Big Tech Should Officially Start Panicking
Biden’s appointment of two antitrust firebrands leaves little room for ambiguity
If you haven’t noticed by now, two major Biden administration appointments affecting antitrust policy are attracting extraordinary chatter across industries, experts, and media. The reason is vexing confusion as to whether President Biden is signaling that he intends to upend four decades of antitrust law — a thrust that, if it takes place, could shake up multiple concentrated industries, disrupt Big Tech, and reorder some of the economy. The answer is a definitive yes.
I’m referring to Biden’s appointment of two antitrust firebrands, both Columbia Law School professors: Tim Wu, author of The Curse of Bigness: Antitrust in the New Gilded Age, is joining the National Economic Council; and Lina Khan, author of a seminal 2017 article in the Yale Law Journal titled “Amazon’s Antitrust Paradox,” is expected to be nominated to the Federal Trade Commission.
To understand why their elevation is so consequential, travel back a decade to the New America Foundation, a Washington, D.C., think tank. At the time, Wu had just finished a fellowship there. Khan was a junior member of the Open Markets Program, a New America unit run by Barry Lynn, an intense personality for whom the word “rabble-rouser” was invented.
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I had an office down the hall, from which I observed Lynn forever prowling the corridors or boiling behind his desk, scheming anti-monopoly journalism to assign Khan or carry out himself. Khan churned out copy for Lynn; her stories had headlines like “The Rise of Big Chocolate,” “How Monsanto Outfoxed the Obama Administration,” and “Why Goldman Sachs Has No Business Owning a Coal Mine in Colombia.”
But what really animated Khan was Amazon. She thought the company encompassed a lot of the ills she had been researching with Lynn. By 2015, she had a job offer from the Wall Street Journal and admission to several Ivy League law schools. Khan was torn about what to do. She chose Yale but decided she could pursue her passion there: digging into Amazon in an unprecedented fashion. Researching the company and the field, Khan determined that antitrust law, as developed in the 1980s by Robert Bork and Milton Friedman, had veered wildly from its origins. When it came to Big Tech, and specifically companies like Amazon, their narrow-gauge philosophy was no longer relevant: For regulators policing industry in the first three quarters of the previous century, bigness and market concentration alone were often sufficient to warrant action.
As influenced by Bork and Friedman, the standard changed to focus more or less on a single metric: whether prices charged by a given company had gone up. But by that measure, Khan saw, Amazon was no problem to the market at all, even though it routinely worked both sides of the deal on its platform, selling third-party products and replicating those same products and selling them in competition with its clients. Khan’s resulting Yale Law Journal article, explaining her new theory of antitrust, made her an overnight legal sensation.
Meanwhile, her old boss Barry Lynn had been thrown out of New America. He had crossed swords with Google, a big donor to the think tank, and that made him persona non grata. But the drama around the kerfuffle played to Lynn’s activism, and he reestablished his program outside the think tank. The Open Markets Institute became perhaps the most influential anti-monopoly think tank in the capital. Wu, with his latest book, had cemented himself as a leading voice calling for a return to antitrust origins and a breakup of one or more of the Big Tech companies.
Today, Khan, Wu, and Lynn are more or less the Woodward and Bernstein of antitrust activism. In naming not one but two of them to his administration, Biden knows their way of thinking will dominate the policy discussion.
Both move from the bleachers, shouting at the refs, to front and center, deciding how things will go. And that is a far more hostile environment than any we’ve seen in recent history for Big Tech, which can expect to see more serious action around monopolization, anticompetitive behavior, and potentially even breakups in the near future.