What’s Missing in CNN’s Lina Khan Profile

October 17th, 2023

The media just cannot help but remain in the thrall of Lina Khan, even as the legacy the FTC chair is trying to establish fails to get traction. Case in point, CNN’s profile of Khan as she struggles to convince court after court to adopt her antitrust theories. The story by Brian Fung and Catherine Thorbecke has a quote (from a former Bush FTC chair no less, et tu?) that while “it’s a tough row to hoe” Khan is attempting, the “upholders of the status quo look old and tired.”

Okay, that one hurts. Let me be the first to admit that younger people have better things to do than to champion the consumer welfare standard. But fairness and reason do not age, even though every couple of generations they fall out of fashion. 

The piece makes enough nods to critics and to balance – a mention of former FTC Commissioner Christine Wilson (though the reporters do not dive into her critique of Khan), as well as quoting a tart question from Rep. Kevin Kiley (R-CA): “Why are you losing so much?”

The arc of this piece is that Khan is bold but will likely not see any great, paradigm-shifting victories before she likely vacates her chair. Instead, her record will mostly be remembered for a string of big court losses, the latest of which was the rejection of Microsoft’s Activision merger. But the piece ends on a cheery, somewhat chirpy note that Khan’s labors will shift the paradigm in antitrust law. This comes under the subhead: “A generational change happening.”

It’s all so clear now: There’s somethin’ happenin’ here. But what it is ain’t exactly clear. You can make the mountains sing or you can make the angels cry. Hey out there! I see you!

Despite this somewhat inflated estimation, this CNN piece does a commendable job of noting the stakes in Khan’s challenge to the law and to the courts. If she has a big win on the Amazon suit, it will be as monumental as a change as the government’s victory in breaking up Standard Oil in 1911. On that, we agree. But unlike Standard Oil, would it be a good thing for the country?

What I would like to see is a deeper exploration between Khan’s Amazon thesis, which portrayed Amazon as a monopoly predator that ruined competition by setting predatory low prices, and the current FTC complaint that Amazon is driving consumer inflation by requiring sellers not to offer the same product on another platform for a lower price. The illogic of this economic analysis is apparent when you consider that Amazon’s prices are 13 percent below those of a dozen other leading retail sellers.

Khan’s explanation is that “Your entire understanding of what’s going on beneath the hood is going to look different than when you’re on the outside doing independent research.” If there is any sign that Khan accessed her 80-plus team of economists for solid economic analysis, it is not in her filing against Amazon. Also, Khan says, the current complaint from the FTC is that it “is about tactics that Amazon is engaging in today.”

To hark back once again to our revolutionary spirit, what it is ain’t exactly clear. Driving higher prices for consumers while being the leader in low prices according to independent, third-party analysis? Being a monopolist in the “online superstore market,” even though Amazon is losing ground to the likes of Walmart and Target? Progressive antitrust is not grounded in hard-and-fast market realities, which is fine because it is not really about antitrust.

If I’d like to convince journalists of anything, it is the following.

First, the consumer welfare standard is not just about price. It also has metrics for innovation, quality, and supply.

Second, the consumer welfare standard is supremely democratic. It lets people vote with their dollars. Sometimes, the choices consumers make offend the sensibilities of those in power. That’s democracy!

Third, the project of Khan and her colleagues to include a litany of interests in antitrust – from the concerns of workers to those of (less efficient) competitors, even to address the effects of “centuries of racial discrimination,” as commendable as pursuing those goals may be under different sets of law – these concerns are simply too vague to work in antitrust.

Worse, these concerns are vast and plastic, making them utterly unpredictable in their application. The result, intended or not (and I think it is intended), is that Lina Khan’s new standard is so breathtakingly broad that it puts any business in the crosshairs of potential legal action at any time, for any reason.

That is what alarms defenders of the consumer welfare standard. It gives unelected regulators the means for a soft takeover of the commanding heights of the economy.