entrepreneurs like Bezos as sources of innovation and jobs. In 2013, in a speech given at an Amazon warehouse in Chattanooga, Tennessee, Obama described the company’s role in bolstering the financial security of the middle class and creating stable, well-paying work. He spoke with near-awe of how, during the previous Christmas rush, Amazon had sold more than three hundred items per second. Obama was also close with Eric Schmidt, the former executive chairman of Alphabet, Google’s parent company. An analysis by the Intercept found that employees and lobbyists from Alphabet visited the White House more than those from any other company, and White House staff turned to Google technologists to troubleshoot the Affordable Care Act Web site and other projects. Between 2010 and 2016, Amazon, Google, and other tech giants bought up hundreds of competitors, and the government, for the most part, did not object. The analysis also found that nearly two hundred and fifty people moved between government positions and companies controlled by Schmidt, law and lobbying firms that did work for Alphabet, or Alphabet itself. When Obama left office, many of his top aides took jobs at tech companies: Jay Carney, Obama’s former press secretary, joined Amazon; David Plouffe, his campaign manager, and Tony West, a high-ranking official at the Department of Justice, joined Uber; and Lisa Jackson, the former head of the Environmental Protection Agency, went to Apple.
The ascent of Donald Trump spurred activists across the political spectrum to become interested in the new power of tech companies, upending many traditional partisan differences. The role that Facebook played in the 2016 election, and the enormous influence that the company had over the information that people were seeing, was an electrifying moment. In fact, many of the major tech companies were accused of playing a role in the conditions that led voters to choose Trump and his populist message: Uber and Lyft, with their gig-economy jobs, were blamed for undermining labor unions and the middle class; Amazon had helped drive Main Street businesses into bankruptcy; Facebook was the site of Russian disinformation campaigns and a platform of choice for figures from the far right; Apple made most of its luxury devices in factories in China, reaping enormous profits while creating relatively few jobs in the U.S.; Google, through its subsidiary YouTube, hosted hate speech.
As a result, antitrust policy, especially as it pertains to big technology firms, has emerged as one of the starkest differences between the Biden Presidency and the Obama one. Stacy Mitchell, a co-director of the Institute for Local Self-Reliance, an anti-monopoly think tank, described the contrast as “night and day.” Obama’s politics were “very much in the center of the road, in terms of the dominant thought of the last several decades,” Mitchell told me. She noted that evidence of this world view could be seen early in Obama’s tenure, when his Administration declined to break up the big banks that had helped cause the 2008 financial crisis, and, instead, allowed them to become even larger and more powerful, while millions of people lost their homes to foreclosure. “Because of his identity as someone who was very progressive on a lot of other issues, I don’t think people saw that very clearly,” she said.
Through a series of appointments to regulatory and legal positions, the Biden Administration has indicated that it wants to reshape the role that major technology companies play in the economy and in our lives. On March 5th, Biden named Tim Wu, a Columbia Law School professor and an anti-monopoly advocate who has argued that Facebook should be broken up, to the newly created position of head of competition policy at the National Economic Council, which advises the President on economic-policy matters. On March 22nd, Biden nominated Khan to her current role. And, in July, he selected Jonathan Kanter to head the antitrust division of the Department of Justice. Kanter left the law firm Paul, Weiss in 2020 because his work representing companies making antitrust claims against Big Tech firms posed a conflict for the firm’s work for Apple, among others. Wu, Khan, Kanter, and a handful of other anti-monopoly advocates have been referred to as members of a “New Brandeis movement,” after the Supreme Court Justice Louis Brandeis, whose decisions limited the power of big business. Because of Khan’s youth, she has also been called the leader of the “hipster antitrust” faction, but this doesn’t capture the seriousness of her intentions. On August 19th, she re-filed an aggressive antitrust complaint that the F.T.C. had initiated in 2020, seeking to break up Facebook. In September, the agency published a report analyzing hundreds of acquisitions made by the biggest tech companies which were never submitted for government review. Although the report didn’t call for any specific action, it was a sign that Khan intends to look far deeper into Big Tech’s business than her predecessors did.
The F.T.C.’s headquarters, in Washington, D.C., occupies a limestone building from 1938 whose hulking proportions were meant to convey the steadiness of the federal government. The lobby is lined with black-and-white portraits of former F.T.C. chairmen and commissioners, almost all depicting white men. The agency has been under a work-from-home order since March, 2020, but Khan goes in whenever she can. (She lives in New York City, where her husband, Shah Ali, a cardiologist, works.) On a recent afternoon, I visited her in her third-floor office, where she was preparing for a meeting with members of a foreign law-enforcement agency. “Coming in, I was aware that this is potentially a historic moment,” she said. “If there are ventilator shortages after a merger we approved—these are all problems tied up in policy decisions.” When I asked when she first became aware of the concept of injustice, she said, “Most kids are aware of bullies, and of who has power and who doesn’t have power.”
Khan, who has dark eyes, angular features, and dark-brown hair that’s often tied in a loose bun, was born in London to parents from Pakistan. When she was eleven, the family moved to the U.S., where her father was a management consultant and her mother worked at Thomson Reuters. They settled in Mamaroneck, a suburb of New York City, where Khan and her two brothers attended public school.
After working at Open Markets for three years, Khan applied to law school and to several journalism jobs. She was accepted at Yale, and the Wall Street Journal offered her a position as a reporter covering commodities, in part because editors there had seen work she had published for Open Markets on the manipulation of commodities markets by firms such as Goldman Sachs. “It was a real ‘choose the path’ moment,” Khan told me. She chose Yale, which has been home to some of the most prominent antitrust legal scholars in the country, albeit ones who subscribe to a view that Khan finds outdated.
In his compact yet far-reaching book “The Curse of Bigness: Antitrust in the New Gilded Age,” Wu traces the history of the idea that the government should restrain companies that become extremely powerful. He describes the more than two thousand manufacturing mergers that occurred between 1895 and 1904 as a “monopolization movement,” when business moguls argued openly that too much competition among companies was bad for the country. By the early twentieth century, most major industries were controlled, or soon would be, by one giant firm. These conglomerates were called trusts, for the complicated legal structures that sometimes obscured their ownership. Among the most famous were those operated by John D. Rockefeller, whose Standard Oil came to own more than ninety per cent of the domestic oil-refining market, and by John Pierpont Morgan, who controlled an empire of steel manufacturing, railroads, shipping, and communications networks. The first antitrust law, the Sherman Act, passed in 1890, outlawed collusion or mergers among businesses that would lead to control of a particular market. The intention was to protect fair competition, but its terms were vague, and the new law was not strongly enforced until at least a decade later.
Louis Brandeis, who was born and raised in Louisville, Kentucky, graduated from Harvard Law School in 1877 and practiced law in St. Louis and Boston. He believed that, when individuals or corporations amassed too much economic power, they could exert pressure on the political system to favor their interests, undermining democracy. He worked on cases that fought Morgan’s railroad monopoly and defended labor laws. In 1901, President Theodore Roosevelt began a campaign to break up the trusts, filing lawsuits seeking to dismantle Standard Oil and Morgan’s railroad conglomerate, the Northern Securities Company. He initiated lawsuits against more than forty major corporations during his tenure, while expanding the federal government’s ability to investigate private enterprise. Roosevelt’s successor, Woodrow Wilson, appointed Brandeis to the Supreme Court in 1916.
Brandeis helped popularize the belief that the government had a duty to prevent any single entity from becoming too dominant, and thus to insure competitive markets. This idea influenced public policy for decades. “Antitrust through the nineteen-seventies was Brandeisian,” Lynn said. “Anti-monopolism is the extension of the basic concept of checks and balances into the political economy.” In the mid-seventies, a group of economists and legal scholars with ties to the University of Chicago and the economists Gary S. Becker and Milton Friedman began to argue that markets could regulate themselves, providing a check against government overreach and, potentially, against totalitarianism. In 1978, the jurist Robert Bork published “The Antitrust Paradox,” which applied the Chicago School’s arguments to competition policy. Bork wrote that antitrust law was not intended to maintain fairness in an abstract sense; harm to consumers was the only metric that mattered. If the price that people were paying for a product did not rise dramatically, Bork argued, then there was no antitrust violation, regardless of a company’s size or market share. This came to be known as the consumer-welfare standard.
During the Reagan Presidency, the Chicago School’s theories took over mainstream economics. Lynn described this shift as “the most radical change in thinking about power in the United States since the country’s founding.”
“Once the enforcement of our monopoly laws was weakened, you saw explosive growth of these dominant monopolies,” Stoller, of the Economic Liberties Project, told me. “These are creatures of law and policy.” As an illustration, he pointed to the growth of Walmart, which in 1970 became a publicly traded company and had approximately forty-four million dollars in annual sales; in 1980, it reached more than a billion dollars. By 2010, the company was reporting annual sales of four hundred billion dollars.
“I went into law school knowing that we were at this moment where we needed to rehabilitate our antitrust laws,” Khan said. The main antitrust course at Yale was taught by George L. Priest, who had worked as a consultant for Microsoft in the early two-thousands, after the Justice Department filed an anti-competitive-behavior suit against the company. Priest was a friend of Bork’s, and Bork had been a professor at Yale’s law school when President Ronald Reagan nominated him, in 1987, to the Supreme Court. (He was rejected by the Senate after a bitter nomination battle.) Priest encouraged his students to read “The Antitrust Paradox” before the class started.
Benjamin Woodring, who worked with Khan on the Yale Journal on Regulation, said that she seemed more sophisticated than the typical law student. “She understood the political dimension of regulation and the lawmaking process,” Woodring told me. “It’s so easy for law students, especially relatively green ones coming straight from college, to just treat the study of law as this disembodied language in a vacuum. But, in reality, especially with things like antitrust and civil rights, it is very much a political struggle, a complicated journey that involves all three branches. She was comfortable with the nuts and bolts of how that process worked.”
In early 2016, when Khan was in her second year, she was invited, along with Lynn, Kanter, and Teddy Downey, the executive editor of the Capitol Forum, which researches antitrust issues, to dinner with Senator Elizabeth Warren in her Senate office. Warren, who had previously taught at Harvard Law School, where she studied the erosion of the financial security of the middle class, was trying to better understand the relationship of monopoly to inequality. Lynn recalls that, at dinner, Warren’s eyes gleamed as she listened to them talk about the threat that economic concentration posed to a free and equal society. “Having had dozens of these kinds of conversations with experts and policymakers all around the world, this was one of just a few where you start to talk to someone and they get it immediately,” Lynn said. Several months later, at an event hosted by Open Markets, Warren gave a speech on the subject of competition in the U.S. economy. Warren was known as a critic of Wall Street, and as the creator of the Consumer Financial Protection Bureau; the speech announced that she planned to target the major tech companies in a similar way. “Google, Apple, and Amazon have created disruptive technologies that changed the world, and every day they deliver enormous value,” she said. “They deserve to be highly profitable and highly successful. But the opportunity to compete must remain open for new entrants and smaller competitors who want their chance to change the world.” It was the first time that such a high-profile political figure had publicly embraced the ideas that Khan, Lynn, and other activists were advocating.