Charles Gasparino recently made the case in the New York Post that the Biden Administration is assembling the most extreme team of antitrust regulators ever. He focuses on Lina Khan and her surprise elevation to the chair of the Federal Trade Commission, a move that showed great disrespect to the Senate and surprised even Chuck Schumer.
D.C. Attorney General Karl Racine who, despite his relatively short history with antitrust issues, now seems a likely candidate to assume leadership of the Department of Justice’s antitrust division. Gary Gensler, the first openly antibusiness chairman of the Securities and Exchange Commission, is part of this mix. I would add to the mix Tim Wu, hipster antitrust scholar, now in a powerful position to coordinate all this antitrust carnage policy from the White House.
The views held by Khan and Racine are extreme in the antitrust world, to say the least. Worse, their views are formed without the sort of real-world experience and experiential know-how that comes with service that normally qualifies one for a leadership position in government.
Racine, for example, became D.C.’s first independently elected attorney general by campaigning on social and juvenile justice issues. As Gasparino puts it, Racine switched lanes and recently “sued Amazon over alleged antitrust violations, seeking among other remedies so-called ‘structural relief,’ which is a legalistic way of saying he wants to break up one of America’s most successful companies.”
Gasparino similarly lays bare the thin qualifications of Khan and how her rapid elevation is based more on style than on substance. He goes on to point out how her popular reputation as the “antitrust hipster” and the progressive praise of her article “Amazon’s Antitrust Paradox” catapulted her to a level that is unthinkable for most recent law school graduates. But Gasparino, makes it clear that it is her views on antitrust and not her age that causes him to worry about Khan.
Gasparino writes: “Her paper argued that it does not matter if consumers love to use Amazon because it’s a cheap and efficient retailer selling anything from movies to hand cleanser. Its evil resides in its size; as the dominant online retailer, independent retailers need to have access to the platform. It collects data from consumers and these businesses to further its power as an economic monster. Because of its size, it can cut prices and take market share from any business that dares to challenge its business model. Amazon, she believes, is the modern equivalent of those greedy robber barons of the late 19th century.”
It is easy to forget what a novel take this is on antitrust, one that upends half a century of consistent and beneficial enforcement under the Consumer Welfare Standard. But such radicalism is canon in the Biden Administration. Gasparino points out how important companies like Amazon have been during the pandemic and how such a shortsighted and flawed view of antitrust could endanger our economic recovery just at the final moment of victory over covid.
We must also remember that the Biden Administration is not alone in its desire to rewrite the rules of antitrust regulation. A House committee this week moved on six bills aimed at a level of regulation of tech companies that amounts to government ownership. These bills would create so many new enforcement tools and resources that Big Tech would have to ask permission to Washington for every move. Now wonder Jim Jordan called it “a marriage of Big Government and Big Tech.”
At some point, I would add, regulation becomes ownership.