We Found Corporate America’s Biggest Enemy

In the world of big business, there is one woman who inspires great fear and awe. I wanted to have you on a podcast, and Apple asked us not to do it. The FTC is back in that role of torturing all the companies that America likes. The business community feels that the FTC is waging a war against us, and it's time to fight back. That woman is 34-year-old chair of the Federal Trade Commission, Lena Kahn. As FTC chair, Lena Kahn has become public enemy number one for the corporate establishment. But here's an interesting twist. She's also simultaneously managing to bring together an unlikely political alliance from both sides of the aisle. You are a brilliant woman with a tremendous ability to impact how consumers are going to interface with the digital world. One of the outstanding members of the Biden administration, and that is Lena Kahn. I look at Lena Kahn as one of the few people in the Biden administration that I actually think is doing a pretty good job. So who is Lena Kahn, and what is it about this young FTC chair that makes corporate America shake in their boots, all while uniting politicians like Matt Gaetz and Bernie Sanders? Many political bureaucrats who enter government service do so with the framework of wanting to be seen as fighting on partisan terms for their respective parties. They're often looking ahead to their next cushy job, rather than worrying about being strong public advocates in their current roles. Unlike public servants of the past four decades, Kahn enters with a very different framework. She's more interested in analyzing who has too much power and who doesn't have enough. She's not fighting a partisan game. Instead, she's focused on something that she's had her eyes on since she was a teenager, waging battles against powerful, predatory, multinational corporations that are exploiting working people. I was thinking back to 2004, young Lena Kahn writes about Starbucks at the age of 15. When did Lena Kahn get so animated around a vision of wanting to address economic justice, particularly corporate power in America? You know, from an early age, I was interested in being a journalist. And one reason why I wanted to be a journalist was because at their best, they hold power to account. After college, I ended up working for an organization where my job was instead to look at how different markets were structured. One of the first areas I did this work was in poultry farming. You have millions of consumers on one end, thousands of farmers on the other end, but they're connected just by a very small number of companies. And practically, that can mean that for a chicken farmer, their entire livelihood is just dependent on one company. And so that company has huge amounts of power over them. And so it was just a clear picture of how concentrated economic power, concentrated corporate power is ripe for abuse. In 2012, Kahn wrote a poignant article called Obama's Game of Chicken, in which she foretold the kind of public servant she would aspire to be, one who stood in sharp contrast to Obama's then-legal enforcers at the Department of Justice. In this article, Kahn was critical of Christine Varney, the head of the DOJ's Antitrust Division, for making compromises with power instead of taking them on in court. Varney's approach was simple, and it mirrored the cautious political approach taken by government regulators for decades. According to Varney, the government was unlikely to win against powerful poultry producers in court, and therefore she was unwilling to wage an uphill legal battle. And she had this to say about the apparently too-big-to-touch corporations gaining a stranglehold over our economy. In America, we reward success. And I applaud the companies that have been very successful in the last decade, particularly the technology companies. Like Clockwork, Varney left Washington to join Cravath, a fancy corporate law firm in Manhattan. She now represents wealthy clients who are facing scrutiny from Biden's antitrust enforcers. Corporations such as Paramount, Epic Games, Imperial Sugar Company, and Illumina, to name just a few. Ten years after writing her article, Lena Khan was chosen by Joe Biden to head up the FTC and has since been making very different judgments on behalf of the public interest. When we spot an illegal merger, we won't hesitate to act, because if we don't do our job, the American people will lose out. By going to bat for people against predatory corporations that are extorting America, Lena Khan is animating a form of populism that transcends party lines, one that is not Democrat versus Republican, but corporate monopolist versus the people. For most people, their day-to-day interaction with power is not necessarily with their government, but it's in our economy. And at a fundamental level, if we care about having real liberty for people, real democracy for people, we need to make sure that they're able to feel free, not just in our politics when they go to cast a vote, but also in our commercial sphere. Khan is putting economic justice at the center of the FTC's policymaking, returning the agency to its roots of fighting monopolies and standing up against big business interests. I mean, all the way back in 1890, you had lawmakers talking about how the railroad monopolies and the great trusts in the sugar industry, in the steel industry, were abusing their power in ways that was bad for workers, that was bad for farmers, and they said, we need these antitrust laws to protect Americans from concentrated economic power. There have been tools on the books for a long time that our government has not used aggressively and used assertively. This administration has made clear that we are breaking from that past and from that history, and we're going to use all of the tools and authorities that we have to do our job. And use all the tools they have in industry after industry. Instead of focusing on just one area of the economy to unrig, Khan has chosen to go to battle with big pharma, big oil, big ag, the military industrial complex, giant semiconductor chip companies, housing giants, big tech, credit card companies, mega grocery chains, auto dealers, private equity firms, and on and on and on. To understand the power of these enforcement actions, let's dig a little bit deeper. Take big pharma. The modern inhaler wasn't invented in the 1950s, but in America today, millions of Americans still pay hundreds of dollars just to get an inhaler that they rely on to be able to breathe. Our team took a closer look, and we realized that these inhaler companies, in some cases, had been claiming bogus patents for parts of the inhaler that really shouldn't have been patented. So we sent them letters challenging those patents, saying that those patents were unfairly blocking out competition, blocking out generic cheaper options. And in response, a whole set of companies ended up delisting their patents and announcing that starting in June, they're going to cap how much any American pays for an inhaler to $35. Pharma is hardly alone. From drug prices to junk fees, those unnecessary charges on ticket prices and airfares that seemingly come out of nowhere, Lina Khan has used her rulemaking authorities to save Americans money whenever and wherever she has the authority to do so. Junk fees cost Americans over $90 billion a year, money that corporations are extracting from Americans just because they can. She's even gone after those pesky subscriptions that often keep you paying long after you stop using a service. We've seen too many times companies make it so easy to sign up, but then when you try to cancel, you have to go in person, you have to make a phone call, but there's nobody there to pick up. And as a result, Americans end up paying tens of dollars or hundreds of dollars a month stuck in subscriptions that they no longer want. Another way Lina Khan is making her mark? She's using antitrust to protect workers. Earlier this year, Khan instituted a rule banning non-compete agreements and employee contracts, which could raise workers' wages by nearly $300 billion per year. Right now, workers are stuck in place because of these non-competes. And so even if they get a better job opportunity with higher wages, with better benefits, they can't actually switch jobs. And using her litigation power, she has sued to block what could be the largest supermarket merger in U.S. history, Kroger's $24.6 billion acquisition of Albertsons. The commission alleged that the deal would be bad for shoppers, but also would be bad for unionized workers who in the past had used the competition between Kroger and Albertsons to actually get more bargaining leverage when they were negotiating a contract. But perhaps her biggest claim to fame is her battle with big tech, a battle she's waged since law school, when she wrote a widely cited paper called Amazon's Antitrust Paradox. As the country's top antitrust enforcer, Khan has gone after Silicon Valley's biggest tech giants. The Federal Trade Commission and 17 states are suing Amazon, claiming it operates an illegal monopoly. Zuckerberg in court today for a hearing surrounding the FTC's antitrust suit against the company. OpenAI is facing a new complaint filed with the FTC today over the company's popular chat GPT product. There is enormous opportunity here for a vibrant market, but we also see risk. We see risk of consolidation. We see risk of monopolization. As her critics love to point out, not all of the legal battles Khan has waged have been successful. But unlike her predecessors, Khan hasn't taken a play-it-safe approach that worries simply about her record in court. It's about proving that there are people in government who have the courage to wage tough battles in ways that have not been seen in recent history. People all too often are being pitted against massive corporations that have a lot of power and that feel they can use that power to bully people, to coerce people, to steal from them. And the government's supposed to be on the side of the people and enforce the laws to protect them. Khan has been so steadfast in her approach to litigation that the FTC is now having a deterrent effect, which means that countless corporations are not even attempting to engage in mergers and acquisitions out of fear that their proposed combinations will be deemed illegal. What we hear from senior lawyers and corporate executives is that back in the day, if they were proposing a merger, they wouldn't really think about antitrust risk until the very end, if at all. But now antitrust is being discussed right at the beginning of when a deal is even being considered. And as a law enforcer, our goal has to be to deter illegal behavior to begin with. All of these actions have made Lena Khan a frequent target of the CEO class in America. Just take a look at the pages of The Wall Street Journal. In those op-ed pages, you'll find more than 100 articles attacking her in just the past few years. As of January, the journal had run an average of one piece every 10 days attacking her. Big business has been gunning for Lena to be fired, and they pounced quickly once Kamala Harris became the Democratic Party's presumptive nominee for president. I do think that Lena Khan is a person who is not helping America in her job and what she's doing. And so I would hope that Vice President Harris would replace her. But I will say Jonathan Cannon, the attorney general, he goes, Khan goes, these people go. A number of prominent Democrats have been lobbying Harris to drop people like Lena Khan. Do you think that it's going to happen? And would you lobby for that? Yeah, I would. You would? Yeah, I think she's a dope. Still, Khan remains undeterred. You've got a whole bunch of conservative actors who want to raise a fuss because, quite frankly, they seem to know that the things that you are doing impact bottom lines and affect their power. Can you be bullied? Absolutely not. This is a job that Congress has given us. And it's no surprise that when you try to enforce the anti-monopoly laws assertively and in a way that's faithful to what Congress told us to do, monopolies are going to fight back. Lena Khan is revamping antitrust and reminding the people who the FTC was created to fight for and against. She speaks softly while carrying a big stick. With her courage and dedication, Khan has put forth a model for how government officials should use their time and authority while they're serving in public office. I mean, the problems that Americans are facing in their day-to-day lives are so urgent, are so painful, and we really owe it to them to use everything we have to try to fight for them and protect them when the law is on their side.