US President Joe Biden speaks during International Women’s Day in the East Room of the White House in Washington, DC, on March 8, 2021.
Mandel Ngan | AFP | Getty Images
Almost two months after his presidency, it is finally becoming clear how Joe Biden plans to approach the technology sector. And it looks very different from the approach under the Obama administration.
The choice of two great critics of the big technology companies, Lina Khan and Tim Wu, for important management positions seems to signal that Biden is serious about the analysis of giants like Amazon, Apple, Facebook and Google. The last two of these companies already face federal antitrust lawsuits filed during the previous administration.
Khan’s alleged choice of Biden as a candidate for the Federal Trade Commission leaves little room for doubt that the government hopes to see a robust application of antitrust laws and other regulations in the technology sector. Politico said on Tuesday that the government this week was in the final stages of vetoing the candidate, citing sources. A White House spokesman did not immediately respond to CNBC’s request for comment on the report.
Before assuming his current role as a law professor at Columbia University, Khan worked for the House Judiciary’s antitrust subcommittee, helping to compile the nearly 450-page report accusing the four tech giants of maintaining monopoly power and suggesting a major overhaul of antitrust laws and their application.
Khan, 32, gained prominence on the antitrust scholarship after writing “Amazon’s Antitrust Paradox” as a law student at Yale University in 2017, in which she advocated a broader understanding of how the United States’ antitrust laws could be applied to a company like Amazon. Although courts have often relied on the much-debated “consumer welfare” standard to assess whether an antitrust violation has occurred (often linked to the price of goods and services to consumers), Khan argued that the standard is ill-equipped to assess potential damage from online platforms.
Khan wrote that predatory pricing may be of exclusive interest to platforms because they are often rewarded for pursuing growth rather than profits. On the outside, this could appear to benefit consumers by lowering prices, while harming legitimate competitors who could be excluded from the market. She also argued that platforms can control the “essential infrastructure” on which competitors come to depend, which allows platforms to exploit information against rivals.
In addition to Khan’s expected nomination, the government announced last week that Columbia University law professor Tim Wu would join the National Economic Council to work on technology and competition policy. Wu helped popularize the idea that big tech companies may need to be spun off to reinvigorate competition through his 2018 book, “The Curse of Bigness: Antitrust in the Gilded Age”. He also coined the term “net neutrality”, which ended up generating a big debate about whether internet service providers should be able to slow down or speed up internet services.
Before these two choices were revealed, tech critics remained cautious about how Biden would ultimately select his main security officers. Progressive groups have warned the government not to select employees or nominees with ties to Big Tech, including former Google CEO Eric Schmidt, who was rumored to be discussed for an administrative role.
The fear also came from the Obama administration’s reputation as a tech-friendly White House, which also failed to bring about major coercive actions against tech giants. Still, many expected Biden’s approach to be likely to be different, just because public sentiment about the technology sector has changed dramatically since 2016.
To be sure, Biden must still fill the senior antitrust role in the Department of Justice and fifth place in the FTC, assuming his appointment to the Consumer Financial Protection Bureau, which is a current FTC commissioner, is confirmed. But Khan and Wu’s choice of key roles seems to send a strong signal to both progressives and big tech companies that the government will not give up on rigorous enforcement.
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