Breathing Life Back Into Antitrust

Khan has faced widespread opposition from Silicon Valley for her lawsuits against some of the industry’s biggest companies, like Meta, Microsoft, and Amazon.

Since Khan took the reins of the FTC in 2021, she has launched an aggressive crackdown on corporate power, bringing antitrust cases against major powers — from Big Tech to Big Pharma — a stunning turnaround after decades of weak enforcement by the agency.

Before Biden nominated Khan in March 2021, she was a legal scholar who had built a reputation as a critic of Amazon and Big Tech’s growing monopoly power. Under her leadership, the FTC has sued Amazon over anticompetitive conduct, battled Meta’s massive social media acquisitions, and has hinted at coming enforcement of monopolies in cloud computing, which may have contributed to last week’s global Microsoft outage.

Khan’s vision has not been limited to Big Tech.

Over the last three years, the FTC has taken on the pharmaceutical industry’s “patent thickets,” a strategy to hike up drug prices; banned noncompete agreements for workers (a move that just this week survived a major legal challenge); and has raked in hundreds of millions in settlement payments for consumers.

“This crew is trying to breathe life back into antitrust enforcement,” said Hal Singer, an expert in antitrust, consumer protection, and regulation, referring to Khan and her allies in Washington.

For major companies that are well accustomed to past FTC chairs who took a more lukewarm approach, and who themselves had corporate law backgrounds, Khan has proved a threat — and become a target.

The lobbying group NetChoice, which is funded by Big Tech, has railed against Khan, calling her actions “overreaches of power.” The business press, most notably the Wall Street Journal, has published an endless series of op-eds pillorying her tenure.

Khan has also called for increased enforcement of cryptocurrency and highlighted widespread fraud in the industry. “In 2021, consumers have reported losing over $1 billion in crypto to scams,” Khan posted on Twitter/X.

Her position on crypto could be a particular concern to Hoffman, who is a longtime supporter of crypto and was an early investor in the cryptocurrency trading platform Coinbase. While the FTC hasn’t gone after Coinbase, the Securities and Exchange Commission (SEC) sued Coinbase for allegedly facilitating the trade of tokens without registering them as securities, which the agency considered to be investments like stocks or bonds.

The Commodity Futures Trading Commission also issued a $6.5 million fine against Coinbase for falsely reporting information.

Top Silicon Valley investors have also expressed their opposition to the Biden appointee Gary Gensler, chair of the SEC, for his tough regulation of crypto.

In a statement provided to CNN, the FTC said, “Chair Khan is honored to work in this administration where she has worked to protect consumers, workers, and entrepreneurs from corporate abuses.”

Hoffman’s Board Positions

Hoffman has a history of supporting conservative Democratic interests. In 2022, his political action committee Mainstream Democrats spent more than $750,000 supporting Texas Rep. Henry Cuellar, an antiabortion Democrat, against the progressive challenger Jessica Cisneros. Mainstream Democrats also spent at least $700,000 on attack ads against progressive contender Jamie McLeod-Skinner in Oregon. Her opponent, incumbent former representative Kurt Schrader, who has received donations from Big Pharma, voted to kill a bill that would allow the government to negotiate prescription drug prices.

Hoffman sits on the board of directors for Aurora, a self-driving car company that is partially owned by Amazon. Khan is suing Amazon for “illegally maintaining monopoly power” and blocking competition.

Hoffman also sits on the board of directors for Microsoft. Khan’s agency sued to stop Microsoft from merging with Activision Blizzard, a video game developer that created World of Warcraft, Call of Duty, and other popular games.

Hoffman also served in several roles at PayPal, including on the board of directors, as chief operating officer, and as executive vice president. PayPal recently faced a class-action antitrust lawsuit, alleging that the platform unfairly stifled competition against other e-commerce platforms like Stripe and Shopify.

Hoffman also served on the board of directors of OpenAI, the company behind ChatGPT, stepping down after cofounding rival company Inflection AI. The FTC investigated OpenAI last year over concerns that the chatbot had made false and disparaging statements about people and the company had not properly safeguarded people’s data.

Hoffman is just one of many tech billionaires, including Sheryl Sandberg and Melinda Gates, who are now lining up behind Harris, the Democratic Party’s presumptive nominee. Another investor, former Facebook executive Chris Kelly, believed that a Harris administration would be an improvement compared to Biden on tech by bringing in different regulators.

Circle of Friends

Throughout her political career, Harris has been largely noncommittal on antitrust matters.

During her 2010 attorney general campaign, she spoke with top Google executives at their headquarters. When asked about the subject, she encouraged the government not to “stand in the way of business growth and development,” saying, “Bad businesses are not good for good businesses.”

Harris referred to Big Tech companies as “family” in the same interview, and told donors during this campaign that she was a “capitalist.”

Almost a decade later, she refused to answer directly when asked whether Big Tech companies like Amazon and Google should be broken up, though she later said she would consider breaking up Facebook.

Once in office, she took a firmer stand on health care consolidation and the pharmaceutical industry than on the tech companies amassing power in Silicon Valley.

However, she sued eBay for an illegal agreement it had with Intuit not to poach each other’s employees. She also pushed companies like Google, Facebook, and Microsoft to remove nonconsensual intimate photos and videos posted on these companies’ platforms.

As vice president, Harris has for the most part maintained a low profile on tech and big business, aside from grilling Meta chairman Mark Zuckerberg on Facebook’s privacy practices, backing unionization efforts at Google, and promoting Biden’s efforts to ban junk fees and noncompete agreements.

But at the same time, several of Harris’s former aides have quietly gone on to work for some of the country’s biggest companies like Exxon, Airbnb, and Starbucks. A former senior counsel for Harris now lobbies for Amazon, opposing the FTC’s “click to cancel” rule that would make it easier for consumers to cancel their digital subscriptions and memberships.

While economics commentator Jim Cramer recently claimed that Harris would fire Khan as president, antitrust-focused economist Singer isn’t so sure, saying such a move would be “a blatant display of corporatism.”

“Kamala would understand the blowback that would entail,” Singer said. “There are more subtle ways that you can achieve these pro-monopoly or corporatist ends besides toppling Lina.”