As FTC Chair Lina Khan’s Term Expires, Democrats Are Torn Between Donors and Their Base

For months, speculation has raged in Washington over the future of Lina Khan, the Federal Trade Commission chair and face of the Biden administration’s crusade against monopoly power. Overturning decades of antitrust norms, charged by Khan with failing to curb extreme concentrations of corporate power, the administration has routinely scrutinized major acquisitions traditionally ignored by Khan’s predecessors, forcing companies like Lockheed Martin and Nvidia to abandon multibillion-dollar deals in court.
Opponents of Khan—who is often described as a legal “wunderkind” or “prodigy,” though invariably as “young”—include a number of powerful investors and CEOs known as prominent backers of the Democratic Party; billionaires with ties to businesses long under the FTC’s microscope.
The donors, which include LinkedIn cofounder Reid Hoffman and media mogul Barry Diller, have openly urged Kamala Harris to replace Khan in the event she wins in November, a move that would likely spell disaster for president Joe Biden’s antitrust revolution.
Diller, for his part, laid into Khan publicly in July, calling her a “dope” on national television, a remark that he later walked back, calling her “smart,” but “disrupting sensible business combinations.” To the ire of many of Khan’s supporters, the Harris campaign has remained silent on her future.
Neither the Harris campaign nor the FTC responded to a request for comment. Diller did not immediately respond. Hoffman declined to comment.
Roughly 80 percent of Democrats feel that the government should be doing more to take on corporate monopolies, compared to only 3 percent who say it should be doing less, according to new polling. Nearly 90 percent of Democrats, meanwhile, feel that lobbyists and corporate executives hold too much power over the government.
The same poll, commissioned by the Tech Oversight Project, found that more than three-fourths of Democrats feel Big Tech wields monopoly power in ways that harm consumers and small businesses. Only 7 percent said the companies should face no repercussions, since they have continued to innovate.
“Democratic voters want to build on the Biden-Harris administration’s record of protecting competition, holding monopolies accountable for breaking the law, and lowering the cost of living for everyday families,” says Sacha Haworth, the project’s executive director, who favors Khan as the “natural favorite” to carry on this campaign.
Due perhaps in part to polling like this, there are strong indications that the billionaires are wasting their breath when it comes to the ousting of Khan. Last month, the Democratic Party adopted a platform that celebrated Khan’s crackdown on “corporate greed,” while calling for further investigations into the “potentially harmful effects of corporate consolidation” in Big Pharma and across the media industry. While Khan gave no speeches at the convention, the party’s promise to rid America of “monopolies that crush workers and small businesses and startups” was delivered—perhaps even more potently—by Biden’s secretary of commerce, Gina Raimondo, a consummate corporate advocate.
Khan supporters, alarmed that Harris has yet to rally to the legal star’s side, erected a mock website this month, labeling her “Bad for Billionaires,” while satirizing some of the Democrats’ biggest donors, Hoffman and Diller among them. “Lina Khan must be fired,” the page declares, “so we can continue our untrammeled profiteering!”
The Demand Progress Educational Fund and the Revolving Door Project, organizations that monitor and lobby against corporate influence over US policy, took credit for launching the site.
“It’s pretty funny that these billionaires are clutching their pearls when they have a financial stake in ensuring the FTC stops fighting for consumers,” says Emily Peterson-Cassin, director of corporate power at Demand Progress. “It’s absurd for them to pretend that their Lina Khan obsession is about anything other than money in their pocket.”
Over the course of Khan’s term, the FTC has taken nearly 30 merger enforcement actions, forcing a dozen companies to abandon plans to consolidate, as opposed to slogging it out in court with the Justice Department’s antitrust lawyers.
While Khan’s term technically expired this month, it’s possible that she could remain at her post for many years. If former president Donald Trump wins the election, it’s almost a certainty she will be fired. Harris, however, would be free to delay naming her replacement—indefinitely should she so choose. There is no mechanism to automatically eject her from her chair.
One former Senate staffer and Democratic operative tells WIRED that Harris is likely benefiting for the time being by remaining “purposefully ambiguous,” allowing supporters and donors to project their own image of the president they hope she’ll be. But the optics of actually abandoning Khan would be awful, they say.
“What kind of message does that send to every other agency head?” they said. “‘Whatever you do, don’t piss off billionaire donors?’ What we’re talking about here is law enforcement, right? Law enforcers should feel unencumbered by that kind of political pressure.”
The former staffer says that with both campaigns spending in excess of a billion dollars, the press is overestimating the influence of any one particular donor, adding that there’s an entire industry propped up by such notions.
“Underneath the iceberg [of pollsters and media consultants] is every rich person and every corporate special interest who wants the access and influence,” the source says. “And all of these people have built up this enormous propaganda machine, making it seem like every extra $20 million Kamala raises will make a huge difference.”
On Sunday night, Khan defended the FTC during an episode of 60 Minutes against accusations from business leaders that she’s overstepped her bounds, saying that the agency is doing its duty and enforcing the law. She also rebuffed claims that her enforcers had adopted a spray-and-pray mentality: “Of all the thousands of deals that are proposed every year, the FTC and DOJ collectively investigate maybe 2 or 3 percent,” she said.
Asked whether she would choose to remain on the job, Khan said, “Obviously those are conversations one has with one’s family … But absolutely, there’s so much work to be done.”
Khan’s term culminated this month in the release of a critical FTC staff report detailing the “staggering” levels of commercial surveillance conducted by some of America’s most massive companies. The report, Khan says, “lays out how social media and video streaming companies harvest an enormous amount of Americans’ personal data, and monetize it to the tune of billions of dollars a year.”
The report, which focuses on the business practices of Amazon, Meta, Google, and others of comparable size, is critical of the companies’ efforts to accumulate and store highly sensitive data on their customers, as well as consumers who aren’t actually users of those companies’ apps and services. It charges eight out of nine of the companies, for instance, with being more or less incurious about how users’ privacy settings are updated or changed.
“They track what we read, what websites we visit, whether we are married and have children, our educational level and income bracket, our location, our purchasing habits, our personal interests, and in some cases even our health conditions and religious faith,” says Samuel Levine, head of the FTC’s enforcement division, which led the investigation.
“While lucrative for the companies,” adds Khan, “these surveillance practices can endanger people’s privacy, threaten their freedoms, and expose them to a host of harms, from identity theft to stalking.”
Saying US companies “can and should do more” to respect their customers’ privacy, the FTC adds that it is incumbent on Congress to pass “comprehensive federal privacy legislation” soon. Efforts at doing so, however, remain long mired in disagreement among lawmakers, despite years of ceaseless negotiation.
At least under Khan, the FTC has made aggressive strides in picking up Congress’ slack. Like the conglomerates seeking to further their dominance through endless consolidation, those that prosper most from commercial surveillance stand to gain far more than they’d lose watching her chair go to another.