Across 96 pages of the Yale Law Journal in 2017, Lina Khan set out why she believed the US’s policing of big business was failing. The paper – which targeted Amazon – shook the Silicon Valley establishment and catapulted Khan into the heart of a battle over America’s business orthodoxy and, ultimately, into a role in which she could overhaul it.
Khan’s appointment to lead the Federal Trade Commission (FTC) just four years later angered big tech, but it has become increasingly clear that Khan, and the Biden administration have an even bigger agenda: resetting the federal government’s decades-old stance on competition in a manner unseen in decades.
Charged with enforcing antitrust law and promoting consumer protection, the FTC is nominally the regulator charged with stopping deals that will harm consumers. But under successive administrations – Republican and Democratic – some critics charge the FTC stood by as industry after industry consolidated power in the hands of fewer and fewer companies.
All that changed under Joe Biden, who has consistently attacked the monopolization of US business. Khan is his most high-profile warrior. She has redefined the battlefield in such a sweeping manner that some argue there is no going back no matter who wins 2024’s election. But tough talk is just that – talk. Drawing a line under an era of light-touch antitrust enforcement has proven easier said than done.
The hands of the few
Last week the FTC sued to block Kroger’s $24.6bn takeover of rival grocer Albertsons. If approved, the agency warned, the U’s largest-ever supermarket merger would raise prices for millions of shoppers.
Kroger and Albertsons would collectively have over 5,000 stores and 700,000 employees across 48 states, according to the FTC, which claimed an executive involved in the deal had conceded it was “basically creating a monopoly”.
The grocery market is a classic example of consolidation in the US. In a nation of 331 million people, just six companies control half the market.
And the sector’s concentration is far from unique. Two-thirds of the US aviation market is held by four airlines. An estimated 85% of steer and heifer cattle purchases are handled by four meatpacking firms. More than half the US chocolate market is controlled by two confectionary giants.
Right across the world’s largest economy, wealth, power and control is “increasingly concentrated in the hands of the few”, according to Open Markets, an institute where Khan, 35, cut her teeth as an advocate for greater competition.
Reversing that trend was never going to be easy.
‘The cop is back on the beat’
Wall Street loves a merger – not least for the banking fees – but the US government now looms over those deals in a way that would have seemed unimaginable under the Trump, Obama, Bush or Clinton administrations. In boardrooms, administration officials believe the mere threat of an FTC investigation now looms large. “The cop is back on the beat,” claimed an FTC source. “That in itself is deterring a lot of bad deals that just never get proposed.”
A radical reset of antitrust enforcement, however, also requires winning cases in court.
The FTC suffered two significant legal blows last year, with a judge denying its request to stop Meta Platforms from buying virtual reality startup Within Unlimited in the spring, before another judge allowed Microsoft to complete its blockbuster $69bn takeover of Activision Blizzard in the summer. The agency has appealed the latter decision.
While the FTC declined a request to interview Khan, she and her allies are quick to highlight successful challenges on her watch. Two years ago, for example, Nvidia abandoned its $40bn takeover of the chip designer Arm Holdings following an FTC lawsuit.
“Not only has Nvidia remained the leading AI chipmaker in the AI chip arms race, with a surging stock valuation,” Khan told the RemedyFest conference last week, “but Arm ended up going public, and has a forward earnings multiple that is more than double Nvidia’s.”
Khan is “probably the best leader the FTC’s ever had”, argued Matt Stoller, director of research at the American Economic Liberties Project, and a former colleague. “That doesn’t mean she will succeed, or fail. But she’s really stretching all of their resources and trying to use the authority they’ve been granted to fulfill the mission they’ve been charged with.”
Khan faces her own internal battles too. Change is hard, but Khan has also faced accusations of poor management. Inside the agency, satisfaction among the rank and file dropped from 82% in 2020 to 60% in 2021, according to an annual workplace survey. This has since recovered to 68%.
Workers “didn’t react well to being told they were incompetent and bad at their jobs”, according to one former senior official. “Sending people out to litigate cases they don’t believe in has a negative impact on morale.”
Those around Khan see things differently. “She’s never called staff incompetent,” insisted the FTC source, claiming the agency’s economics and competition bureaus had unanimously supported its pursuit of Microsoft and Activision.
“It’s true that she’s been critical of the prior political leadership of the agency, because she believes it was not doing enough to prevent consolidation,” the FTC source said. “And the truth is that many in the staff agreed with her.”
With Washington plagued by partisan warring, Khan has also become the subject of intense Republican criticism. Jim Jordan, the judiciary committee’s chairman, recently released a report claiming the FTC was “beset by dysfunction and chaos stemming from the poor leadership and ideological bullying of its Chair and her leadership staff”.
But frustration with corporate America’s most powerful forces crosses party lines. She is “doing a pretty good job”, Republican congressman JD Vance told RemedyFest. “You are a brilliant woman,” Matt Gaetz, the Republican congressman, told Khan during a congressional hearing last July.
‘What’s going on?’
Khan’s antitrust origin story starts in 2011 when, fresh out of Williams College, she applied unsuccessfully for two jobs at New America, an influential Washington thinktank. Her name was passed to Barry Lynn.
Lynn, an antitrust scholar building a program focused on monopolization, had secured funding for one full-time staffer for his Open Markets program. He was seeking someone “plain smart”, without “any theories, any twists, any alterations by any specialized academy”.
Khan, he concluded, was that person – despite her limited interest in the subject. “I don’t think she had ever thought much about antitrust, perhaps after seventh grade civics class,” Lynn recalled in an interview. The focus of her first assignment? Amazon.
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She produced a “long, very rich report” on the book market, and how it was turned on its head by the tech giant, which was ultimately never published. “The audience just wasn’t ready yet for hearing that Amazon was a threat,” said Lynn.
Her focus turned elsewhere, to chicken farming, airlines and even candy: all around, Khan found what she deemed to be evidence of insufficient regulation and antitrust enforcement. The government, in her view, was often missing in action.
According to its critics, the antitrust framework used by successive administrations since Reagan placed too much emphasis on short-term price effects when considering competition issues. Such a narrow focus, they argued, failed to miss the realities of modern-day markets.
“Economists had these models, and that’s how we viewed the world,” said Stoller. “Lina just talked to business people and was like: ‘What’s going on? How does this market actually work?’ What she found is something that is not in the models, which is power.”
A few years later, studying at Yale Law School, Khan turned her focus back to Amazon. This titan’s structure and conduct across myriad industries raised “anticompetitive concerns – yet it has escaped antitrust scrutiny”. she wrote in the Yale Law Journal.
In legal circles, the note went viral. Its author was profiled in the the New York Times, and became a leading voice in the campaign for a fundamental shift in how government measures market power, and tackles monopolistic activity.
“Much of the interest in Lina’s personal story must be owing to her relative youth, and thus the desire to conscript her into some sort of David v Goliath framing: the young regulator against the big monopolies,” said David Singh Grewal, her professor at Yale.
This framing, he continued, “does no justice either to Lina’s own academic analyses, or to the complexity of the regulatory problems that she now regularly engages”.
‘No going back’
America has “a major problem”, Biden declared a few months into his presidency: a dwindling collection of powerful corporations were, in his view, holding back its economy. “Rather than competing for consumers, they are consuming their competitors.”
The president, flanked by his top economic officials in the state dining room of the White House, hailed a new dawn. “No more tolerance for abusive actions by monopolies,” he said. “No more bad mergers that lead to mass layoffs, higher prices, fewer options for workers and consumers alike.”
Khan’s appointment as FTC chair was widely seen as a key pillar of this new approach. Another was Jonathan Kanter’s appointment as assistant attorney general at the Department of Justice, which just this month halted a $3.8bn merger between JetBlue Airways and Spirit Airlines.
The federal government has “innumerable tools” to promote competition, Jon Donenberg, deputy director of the White House National Economic Council, told the Guardian. “But what we have seen in recent generations is a real crawl-back from that forward-leaning perspective.”
Americans expect the government to “set the rules of the road for market capitalism to work effectively”, Donenberg continued. “The president has been very clear that competition promotion is critical across every sector of the economy.”
Those leading the FTC since 2021 have tried to confine its former playbook to history. Attention is now shifting to the future.
Key figures in Khan’s orbit are confident the US government’s modified approach to antitrust enforcement is here to stay – regardless of who comes to sit in the White House, or chair the FTC, in future years.
The previous orthodoxy has been shattered, according to Lynn, her former boss. “There’s something the other side can never put back together again,” he suggested, the belief “that we had developed a scientific understanding of competition, that there were natural processes at work here, that scientists could study and teach us how to regulate.”
Even so, with a presidential election looming, the FTC case most closely associated with Khan – its lawsuit against Amazon, filed in September, accusing the group of using anti-competitive and unfair strategies to maintain monopoly power – may well come to a head under a different leader. A trial has been set for October 2026.
“If you look at the history of America, it’s been a history of a struggle between monopolies and democracy,” said David Cicilline, a former Democratic congressman who chaired the House Judiciary committee’s antitrust panel.
Economic and political power so often go hand in hand, added Cicilline, who worked with Khan on the subcommittee’s investigation into big tech in 2019 and 2020, “so this is a battle for the country”.
Khan smiled when asked last month what a second Trump presidency would mean. “We obviously don’t know what’s going to happen in November,” she told the DCN: Next Summit. “But I think as a general matter, one of the most fascinating aspects of the anti-monopoly work is that there is strong bipartisan concern here.”
There is concern, Khan observed, on both sides of the aisle. “No matter who wins in November,” she believes “the commitment to strong, robust anti-monopoly work will last beyond my time at the agency.”
Khan “knows what she’s up against”, said Cicilline. “She’s going to prevail. She’s making the case. There’s no going back.”