FTC’s Lina Khan talks big tech monopolies on The Daily Show – The Ticker

Jon Stewart was asked by Apple Inc. to not have Federal Trade Commission Chair Lina Khan on his podcast. Nonetheless, amid several ongoing investigations by the FTC, he brought her onto The Daily Show to discuss recent antitrust legal action against tech giants and to explore corporate accountability concerns on April 1.

Regarding Apple, Stewart asked Khan, What is that sensitivity? Why are they so afraid to even have these conversations out in the public sphere?

Khan replied, Going back all the way to the founding, there was a recognition that in the same way that you need the Constitution to create checks and balances in our political sphere, you also needed the antitrust and anti-monopoly laws to safeguard against concentration of economic power because you dont want an autocrat of trade in the same way that you dont want a monarch.

During the 20-minute interview, Khan discussed how companies get away with monopolistic activity, including how to identify it through company behavior. With Stewart bridging the concept to oligopolies, Khan addressed how companies becoming less competitive harms Americans.

While monopolistic activity can be spotted through assessing the boundary of the market or the market share, Khan said the most direct way is looking at how the company behaves.

She presented Amazon.com Inc. as an example, which the FTC filed a lawsuit against in September 2023, alleging it prevented sellers from offering their products at reduced prices on alternative platforms. This included steadily hiking the fees small businesses had to pay to sell through Amazon, eventually paying one out of every two dollars to the company creating a 50% monopoly tax, Khan said.

When holding these companies accountable, the FTC, which employs about 1,200 employees, is outnumbered 10 to 1 in terms of legal staff. Khan says it leaves them outgunned, but not outmatched.

So this isnt just about getting a fine, Stewart interjected. They [SEC] go after groups and then they cant really prove it in court, so then theyre like, How about this? You give us a cut of your profit and well all be done here.

Khan said the FTC deters illegal behavior by, for instance, naming individual executives in some of the lawsuits. However, despite not having criminal authority, the FTC succeeded with Baruch alumnus Martin Shkreli, who hiked up the price of Daraprim by 5,000%, by banning him from doing business in the pharmaceutical industry.

Stewart then shifted focus to tech companies, which have faced recent antitrust lawsuits for stifling competition, citing Apple as an example. In March, the DOJ and 17 states sued Apple, alleging it maintains an illegal monopoly through practices fostering customer dependence on its devices.

Regarding oligopolies, which refers to a market structure where few firms influence the market, Stewart asked if companies are colluding together to corner the market.

One trend that were especially concerned about is the way that algorithms may be facilitating price fixing, Khan said. If you have a whole bunch of competitors in a market, be it hotels, be it casinos, and they all decide theyre going to outsource their pricing decision to the same algorithm, they may be in effect fixing their prices even if theyre not getting in a back room and making secret deals.

Concluding the interview on AI consolidation, Stewart mentioned how companies like Apple, Googles parent company Alphabet Inc. or Microsoft Corp. acquire AI startups and restrict access, leading to an arms race to see who will establish a monopoly or if this will become a new oligopoly.

The first thing we need to do is be clear-eyed that theres no AI exemption from the laws on the books, Khan said.

When asked by Stewart on what will follow if something catastrophic happens through AI, Khan said theres no inevitable outcome.

We are the decision makers. Khan said. We need to use the policy tools and levers that we have to make sure that these technologies are proceeding on a trajectory that benefits Americans, and were not subjected to all of the risks and harms.

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FTC's Lina Khan talks big tech monopolies on The Daily Show - The Ticker