The Lina Khan Episode | Ep. 020 Lemonade Stand 🍋

As our very first guest on Lemonade Stand, we have Lena Kahn, the former chair of the FTC from the Biden administration, one of the most influential people from the entire Biden administration, and one who had a lot of bipartisan support from both sides of the spectrum.

And you might hear that and go, oh my God, you guys are Lena Khan.

That's crazy.

And you might hear that and go, who?

Who is that?

And you might hear that and go, oh my God, why are they including Aiden?

Why do they have a guest and Aiden?

But we've decided to mix things up and do the entire podcast plus a guest.

Well, that's nice.

It's good that you guys decided.

It's good that I get to be involved.

So, we had a full long-form discussion with Lena Khan about her tenure as the FTC chair, what it meant for the economy, for business, for merger.

We had a full

conversation.

I was a little real Federal Trade Commissioner.

I think it was absolutely awesome.

This is somebody who I really think made an impact on the whole economy.

And so, I hope you enjoy this episode.

Lena Khan, welcome to the Lemonade Stand.

Thanks for having me.

It is so awesome to have you here.

This is so cool.

This is a cool moment.

I got a guest.

Our dead podcast got a guest finally.

Arguably, we're setting the standard too high, and this is now going to be hard for every future guest we have.

Listen,

we

have probably had a similar story as we come up to this interview is where we talk to our friends and family, people around us, telling us we're going to have their first guest, and it's Lena Khan.

It's a big deal.

My experience with this was either people would be extremely excited, like, holy crap, you got Lena Khan.

That's a big deal.

Or they would have absolutely no idea who you were and no idea what the FTC does and just completely like blank face.

Like, cool, I guess.

So

from that POV, knowing that some people watching this are going to have no idea, do you have like a high level like

what

you did at the FTC and what the FTC does and why it matters to the regular person?

Yeah, so the Federal Trade Commission is a government agency.

It was created in 1914 against the backdrop of the robber barons and the industrial trusts and these enormous companies that had come to wield a tremendous amount of power.

And Congress worried that these companies were able to abuse that power in ways that were just screwing everyday Americans.

And so they created this agency.

And it had basically the authority to police mergers, police monopolies.

It later also got consumer protection authorities, which means if you see scams or frauds or even things like surveillance by data brokers to subscription traps, it's a pretty broad purview.

And I had a real honor of getting to lead the agency for several years during the last administration.

And we really focused on, you know, how do we make sure that this agency is firing on all cylinders?

I think a lot of times people feel like they're not getting a fair shake in the economy.

And agencies like the FTC can help make that better.

Yeah,

I want to walk you through a real high-level picture.

And I want you to correct me where I'm wrong, okay?

Because this is my simpleton understanding.

So there's, in the time it was founded, there's these robber barons, there's these abuses, we go into the Great Depression,

and all of these new laws on banking and restricting corporate power come into place.

And then we have this period from the 40s to maybe the 70s where you see sort of the system, not in every way, but it works simply.

There's growth, there's productivity, there's a rising middle class.

And then around, let's say the Ronald Reagan years, we start to have a shift in the stance of antitrust.

And since then, we've had consolidation, we've had more mergers, we've had more

locked in corporate power.

Am I directionally right?

Or is there areas you want to take issue with that?

Because I think people watching this show have grown up in a world where they don't know any different.

It's always been this way.

And so what I'm trying to get across is maybe it was different in America and it wasn't that crazy.

It wasn't, is that?

That's right.

Yeah.

I mean, I think through, you know, into the 70s, we had vigorous antitrust, anti-monopoly enforcement.

And starting in the Reagan years, I mean, starting in some ways in the tail end of the Carter years, where we actually started to see some deregulation, including deregulation.

Carter was crooked.

Well, we stabbed that.

Rest in peace, though.

It was this kind of like growing ideology that was like questioning whether the kind of New Deal approach to doing things was the right way.

But the kind of pivot went into kind of, you know,

full speed starting with the Reagan years.

And we saw huge radical shifts in places like antitrust, but also in all other parts of government that were really involved involved in checking corporate power.

So it happened with banking, it happened with how we kind of regulate parts of the food system.

But in antitrust, basically we went, we shifted to a philosophy that generally thought big is better.

And so where you had previously anti-monopoly laws that were broadly trying to keep monopolies in check, this new approach said, yeah, but what if monopolies can be good?

And maybe the government should get out of the way more?

And the theory there was monopolies or concentration more generally could make prices lower.

And we went to the point.

They said that?

More or less.

They said that.

They also said, well, look, if a monopoly starts abusing its power by raising prices, it's going to be disciplined by the market because you're going to get this flood of new businesses that are going to say, well, that monopoly is abusing its power.

Let me get in on that.

And basically, competition would check that.

No, that makes sense.

Monopolies notably let a bunch of new competition into the market succeed.

I mean, I have a quick question from that because

my understanding is the last big breakup we actually did in this country was the ATT

breakup in, I think, 1984.

So for most people,

and that was, you know, that wasn't the FTC, but

for most people, they've gone a huge chunk of their life without any major breakup of any company, right?

So, and they might have this outlook of, well, things have been fine, you know, in the past 30, 40 years.

Why

is it important that we go through this big change and start approaching these types of suits again?

Yeah.

And if I could add in, so my understanding is you talked about the timeline.

And then in 2010, the rules around mergers and acquisitions became even looser, right?

And so at that point, basically it shifted to say, okay, you have to be a really gigantic company to warrant any any scrutiny by the FTC.

And then you came in during the Biden term and basically said, we're going to reset expectations in this major way.

And so I think maybe for people who aren't following, there was a huge shift in how the government, the federal government through the FTC was viewing these mergers.

So I'd also be curious as part of this question of like how you were thinking about that shift in expectations, because literally all of us, like, that's all we've known for our whole lives.

Yeah.

Yeah.

I mean, a couple of things.

I think you're right that the last big government

instituted breakup was of AT ⁇ T.

But interestingly, corporations actually break themselves up not infrequently.

For example,

Warner Brothers recently announced that it's going to be doing a spin-off.

General Electric in the last few years has been kind of spinning off various components.

And I say that just to make the point that

Actually, breakups are not that uncommon in the corporate world because one of the arguments you sometimes hear against antitrust instituted breakups is just how radical it is, how it's going to kind of lead to all of this, you know, chilling of innovation.

If Mark Zuckerberg can't have Instagram, this is a

failed site.

It's a failed site.

Yeah.

No, but well, my quick response to that would be, I imagine General Electric isn't spinning off portions of its company out of the goodness of its heart in order to keep a market more competitive.

So did they have an argument there as to the reasoning behind it being different?

Yeah, I mean, you know, sometimes it's actually investors and shareholders that are pushing for the breakups because they believe that some of these conglomerates actually have become inefficient.

And if you actually spin out certain units, they could be even more profitable.

And so you actually have, for example, some commentators and analysts that think Amazon should spin out AWS and that would actually lead to even a better company.

And so I just make that, you know, note that as a way to kind of rebut sometimes what we hear, which is that breakups are radical.

And so, you know, like unicorns.

It's like, no, actually, they're not uncommon.

And sometimes it's proper for the government to say, we need a breakup here.

On your point, I think that timeline is definitely right.

There were definitely some changes on the margins between administration.

But one thing that was candidly quite impressive about the Reagan people was that they really came in with a vision and they were able to make it durable.

And so we had eight years of Reagan, four years of Bush.

And by the time President Clinton came around, what had started off as being pretty radical, Reagan administration stuff had kind of become the new common wisdom.

And then we saw more or less

maintenance of that approach through the Clinton years, through the Bush years, even through the Obama years.

Now, again, you had some different priorities.

You had, you know, the Democrats generally were a little bit more vigorous, but more or less, this basic worldview that the Reagan people had introduced stayed in place

until the Biden administration.

I, okay,

this leads into a huge question I had because what I was wondering is that in the past few years, it feels something like this, this MAGA movement around Trump is actually very anti-corporation, at least in its messaging.

And there does seem to be an agreeance from average people that corporations have too much power or have consolidated too much.

Like it's interesting to see that you in your position at the FTC had the support of somebody like President Biden, but also had the support of someone like Steve Bannon, which is very, which is very interesting.

Or J.D.

Vance, too.

Yeah, or somebody like J.D.

Vance saying that your work was a good thing.

And it feels like this is something we should be able to very easily agree on across all

constituents in the United States.

That's the only sliver in that Venn diagram in all of politics.

I don't think they agree on almost anything else.

Yeah, that is a good question.

So since you were, you know, and then Trump comes back into office and you're no longer in that position anymore, I was wondering, you know, what do you think it takes to get

this type of approach to antitrust to stick right now?

Like something that feels so accepted by so many people regardless of their political affiliation, but it seems very difficult to keep that agenda locked in in government.

What do you think?

How do we approach that?

I think you're absolutely right that among just like regular people, the work that the FTC was doing was enormously popular.

I think people in their day-to-day lives just feel like nickel and dimed and like they're just generally always having to look around the corner to see are they about to get cheated or tricked and like the economy just doesn't feel fair.

Right.

And an agency like the FTC coming in and doing investigations and starting to sue corporate lawbreakers, even when it's really powerful corporations, I think for a lot of people

just affirmed that the economy is not unfair because it's just like the weather, but because corporate actors are abusing their power, right?

It's not some inevitability.

And, you know, we would get comments from people saying things like, I'm a lifelong Republican, hardcore, free market, capitalist, but if the Federal Trade Commission goes through with banning non-compete clauses, it'll be the best thing the government has ever done.

And so we were able to attract a pretty broad coalition of just regular people who thought that it was really important for the government to check corporate abuses.

I think, you know, in terms of the institutional durability question, it's interesting because after the election, we saw just a surge in expectations in Wall Street and dealmakers thinking, you know, things are going to go back the way they were precisely before the Biden administration.

Yeah.

I think we saw kind of just a lot of like almost salivating right at Wall Street in terms of just the deal making prospects.

And that hasn't entirely come to pass.

So the new administration, the new Trump administration has kept in place our new merger guidelines, some of the new merger rules we put in place.

They have continued so far, the Facebook litigation, the Amazon litigation, the Google litigations.

So there is, I think, much more continuity than a lot of people, especially on Wall Street, expected.

That said, we are also seeing pretty significant backsliding, including on the consumer protection work, on mergers.

The new administration seems very eager to do settlements and these kind of consent decrees, which there's a long record of them failing, where basically the government will say, sure, this merger is illegal, but if you make certain promises about how you won't abuse your power, we'll let it go through.

Sure, there's murder is illegal, but if you give us the gun, we

I'd love to follow up on that.

So I think a key thing for people aren't aware that the FDC does is that when two big companies are merging or a company's buying another, that needs, let's say, to be at least be approved by the, maybe approve is the wrong word, but the FTC will see that.

And then, if the FTC is concerned, this feels illegal, this is anti-competitive, then you can push back against it.

You can sue to try to block it, or you can ask for negotiations and say, hey, for you to go through with this merger, we feel like you have to do these specific things in order to make it feel like you aren't going to infringe on the free marketplace and competitiveness.

So I'm curious, with a few of the cases that you did, that is how you guys resolved it.

For example, the anti-bundling case with pharmaceuticals, there was two giant healthcare conglomerates that were coming together.

And the concern, please correct me if I'm wrong, was that they might bundle together their products and then sort of like force insurance companies to only buy their products.

So the concern was you guys by combining together can then sort of influence the market unfairly.

And my understanding is the resolution from your end was they agreed to not bundle.

And so to me, that seemed like actually a good use of that resolution.

But what you're saying just now sounds like maybe that's not always applicable, like just asking the companies to give up a certain element of the business.

Yeah, I mean, you always have to look at what is the specific merger, but we basically went through a decade where these types of settlements were very fashionable.

And so we saw things like a merger between two rental car companies.

And as part of that merger, the government said, you have to spin off some of these assets and sell them to a third party.

Within a year, that third party had failed and the merging rental company ended up buying all of those assets back at a discount, right?

We saw something similar happen with the Safeway Albertsons merger, where the government said, this is anti-competitive, but if you sell off these stores to this third party, we'll let it go through.

Third party went bankrupt, the merging companies bought it back.

So we had a track record of some of these divestitures failing.

You're absolutely right that there could be instances in which they work and the administration

did sparingly allow some of those to happen.

But I think what we're seeing now is almost a preference for consent decrees rather than suing and litigating in court.

And look, you know, it's always difficult to predict with precision what's going to happen when a merger is going to go through, right?

It's basically trying to look into the future.

And as the government, you're looking at documents, you're interviewing a lot of market participants, you're doing these investigations.

But at the end of the day, if there is a high likelihood that a merger is going to undermine competition and that Americans will lose out.

There's a question about who should bear the risk of that, right?

And if a company is saying, well, let us just do this settlement and the government's like, I'm not sure if that's going to work, but maybe we'll let you try it.

The cost of the we'll let you try it is to regular people.

And so, you know, one thing that we really kept in mind was just like, how risky are these settlements?

And if they are risky, we don't think it's fair to just let regular people bear that cost.

Something

I liked what you said in a different interview was that we can't let fines or settlements become the cost of doing business.

It's just something that these companies basically hope for or agree to pay, and it's a calculated part of how they approach doing business in the future.

And I liked that a lot.

Yeah, man, I think your end goal, correct me if I'm wrong, is to just not have hyper-concentrated corporate power.

Not that they're paying a fine on it out there, but they're just that it does not exist.

Wait, but I, so I have a question.

But what's so I like the way you broke it down, right?

The idea of like, well, the risk or who the cost actually sets with right but

how do you

decide what the threshold is like if i'm kroger why can't i buy up one more grocery chain it's just one more you know

yeah it's a great question and and we did review and then ultimately sue to block the kroger albertsons merger that would have been the largest grocery merger in u.s history and practically you know what an investigation looks like is you figure out where are all the areas where these two companies are competing.

And competing can look like different things.

It can look like a Kroger executive saying, oh, look, Albertson's is, you know, increasing the number of sales it's doing.

We need to up our game too.

Or, you know, Kroger saying, look, Albertson's just agreed to a higher wage for its workers.

So we have to up our game, right?

When you have companies that are kind of looking over their shoulder and reacting in response to one another's competitive decisions, that's competition.

And in the Kroger-Albertson's case, there were hundreds of markets across the country where these two companies were competing.

And Kroger was very eager to get one of these settlements.

They said, hey, we'll sell off, you know, stores to this third buyer.

That third buyer had no experience running a grocery store, right?

So one of the things you have to think about is like, what's the likelihood that this buyer is going to actually be able to succeed?

And if you're Kroger, you kind of don't have an incentive for that third party to succeed because it's going to be a competitor, right?

So you kind of have to think about what are the conflicts here.

And there are a whole set of factors that you look at to figure out, is this buyer actually going to succeed or, you know, is it, is it likely to be a bust?

Can I ask a question about, here's the thing.

I think when we discuss mergers, for a lot of regular people, it is tough for them to know how breaking up a Google or an Amazon or a Kroger Alberts affects them.

It's hard.

It just, it's very abstracted from their day-to-day.

And so I wanted to talk about some of the consumer protection stuff you did, because I think when I talk to people, that is the stuff they can immediately see the impact of.

And so that's like click to cancel, the non-competes, things like that.

And that is the area where, you know, you just informed me that there's a huge backsliding.

So first of all, I want to talk about the difference between that and what your priorities are, you know, whether it's mergers versus

that stuff.

Or, and then what do you think about the backsliding in that area?

Yeah, so the way the FTC is organized is there's a Bureau of Competition, and so they police the mergers, they look at monopolization, and then there was a Bureau of Consumer Protection.

And so their job was looking at: is there deception in the marketplace?

Is there unfairness?

They were focused on everything from the subscription traps to the junk fees, the kind of fees that show up in ticket master stuff, right?

Ticket master stuff.

Everybody hates it.

Did you ever think about all the people who love those fees?

You're taking away their joy.

These are like the most universally hated things.

And it's baffling to us that there is backsliding.

I mean, with like mergers, this is the proud.

Yeah.

I support my large ticket, the ticket platform chains.

Convenience for me, smiling.

I would have to go through 30 pages to cancel a subscription to my gym.

Oh, yeah.

Yeah.

So, yeah, that's a great way to phrase it.

Like, everybody hates these.

Everybody.

There's like, there's not a single person.

So, first of all, except for like a CEO, like 15 CEOs.

Is that all it is?

Like, who are the people that are that are fighting back to stop this from going through?

Because it was already, correct me if I'm wrong, but it was passed.

It was, it was law or it was, it was in, like, how does that?

Yeah, so it was.

I told everybody it was done.

I was like, one click to cancel is here.

It'll be here in July.

And I was like, I'm really digging in the knife right now.

Yeah.

I'm sorry.

I'm not trying to make you feel better.

But I just, I, I think I did streams and videos where I'm like, this is a huge deal.

Non-competes are banned.

One click to cancel.

This is going to impact your life in a major way.

And then they never happened.

And so I, who stopped that?

Can you be more specific?

It's such an important question.

And I think as part of this larger conversation about does government really work for us and is government effective, I think this component sometimes gets left out: well, even once government is able to do stuff, sometimes it doesn't come into effect.

In the FTC's case, that was because big business lobbyists fought back.

They filed lawsuits, sometimes picking very specific jurisdictions in Texas where they knew they'd get a favorable judge, and then basically were able to jam up these rules.

Unfortunately, just last week, we found out that the Eighth Circuit tossed out the click-to-cancel rule on the grounds that basically industry didn't have enough opportunity to weigh in.

And just to be clear, it's not easy for an agency to just pass get through one of these rules.

They have to go through this really bureaucratic set of procedures, which include for the click to cancel, for example, you first put out a set of questions that people can respond to, such as, you know, how hard is it to cancel subscriptions?

Should the FTC be reviewing this?

So that's one comment period.

Then you do a draft rule where you get additional comments.

We got 16,000 comments.

Then industry asked to get a hearing.

So there was a hearing where industry got to send their lawyers and kind of in front of a nailed, an administrative law judge, kind of hash it out with FTC staff.

Sorry, interrupt.

Do you ever get

You know, it's something so consumer friendly.

Do you ever get comments from like a CEO?

Do you ever get someone who gets embarrassed?

Like,

I'm not kidding you.

I thought about the exact same thing.

I assume every comments from a regular person, but have you ever gotten comments on on these things that are like, I actually love this stuff?

The CEO of Planet Fitness is just like typing up a bunch of.

They usually get fancy lawyers to kind of dress it up a little bit, but

the kind of pro-junk fee, pro-subscription trait

component is there.

I mean, that's why some of these rules get struck down, right?

Just like a chat GPT written on how much you love junk fees.

Yeah.

That's so funny.

That's real.

I was joking.

Okay, I'm sorry.

So you have to gather all of these comments.

You're saying you have to gather all these comments.

You have to read all of them.

You have to respond to arguments that are made.

And so for the click to cancel rule, that took over three years from beginning to end.

We finalized it last October.

It was set to go into effect in May.

So we gave a six-month kind of heads up to industry.

Not enough, Lena.

Not enough.

This FTC decided to delay it even more.

into July.

And then right before it came into effect, a judge tossed it up.

Yeah, I just, we've we've talked about this in the show a lot, but there is this pervasive feeling I feel, especially among younger people, that like nothing ever happens.

There's just, it does, nothing, you can't get excited about anything because nothing actually happens.

Nothing goes through.

And so it's frustrating to see someone like yourself who puts it, who goes like, I'm going to do it the right way.

I'm going to go through all the three years.

And then it gets undermined.

I don't know what your thoughts are on that, but it feels demoralizing, I think, to a younger audience.

Yeah, rightly so, honestly.

I mean, I think, you know, one component of like governance right now is the courts.

And the courts have become extremely hostile, in particular, to executive action by Democrats, just to be blunt.

Right.

And so there were a whole bunch of rules that the last administration was able to push through that would have materially improved people's lives, including things like limits on overdraft fees, things like overtime rules, you know, for when people are working overtime,

the FTC's click-to-cancel rule, our non-competes rule, over a dozen rules that would have just made life better in very concrete ways, including a rule that basically would have required transparency from airlines on how they advertise their fares.

All of those went to go die at the doorstep of some judge.

And I think that doesn't get talked about enough in terms of just the role that the courts are playing.

And the courts have an incredibly important role to play.

But if they are becoming categorically hostile to certain forms of governing, we need to kind of update our approach.

I will say, you know, we did see some success in rules coming into effect.

So our junk fees rule that basically bans deceptive pricing in short-term lodging and live event tickets has gone into place.

And so if you try to buy a concert ticket, a sports ticket, book a hotel, those companies are not able to advertise at a low fee, a low price and then tack all these fees on at the end.

We also were able to bring down the cost of inhalers through through some of our work taking on abusive patenting practices by big pharma companies.

So there was progress.

They would add like a little

strap to it or something.

Exactly.

Yeah.

Okay.

Yeah.

So, you know, we feel like that's disrespectful to all the research that went into developing

the strap to the inhaler.

You know, on that one, they just caved.

They didn't try to make that argument.

I do like that because it's just like, ah, you got me.

The lawyer sat down to write the comment.

Was like, I can't come up with anything.

Even ChatGPT just says, I can't help with that.

That's

such a line, though, because if they'll fight, click to cancel, but not fight that.

That means how bad this has to be.

Man, that's funny.

Well,

in the vein of things like not fully going through or fully sticking,

the one case that I had a specific question about was the Microsoft Activision Blizzard case that you guys had.

And like how you're saying, you have to push and develop the case for these things over years.

And then to have something like that not go through at the end of it, how does that affect your team's internal morale or and how you approach things in the future?

Because

when you put that much time and effort into something and have it not go through, I imagine it's frustrating.

Can I add on to that?

We have a lot of gamers in our audience.

And if you're the average gamer, you probably don't care that much if Microsoft wants to buy a video game producer like Activision.

So like when you guys first saw this, when the merger proposal hit your desk and you are trying to evaluate, is this problematic, what led you to then go, we do think this is going to cause issues for customers?

Like, why should a gamer care about this?

So great question.

So basically, when those types of deals get filed, we have staff that starts investigating and they start investigating by requesting, you know, thousands, if not millions of documents from the companies to figure out, you know, why are they pursuing this deal?

What are they looking to get out of it?

They do a lot of interviews with people in the market, including other game developers, other rivals, and basically come up with an assessment as well as an economic analysis of like, if these companies merge, what is their incentive going to be?

What is their business plan?

What is their business strategy?

And is that ultimately reducing competition and making things worse?

In this instance,

You know, and the team had felt very strongly about this one and recommending that the FTC sue to block it.

The concern was that so far, Activision had really thrived as this platform agnostic developer, right?

They were investing, they were developing games and doing it to get them out through as many platforms and distribution channels as possible.

And there was a real concern that if we allowed this merger to go through, it would basically start creating walled gardens in gaming, where instead of having kind of these platform neutral content developers that could sell through all these different outlets, you would instead see kind of what's happened in Hollywood, candidly, where you see this vertical integration between the distributors and the content producers.

And over the long term, that can make it much harder for creators to get their stuff out.

Didn't it used to be the case that like a movie studio could not own theaters?

Is that the idea?

But now because of streaming, it

isn't that how it works where I've noticed it over and over that every time there's a rule that seems to make sense and we agree on.

With big tech, a lot of what they do is just find a way to rename it or just do something like with Uber and minimum minimum wage workers and all these ways just like it's just renaming the same thing but you're just going around like like buy now pay later versus debt you know and they get around all the rules that existed for that thing because it has a different name but it's the same thing how does that how come nobody in the court or in the ftc can just be like this is very obviously the same thing why is it i i honestly want to i like this all the time like

because if you ban buy now pay later can they just call it something else and then do the same thing

it's a great question and candidly there is just an enormous amount of lobbying power in DC that is dedicated to basically arguing that something is new and innovative.

And so the old laws don't apply.

Right.

I mean, I think we've seen that time and time again.

We've seen it with AI, candidly, with companies trying to say, well, this is so new and different.

And so those rules don't apply.

And so with AI, for example, we had made it very clear that.

Collusion is illegal regardless of whether you're doing it in an old school way or through algorithms.

Discrimination is illegal if you're doing it through an algorithm.

There's no kind of AI exemption from the laws on the books.

But I think you're right that with various technologies, you always try to see kind of this arbitrage effort.

Yeah.

Yeah.

It brings me to a question that I really wanted to ask.

And this is maybe jumping ahead, but I just want to run with it because.

Wait, can I interrupt you?

Yes.

Could you follow up and say what it was like at the end of the acquisition, Microsoft?

I'm sorry.

Yeah, yeah.

Oh, yeah.

I think the morale part, but I think this ties into everything here, which is the, you're fighting against the lobbying.

You're dealing with judges in certain areas or certain certain jurisdictions.

And when we talked about earlier, Microsoft starts saying, oh, we'll do this.

We'll like Call of Duty be like they start offering those little like, you know, breadcrumbs to say, well, it actually is fine.

So because it does, and the way you've described the FTC in the past is a relatively small agency, right?

So when you're in this constant David versus Goliath battle,

how do you Yeah, how do you guys stay motivated and keep the morale up in the wake of things not going through?

I was really curious about that because it feels because there's so much collective support that we need to keep pushing for these things in general.

So, yeah, how do you feel about that?

Yeah, I mean, look, those setbacks are tough.

And, you know, the team was obviously really disappointed when initially at the district court level, the FTC lost.

There was a really strong recommendation to make sure we were appealing that.

And so we did appeal it,

you know, pointed out where we thought the judge got it wrong.

I think on the question of motivation, you know, you're right that the agency is really small, but it has such an incredibly important role to play, right?

I mean, the work that the agency does can determine are people able to afford their medicines or are they having to ration them, right?

Are you able to drive 10 miles to a hospital as opposed to 100 miles?

Are you having to do buy now pay later for your groceries because they're too expensive?

Which is cool.

That's a good question.

Are you able to easily switch jobs or are you locked down by a non-compete, right?

I mean, these are really concrete things that affect people's lives.

And I made it a big focus at the FTC to make sure that we were actually hearing from people across the country.

It's really easy in these types of jobs to become super insulated.

And, you know, your kind of default calendar is basically people who know how to reach the agency and navigate the halls of power in DC.

And you're not really as plugged in with like just the vast majority of

regular folks, like podcasters.

And so we made a big effort to do kind of listening sessions across the country, you know, a lot of opportunity to public comment.

We did open commission meetings where any American could sign up to come talk directly to the FTC commissioners.

For real.

Oh, that is awesome.

I didn't even.

I mean, while you're doing that, you know, I feel like Joe Rogan kind of has a monopoly on our industry.

And I was wondering if you could break up some of his

break off Joe into two, guys.

Break off into two.

Joe and Rogan.

Wait, can I ask my question?

Because I'll forget it.

And I really want to ask it.

It's something I've been thinking about.

And it's based off what you said.

So you're familiar familiar with like RealPage and like the

that scares me because

basically what RealPage is, it's like an AI algorithm that

tells me if I'm wrong, by the way, landlords can like input how much they're charging into, and then it recommends them what price to charge.

Oh, good.

What it's doing is everyone is signed up for RealPage.

So all the landlords are soft colluding without talking to each other because they're all putting their things in and it's deciding the best price that they can all, it's like they're one company.

So they're doing a monopoly price without having to be a monopoly.

That scares me because

couldn't any industry do that and how how do you enforce or stop that like once they have that capability it feels like a unleashed pandora's box demon like i i'm super scared of that and i want to know if you have some words that would make me feel like

that's honestly what i want like because i i'm a huge supporter of remission and i've talked about it a lot on my content and reading about real page it's like wait a minute even if you ban that how how can they how is it enforceable how could you not just hide that Or I don't know.

It's all scary.

So

please.

I mean, honestly, you're right to be freaked out.

And, you know, this, this was inflating rents for people across the country, right?

Serious money that people were having to just overpay because of this real page collusion.

And to go back to what you were saying earlier, there is, there are right now lawsuits that are making the argument that, hey, this is collusion.

This is old school collusion.

It's being done in different ways, but

this is

it's the juicero of collusion.

It's like, no,

we've repackaged making juice.

It's AI collusion.

Yeah.

And so that's still being worked through the courts, but you know, I hope that judges will kind of come to agree that if you're price fixing through algorithm, that's still illegal.

Yeah.

But I mean, once they ban it, I guess I'm just so nervous that something that's so like if they have an app on their phone,

how do you stop landlords from knowing that makes them more money?

I guess I, yeah, I don't know.

I guess you just enforce it.

But I, I just, uh, it's spooky because RealPage, I assume, is not the only example of this.

I think you saw, you, you said something about airlines, right?

Airlines are doing this or?

Yeah, they're doing a variation of basically surveillance pricing.

So basically the holy grail for companies for a long time has been the ability to charge each person what their willingness to pay is.

And so, you know, they want to basically be able to figure out what is your demand curve versus your demand curve.

You know, if you're really hungry for lunch, maybe they'll charge you 10 bucks for a burger, but if you're not that hungry, maybe they'll charge you three bucks.

But more nefariously,

I don't even, I don't even need this.

I don't even care about this Wendy's burger.

But now there's so much data collected about individual people by data brokers, by this whole shadowy ecosystem that's just tracking you through your phone, through your browsing history, that there is a serious worry that companies will be able to do this.

And actually, Delta Airlines just announced on their earnings call that they're going to start using some of these algorithms to price some of their tickets.

And so imagine a world in which you have the death in the family, you have to go home for a funeral, and they know that through scraping your email that is, you know, announcing when the service is going to be.

They know you're in a tight spot.

And so you're going to be charged much more because of that, right?

Or imagine that you're a family that has a nut allergy.

Are you going to be charged more for the nut-free cereal than for the one with nuts than other families that don't have that?

Right.

And so.

Well, it's the free mark.

Well, you could counteract that by posting how much you hate your mom who passed away.

And that way, Donald's like, I don't even need to go.

Me sending fake emails about how I

fucking hated my mom

to get the lower point.

Every email you see the price drop, 20 bucks.

That is dystopian.

That is dystopian.

Yeah, that's dystopian.

That is horrendous, man.

That's what that real page stuff makes me think about because it just feels, you know, like you said, I think we said this actually off-pop, we were talking, but sometimes these companies will use the technical difficulty of it to run circles around lawyers and government officials who just can't keep up with, they don't, they hear the word AI and their eyes glaze over or whatever.

And

so,

yeah, I just find that to be

a very annoying loophole.

It seems like it's coming right at us with like a full-speed train.

Yeah, I mean, the good news is, you know, we started raising the alarm about this at the FTC.

We started kind of an inquiry into it.

I'm not sure if this FTC is continuing it candidly.

One of the first things they did was kind of shut down like a public comment period about it.

So, you know, TBD, but states are actually stepping in.

And so we see more states and cities introducing laws that would ban this type of surveillance pricing.

And so, you know, maybe something could be done there.

What are some of the states that are looking at that right now?

So I think there have been proposals introduced in a bunch of places.

I think New York York is looking at it.

I think parts of California are looking at it.

But, you know, it's something that more and more state and local lawmakers are reaching out to say, hey, this seems troubling.

You know, what should we do?

That's awesome.

I, we said the word AI and I immediately perked up and got excited.

So

I actually promised some friends that I would bring this up, which is I think one of the, I think the consumer protection work that the FTC did while you were there, immensely popular by basically everybody.

And the area that I saw more pushback was was on mergers and acquisitions.

So, broadly, for people, you know, again, like we mentioned, I think up till 2010, the scrutiny around mergers or a company buying another company just kept loosening and just became more and more okay.

And then you came in and tried to reset expectations and say, look, it's not just, first off, we're going to like have more scrutiny for even if you're a smaller company, you don't have to be quite as massive.

But on top of that, we're also going to look at different types of mergers that in the past weren't considered problematic.

So, if, for example, a vertical merger, meaning let's say Facebook is buying the VR fitness company that doesn't feel like a competitor to Facebook, but it's kind of below it in the chain, that now is something you might scrutinize.

or the bundling that we talked about earlier.

And so the criticism that I've heard from folks in Silicon Valley is because you broadened the scope of what types of mergers you were going to scrutinize and potentially push back against, this dramatically slowed the willingness of big tech companies to buy startups.

And for the Silicon Valley world, you know, I have friends who at startups were basically saying the policies that are going in by the FTC right now are killing our ability to get our companies acquired.

The folks who, right now, the whole ecosystem of Silicon Valley, for people who are not aware, is you basically make a startup and then nine out of literally 90% of the time, the exit strategy is you get bought by a company.

That didn't used to be the case a couple of decades ago, but that's the trend.

And so there's definitely folks who are supportive of this change and saying, like, look, this is actually healthy for the ecosystem.

Like Gary Tan is somebody I really like and who runs Y Combinator and he was really in support of this but there's plenty of notable folks who criticized what the ftc was doing and saying uh the policies the scrutiny is becoming so broad and you're scrutinizing so many mergers that mergers broadly are just happening less often and startups are suffering.

So I would like to hear like how you thought about that.

Is that a consequence that you were, you know, sort of intentionally doing or was it a knock-on consequence and like how the FTC thought about that?

Yeah.

And, you know,

throughout my tenure, we made a big effort to hear from people about how our policies were affecting them.

And so went out to Silicon Valley a few times, sat down with founders and startups.

And I think one thing that was interesting was that sometimes the tech industry gets talked about as a monolith, but actually different players have different interests, right?

And so the interest in what is good for founders and startups is not necessarily what's also good for big tech.

I came into office against the backdrop of, you know, what's sometimes called big tech amnesty, where there were hundreds of acquisitions, I think somewhere around 800 that the five big tech companies had done, not a single one of which had been challenged.

And

it was just like.

Yeah, it was allowed to go through.

And that included Facebook's acquisition of Instagram and WhatsApp.

It included Google's acquisition of DoubleClick, AdMob, the kind of all of these companies against the, across the ad tech stack, which now a judge has ruled illegally allowed Google to monopolize.

And so there was a lot that was missed.

And it's much more difficult to fix errors on the back end after years of these acquisitions having gone through than scrutinizing on the front end.

The other thing that we actually heard from deal lawyers, antitrust lawyers,

was that they would sometimes just try to get illegal mergers through.

Just for fun.

Well, they were like, what are the chances that this is going to get scrutinized or going to get blocked?

And so they were not really doing antitrust risk assessment.

on the front end.

They were like, let's go through.

And at worst, maybe the agency, well, at worst, maybe the agency will sue, but more likely is the agency will point out some problems and then we can enter a settlement.

And that's just not a good way to use taxpayer resources.

It should not be the government's job to basically be like playing, you know, business strategists and helping figure out how do we make this illegal merger legal.

That's what their lawyers are for.

I think I follow.

Yeah, that's wild.

And so, you know, partly the kind of deterrence value, and you saw this, right?

Within like a year of of our tenure, you had, you know, senior executives, deal makers saying, well, yeah, of course now we have to think about antitrust on day one.

That's a good thing, right?

Only pursue deals that are illegal.

And by the way, the vast majority of mergers go through.

So of the thousands of deals that get reported, around 2% get looked at by the FTC or the DOJ, and even a smaller fraction actually get blocked.

And so the vast majority of deals are going through.

I hear you on, you know, the kind of exit options being limited.

Yeah.

I would say a few things.

One,

a world in which the kind of big tech companies are basically in the driver's seat about which companies are going to thrive and which companies are going to die, I don't think is good for innovation, right?

Like the way that historically America has stayed ahead in terms of new innovations coming in is by some of the incumbents being toppled.

And so, you know, I think a world in which the startups are exclusively thinking about some of these acquisitions as their exit can be bad for innovation in the long term.

The other thing is, even if you want an exit by being bought up, a world in which there are seven or eight or nine or 10 potential buyers of your company is better than if they're just one or two in terms of your ability to negotiate, in terms of your ability to actually get better value.

And so, you know, I think overall, we did definitely see big tech slow down some of their acquisitions.

I think some of that definitely dissuaded illegal deals to the extent that companies were looking for more clarity.

We tried to offer that.

But interestingly, there were some pretty significant examples of when tech acquisitions were stopped that ended up leading to more innovation.

So one of the deals we stopped was NVIDIA trying to merge with ARM.

which we alleged would have basically inhibited innovation in semiconductors.

We worked at NVIDIA.

I worked at NVIDIA and this helped my stock price a lot.

Apologies.

I've been with you on everything else.

But ARM ended up IPOing and becoming enormously successful and is now talking about maybe directly competing with NVIDIA.

Similarly, the Adobe ARM merger, the Adobe Figma merger ended up not going through.

Actually, not because of U.S.

enforcers, but because of Europe.

Figma has now announced it's exploring an IPO.

So we are seeing kind of instances in which not having been able to merge is leading to kind of more success and more innovation.

100%.

I mean, there's a great example historically, right, where the FTC or DOJ, I don't know which one, was attempting to break up Microsoft.

And they didn't, it got blocked at the last minute.

But even that threat and that aura hanging over them, I think allowed for the free space for Google and all these other tech startups to rise in Microsoft's dominance that ended up becoming dominant themselves.

But like that area wouldn't have existed.

It was my understanding.

Yep.

Okay.

So I'd like to continue to steel man the frustrations around this new like broadened scrutiny.

So one of the examples that was brought up for me when talking to folks was Windsurf.

So for people who are not aware, Windsurf is an AI coding company.

It was about to be bought by Open AI.

The deal fell through.

And last, like a couple days ago, Google came in and announced that they are going to spend $2.7 billion, which is an insane amount of money for this company, to basically buy the CEO, all of their researchers, and a license to their technology, but not buy the actual company at all.

And the thinking here is Google basically came in, gutted the best people from the company while screwing over the rest of the employees who like work there, who aren't benefiting from a sort of exit of any kind.

And then they leave and Google has no scrutiny because they didn't technically acquire a company.

They just bought all the talent.

And so I've seen this as an example where people are saying, okay, well, if you try to stop, if you really scrutinize all these different potential mergers from big tech companies, they're just going to find these other things that actually harm the startup workers.

So I'm curious how you think about that.

Yeah, I mean, I'll say, first of all, I think this is a really important question because actually figuring out how are we incentivizing innovation is super important.

And I think one of the costs of allowing big tech dominance to go unchecked for so long was that there was a real cost to innovation.

And so I think getting this right is super important.

You know, it's interesting.

I think there are kind of different narratives about what happened here.

I think one narrative is this deal was structured this way to evade antitrust scrutiny, which maybe is true, although antitrust enforcers are also supposed to look at what is functionally happening, not just what's formally happening.

And so if they're functionally gaining control of kind of key assets or operations, that should be reviewable.

But I think the other interesting thing here that some commentators have pointed out was

there could be something around some of these AI investments that are more susceptible.

to this type of kind of like extraction strategy.

Because the talent is so important, right?

Because the talent seems to be so critical.

The other thing is it doesn't doesn't seem like there are kind of key moats right now.

And this is not an acquisition structure, I don't think, that, for example, Facebook could have pursued with Instagram.

Because there they were really looking to bring in-house this rival platform, this rival network.

And we just aren't seeing those dynamics here.

I think the other thing, candidly, and I think we saw this, you know, in 2020, 2021, where we were in a zero interest rate.

policy environment, sometimes there are bad investments that are done, right?

And I think sometimes NFTs are going to go up any day now.

And I think, you know, there are some kind of vocal venture capitalists that are very eager to kind of blame the government or, but then kind of hysterically come asking the government for a bailout for kind of Silicon Valley Bank.

But, you know, practically, I think you kind of need to drill down into the details and figure out what's actually going on here.

Are these some kind of just erroneous investments or

is antitrust policy really responsible here?

You know, of course, my heart goes out to any employees that are kind of being screwed by these types of arrangements.

And I think they should be scrutinized to the extent that it's allowing some of these big tech companies to kind of consolidate control.

Yeah,

it does not make sense how what Google is doing is allowed that you just come in, buy specifically all the leadership and then leave.

It's kind of crazy.

Zuckerberg with scale AI.

I mean, my understanding is that they bought like 49% to not trigger.

owning the company, but like they basically own the company and all its resources.

And then they have no more clients because no one wants to work with them because they're basically a Zuckerberg company.

It's interesting to me.

I want to talk about, okay, because we're on time here.

I want to talk about the great white whale, your ultimate target, the one that started your career.

You know, when you were at Yale Law, you wrote an article about Amazon and antitrust.

And it sort of, I think, kick-started your career and led to you being the youngest FDC chair, which is incredible, by the way, because I think we're around the same age and I'm doing podcasting.

So that's awesome.

You know, I want to talk to you through what, what specifically about Amazon, because I think from the perspective of a regular person, they like Amazon.

That's the thing is I can I say something?

Yeah, I love how cheap it is.

It's great.

People like

prime shipping.

Like, I don't know why you hate prime shipping, Lina Khan, but

I think I know how cheap this shirt was, Lena?

They're cheap.

I want you to sort of explain, I think, the key idea of your paper, like how they abuse antitrust or monopoly in a way that's not

seen, like in a way that it's not directly on consumer prices.

And how you handled that the FTC and what the current status is on the lawsuit with Amazon

yeah so I got my start here

through doing research and reporting where I was basically talking to a lot of the businesses that sell through Amazon and then also talking to the investors and analysts that were looking at Amazon as just through a long-term financial prism and this was around kind of 2013 2014 and it was really interesting because talking to the businesses that were dependent on Amazon it became very clear that this company was developing as a gatekeeper where they were increasingly becoming dominant over kind of a key channel of commerce.

And then the same way that 100 years ago, if you wanted to get to market, you had to ride the rails of the railroads.

Increasingly, if you wanted to sell on the internet, you had to have a presence on Amazon.

And then talking to...

financiers and investors, it was clear they recognized that Amazon was structurally amassing dominance that would would pay off in the long term.

And it was interesting because for a while, Amazon would not report profits and yet its stock price would rise.

Yeah.

And so I was just really interested in that perspective, which candidly was at odds with how most policy people in DC and antitrust enforcers were viewing Amazon, which is, as you said, this is a company that seems to be obsessed with delivering cheap stuff to people.

And so, you know, nothing to see here.

And in fact, the kind of lawsuit that most touched Amazon in an antitrust way was a lawsuit bought against book publishers who were trying to kind of team up to take on Amazon.

And so it was really interesting, just this gap between how the business world was viewing Amazon and how antitrust lawyers were viewing Amazon.

And so I wrote the paper to basically use Amazon to tell this broader story about antitrust and how some of the key business strategies that Amazon used, including predatory pricing, where it just ruthlessly priced below cost in certain key segments to gain dominance,

as well as vertical integration, where it would both be the platform and then competing with companies on the platform.

That those types of practices used to be viewed as illegal in some cases or viewed very suspiciously.

And as part of the Reagan revolution, those practices were now basically not enforced against.

And so the article was a way to basically use Amazon to tell this broader story about antitrust.

I mean, one example I think that you gave was

where people who are selling something on Amazon cannot price lower elsewhere or they get blacklisted from Amazon.

And Amazon charges them an enormous fee, like five of every $10.

And so if someone else is offering two out of $10, you can't price it cheaper there, even though you could offer it for cheaper.

And they just use their market dominance there, which I thought was that made it so clear to me from the side of like, maybe I'm not personally seeing the abuse as someone who buys something, but the person selling me this product is getting bullied constantly and it's they're getting squeezed um what is the what is the realistic solution from your perspective to something like that like what tools uh what is the end result of the ftc trying to take action against something like that versus

a more dramatic example i could think of is if you've created something that is so integral to the way that we conduct business and engage with each other in society which maybe you could make an argument if everybody buys everything off amazon all the time at least online, then is it borderline a public utility and the government needs some sort of direct ownership in it?

Is that a solution?

Is there a more moderate solution that you look for?

Do we leave it unattended and see how it continues to develop?

Like what are the options to addressing it?

You're absolutely right that there are kind of a range of tools.

And historically, a kind of first order question has been, is this a market where competition can actually work?

Like, is this a market where you can imagine, you know, a certain number of firms that are competing against one another in ways that prevents any single one from abusing its power?

Right.

And there are a whole bunch of vast majority of markets in the United States we consider to be governed by competition.

Then there are markets where, for a variety of reasons, vigorous competition is not going to happen.

Right.

Oftentimes we see that in infrastructure industries like the railroads, like the telecoms.

You know, there are huge fixed costs.

If you're laying physical role uh rails or or wires like you're not going to want like lot multiple companies installing the same stuff and so in in those instances instead of using antitrust we've used what's known as kind of more of the public utility toolkit which has basically meant that we prevent them from discriminating and so you have to charge everybody equal rates for equal service we've limited what other businesses they can operate in so for example for a while the railroads were all buying up coal mines, and then they would

transport their own coal, but not the coal of third parties.

And so Congress passed a law that basically said railroads could not own commodities because it created a conflict of interest.

Similarly, in banking law, historically, we had a separation between banking and commerce.

So if you were a bank, you couldn't also

own a commercial enterprise because that would put you in competition with the very businesses that were dependent on you for credit.

And so we've used this variety of tools to basically police companies and prevent them from abusing their power if we don't think competition is going to do the trick.

Do any of these laws still exist or are they just not enforced?

You know, it's a variety.

In some areas, we saw active deregulation, a lot of which started in the Carter years.

In some instances, the laws are there, but interpreted differently.

But generally, there has been a big retreat from this way of doing things.

But to go to your earlier point, you're absolutely right that one of, you know, the lawsuit that we filed against Amazon was very different from the paper I wrote about Amazon, in part because being a law enforcer is different from writing a law review paper, but also because a decade had passed and Amazon's business strategy over that period changed.

I don't know if you're familiar with the work of Corey Doctorow,

but he's written about kind of what he calls insidification of platforms.

And he talks about how, like, in phase one, a platform's goal is to get as many people on the platform as possible, right?

And so it'll go out of its way to make things cheap.

It'll go out of its way to have very favorable terms of service.

But once it basically gets enough momentum and enough business and tips into being more of a monopoly, it can flip the switch and start becoming much more extractive.

And that's what's happened with Amazon.

Perfect description of like Uber,

of Netflix, of like every single app people can think of where everyone talks about how they love early Netflix.

It had everything.

It was so cheap.

Why is it so expensive?

It's like, that might have been enough.

That might have been the point.

Let me tell you.

Even Xbox Game Pass, which now that they've got the Activision Blizzard, the price has gone.

$20 a month now.

Xbox Game Pass.

I'm just trying to keep all the champions in league.

Anyway,

yeah, so

I went and got breakfast just at a cafe on my walk over here this morning, and I asked three random people.

I was like, can you just name a company that you think is just too big?

It could be any company.

What do you feel like is just too big?

Literally all three, said Amazon.

Really?

Yes, all three.

And I think

in the vein of asking that question,

I was wondering if there's any pressure when you're in the position of directing resources to block mergers or address some sort of problem.

Is it important to go after companies that are bigger names or top of people's mind?

Because when I was looking into your work, I noticed, I think it was Illumina,

they were prevented from merging with or buying out Grail.

And I had to look up what those companies were, right?

I was not familiar with them.

But there's plenty of industry and plenty of companies that fill out our economy that most people are unaware of, like their impact, right?

But Amazon, Google, Apple, these are the companies that are top of mind.

So when you're choosing cases to approach, is there a pressure to pick things that'll have a little more public oomph?

Like, how do you balance the way you're, maybe the industries or the companies that you're prioritizing when you take action?

Yeah, it's a really apt question because the agency is so small and every investigation or case you're doing is one other investigation or case you're not doing.

And so those trade-offs are super acute.

You know, for me, it was less like, do people know this company and more what is the magnitude of harm that's happening here?

And I think one critique that the FTC had been subject to at various points over the last few decades was that it had been very focused on small ball fraudsters and scammers while being somewhat missing in action with some of the biggest corporate abuses in our economy, including the subprime mortgage lending crisis, for-profit colleges, you know, the opioid crisis and kind of fraudulent marketing.

And, you know, so

sorry, imagine going into work and that being like the list of of problems you can help.

It's like, oh, okay.

I mean, it was a hard job, but you know, one thing that I really worried about was if the agency punches below its weight, there's just a huge risk that Congress is going to strip it of power, strip it of money.

There's always going to be opponents to the agency.

And so there's kind of a, you know, you should do your job because it's right to do your job, but there's also like a self-interest in wanting to make sure you're showing what your worth is and your importance to the public.

So, you know, we were very focused on what are the biggest pain points for people.

For me, near top of that list was healthcare.

You know, healthcare is not discretionary.

People pay way too much for service that candidly is worse than in many parts of the world.

So we are very focused on drug prices, on hospital mergers, on things like independent pharmacies and making sure they're able to stay afloat.

We are very focused on food and agriculture, you know, with the Kroger-Albertsons merger, but also with things like we brought brought a lawsuit against John Deere because they have these restrictions on being able to repair your own tractors.

We're like weirdly familiar with that.

Oh, really?

We run a tractor business.

Yeah, on the side, we do a little trash.

No, it's just a, yeah.

As well as tech markets, because so many of these companies have become so integral to navigating day-to-day life.

So, you know, that kind of.

what is the magnitude of harm?

How important is this industry?

Those are types of factors that we've considered.

That's That's so cool.

I mean, it's nice to hear that there's like a, what the balance, what the balance to the approach is.

One thing you've mentioned a couple of times is,

or earlier, you were talking about how Europe had approached regulating

a merger before the United States had.

And in general, like when looking at things related to Apple, for instance, there's actions that Europe has taken first or maybe other countries in general that we have not.

And I was wondering, since companies are so big now and these are global corporations, do you guys look to what other regulatory bodies are doing as inspiration for what you might want to take action on in the United States?

Like, what model does the EU set?

Or is it totally independent in the way you pick?

Not that they're like in your ear, like, yes, America, do this, but more just like, oh, they're looking into these type of things.

Should we also try to take that type of action?

And then also, because these companies are so global, did they have an assortment of like workarounds or ways to weasel around things because

of their place in all these other countries as well?

So the FTC has a lot of these cooperation agreements with jurisdictions around the world.

And, you know, long before my time, the agency was kind of very enmeshed in talking to other regulators and enforcers.

For a long time, those relationships had been used to candidly export the Reagan-era hands-off policy and basically, you know, chide other jurisdictions for being too tough on American companies.

You know, we had very good relationships with other jurisdictions, but of course, American laws are different from other laws.

And so we were very focused on what is illegal under our laws, but aware of what other

agencies were doing.

Companies always tried to basically

use these different jurisdictions to try to get around some review, or they would kind of try to time merger reviews so that they would get approval in some places and then come to the U.S.

and say, well, look, you know, 99 out of 100 have signed off.

And so judge, you know, the Americans are being weird.

Yeah, basically.

So, you know, we were really lucky to have really strong relationships with all, with a whole bunch of other agencies, but, you know, very focused on what is the impact on the American market?

What are the American laws?

Well, your relationship with other agencies is something I wanted to touch on.

This is a little bit in the weeds for me.

We literally were like, don't ask about this.

We said this.

I can't help myself.

I'm down to ask you this question.

This is about the DOJ.

It's about the DOJ.

We told you not to ask this question.

Because I met

somebody that works for you

a few months ago, and I embarrassingly referred to a case that was the DOJ's and not the FTC's when I met her.

And I still think about it.

But the reason I wanted to bring this up up was because the DOJ seems to be the other agency that can tackle something, like issues with mergers.

So when you guys are deciding how to approach things, are you coordinating or like speaking to the DOJ about like, all right, you guys take this, we'll take this?

Are there other agencies within the US that can approach these problems?

What's the difference between you and the other person?

And I feel like this is a really reasonable question.

Is it rock, paper, scissors?

Do you think that's a little too inside baseball for an audience of of

it?

We're an hour in.

Yeah, we've got a vote.

If they're watching, they're okay, fine.

Yeah, I'd love to know.

Yeah, no, a very, a very relevant question, honestly.

Bitch shit.

Don't, don't.

Bitch shit.

He's going to halt us over on us.

Be nice to him.

Nina called him.

Could it clip out really relevant question?

Listen to that a few times.

Clip it fair.

But this is something I was genuinely curious about because as I was going through cases from the past 10 years, I'm like, oh, a lot of these things are the DOJ.

So, how do you balance the approach between the two agencies?

Yeah.

So, you're right that the antitrust laws are enforced both by the Federal Trade Commission and by the Antitrust Division within the Justice Department.

Some of how we divide and conquer is a result of law.

So, the FTC doesn't have jurisdiction over banks,

over certain meat packers,

over common carriers like the airline.

Certain meat packers?

Certain parts of the agriculture supply chains.

Some parts of the agriculture supply chain.

And actually, this goes back to the FTC wrote a really hard-hitting report exposing the meatpacker oligopoly in like 1919.

And there was such ferocious backlash that Congress stripped our jurisdiction over that sector and gave it to DOJ.

That's crazy.

Railroads, airlines, telecom, DOJ does that.

But for areas that are not kind of a result of what's written in the law, it's partly a combination of kind of experience, right?

So, who historically has looked at some markets, who historically has looked at others?

The FTC has looked, for example, historically at grocery stores, at hospitals, at pharma, whereas DOJ has looked at health insurers.

And so, partly it's, you know, just based on experience.

There would sometimes, you know, before

this last administration, there had been a lot of turfiness.

And sometimes they actually did have to resort to a coin flip.

You're not kidding.

No,

the administration right before ours was kind of famously most at war, including, you know, it resulted in things like DOJ sometimes filing amicus briefs against the FTC in the FTC's cases.

So there was like a lot of dysfunction.

I was very lucky that my counterpart, Jonathan Cantor, who was at the antitrust division, was a really fantastic partner.

And so we had, you know, we were very aligned.

And we can call heads or tails during the coin flips.

And why?

When they meet at the head of agency meeting that they all do before they decide the weather, they flip the coin to decide who gets the

weather.

No, this is that, you know, what a hard-hitting question that I'll uncover all this information.

I didn't know there was meatpacking drama.

If I knew there was meatpacking drama,

because we, where's a meatpacking oligopoly right now?

Who handles that?

It's DOJ.

Okay.

So they're kind of basically four million.

Is that worse than you?

Does it not get handled?

I mean, I obviously have a lot of agency pride for the FTC, but, you know, the antitrust division did fantastic work these last few years too.

Yeah.

All right.

Well, I just think Tyson Food still owns all the meat packing, and I wonder who's at the DHS right now.

Off the clock, are we?

I saw Amazon lawsuit.

I saw Meta lawsuit.

I didn't see a lot of Tyson Food lawsuits.

I would like to ask about what it was like working as the youngest FTC chair.

Cause I think what is so cool about you being one of the most, I would argue, influential people of the Biden administration is that, like, you started that role, like, when you were about my age, like, you know, and the people watching, you're a politician who actually is part of our generation.

I was going to say you're about 40 years too young to be in that position.

Yeah.

According to, if we look at the status quo, right?

So I genuinely want to hear about this because I think something that causes so much frustration with millennials and Gen Z, certainly for me, is the feeling that our politicians don't represent us.

And so for you, as somebody who came in incredibly young by comparison, what is it like to work with, let's say, Congress, who the average person is 95 years older than you?

How do you bridge that gap?

Like, was that hard?

Like, what is going on here?

Why don't we have more younger people in politics?

I mean, I do hope that that's a trend that will continue.

It was obviously a big honor to get to do this job the last few years.

You know, I think one of the kind of biggest takeaways for me is just like how you build a team is really important, right?

I was picked for this role because I had kind of certain views on, you know, what had gone wrong and how to fix it.

And when you're kind of leading an organization like the FTC, you want to make sure you're able to spend as much of your time on a daily basis basically doing what your value add is and making sure you're building like a really great team around you to kind of get to do the things that are not kind of your value add.

And so it was really lucky to have a fantastic team in place to kind of help us do all the work we did.

You know, we worked a lot with Congress.

I would get kind of invited to go do hearings and testify before them.

And I think what was really striking to me was that even though there were a lot of big business lobbyists that were attacking the agency, there was actually a lot of bipartisan support in Congress.

And so, you know, I would go testify and I would hear from Republican members about how worried they were about their main streets being hollowed out because of big middlemen that were squeezing independent pharmacies or independent grocers.

A lot of bipartisan concern about kind of big tech's effect on kids and whether basically they're running like a mass experiment on, you know, our nation's children who are now,

you know, facing online abuse, addiction, and kind of what agencies like the FTC could do there.

And so it was really neat to see how actually there was a lot of on-the-ground support for what we were doing.

Does it make you hopeful?

I mean, we've talked about some of the depressing sides, the dystopian sides, the backsliding.

But I do feel there's a trend towards more people understanding the importance of this stuff on both sides of the aisle and people getting passionate about it.

Are you hopeful at all that there's going to be more progress in the future?

Or do you think we're going to be in a period of

less so?

You can be honest,

I don't know where you're, where you're, what's your head at?

I mean, look, it's a pretty troubling time right now in our politics.

I think we're seeing like mass lawlessness across from what some of this administration is doing.

And,

you know, how we kind of navigate the next few years is going to be really critical.

I do think part of how we got here was that a lot of people don't feel like government's been working for them.

And I was so proud of what we were able to do in the kind of three and a half years we had, but we were working up against 40 years of things being done in a way that totally failed.

And so we really needed more time to kind of fully make the turn.

It has been really interesting, candidly, to see just continued interest in the work that the FTC was doing among lawmakers, among people in the states.

And so, you know, I do hope that there is a lot of momentum.

Obviously, the kind of Zoran Mambani victory in New York, I think, is really interesting.

But we're seeing people who identify, you know, in a range of ways, ideologically, I think, gravitate towards the fact that taking on corporate abuse is good policy and good politics.

What is it like going back to a normal job after you're like one of the most influential people in the country?

You know, the day-to-day shift is pretty stark in that you would kind of go from having, you know, like 10 hours of back-to-back meetings and kind of at any moment get a phone call that something really bad is about to happen uh to just having a more easy life and honestly

uh i obviously wish we were uh still governing but there are definitely

personal upsides um

this is a joke that i've made with friends and i'm going to ask you honestly is there any chance we're going to see you in a few years as like a lobbyist for google

Because there's many people in the past who have been great public servants who then seem to leave and go revolving door right into the things they used to fight against.

You know, I think I had an unusual path to the FTC and I'm not planning to do that.

Okay, I'm glad.

I'm holding you to that.

That could have been our breaking news.

Actually, I just got Aquahire in my Goodle this morning.

I just want this clip in case you do it so I could be like, well, she told me.

You had mentioned before we started that you're

about to be or you're, you already are a professor at Columbia Law School.

So is that, you know, is that what you're doing for the foreseeable future?

Is that for a couple years?

Like, how do you, you know, how do you go from a position like that and then look at the rest of your career?

Because you've done something so incredible already and you could, you know, seek to go back to that, I guess.

Or, you know, what are the paths forward for you?

Yeah, I mean, I think, you know, one of the areas that does actually make me really hopeful and optimistic is that there is a surge of interest in this stuff from young people, including from law students.

I get emails sometimes from high school students saying, you know, I'm doing my project on Ida Tarbell and like want to bust up the trusts.

And, you know, can I interview for my school project?

Like, it just does seem like there is greater consciousness and awareness about the fact that we do have these anti-monopoly laws and just a broader set of laws that are supposed to govern corporate power and make sure our economies working for everybody.

And so the opportunity to kind of help train that next generation is really exciting to me.

And so I'll be doing that partly.

I think we're also just figuring out, you know, how do we keep up the momentum more broadly?

I think one reason why this work was able to go so quickly from kind of being a law review paper and kind of critics on the outside to getting the chance to govern is because we were very focused on like, let's not use outdated theories and models and assumptions to understand how markets work, but let's actually talk to people and do rigorous reporting and research and figure out what's happening on the ground.

And I think there's a lot more opportunity to do that that and to just make sure that

a greater, greater percentage of Americans are actually being heard to and listened to by our government.

We're almost at the end.

I would love to ask at least just a little bit for folks, let's say in our generation or younger, who do feel that sense of hopelessness to some degree with government.

Is there anything you would recommend of either how to think about it or what to do, or maybe just some words for folks who are like, I'm scared of what's going on right now?

Because I think a lot of us feel that.

Yeah.

I mean, I think that thing that I come back to is the fact that in our history, we have faced moments that seem very dark.

And, you know, the 20s, not a great time.

No.

And that we had the New Deal, but between that, we had, you know, the big crash.

A few world wars.

And so, you know, I do think that

This country is capable of a lot of incredible things.

And that's partly because of the people here.

And I think more and more people are recognizing that the state of things being so terrible is not some inevitability, but actually is the result of people in positions of power making decisions one way, but that could be made a different way,

is really important.

And so I think, you know, focusing on local government, on state government, making sure that people are in those positions because they want to do the right thing, even when it means standing up to powerful interests, I think is really important.

And, you know, obviously what happens in the coming years politically is going to be really key.

I love that you grounded in history because I think so many people think some of the ideas you're talking about are like insanely radical, but they really are in living memory things that were enforced and done in America.

Like Joe Biden was 30.

It's not that crazy to have done these things.

And it's so funny that now after some of these years that it just is treated like that's un-American.

It's completely impossible for us to be enforcing antitrust in a way that worked great.

I mean, it's as American as it comes, right?

I mean, the American Revolution was in part a protest against monopoly, right?

The British East India Tea Company had achieved a monopoly over this key input, and Americans were revolting against that.

And the idea that, you know, we overthrew a king just to go be ruled by some monopolies was like...

so anathema that it's partly what led to the antitrust laws.

And they actually talked about it, they said, you know, if we're not going to be ruled by a king, we also don't want to be ruled by these autocrats of trade.

And there was a real understanding that if what we really care about is democracy and freedom for people, we need checks and balances in our government and our political sphere, but we also need checks on monopoly power and making sure our economy is more fair.

And so I think those things being really connected is very American.

Lena Khan, that was a pleasure.

Fantastic NB.

Thank you so much for joining us.

This is really, really interesting.

Thank you.

That was great.

Thank you so much.

And now the celebratory lemon that we always do.

Oh, oh, that's it.

I thought it was our plastic one, like normal.

And I was like, throw luck, Leo.

That's great.

Thank you for coming on.

Strong sweetness.

That has.