Meet the Most Feared Person in Silicon Valley

Summary

Podcast Summary: Pablo Torre Finds Out – "Meet the Most Feared Person in Silicon Valley"

Episode Information

• Title: Meet the Most Feared Person in Silicon Valley
• Host: Pablo Torre
• Guest: Lina Khan, Former Chair of the Federal Trade Commission (FTC)
• Release Date: June 17, 2025

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1. Introduction

In this episode of Pablo Torre Finds Out, host Pablo Torre delves into the influential and controversial role of Lina Khan, the former Chair of the Federal Trade Commission (FTC). Known as "the most feared person in Silicon Valley" and "the most hated person on Wall Street," Khan's tenure at the FTC marked a significant shift in antitrust and consumer protection enforcement. The episode aims to uncover the complexities of her role, her impact on major corporations, and the bipartisan reactions her actions have elicited.

2. Background on Lina Khan

Lina Khan's rise to prominence began with her seminal 2017 article, "Amazon's Antitrust Paradox," published in the Yale Law Journal. Her work reinvigorated antitrust discourse, challenging traditional notions and advocating for a more robust stance against corporate consolidation. Appointed by President Joe Biden at the age of 32, Khan became the youngest chair in FTC history. Despite her young age, her academic and professional background positioned her as a formidable figure in regulatory circles.

Quote:

• Khan (00:35): "Go, why meet them when you can shatter them?"

3. Bipartisan Criticism and Support

Khan's aggressive enforcement of antitrust laws garnered both staunch supporters and vehement opponents. High-profile critics included Elon Musk, Republican Congressman Darrell Issa, Senator Mike Lee, and even Democratic figures like Mark Cuban and Reid Hoffman. This diverse opposition underscores the broad impact of Khan's policies across different sectors.

Notable Criticism:

• Elon Musk (02:26): "The FTC chair, Lina Khan, will be fired very soon."

Notable Support:

• Mark Cuban (Implicit Support Mentioned): Despite being a major figure in sports and tech, Cuban emerged as a surrogate for Kamala Harris, indirectly supporting antitrust measures against giants like Khan targets.

4. Role and Achievements at the FTC

a. Enforcing Consumer Protection and Antitrust Laws

Khan emphasized the FTC's dual mandate: enforcing consumer protection laws and antitrust regulations. Her approach aimed to level the playing field, ensuring that even large corporations adhere to fair competition practices.

Quote:

• Khan (04:32): "The Federal Trade Commission was created in 1914 to stand up for the American people against corporate abuse and exploitation."

b. Key Initiatives and Policies

1. Lawsuit Against John Deere (10:48): Khan criticized John Deere for making it difficult for farmers to repair their equipment, leading to increased costs and operational delays. The FTC's lawsuit aimed to ensure that farmers could access independent repair services without undue restrictions.

2. Click-to-Cancel Rule (24:09): Addressing the rampant issue of subscription services making cancellation intentionally difficult, Khan spearheaded a rule requiring companies to allow consumers to cancel subscriptions as easily as they signed up—ideally with one or two clicks.

3. Fake Reviews and Junk Fees (25:32): The FTC under Khan targeted deceptive online reviews and hidden fees, such as those seen with event ticket pricing, enforcing transparency and honesty in consumer transactions.

4. FTC v. Meta (Facebook) Trial (27:25): Khan was instrumental in bringing forward a landmark case against Mark Zuckerberg and Meta for acquiring Instagram and WhatsApp to eliminate competition. The six-week trial showcased evidence of anti-competitive practices aimed at securing a monopoly in social media platforms.

Quote:

• Khan (05:18): "When you have corporate elites, when you have fancy people in suits breaking the law, the government seemed to go much lighter."

5. Antitrust in Sports

Khan also explored the intersection of antitrust laws and the sports industry, highlighting significant cases that challenge traditional structures:

1. House v. NCAA (40:26): A U.S. district judge approved legal changes allowing schools to pay athletes directly, undermining the NCAA's previous restrictions on education-based benefits.

2. Michael Jordan vs. NASCAR (42:46): Michael Jordan filed an antitrust suit against NASCAR, alleging that the organization employed illegal tactics, including acquisitions and non-compete clauses, to maintain its monopoly over premium racing series.

Quote:

• Khan (44:41): "Students athletes could be subjected to anti-competitive constraints. The NCAA was not exempt from antitrust laws."

6. Perspectives on AI and Competition

Khan expressed concerns about the concentration of power within the artificial intelligence sector. She highlighted the risk of a few companies controlling the development and deployment of AI technologies, which could stifle competition and innovation.

Quote:

• Khan (33:36): "The number of companies or even individuals that are getting to call the shots on a lot of how these technologies develop is pretty small."

She emphasized the need for regulatory frameworks to ensure fair competition and protect creators' rights in an AI-driven landscape.

7. Current State of FTC and Future Plans

As of January 2025, Khan stepped down from her role at the FTC, amid ongoing political pressures and administrative shifts. Her departure signifies potential changes in the agency's direction, with a new chair aligned more closely with the previous administration's deregulation stance.

Future Endeavors:

• Teaching Antitrust Law (50:35): Khan plans to educate the next generation on antitrust principles and continue advocating for robust competition policies.
• Building a Movement: She aims to harness the enthusiasm of young activists and scholars to sustain the antitrust momentum she established at the FTC.

Quote:

• Khan (50:40): "I want to ensure that we have a game plan to revitalize all these agencies and make sure that we're being smart and effective in that government."

8. Conclusion

The episode concludes with reflections on Khan's legacy and the challenges facing antitrust enforcement in contemporary America. Despite her departure from the FTC, Lina Khan remains a pivotal figure in the fight against corporate monopolies, inspiring future generations to continue the quest for fair competition and consumer protection.

Final Thought:

• Pablo Torre (53:24): "Lina Khan in a world of staggering insurification. Thank you for trying to find a reasonable path forward."

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Notable Timestamps and Quotes:

• 00:35: Khan: "Go, why meet them when you can shatter them?"
• 02:26: Musk: "The FTC chair, Lina Khan, will be fired very soon."
• 04:32: Khan: "The Federal Trade Commission was created in 1914 to stand up for the American people against corporate abuse and exploitation."
• 05:18: Khan: "When you have corporate elites, when you have fancy people in suits breaking the law, the government seemed to go much lighter."
• 24:09: Khan: "We finalized a rule that says companies have to make it as easy to cancel as it is to sign up."
• 27:25: Khan: "This case really goes back to Facebook... there's a lot of evidence showing that these transactions were anti-competitive."
• 33:36: Khan: "The number of companies or even individuals that are getting to call the shots on a lot of how these technologies develop is pretty small."
• 50:35: Khan: "I want to ensure that we have a game plan to revitalize all these agencies and make sure that we're being smart and effective in that government."

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Conclusion

This episode offers an in-depth exploration of Lina Khan's transformative, albeit contentious, tenure at the FTC. Through her rigorous enforcement of antitrust laws and consumer protection measures, Khan has left an indelible mark on the regulatory landscape, challenging some of the most powerful corporations in Silicon Valley and beyond. Her efforts have sparked both admiration and opposition, highlighting the complex interplay between regulation, corporate power, and consumer rights in modern America.

Transcript

[Pablo Torre]

Welcome to Pablo Torre finds out. I am Pablo Torre and today we're gonna find out what this sound is. I think Lina Khan should have been given more power, should have been able to do more things. I think there's obviously a big problem. I think a big problem in Silicon Valley right after this ad.

[Lina Khan]

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[Pablo Torre]

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[Lina Khan]

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[Pablo Torre]

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[Lina Khan]

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[Pablo Torre]

I think you're on mute.

[Lina Khan]

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[Pablo Torre]

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[Lina Khan]

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[Pablo Torre]

How do I call you Lena? Do I call you Chair Khan? How does that work?

[Lina Khan]

Whatever you want. I mean, I'm not really a chair anymore, so.

[Pablo Torre]

Well, I was gonna say, I don't know if it's like, you know, you're sort of Mr. President forever. I don't know how it works with the.

[Lina Khan]

I think we get to set the rules. So.

[Pablo Torre]

Okay, whatever you want, you're going, you're going, you're going casual today.

[Lina Khan]

We can do that. I mean this, it would seem fitting.

[Pablo Torre]

Well, look, I, I've told a bunch of people in my life you were coming to visit our studio today and thank you for being here, by the way. And the reactions tend to go into two camps. One of them is holy, the other one is. Who is that?

[Lina Khan]

That's not too surprising. I mean, for a long time, you know, the Federal Trade Commission was somewhat esoteric and arcane and we really tried to revive it, revitalize it, start focusing on some of the biggest pain points that people were facing in their day to day lives. And so I would say that did generally elevate the profile of the agency.

[Pablo Torre]

So if you're one of the people who have zero idea who Lina Khan is or what any of this even has to do with sports, which we will get to, I promise, you should know something very important here, which is that there is an almost inspiringly bipartisan coalition of people who hate her guts. Elon Musk, who I guess is going to be in charge of the Federal government soon stated that the FTC chair, Lina Khan, quote, will be fired very soon.

[Lina Khan]

Lina Khan going over and reportedly colluding with European regulators when she should be standing up for American companies. She's colluding against them, and that's horrible.

[Pablo Torre]

Why are you harassing Twitter?

[Lina Khan]

My problem here today is that you're a bully.

[Pablo Torre]

Mark Cuban, who has really emerged as a major Kamala surrogate, quote, if it were me, I wouldn't asked if she should keep Lina Khan as FTC chair. And it keeps going like that. The roster of critics who have called for Lina Khan to be out of power includes Elon Musk and, yes, Republican Congressman Darrell Issa, as well as Republican Senator Mike Lee and plenty of guys along those lines. But also Mark Cuban and tech billionaire Reid Hoffman and Maryland Governor Wes Moore, these noted Democrats. All of which leaves Lina Khan with one conspicuous and unlikely defender. Look, I think Lina Khan is one of the most important political figures in this country. And I think if she had been listened to more by Democrats, they would actually been more competitive against us in November of 2024. Steve Bannon, who said that at a tech conference in April, is of course, the ideological steward of the Make America Great Again movement. He is also an avowed enemy of Silicon Valley, which raises one, at this point, relatively overdue question. Just the basic job description of FTC chair. What does it mean?

[Lina Khan]

Yeah, so the Federal Trade Commission, so we were created in 1914 against, again, the backdrop of the robber barons. The industrial trusts and Congress wanted an agency that would stand up for the American people against corporate abuse and exploitation. The nuts and bolts of that are that the agency is supposed to enforce the consumer protection laws. And so if companies are engaging in unfair or deceptive behavior that can span anything from fraud and scams to data brokers illegally spying on you, that's a big part of the job. And then the agency is also supposed to enforce the antitrust laws. So if companies are trying to illegally merge to snuff out the competition or are engaging in monopolistic practices, that's what the agency is supposed to take on as well.

[Pablo Torre]

And Lina Khan, who has the endorsement, incidentally, of Bernie Sanders, but was appointed by Joe Biden, actually did take on Amazon and Facebook Meta and has since become a wildly endangered political species. You are referred to as the most feared person in Silicon Valley, the most hated person on Wall Street. You provoke strong reactions, I guess is the brief scouting report on Lina Khan.

[Lina Khan]

The job I had was to enforce the law without fear or favor. And I think for A period there was a sense that the government's very comfortable going really hard when it finds kind of small ball violators of the law, right. Pickpockets or kind of small time scammers, and it's ready to bring the force of the government to go after them. But that when you have corporate elites, when you have fancy people in suits breaking the law, time and time again, the government seemed to go much lighter. And, you know, I came of age during the financial crisis where I think we saw that discrepancy and it made a big impression on me and I think has contributed to some of the disillusionment we see across America with government. And so when I came into this role, it was really important to me that we actually be even handed. And even if we found that it was really big corporations breaking the law, that we didn't think, oh, well, we have to go soft here. And I think that did provoke some emotions, some hysteria sometimes from those corners. And, you know, that's just part of the job.

[Pablo Torre]

And Elon Musk said after Trump did in fact win that quote, she will be fired soon. And so I'm talking to you now. It is June. You left your post as of January.

[Lina Khan]

So I left the Federal Trade Commission at the end of January. The last few years had been super intense. So I've been mapping out what the next phase of all of this work will be. You know, for those who are not following it super closely, it was pretty unusual for me to become head of the ftc at age 32.

[Pablo Torre]

The youngest ftc chair ever.

[Lina Khan]

Yeah. And just more generally, a lot of this work went from kind of a very small number of people, reformers making arguments about how we had gone too soft on monopolies and corporate lawbreakers to suddenly be given the opportunity to govern. Oftentimes, it takes decades for kind of reformers on the outside to ultimately be able to kind of get into positions in government and start governing.

[Pablo Torre]

So before it sounds like the focus of the FTC when it came to what they're enforcing, it was centered around this standard of prices, prices that consumers had to pay, that being the way that we could evaluate whether something needed to be intervened against. But what yours, and again, it's been called neo brandisian, but also hipster. What's the term?

[Lina Khan]

I think there are a lot of different terms running around. I mean, the way I look at it is this is about competition and power. Right. And there are lots of different ways that companies can exercise power. Sure. In some cases, companies absolutely use Their power to hike prices, to inflate prices, especially when they know you don't have competition, you don't face choice, you're kind of stuck. Right. And companies can become too big to care and then just price gouge you, basically. But we also see that companies use their power in other ways, right? And especially in digital markets where sometimes people are not paying with dollars, they're paying with their data. We've seen, for example, companies like Facebook or Google degrade their privacy policies and dramatically expand the data they're collecting on you. We've seen companies just make products and services worse. I mean, I think a lot of people can relate to Google search just becoming much worse, becoming cluttered with all of these ads. And I think we just see across the board that when companies don't have to compete for your business, where you're kind of stuck with them because there aren't other options in the marketplace, they don't just, they just don't have to try that hard.

[Pablo Torre]

But even more to the point, and you're referring to a thing, I don't know if you co signed this term, but inshitification is the term that I always go back to whether the McDonald's ice cream machine works.

[Lina Khan]

Yeah, well, we fixed that the last administration did.

[Pablo Torre]

So I feel like you should be proud. I forgot to mention that up top in this episode.

[Lina Khan]

So one trend that we've seen has been that manufacturers can make it really difficult to fix products, be it tractors, you know, be it ice cream machines. And the FTC was pretty active in this area, requiring that companies not artificially make it difficult to repair your own product. And that could mean either allowing you yourself to be able to kind of go in and tinker or give you the freedom to not just go get it fixed by the manufacturer, but actually go to an independent repair shop. Right. And so we ended up filing a lawsuit against John Deere because we had heard that they had been making it very difficult for farmers to get their equipment fixed in a timely way. Which if you're a farmer, can be really devastating if you find out, hey, you're in a like four month queue and you need your tractor now in harvest season. So that was something we did. But we also provided support to the copyright office which was, you know, looking at some of these rules that ended up affecting things like the McFlurry machine. And they ended up making a ruling that would make it much easier for those machines to be fixed.

[Pablo Torre]

You made America McFlurry again.

[Lina Khan]

You know, it seems like something that people could really do with right now.

[Pablo Torre]

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[Lina Khan]

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[Pablo Torre]

Subject to terms and conditions applies to orders over $35. So now I imagine that you might be wondering how Lina Khan became the youngest chair in the history of the FTC in the first place. And if you've listened to PTFO before, you probably remember that I personally dreamed of going to law school and wound up becoming this journalist. Lina Khan is kind of the opposite.

[Lina Khan]

It was a kind of childhood dream to be a journalist for me and I, you know, in high school spent my summers working at local newspapers. I was worked on the high school newspaper, the college newspaper and just happened to graduate in 2010. You know, still the financial crisis was very raw. It was pretty difficult to get journalism jobs.

[Pablo Torre]

Yes.

[Lina Khan]

And so ended up at a think tank doing kind of research and you know, some journalism and reporting, but not a traditional news outlet.

[Pablo Torre]

And she kind of loved it. And by the time she was offered a traditional job by the Wall Street Journal, the gold standard to be a commodities beat reporter. This was some years later, Lina Khan turned it down.

[Lina Khan]

By that point had become really interested in this issue of consolidation of economic power and was really confused by how it was that we on the one hand had these really strong laws on the books that were designed to check monopolies and take on concentrations of economic power. And yet in industry after industry, it seemed like we had just allowed so much consolidation. And so I was just really intrigued by that gap and thought we were on the cusp of really needing a renewed anti monopoly movement and decided to go to law school to figure out how I could be part of that.

[Pablo Torre]

And in 2017 at Yale Law School would be Wall Street Journal reporter Lina Khan found out how he published a 95 page article for the Yale Law Journal that became a seminal text in the so called hipster antitrust movement, which renewed the work of former Supreme Court Justice Louis Brande and also drew the attention of the future Biden administration in the process. And the article with the byline Lina M. Khan was titled Amazon's Antitrust Paradox. So you turned down this job at the Journal. And are you, I presume in the abstract you're aware of how much you've been covered by the Wall Street Journal as a result of that sliding doors choice? Do you have the number, the number of pieces that again, mostly op EDS and editorials that the Journal has published about you?

[Lina Khan]

I don't have that number.

[Pablo Torre]

124. Feels. Feels about right?

[Lina Khan]

Yeah, in the ballpark for sure.

[Pablo Torre]

And just in case you were wondering, the Journal editorial board is not a fan. So the idea that one of your biggest fans was your most outspoken fan is Steve Bannon, who is a guy who, and for people who somehow don't know who Steve Bannon is, former chief strategist for Donald Trump, helped get Trump elected. Ran Breitbart News. One of the chief architects of the whole MAGA movement went to federal prison because of his role and his refusal to cooperate with the government after January 6th. I'm just curious the first time that you realized that Steve Bannon was going to be a Stan of yours, that he would be a Lena Khan simp. I'm a Lena Khan fan. You're a Lena Khan fan. Break him up. I would be a huge supporter of Lena Khan remaining and I would love to see Lina Khan given more power. I think Lina Khan should have been given more power, should have been able to do more things. I think there's obviously a big problem, I think a big problem in Silicon Valley. Do you remember that? Do you remember your reaction, how you, how you even discovered that?

[Lina Khan]

I don't remember the Precise moment. But it's unusual, it's surprising, it's unexpected. And I think it just reveals just more generally how strange it is that on this issue of taking on unchecked corporate power, there has been this strange bipartisan alliance where there were certain cases filed against companies like Google and Facebook that were filed under the first Trump administration. We saw then those be continued, built upon, expanded during the Biden administration. And now we're back in the Trump administration. And I think there's a big question mark about what's going to happen. But we do see a real factional fight in the, the Republican Party between, say, the kind of corporatists, the oligarchs and the populace, or the people who think that we do actually need to enforce the law against powerful lawbreaking corporations. And I think we see a troubling set of signs, including for example, the shutdown of the Consumer Financial Protection Bureau, one of the government agencies that was on the front lines of standing up for Americans against corporate abuse and predation. So dismantling the government, dismantling the law enforcers that are supposed to stand up to this predation is not a great sign.

[Pablo Torre]

The strange bedfellows aspect of this, though, does speak to something that is so glaring in its otherwise conspicuous absence, which is what does cut across the aisle these days. And insofar as there is this rainbow coalition in which it's you and Steve Bannon and a bunch of other people, I'm curious how much of tech is the glue there, in your view?

[Lina Khan]

It's true that some of it started around tech in kind of both parties. I think, especially with the 2016 election, there was a revelation for people about how a very small number of tech giants held huge sway over key information channels, could potentially even contribute to swaying elections. And I think that was a real wake up moment for a lot of people in both parties. But this something that's much broader. I mean, at the ftc, you know, we were filing lawsuits against companies like Facebook and Amazon, but we were also taking on hospital monopolies. You know, we were also taking on big pharma companies who have been using some of these patenting tricks to make it much more expensive for Americans who are trying to just buy, say, prescription medicines. And so this is something that goes much beyond just tech.

[Pablo Torre]

I get the sense that you have seen the inside of various places that, that a lot of, again, everyday Americans have not taken the time or had the access to really examine. Was there something that really kind of startled you? Is there something that you think of where it's like, even I am surprised that they are this brazen.

[Lina Khan]

We found that asthma inhalers have been around for decades, but for some reason, people were still having to pay out of pocket as much as 500, 600, $700, even though asthma inhalers are as cheap as, say, $7 in other countries. And we tried to figure out why this was, and we found that some of the big pharma companies were using patenting tricks to have patents on things like the plastic inhaler cap or the piece of it that counts the dosages, nothing to do with the ingredients, the drug ingredients. And so we called them out on this. We said, you know, this seems illegal. And within a few months, three of the four big inhaler manufacturers said, okay, we're going to cap how much people pay out of pocket to $35, down from hundreds of dollars. And on the one hand, that was a, you know, big win for people, but on the other hand, I'm like, how many years and how many billions of dollars were these asthma inhaler companies able to extract from people just from these illegal patent tricks? And candidly, why was this not fixed until, you know, 2023, 2024? These authorities have been on the books. And I think that's another component of this. Sometimes there are all these legal authorities that agencies have that have just gone somewhat dormant, that people have not been using assertively. And that was another thing that we really tried to change is once I came in, we kind of read all of the laws that Congress had passed that gave us powers and authorities and said, okay, what does this provision do? What does this provision do? Oh, this hasn't been used in a few decades. Why is that? What can we do it? And I think you. You really need that full canvassing of what an agency's authorities are and make sure you're actually using all your tools.

[Pablo Torre]

Yeah. The more I think about hipster antitrust as the label, the more sort of darkly ironic it is that actually what you're doing is hearkening back to the before times when there was a more aggressive way to. Yeah. Enforce the need for this country to have competition. It feels like your revolution is almost a throwback as much as it is something that, you know, is very Williamsburg or whatever the people hipsters are now.

[Lina Khan]

Yeah, it's. There is a real conservative orientation.

[Pablo Torre]

Dare I say even conservative. Lena.

[Lina Khan]

There we go.

[Pablo Torre]

Yeah.

[Lina Khan]

And, you know, one thing I did at the FTC was made a big effort to travel across the country. I think in D.C. there can sometimes be this tendency to kind of just fall into these pretty narrow feedback loops where you're over indexing for a lot of kind of elite punditry and commentary that's pretty removed from what the vast majority of people in this country are thinking and feeling and experiencing. And so we tried to really mitigate those blind spots by going to places like Baraboo, Wisconsin or Kansas City, meeting with independent pharmacists and figuring out, you know, what are the biggest pain points that people are seeing in their day to day lives. And I was just struck time and time again how this is not a partisan issue. I think people feel like a lot of their daily choices are being constrained by big corporations and that all too often they're not able to get a fair shake in our economy. And you know, for most people, a lot of how they end up interacting with power in their day to day lives is less directly with the government, but more with their commercial relationships and economic transactions. Right. If you're trying to switch cable companies and you're trying to call your cable company and you have to wait for three hours on hold and then the call drops, they're just all of these day to day frustrations that, that people feel when navigating what should be the most simple of transactions. And I think people just feel this basic indignity to that in big and small ways. We got enormous support and we would get letters and comments from people who would say things like, I'm a lifelong Republican, I'm a hardcore free market capitalist, but what this FTC is doing in say, taking on non compete clauses which trap you, or in requiring that companies make it as easy to cancel a subscription as it is sign up.

[Pablo Torre]

Some of the best stuff that you guys did was just like the click to cancel rules, which is again, we all know how unbelievably annoying it is to try and cancel like a streaming service or some subscription product. And why, why is it so hard is the thing we've all yelled into our laptop screens or phones at one.

[Lina Khan]

Point when the FTC would investigate some of this. I think we were stunned to see just how deliberate a business strategy it is.

[Pablo Torre]

I think people sometimes are willing to be generous to just the monolith of corporate bureaucracy because it's just like the way of course a big company works. But you're suggesting that we need to understand that these patterns are not accidental.

[Lina Khan]

That's right. I mean, I think one thing we've seen over the last few years accelerated during the pandemic is that there's been a huge, huge surge in subscription based services. Right? So previously there'd be several services that you would just go out and buy and then own the thing. Right. Even with things like printers that now there are all sorts of subscriptions associated with.

[Pablo Torre]

Everything wants to be a subscription.

[Lina Khan]

Everything wants to be a subscription. And firms have identified this as, you know, a key revenue source. And they've noted that to fully monetize that, they need to make it as easy to sign up up and as difficult to cancel. And unfortunately we saw when we were investigating companies like Adobe, for example, or Amazon with Amazon prime, that there was explicit strategies to make that happen. Amazon even had a name for the cancellation process. It was called Project Iliad, after the kind of epic tale of the war.

[Pablo Torre]

As in canceling Amazon is as hard as reading the entirety of the Iliad or even yet. Yeah, going on an odyssey, sometimes a literal odyssey.

[Lina Khan]

Nobody should be stuck paying for a subscription that they either never signed up for or want to cancel. And so the FTC did finalize a rule that says companies have to make it as easy to cancel as it is to sign up. So if you can sign up online with one click or two click clicks, you have to be able to cancel with one click or two clicks. This rule was actually supposed to be in effect already. It was supposed to go into effect last month. Unfortunately, this new FTC for some reason punted out the date, so it's not going to come into effect till next month. I really hope that sticks because, you know, this is hurting people.

[Pablo Torre]

Why does all of this take so long? And I mean that not merely in, in the way of trying to cancel a subscription, but also just let like the gears of change when it comes to antitrust stuff. How should we feel about that?

[Lina Khan]

Yeah, it's a great question. And I think there's an antitrust specific version of it where you're absolutely right. It just sometimes takes too long. These cases take too long. I mean, the Facebook case was Originally filed in December 2020.

[Pablo Torre]

Right.

[Lina Khan]

The Dutch then tossed out the Trump administration's complaint. We've refiled it, kind of fixed some of the deficiencies and it only went to trial a couple of months ago. Go.

[Pablo Torre]

You are the person who got Mark Zuckerberg to testify on the stand in this landmark case of FTC v. Mehta. And you brought this. The government brought this. Thanks to you, I should say. The six week trial just wrapped up. It now sits with a judge, as you were alluding to, and the government Just to do the brief recap here, the government accused Mark Zuckerberg and Meta of acquiring Instagram and WhatsApp in a quote unquote, buy or bury strategy to secure his monopoly.

[Lina Khan]

So that is an accurate summary. I mean, it really goes back to Facebook, watching the switch from desktop to mobile. I mean, Facebook had become pretty successful in the desktop market, but as people started using smartphones more, it realized it needed to pivot. And it tried, you know, all sorts of features and apps that just wouldn't take off. And it saw mobile native apps like Instagram and WhatsApp do really well and grow really quickly, grow exponentially. And we have documents and communications showing that Zuckerberg and other top executives feared being lapped and being left behind where Facebook would just be a desktop service and not really be successful in mobile. And they realized that that was really existential.

[Pablo Torre]

Phones, it turned out, would be important.

[Lina Khan]

Exactly. And instead of being able to compete with Instagram and WhatsApp, Zuckerberg decided to just go out and buy the money up. And this ended up being harmful for people because just to take an example, WhatsApp at the time had the distinction of not selling people's data, right? You could pay as little as $1. And there were a lot of privacy protections that people would have on WhatsApp. And then they were bought by Facebook. And you know, Facebook is a behavioral ad based business model, so they monetize people's data. And so there were a lot of privacy protections that people ended up losing. And kind of one of the main privacy messaging apps was suddenly taken off the market. I think more generally we've seen that. To go back to your earlier point about insurification, you know, historically a major vector of innovation and of products and services getting better for people has been when companies have to compete, right? When even the biggest giants have to look over their shoulder and say, oh, you know, I need to go faster and make my services even better. And when companies are able to just buy out the competition, we see they can get lazy. Right. They don't feel like they have to try as hard. And that is something that the antitrust laws are supposed to prevent. So this case, you know, just wrapped up in terms of the trial. There was a lot of evidence that the FGC put forward showing both that these transactions were anti competitive, but also that there's been a real cost for people, including with things like, like the ad load. So, for example, Facebook's been able to get away with increasing the proportion of ads that you see on Apps like Instagram relative to organic content.

[Pablo Torre]

We've noticed.

[Lina Khan]

Yeah, and that's a tax, right? You're not paying higher dollars, but it's a, it's a degradation of the service. And ultimately this is also about what is going to be the future of innovation in some of these markets. And are we going to allow a company like Facebook to monopolize? So I wish this case would have been able to go to trial even faster, but I think this is a government wide challenge. One thing we saw at the FTC was there had been a lot of procedures and red tape and bureaucracy that the agency itself was handicapping itself with. And this is actually a legacy of the Reagan administration. Right. I mean, they came in with a very deregulatory view. They wanted to weaken agencies, handicap them. And one of the mechanisms for doing that was just handcuffing agencies in their own red tape. There was so much process and bureaucracy that when we came in and said, hey, let's you know, do some of these rules, like the click to cancel rule. Some people were like, well that's gonna take at least five years, maybe closer to 10. And we were like, what? That's wild.

[Pablo Torre]

It's like the problem of click to cancel also applied to the literal thing that enabled click to cancel. Yeah, how can I cancel bad government?

[Lina Khan]

And so we looked at those procedures and we said, wait, these are not even required by the law. These are just discretionary. And it seems like a legacy of some of this Reagan administration. And so we streamlined those, we eliminated the unnecessary red tape. And so instead of it taking at least five years, we were able to do some of those rules in two years. So we had the click to cancel rule. We also had a rule that, that prohibits fake reviews. And I think one phenomena we've seen is just this total pollution of the online reviews with either paid reviews that are not being disclosed, or sometimes companies were actually paying people to go write bad reviews on their rivals websites. And so just really distorting the information ecosystem. I think we've seen with influencers sometimes just a lack of disclosure around what's really an advertisement versus kind of an organic review. And so we're hoping that'll just promote more honesty and transparency in the system. So that was a rule along with the click to cancel rule that we were able to do in closer to two years. We also just finalized a rule that has now gone into effect that ban some of these junk fees. So if you're buying like an online ticket, I think a lot of people have had the experience that you see a ticket, it's maybe $75, you check out and then all of a sudden it's like $130.

[Pablo Torre]

Yeah. Suddenly I have to put my kid up for adoption.

[Lina Khan]

Yeah.

[Pablo Torre]

I don't know where I agreed to that, but I guess I have to do, do so.

[Lina Khan]

And you like squint and you're like, the service fee, a convenience fee, like, what are these fees? What am I paying for? And suddenly there's just this bait and switch. So we finalized a rule that says companies can't do that. They have to be honest about what the price is up front. They can't do this slow drip, drip, drip of these fees just when you've checked out. So that's now in effect with live event tickets and with short term lodging. And we just saw companies including like Airbnb and others that have already switched to this more hon pricing model. So, you know, hopefully these are some ways that people's lives will be better because of what we were able to do.

[Pablo Torre]

Every time I have a guest here who has in any glancing way, a thought about artificial intelligence, I just got to pull them on. Like, where are you on the doomer scale? And even more relevantly perhaps to your point of view, what does scare you the most about AI and also its rollout in the context of competition?

[Lina Khan]

The doomer question is an interesting one because I think it somehow assumes almost this inevitability. Right. The AI is just on this trajectory.

[Pablo Torre]

We've already lost that.

[Lina Khan]

We've already lost that. We're just subjects to whatever is going to happen. And I really reject that assumption. Right. I don't think there's any inevitability here. I think there's a lot of decisions, policy decisions, that are going to determine what is the ultimate trajectory that these technologies take. And I think one of the biggest big red flags for me right now is the enormous concentration of control and power. The number of companies or even individuals that are right now getting to call the shots on a lot of how these technologies develop is pretty small in terms of who controls the ultimate inputs, be it at the level of the chips, be it with these hyperscalers. And I think, you know, having sat down with founders and startups in Silicon Valley, I think there could be some really beneficial uses here. But in order for that to happen, we're going to have to make sure that companies actually have a fair shot. I think the other thing that I've been troubled by is what does the landscape look like for the creation of content and information and art. If we're in a world where all of these inputs can just be ingested by a model and talking to creators, many of whom did just wake up one day to find their life's work ingested by this model and now competing with it. I mean, I think there are kind of basic fairness questions there, but also who's going to invest in the organic production of some of this art or information or content if there's not really a monetization play there? I think that's. That that's a big thing to solve for too.

[Pablo Torre]

Formal government accounts in this administration, we're posting the Studio Ghibli OpenAI art stuff. And I guess it's telling and indicting that you refer to it by the proper name of the actual artistic entity that is responsible for that aesthetic, for that creative sensibility. And yet it's not them, it is them ingested into the OpenAI system and then spat out without any recognition or payment, apparently for the originators of that work.

[Lina Khan]

Yeah, I mean, I think, you know, the other component here is a lot of this requires just an enormous amount of. Of energy. Right. And literal, literal energy. And you know, that that layer of the resources question I think is another one where we just need to make sure that there is public accountability and that we are getting to make some of these decisions as a public rather than, you know, a handful of companies getting to call the shots.

[Pablo Torre]

I was going to ask you, as a user of stuff, as a young person, do you buy things on Amazon on. Do you use ChatGPT? Do you use some of the stuff that. Of course, also you are compelled to take this view of.

[Lina Khan]

I've used Chat GPT to contest a medical bill.

[Pablo Torre]

That's a good use.

[Lina Khan]

Yeah, good use case it was. But look, you know, I think so many of these technologies have now become essential to navigating day to day life.

[Pablo Torre]

Yes.

[Lina Khan]

Right. And so, you know, I don't think whether people are using them or not using them is going to be a mechanism really of major accountability. Right. Just given how enmeshed these companies have become.

[Pablo Torre]

Yeah. They don't need you on Amazon Prime. But I am curious, do you remember the last thing you bought on Amazon?

[Lina Khan]

So I'm not a Prime member. I don't use it very often. You know, I had a kid a couple of years ago and I think probably the last thing I bought was probably a year ago when he started kind of eating more and I got really freaked out about choking and there's like this device you can buy and have at home in case your kid chokes. So I think that was probably the last thing I bought.

[Pablo Torre]

I bought the thing where you have to use your mouth and suck on a tube to get the boogers out. I don't have to you order that one but we got, we got one of those.

[Lina Khan]

Those things are actually really effective. Like kids hate them but they're they really work.

[Pablo Torre]

5 stars Our review Lina Khan and Pablo Tor give 5 stars to the suck boogers out of your kids nose device.

[Lina Khan]

My day kicks off with a refreshing Celsius energy drink. Then straight to the gym prek pick up up back home to meal prep. Time for my fire station shift. One more Celsius.

[Pablo Torre]

Gotta keep the lights on when the three alarm hits.

[Lina Khan]

I'm ready.

[Pablo Torre]

Celsius Live fit.

[Lina Khan]

Go grab a cold refreshing Celsius at.

[Pablo Torre]

Your local retailer or locate [e-mail] this episode is brought to you by State Farm. Knowing you could be saving money for the things you really want is a great feeling.

[Lina Khan]

Talk to a State Farm and agent today to learn how you can choose to bundle and save with the personal price plan. Like a good neighbor, State Farm is there.

[Pablo Torre]

Prices are based on rating plans that vary by state.

[Lina Khan]

Coverage options are selected by the customer.

[Pablo Torre]

Availability, amount of discounts and savings and.

[Lina Khan]

Eligibility vary by state.

[Pablo Torre]

So I don't know how much sports ended up being on your document when you were chair of the ftc, but please enlighten me. I don't know if it did.

[Lina Khan]

Yeah, it wasn't a big area where we were very involved, but there has been some really interesting developments in kind of sports and antitrust over the last few years.

[Pablo Torre]

Yeah. What are you noticing?

[Lina Khan]

So there was a big case several years ago that got to the Supreme Court relating to the NCAA and student athletes and whether some of the restriction Austin, the Austin case, whether some of the restrictions on kind of education based benefits were legal or anti competitive and the court said they were anti competitive. And I think more generally just validated this idea that these student athletes could be subjected to anti competitive constraints. Right. The NCAA was not somehow exempt from the antitrust laws that there needs to be kind of fair competition for the labor that these student athletes are providing. And so that case has led to a whole ripple of additional cases where some of the student athletes are arguing that other forms of restrictions are also illegal.

[Pablo Torre]

But this is where I do just need to jump in to point out that just days ago, in fact we got the latest ripple as Lina Khan just put it that stems from the NCAA's legal wipeout.

[Lina Khan]

There is a big change coming to college Sports. Friday, a U.S. district judge gave a final approval of the House vs. NCAA case. Allowing schools to start paying athletes directly.

[Pablo Torre]

Is the only future college sports model that could hold up in your view under the antitrust laws as you see them. Would the only one to pass that test be a completely unregulated market or can there be these structures and impositions?

[Lina Khan]

I mean, there's no inevitability here. Right. And kind of laws and rules can structure fairness in any type of market. It's been really interest. I think it was the Dartmouth basketball team that unionized.

[Pablo Torre]

Yeah. The men's basketball team.

[Lina Khan]

The men's basketball team. And the nlrb, the National Labor Relations Board kind of came out and said that, you know, student athletes can be employees in some contexts. So that could end up being another vehicle for student athletes being able to assert their rights and making sure that there is fair treatment, fair compensation.

[Pablo Torre]

Now, you may also recall that we have already split spent four episodes on Pablo Torre Finds out covering the domino effects of this historic case, House v. Ncaa. But allowing these schools to pay college athletes directly is also just one antitrust case among many. Last Tuesday, for instance, PTFO also published a deep dive about Trump and golf and Saudi Arabia where we quoted Lina Khan on the monopolistic potential of a merger between the PGA and Liz Tours. And a little over a week ago, we also just got an update in another high profile antitrust showdown, this one involving the owner of 2311 Racing, a franchise which competes in the NASCAR Cup Series. And that owner's name happens to be Michael Jordan. Look, I am. I'm all in. I'm all in. I love it. You know, it replaces a lot of the competitiveness that I had in basketball.

[Lina Khan]

But this is even worse, you know.

[Pablo Torre]

Because I have no control.

[Lina Khan]

If I was playing basketball, I have.

[Pablo Torre]

Total control, but I have no control. So I live vicariously through the drivers and all the crew chiefs and everybody. So I mean, I'm very happy for 2311. 110%. Congratulations. So please walk us through the Michael Jordan case.

[Lina Khan]

Yeah, he filed against NASCAR claiming that basically NASCAR had illegally monopolized premium racing series through a set of tactics including illegal acquisitions, including acquiring racetracks, including through using some of these non compete clauses and basically saying that NASCAR's dominance is not reflective of its just superiority, but instead is reflective of these tactics that they've taken to block out competitors and that that's resulting in under Compensation and worse terms for these teams that have no choice but to only really compete in nascar. So that's a case that's still proceeding. They actually won a preliminary injunction at the district court stage that I think is now being appealed. But just, I think goes to show how relevant antitrust can be to all sorts of corners of the sports world.

[Pablo Torre]

Yeah, I didn't have Michael Jordan, Lina Khan and Steve Bannon somehow hanging out together on one side of the aisle, but I found out quite a bit today it does feel like sports is just another case study in the ways in which we've inherited over time these assumptions around the way things are. One concept that I just wanted to just see if it passes the smell test for you is just the concept of a draft in sports. So the idea that you leave college and you are entering, let's say the NFL draft or the NBA draft. And, and to be very clear about this and almost pedantic about this, so players are required to sign with the team that drafts them according to a formula that regulates their salary that they have no say in determining because they are not a member of a union yet. So they can't really be categorized as working according to the collective bargaining agreement. And yet they do not have freedom of choice when it comes to how they enter professional sports. Why is that legal?

[Lina Khan]

It's a great question. I mean, there are just so many anomalies and idiosyncrasies in a lot of markets. If you are going out and getting multiple offers for employment, you then have negotiating power to make sure you're able to negotiate what your compensation is going to be, what the terms are. You're able to pit those employers against one another and use your leverage. And, you know, we definitely see all sorts of ways in which that dynamic is just not allowed to play out in the context. Context of sports in ways that, you know, seems sometimes unfair to athletes.

[Pablo Torre]

Yeah, I mean, your FTC did, I believe, explore regulating again, non compete clauses and potentially like name, image and likeness stuff for college athletes. Right?

[Lina Khan]

Yeah. We finalized a rule that would ban non compete clauses in the vast majority of contexts because these are clauses that prevent people from being able to freely switch jobs. They affect people in all walks of life. Right. They may have started off in the boardroom, but now they've expanded to affect fast food food workers, janitors, security guards, people making close to minimum wage. And when we put out this rule, we got 26,000 comments from people all across the country, including from, I remember a sports journalist who worked in sports broadcasting and had a non compete and so was stuck because they worked in a small town and if they wanted to go work for arrival they wouldn't be able to. I remember we got a comment from somebody who was involved in designing athletic shoes who had kind of a new design idea but because of this non compete was prevented from being able to go make it out on their own. So yeah, I mean these non competes can affect athletes but also all other corners of the sports world.

[Pablo Torre]

Yeah, Counterpoint, according to Mark Cuban, you are hurting more than you are helping.

[Lina Khan]

Well look, I think ultimately the number of wins that the FTC got for the American people was pretty astounding and something that I was really thrilled we were able to do. I of course wish we had had more time, but I think it really set a model for how government can use all of its tools to really fight for people and make life better for them, even when it means standing up to powerful corporations. And sometimes that's going to trigger hysteria and a lot of emotions from some of those lawbreakers, but that's just part of it.

[Pablo Torre]

I've never known Mark Cuban to be hysterically emotional, so that doesn't sound right.

[Lina Khan]

Hey there travelers.

[Pablo Torre]

Kaley Cuoco here.

[Lina Khan]

Sorry to interrupt your music, great artist.

[Pablo Torre]

BT Dubs, but wouldn't you rather be there to hear it live?

[Lina Khan]

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[Pablo Torre]

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[Lina Khan]

And up to 50% off flights. So don't just dream about that trip. Book it with Priceline. Go to your happy price. Priceline.

[Pablo Torre]

Are you still quoting 30 year old movies? Have you said cool beans in the past 90 days? Do you think Discover isn't widely accepted? If this sounds like you, you're stuck in the past. Discover is accepted at 99% of places that take credit cards nationwide. And every time you make a purchase with your card, you automatically earn cash back. Welcome to the now it pays to Discover. Learn [e-mail] credit card based on the February 2024 Nielsen report. And so this is where I should point out that Mark Cuban and Elon Musk and Senator Mike Lee and this coalition of Democrats and Republicans and the Wall Street Journal editorial board all got what they very loudly demanded when it comes to Lina Khan. Because our guest today, after four years in charge, is no longer chair of the ftc. And just last week, in fact, the same week that House VNCAA was wrapping up, and the same week that huge swathes of America decided to protest against the rise of oligarchs and autocracy in our country, something else was happening in Washington as well. One of Lina Khan's lieutenants, FTC Commissioner Alvaro Bedoya, officially resigned, signed from his post also which formalizes his firing earlier this year by the Trump administration as well as the dissolution of this renewed governmental movement that Lina Khan was trying to lead. I'm looking at the stories coming out of the current ftc and by the way, yes, it is also being chaired by a young person, a 38 year old who is steeped in the Donald Trump agenda, who was talking about, about fighting back against the trans agenda. Also investigating a media company that Elon Musk also happens to be, I believe totally coincidentally be suing. How do you describe the sensation when you are watching what your former part of government is up to now?

[Lina Khan]

I mean, if you step back and make a list of what are the biggest pain points that the American people are seeing in their day to day lives that the FTC could have a job in fixing or addressing? None of the items that you just mentioned would be remotely in the top 10 or 20 or 50. So it is pretty striking and disturbing. And I would just hope that the zeal with which we see the FTC pursue some of these topics they would bring to really addressing the pain points that regular people are facing in their day to day lives.

[Pablo Torre]

Right.

[Lina Khan]

Like high drug prices, high grocery prices, you know, that sort of thing.

[Pablo Torre]

And so for you in the present tense, what are you up to? What's going on?

[Lina Khan]

So I'm going to be teaching antitrust law in the fall and also going to be, you know, making sure we're figuring out how do we continue to build and expand this movement, especially among young people. I get, you know, emails like every week from people including from high schoolers who are like, hey, I read about what you were doing at the FTC and now I'm doing my school project on Ida Tarbell and I want to be a trust buster. And so, so I'm trying to figure out how do we harness that energy and enthusiasm so that if there is another opportunity to govern, we have more of a kind of standing army that's waiting, that's able to kind of come in and help us do all this.

[Pablo Torre]

Yeah. Are you interested in electoral politics personally?

[Lina Khan]

Not personally, but I do think we need to make sure that we are carefully Focusing on what are all the tools and authorities that the government currently has and in the way that we were able to kind of go in and revitalize the ftc, how do we make sure that we have a game plan to do that across all of these other agencies, especially given that some of these agencies are going to look very, very different at the end of this administration, just given how much dismantling we are seeing. So that's going to be a key set of my interests is not just the kind of how does the Democratic Party win elections, but how does the Democratic Party govern and how do we make sure that we're being smart and effective in that government? Yeah.

[Pablo Torre]

If I were to tell you that I looked into my crystal ball and I saw a Supreme Court nomination for you, how would that feel? You've been mentioned. I'm sure you've heard your name bandied about in some of these very nerdy precincts. But bipartisan candidate who has principles, who has a clear legal background, how does that feel to be on. On someone's hypothetical list?

[Lina Khan]

It's very flattering to be sure. You know, I'm focused more on the near term in the kind of coming months and years. So we'll see.

[Pablo Torre]

Well, that is a very political answer.

[Lina Khan]

I did work in D.C. for several years, so I have a 2 year old. And so I find that playing with him ends up being a really good distraction. And, you know, he's very active. So we go to the playground a lot and it's a good place.

[Pablo Torre]

Break. Yeah, now that I think about it, manually sucking boogers out of your child's nose. Not a terrible metaphor for what you might have been trying to do with the American economy.

[Lina Khan]

Yeah, I mean, he's really into cars and trucks and is really into kind of making them race. And so we try to create, you know, a fair competition between the different cars.

[Pablo Torre]

You made the joke before I got there. Lina Khan in a world of. Of staggering insurification. Thank you for trying to find a. Yeah. A reasonable path forward.

[Lina Khan]

Thanks so much for having me.

[Pablo Torre]

This has been Pablo Torre Finds Out a Meadowlark Media production. And I'll talk to you next time. Sam.