New FTC boss attacked: Why Amazon fears this woman

The internet giant Amazon has attacked the new head of the FTC trade commission head-on. This is likely to be just the beginning of a major feud between the tech giants and the Biden government authorities.

It was not until the beginning of June that Lina Khan was surprisingly appointed head of the US Trade Commission FTC. In a 25-page motion, e-commerce giant Amazon accuses the 32-year-old of being out of place because she is biased. Khan should stay out of the investigation into Amazon’s competitive position and resign from her post due to bias. The FTC (Federal Trade Commission) is responsible for consumer protection and conducting competitive investigations.

Amazon calls for “impartial investigation”

To justify its claim, Amazon refers to Khan’s public remarks that Amazon has “violated antitrust law” and “should be broken up”. Amazon sees this as proof that Khan is not as impartial as their position requires.

In a statement to the US television broadcaster CNBC, Amazon spokesman Jack Evans emphasized: “Amazon should be examined just like all other large organizations. But even large companies have the right to an impartial investigation.” Both Khan’s scientific work and her public statements showed that she had already prejudiced Amazon.

Adviser to the House of Representatives

The stumbling block is a scientific article that Khan published in the Yale Law Journal in 2017 as a student at Columbia Law School. The title: “Amazon’s Antitrust Paradox”. In it, Khan argues that the popular cartel models failed in assessing tech giants like Amazon.

It was probably this article that Khan recommended for her position as advisor to the Justice Subcommittee of the House of Representatives on Antitrust, Commercial and Administrative Law, which dealt with the competitive situation in relation to the large Internet company Amazon, Alphabet , Facebook and Apple concerned.

Is this just the beginning?

The calculated attack by Amazon on Khan should only be a foretaste of the storm that will soon hit the authorities and politicians in Washington. Because with Joe Biden there is now a president in power in the USA who is pissed off by the market power of the big tech companies, which has grown ever more in recent years and who does not seem willing to accept it any longer.

His nomination of Khan as head of the FTC, but also of Timothy Wu as advisor to the “National Economic Council” of the White House, was seen by observers as a clear signal in this direction.

Biden is not afraid of confrontation

Timothy Wu, lecturer at Columbia Law School, had made a name for himself as an outspoken advocate of aggressive antitrust proceedings against the American tech giants with his book “The Curse of Bigness”. The “New York Times” therefore sees the Personnel Wu as evidence of the “confrontational approach” of the Biden government.

The fact that Biden does not avoid conflicts with the big tech companies was already shown by his sharp accusations against Amazon in April: The company’s tax payment ethics leave something to be desired, Amazon uses “various tax loopholes,” criticized the US President.

Attempts to appease Microsoft

Experts are convinced that US policy is likely to oppose this more in the future with Amazon, Facebook & Co. a limitation of market power, even break-ups are in the room.

No wonder that Microsoft – a company that has already been diligently gaining experience with antitrust proceedings in the USA and only just missed the breakup in the early 2000s – recently opened its new Windows 11 operating system for competitor apps and announced: “Die Welt needs a more open platform today. ” It remains to be seen whether that will be enough to appease the authorities in Washington.

New opportunities through “creative destruction”?

It is this “regulatory risk” that should not only limit the profits of the big tech companies in the future. The presumably more ruthless approach of the US authorities against the tech companies also poses a considerable risk for the major American stock market indices such as the Dow Jones Industrial and S&P 500, in which these companies have a large weight.

On the other hand, stricter regulation offers smaller companies the opportunity to react quickly and imaginatively to the upheavals in the tech industry. This can generate new business models and thus also new investment opportunities – in keeping with Schumpeter’s “creative destruction”.