Why should any of us care about monopolies? Lina Khan, the youngest-ever chair of the Federal Trade Commission, joins Preet to discuss the real-world impact of monopoly power, the surprising bipartisan support for antitrust enforcement, and her rapid rise to prominence after publishing a groundbreaking paper on Amazon's business practices during law school. Plus, Preet answers questions about the qualifications to become Surgeon General, Kid Rock's restaurant, and Bruce Springsteen. Join the Insider community to stay informed without the hysteria, fear-mongering, or rage-baiting. Sign up on our website, or find us on Substack. Thank you for supporting our work. Show notes and a transcript of the episode are available on our website. You can now watch this episode! Head to the Stay Tuned Youtube channel and subscribe. Help us plan for the future of Pivot by filling out a brief survey: voxmedia.com/survey. Thank you! Learn more about your ad choices. Visit podcastchoices.com/adchoices
Chapter 1: What is the significance of monopolies?
But strikingly, we have seen less of a retreat from this administration on anti-trust than we have in almost any other policy arena. They made a series of decisions to keep the merger guidelines, keep several of our major antitrust lawsuits going. So far, we haven't really seen any major break at all.
Who knows if that will stay in place for the full administration or whether we'll see pretty overt weaponization of the antitrust laws so they're rewarding friends and punishing enemies. But so far, we have seen more continuity than I think anybody expected.
Does aggressive antitrust enforcement fall comfortably within a populist ideology in government?
Well, if you step back, the antitrust laws were founded on the view that extreme concentrations of economic power pose a threat to people's freedoms and liberties, much in the same way that we understand extreme concentrations of political power or state power to pose.
There was a recognition that if what we really want is to create freedom for people in their day-to-day lives, you can't just have checks and balances in your sphere in governance and and then allow monopolies or autocrats of trade, as they were called, to govern.
And, you know, there was a recognition that here Americans had overthrown a monarch and they weren't going to instead sign up to be ruled by monopolists. And so there has been a real original understanding of how antitrust, but more broadly, an anti-monopoly ethos is absolutely critical for some of our most cherished values.
Did you play Monopoly as a kid?
I did.
And did you like the game?
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Chapter 2: How did Lina Khan become FTC Chair?
So there are different ways to define what a monopoly is. And in court, there are different methods and mechanisms that enforcers use. Some are primarily trying to define what is the relevant market, right? Who is in and who is out of this market? And then how do you calculate effectively the percentage that this one company has? And is it enough to trigger monopoly status? Which itself is...
can range from, you know, 60% to, say, 90%. And courts have come out different ways on what the kind of right cutoff point is. To my mind, you know, one of the most effective ways to be able to show a monopoly is through its behavior, what we call direct evidence of monopoly power. And in short, a firm can behave like a monopoly when it's able to
make its products worse or raise its prices for its customers without facing real consequences in the marketplace. And so you can understand this in some ways as a firm becoming too big to care, that they have amassed not just a size, but have also cut out competitors such they can get away with making decisions
products more expensive or marking products or services worse for their customers without the ordinary checks that you would expect in a competitive marketplace. And so those are both just two ways of being able to show monopoly power, even market power. And as when we were bringing our cases, we would routinely deploy both methods.
And what's an example of an entity about which there would be consensus that they have monopoly power?
Well, there are major cases underway. We just saw a verdict from a judge in D.C. a few months ago ruling that Google had monopolized the market for generalized online search. You know, the Justice Department in that instance used both indirect and direct forms of evidence to make that showing. And so Google has now been been found to be a monopoly in online search.
I want to talk about Amazon because Amazon looms large in your origin story as well. So in 2017, you wrote what people call an article in the Yale Law Journal that had quite a response. Amazon's antitrust paradox.
For people who are not from or of law school, I will note for them that even though in the popular press your piece is called an article, it is in fact among law students and lawyers called a note. Because you were just a law student at the time, and obviously not just a law student, but thinking about these big issues.
But I will note for the record that when you're a law student and you write something that's important or not, it's called a note. When you're a law professor, it's called an article. So I just want to put that little piece of business beside.
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