The Sheriff of Silicon Valley: Lina Khan’s FTC agenda for M&A, AI Acquisitions, and Non-Competes

**Elad Gil** (0:05)
Hi, listeners, and welcome to No Priors. Today, we're talking to Lina Khan, Chair of the Federal Trade Commission. When she was appointed at 32 years old, she was the youngest chairperson in the history of the FTC, and one of the youngest leaders of a government agency today. Lina has made a significant impact during her time at the FTC, focusing on high-profile antitrust cases. Within tech, her FTC has challenged Nvidia, Meta and Microsoft, as well as taking actions within healthcare and pharma. We're going to discuss how she thinks about AI, the structure of the markets best for consumers, non-competes, predicting whether or not M&A will happen, and her approach to increasing competition.

**Sarah Normous** (0:43)
Well, Chair Khan, thank you so much for joining us today on No Priors.

**Lina Khan** (0:45)
Thanks so much for having me.

**Sarah Normous** (0:46)
So when you were 32 years old, you were appointed the youngest chairperson in the history of the FTC. Can you tell us a little bit about your career and what led you to the FTC and government?

**Lina Khan** (0:54)
Yeah, happy to. So I got my start as a business reporter and journalist, and one of my jobs was to document how various markets across the US economy had evolved. So I had to do deep dives in areas like the airlines, book publishing, chicken farming, the aluminum market, really all sorts of nooks and crannies that gave me a deeper appreciation for the ways that over the last four decades, our markets had become much more consolidated, primarily through waves of mergers and acquisitions, which in part were permitted through a much more lax approach to antitrust laws and policing mergers. And through that research, I really got a direct view of how consolidation and concentration in markets affects everyday people, be it consumers who are having to drive much further to get to the nearest hospital, to chicken farmers who can only sell to a single company, and that leads to all sorts of exploitation, to entrepreneurs and small businesses about how, you know, when you have a handful of gatekeepers controlling access to markets, that can also lead to much worse terms for them. And so it really got me just interested in this question of market structure. And the fact that how we structure markets is in fact a policy question. Do we want monopolies in every market, or do we want more competition? And historically, America has chosen the path of more competition. And I believe that's what's contributed to just the phenomenal economic growth that we've seen and the birth of so many fantastic companies.

**Elad Gil** (2:35)
While you were at Yale, you published this very influential essay about Amazon and the antitrust paradox. Can you describe the theory behind the essay and how that might differ from traditional antitrust? And if it still applies in your thinking today?

**Lina Khan** (2:52)
The big caveat here is that I wrote this paper as a kind of a law student. It's very different from being a law enforcer. But that paper followed a lot of this market research that I had been doing. And before I went to law school, I spent a good six months just talking to a lot of the businesses that were selling through Amazon and then also talking to various investors and market analysts about how they viewed Amazon from a more long-term perspective.
This was a time when Amazon's returns were still fairly low. And there was just a question about what the end game here is going to be. And it was really interesting through talking to those set of market participants. They were already seeing and experiencing the structural dominance that this company was starting to achieve, even though that structural dominance was not necessarily resulting in higher consumer prices right away. And so the essay was a way to use Amazon as a way to tell a broader story about the history of our antitrust laws and how we had evolved from, you know, viewing this issue of dominance and monopolization through a broader prism and a broader understanding of the different ways that companies can exercise their monopoly power to a much narrower thinned out version of just viewing short-term price effects and output effects, primarily as the metric of whether you do or don't have a monopoly that's abusing its power. And so that's what the paper was about.

**Sarah Normous** (4:21)
Given that you've now run the FTC for a few years, what is your view today in terms of the right framework on what's a competitive market or not, when the government needs to intervene or not? I think, for example, the FTC pursued a case against Metta for a small sort of 30-person fitness VR application acquisition. And in that case, you know, it was a very early market. There wasn't a lot going on yet there, but in part simply because there wasn't as much technology progress and traction. How do you think about more broadly from your lens today having now practiced this for many years? When is the right time to intervene or how do you even think about that?