In God We Antitrust

Summary

Understood: Who Broke the Internet? Episode: In God We Antitrust Release Date: May 19, 2025

Host: Cory Doctorow Guest: Lina Khan, Chair of the Federal Trade Commission (FTC) Featured Story: Michael Wiesel, Small Business Owner

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Introduction

In the episode titled "In God We Antitrust," Cory Doctorow delves deep into the escalating battle against monopoly power in the digital age. Central to this discussion are the struggles of small business owners against corporate giants like Amazon and the pivotal role of Lina Khan, the FTC Chair, in reshaping antitrust enforcement.

Michael Wiesel's Struggle: A Small Business Under Siege

The episode opens with the personal and harrowing story of Michael Wiesel, a small business owner from Knowlton, Quebec. Michael's journey epitomizes the detrimental impact of unchecked corporate dominance on individual entrepreneurs.

Michael Wiesel (00:38):
"I think they're the most evil company on the face of the planet. Of the normal retail giants, they are by far the most evil by far."

Michael recounts how Amazon, once a vital partner that propelled his homemade soap and DIY lip balm kits into national and international markets, turned adversarial. In 2018, while accessing his own Amazon listings to understand the buyer's perspective, Michael made a shocking discovery:

Michael Wiesel (03:15):
"I start seeing my products being sold by Amazon and saying, what the fuck is going on?"

Amazon had begun selling Michael's products at lower prices, directly competing with him on their platform. This was not just a personal vendetta but part of a broader strategy by Amazon to dominate markets by undermining competitors.

Michael Wiesel (03:38):
"So I was selling my products at that point around 19.99 and they were starting to sell my products... It's just incredible greed. I've never seen greed like this in my life."
(Timestamp: 03:38)

Despite the apparent unfairness, such practices weren't initially illegal, highlighting gaps in antitrust enforcement that allowed giants like Amazon to maneuver with impunity.

The Rise of Antitrust Concerns: Lina Khan's Journey

The narrative then shifts to Lina Khan, a 28-year-old law student whose groundbreaking research began challenging the status quo of antitrust laws. Her work would eventually lead her to become the youngest Chair of the FTC.

Lina Khan (05:30):
"I was a law student, and I had spent years doing research and interviews with the businesses that sell on Amazon and had come to conclude that Amazon, as a company, had certain properties of what we traditionally understood to be a monopoly."
(Timestamp: 05:30)

Khan's exploration into Amazon's dominance was not an isolated academic pursuit but a response to real-world injustices faced by entrepreneurs like Michael.

The Antitrust Paradox: From Bork to Khan

To understand the current antitrust landscape, Doctorow provides historical context, tracing the evolution from the Sherman Act of 1890 to the influence of Robert Bork, whose 1978 book, "The Antitrust Paradox," reshaped antitrust enforcement to prioritize consumer welfare—primarily through lower prices.

Robert Bork (10:22):
"When I first started at Yale, I really thought the situation of the law was hopeless, that the intellectual content of antitrust was corrupt beyond redemption..."
(Timestamp: 10:22)

Bork's interpretation sidelined broader concerns about monopolies' societal impacts, focusing narrowly on price reductions as beneficial. This shift paved the way for tech giants to amass unprecedented power without significant legal repercussions.

In contrast, Lina Khan's approach challenges this narrow focus, advocating for a more holistic view of competition that safeguards against monopolistic abuses beyond just pricing.

The FTC's Battle Against Big Tech

Lina Khan's rise to the FTC Chair marked a significant shift in antitrust enforcement. Under her leadership, the FTC began a series of aggressive actions against dominant tech companies to restore competitive balance.

Cory Doctorow:
"In 2017, in her last year at Yale, Lina Khan published her paper. In a cheeky reference to Bork's book, she called it Amazon's antitrust Paradox."
(Timestamp: 26:07)

Her pivotal 2017 paper critiqued the consumer welfare standard, arguing that it allowed companies like Amazon to exploit their market positions without facing meaningful consequences. This perspective resonated widely, leading to her nomination and eventual confirmation as the FTC Chair.

Under Khan's stewardship, the FTC initiated multiple lawsuits targeting major players:

• Amazon: Accused of using its market power to inflate prices and suppress competition (28:15).
• Adobe and Amazon: Sued for creating subscription traps that make canceling services deliberately difficult (30:07).
• Meta and Google: Faced historic antitrust trials over their dominance in social media and search, respectively.

Lina Khan (29:28):
"Sellers who now pay one out of every $2 to Amazon. So this is effectively a 50% tax that businesses pay to Amazon to reach shoppers."
(Timestamp: 29:28)

These actions signify a concerted effort to dismantle entrenched monopolies and restore a fair competitive environment, aligning with the original intents of the Sherman Act.

Broader Implications for the Internet and Future

The episode underscores that the current struggles against monopolies are not isolated incidents but symptomatic of a larger systemic issue where policy choices have enabled tech giants to dominate and dictate market terms.

Clive Thompson (23:31):
"The government had been completely asleep at the till on antitrust for the longest time. And I think the abandonment of antitrust has been pretty disastrous for the Internet that we use today."
(Timestamp: 23:31)

The consolidation of power by companies like Amazon, Google, and Meta stifles innovation, limits consumer choice, and undermines the democratic potential of the internet. However, Lina Khan's efforts represent a beacon of hope for recalibrating this balance.

Conclusion

"In God We Antitrust" paints a compelling picture of the ongoing battle to reclaim the internet from monopolistic control. Through the lens of Michael Wiesel's personal struggles and Lina Khan's transformative leadership, the episode highlights the urgent need for robust antitrust enforcement to ensure a free, fair, and innovative digital landscape.

As the FTC's legal battles against Big Tech unfold, the outcome will likely shape the future of the internet, determining whether it remains a tool for liberation or becomes a mechanism of control by a few dominant entities.

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Notable Quotes:

• Michael Wiesel (03:38):
  "It's just incredible greed. I've never seen greed like this in my life."

• Lina Khan (05:30):
  "Amazon, as a company, had certain properties of what we traditionally understood to be a monopoly."

• Lina Khan (29:28):
  "This is effectively a 50% tax that businesses pay to Amazon to reach shoppers."

• Cory Doctorow (26:07):
  "I used Amazon as a vehicle to tell a broader story about antitrust and how this consumer welfare paradigm had become the Achilles heel..."

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Credits:

Written and produced by Matt Muse, A.C. Rowe, and Cory Doctorow. Featuring clips from CBC, the Wall Street Journal, and other notable sources. Story editing by Veronica Simmons and executive production by Nick McCabe.

For more insights into internet history, check out Season Two, hosted by Sam Cole, exploring the rise and fall of Pornhub's empire.

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Note: This summary is intended to encapsulate the key discussions and narratives presented in the episode "In God We Antitrust" from the podcast series "Understood: Who Broke the Internet?" by CBC.

Transcript

[Ian Urbina]

World Ocean day is upon us. But can we really talk about 2/3 of the earth's surface in just one day? Absolutely not. I'm Ian Urbina, back with an all new season of the Outlaw Ocean. My podcast delves into the impossibly vast and shockingly lawless world of the open seas. Find and follow an all new season of the Outlaw Ocean wherever you get your podcasts.

[CBC]

This is a CBC podcast.

[Michael Wiesel]

I think they're the most evil company on the face of the planet. Of the normal retail giants, they are by far the most evil by far.

[Cory Doctorow]

This is Michael Wiesel, and once upon a time, Amazon was his best friend, A dream sales partner that took his business worldwide until Amazon turned on him.

[Michael Wiesel]

Am I allowed to swear, by the way? A lot of swearing coming.

[Cory Doctorow]

Mike's from Knowlton, Quebec. For years he ran a general store where he sold his own homemade soaps. But his big commercial breakthrough came in 2008. It was inspired by his daughters. They were nine and seven, deep in their crafting era and making a mess.

[Michael Wiesel]

I said, what do you guys do? You know Katie? I remember she was like 70. Oh, we're making lip balms. And I remember her like, you know, kids over exaggerate everything. She was taking the lip balm and like putting it like all over her face. And I'd look at the ingredients. I said, oh, I wonder what's, what are the ingredients? How do you make a lip balm? The first ingredient in this lip balm making kit was propylene glycol, which Propylene glycol is basically one of the main ingredients in antifreeze.

[Cory Doctorow]

Yeah.

[Michael Wiesel]

So it's not a really wonderful thing. So me being a soap maker, I said, hey, how hard can it be to make a natural lip balm?

[Cory Doctorow]

Turns out, not that hard. Mike found a recipe online and started making non toxic all natural DIY lip balm kits for kids. And they took off. He got them into toy stores across Canada and the U.S. and then around 2010, a friend convinced him to start selling on Amazon.

[Michael Wiesel]

And it was like so exciting because we were like doing serious numbers on Amazon. It was awesome because they were helping all these kind of small brands get exposure.

[Cory Doctorow]

So Fast forward to 2018. Mike's company is doing well. He even moves production into a new building that has a sort of style startup vibe.

[Michael Wiesel]

Really cool loft in Montreal in the old RCA building. It was really cool.

[Cory Doctorow]

And he hires staff to help him zhuz up his products.

[Michael Wiesel]

Amazon listings, better pictures, better keywords, you know, all the stuff you really need to get seen out there.

[Cory Doctorow]

Then one day, Mike's tinkering around Amazon, searching for his lip balm kits, wanting to see them from the buyer's perspective. He's scrolling down and that's when he makes a discovery.

[Michael Wiesel]

I start seeing my products being sold by Amazon and saying, what the fuck is going on?

[Cory Doctorow]

Mike had found listings for his lip balm kits, only these weren't his listings, they were Amazon's.

[Michael Wiesel]

They had bought my products from a distributor and they were now competing with me on their platform.

[Cory Doctorow]

Amazon was buying Mike's products from Mike's distributor and underselling him on Amazon with his own stuff.

[Michael Wiesel]

So I was selling my products at that point around 1999 and they were starting to sell my products. I think at 12.99, I think it's the most absurd thing in the world. Like to compete with your own vendors. Like you have to get every piece of the fucking piece. It's just incredible greed. I've never seen greed like this in my life.

[Cory Doctorow]

Amazon is the largest online retailer in the world today. By some estimates, as many as 56% of North Americans looking to buy something start their search on Amazon. You shop on Amazon, I shop on Amazon, we all shop on.

[Michael Wiesel]

I'm a fucking zone.

[Cory Doctorow]

It may feel like the reason Amazon dominates is because they're good at what they do, but what they're really good at is crushing everyone else. What Amazon did, underselling Mike with his own product, that wasn't necessarily illegal, just shitty. But in 2017, a 28 year old law student set out to prove that Amazon had secured a monopoly. And that is illegal. What's more, the US government had let it happen. I'm Cory Doctorow and this is understood. Who broke the Internet? Episode 3 In God we Antitrust. Please welcome to the program Federal Trade Commission Chair Lina Khan. FTC Chair Lina Khan is known for her aggressive approach to curbing corporate power. In the world of big business, there.

[Ian Urbina]

Is one woman who inspires great fear and awe. That woman is Lena Khan.

[Cory Doctorow]

Lena Khan, the honorable Lina Khan. Hello? Hi, can you hear me?

[Lina Khan]

Yeah, I can hear you.

[Cory Doctorow]

Oh, okay.

[Lina Khan]

You're coming through my computer, not my.

[Cory Doctorow]

Ah, okay, no problem. Lina Khan is probably the closest thing an antitrust enforcer ever came to being a rock star. There are T shirts with her face on them with slogans like Lina Khan Slays monopolies and notorious FTC. But her story with Amazon starts back in 2017, when she was just a lowly Yale grad student working on a paper that she was hoping to get published.

[Lina Khan]

I was a law student, and I had spent spent years doing research and interviews with the businesses that sell on Amazon and had come to conclude that Amazon, as a company, had certain properties of what we traditionally understood to be a monopoly.

[Cory Doctorow]

That American tradition of monopolies can be traced way back. Okay, Ever notice that in the game of monopoly, there's this recurring race railroad motif? There's a historical reason for that. The original monopolists were rail barons. During the late 19th century, railroads had changed the face of society and of commerce. You could now ship things across the country. Soon, everyone relied on railroads for just about everything. And this was a huge opportunity for farmers, especially because they could now get their livestock and produce into and out of rural America.

[Lina Khan]

But that technological advance had also consolidated significant power. And so oftentimes, a single railroad could determine whether a farmer sank or swam or whether people could earn a livelihood.

[Cory Doctorow]

Because the railroads were so powerful, they could and did screw these farmers over in a million ways. Two farmers could end up paying vastly different prices from one another or from one day to the next, and on vastly different terms, Even though they were contracting with the same railroad company, just because.

[Lina Khan]

And that arbitrary power that was so consolidated felt unfair and unjust to these farmers. And so, alongside many others, they ended up pushing for congress to act.

[Cory Doctorow]

And a senator named John Sherman he did.

[Lina Khan]

John Sherman was a member of congress, Republican party, and he ended up being one of the main authors of what was known as the Sherman act. This was a law passed in 1890, the first federal antitrust law in the United States.

[Cory Doctorow]

Antitrust is what Americans call their anti monopoly laws. Those laws are grounded in the idea that businesses that get too powerful can crush competition, that they can just screw their customers, workers and suppliers, everyone who relies on them, without worrying about any of them getting poached by a rival who might treat them better, because there are no rivals.

[Lina Khan]

Monopoly power and its abuses are not just some abstract issue. This is about whether people can keep their businesses afloat, Whether they can keep supporting their families, or whether they have to kind of wake up in the middle of the night worrying that a monopolist is arbitrarily gonna turn off the spigot just because it can.

[Cory Doctorow]

The Sherman act aimed to curb that power by making it illegal to form or maintain a monopoly. When senator Sherman was stumping for this law on the floor of the Senate, he let fly with a hell of a quote. If we would not endure a king as a political power, we should not endure a king over the production, transportation, and sale of the necessaries of life.

[Lina Khan]

And so, in the same way that in the United States we overthrew a monarch, there was a recognition that we didn't do that just to be ruled by a different form of sovereign power.

[Cory Doctorow]

Antitrust laws were there for the little guy. And no company was allowed to get too big, too consolidated, or too powerful. No company was allowed to become too much like a king. And for most of the next century, right up until the 1980s, that was how antitrust worked. That is, until Robert Bork came along.

[Robert Bork]

When I first started at Yale, I really thought the situation of the law was hopeless, that the intellectual content of antitrust was corrupt beyond redemption and would be kept that way by political forces hostile to the free market.

[Cory Doctorow]

Robert Bork was also at Yale Law. Not that he and Lena crossed over there or anything. He died in 2012. Bork started teaching at Yale in 1962. That same year, the Supreme Court invoked antitrust law, ruling that a shoe company couldn't buy a chain of shoe stores lest they then kick all the other brands out of their chain. In 1966, a California grocery store was blocked from buying another grocer in case that led to too much consolidation in the local market. In 1967, a frozen pie company wasn't allowed to sell frozen pies in Yellow, Utah, because that might undercut a local pie company that sold fresh pies. And some people thought, okay, sure, there were a few cases where maybe the application of these laws was going too far, but the laws themselves were fundamentally good, and the way the Supreme Court was applying antitrust was fundamentally right. Bork did not agree.

[Lina Khan]

He, alongside a group of other academics, ended up critiquing the antitrust laws and said, the way that these laws are enforced, the way that Congress wrote them doesn't really make any sense, and we really need to focus on a single value known as, you know, what he ended up calling consumer welfare.

[Cory Doctorow]

For Bork, consumer welfare essentially boiled down to one thing. Lower prices. Will this shoe store acquisition, this grocery merger, this sale of frozen pies make the price of shoes, groceries, or pies go down? If so, great, let the acquisition, merger, or pie sales go through. And if it didn't lead to lower prices, no big deal. The market would self correct.

[Lina Khan]

There was an assumption that the end goal of being a monopoly is ultimately to, you know, raise prices. And, and if a monopoly ever were to do that, it would be instantly disciplined by the flood of new entrants that would come into the market and discipline that pricing power.

[Cory Doctorow]

Why enforce antitrust laws. If competitors will just rush in on their own, offering lower prices, consumers will vote with their wallets for the best deal.

[Lina Khan]

This was, you know, gonna take care of itself effectively so that enforcers could be really hands off.

[Cory Doctorow]

Robert Bork wrote about these ideas in a book called the Antitrust Paradox. And it was a hit. His ideas caught on what had been.

[Lina Khan]

Fringe ideas ended up being codified through courts, through the antitrust agencies under the Reagan administration. And so that ended up really catalyzing a major shift that really impacted antitrust enforcement for decades.

[Robert Bork]

And so widely has its influence spread.

[Cory Doctorow]

By the time of this 1987 lecture, a decade after his book was published, Robert Bork had completely changed the way that America and its major trading partners in the UK and Europe enforced their anti monopoly laws.

[Robert Bork]

But matters are immeasurably improved and antitrust has been recaptured for a free market rather than an interventionist statist philosophy.

[Cory Doctorow]

Lina Khan was born in 1989 after the antitrust Paradox was published. So she grew up in Robert Bork's world. This is what she saw.

[Lina Khan]

Market after market become extraordinarily consolidated. From airlines and telecom to cat food to hospitals, you've just seen fewer and fewer players come to dominate. And there are all sorts of ways that affects people in their day to day lives, from people paying higher prices to having lower wages to worse quality.

[Cory Doctorow]

By the time big tech was emerging in the late 1990s, the original intent of the Sherman act to shatter king like corporate power had been consigned to history. Congress and the Federal Trade Commission had gone hands off when it came to enforcing antitrust law in the United States. It was Bork's world and few companies were as well positioned to thrive in it as Amazon.

[Reshma Saujani]

Hey, I'm Reshma Sajani, founder of Girls who Code and Moms First. I consider myself a pretty successful adult woman. So why is it that in midlife, as I'm about to turn 50, I feel so stuck? Join me as I try to find the answer on my so called Midlife from Lemonada Media. I talk to experts and extraordinary guests about divorce, exercise, menopause, sex, drugs and more to understand what we're going through and and how to make the most of it. Listen wherever you get your podcasts.

[Cory Doctorow]

In 1997, Jeff Bezos wrote a letter to Amazon shareholders. In it, he made an explicit promise. Shareholder value was his ultimate goal. He wrote, quote, this value will be a direct result of our ability to extend and solidify our current value market leadership position over the next three decades. That's exactly what Amazon set out to do. Extend and solidify. In 2017, when Lina Khan was writing about Amazon in her paper, one example of Amazon's relentless pursuit of dominance stuck out for her.

[Lina Khan]

The story of Diapers.com so Diapers.com was this innovative upstart. They recognized that there was a need in the market to make sure that parents of young kids could get diapers quickly. And so they started this online commerce business.

[Cory Doctorow]

Marc Lore and Vinnie Bharara started Diapers.com in 2005. That first year, the company sold $2.5 million in diapers and formula. It made sense. Diapers delivered right to your door. Families with young children loved it. And guess who else was paying attention?

[Lina Khan]

Amazon was tracking Diapers.com quite closely and realized that this was a market that they wanted to be in and wanted to excel in.

[Cory Doctorow]

At first, Amazon tried to buy diapers.com out, but diapers parent company was like, no thanks. So Amazon tried another tactic.

[Lina Khan]

They ended up engaging in a ruthless pricing war with diapers.com where they were undercutting the price of diapers to the extent that they were actually losing money on the diapers. With the sole goal of driving Diapers.com.

[Cory Doctorow]

Out of the market, Amazon started selling diapers significantly below cost. So low that reports from the Times said that Amazon was on Track to lose $100 million in just three, three months in order to undercut diapers.com and they could.

[Lina Khan]

Because Amazon, of course, has so many different lines of business and so many different forms of revenue that it's not just dependent on how much it's making on diapers to stay afloat.

[Cory Doctorow]

It was all too much for diapers.com they couldn't keep up.

[Lina Khan]

They got driven out of the market.

[Cory Doctorow]

Diapers parent company was forced to sell. Now both Amazon and Walmart made bids. Walmart actually had the better offer. But by this point point, Diaper's owners had grown so afraid of Amazon that they sold to Bezos for less than they would have gotten from Walmart. Okay, so surely this was anti competitive behavior, right? Surely aggressively running a competitor out of business followed by a hostile takeover would set off some antitrust red flags. Well, it was a big enough acquisition that it had to go in front of the Federal Trade Commission and the ftc. They waved it right on through.

[Lina Khan]

And then, then once Amazon had eliminated the competition, it ended up raising the prices of diapers above what it had been selling them at.

[Cory Doctorow]

The affordability, the cheapness of Amazon's diapers. It was fake. From where Lena was sitting, Robert Bork's so called consumer welfare measurement was a flop.

[Lina Khan]

The consumer welfare standard has failed to promote consumer welfare. In market after market we actually see people paying higher prices.

[Cory Doctorow]

So is Jeff Bezos now an autocrat of trade? Is he the king over the necessaries of life?

[Lina Khan]

Well, look, you should talk to some of the businesses that have to sell on Amazon. And what was really eye opening for me was just how much these businesses live in fear that one day they could wake up and their seller page could have been delisted or they could have fallen in the search rankings from the first page to the seventh for some arbitrary reason. That's a black box. They're calling to find out why they can't get an answer. And meanwhile they're bleeding sales and are worried about going bankrupt.

[Cory Doctorow]

Which is of course exactly what happened to our kids. Lip balm maker to Mike Wiesel.

[Michael Wiesel]

I'm thinking, how the fuck am I going to support my family? I'm going to go out of business. I start to get into fucking panic mode.

[Cory Doctorow]

Mike doesn't know how he would have caught on to Amazon's scheme, buying and underselling his own products if he hadn't gone scrolling that day. I mean, obviously he would have figured it out. When Amazon sent him that next payout.

[Michael Wiesel]

My sales went to one quarter of what they were before and my margin went basically to zero.

[Cory Doctorow]

Mike got his distributor to stop selling to Amazon, but Amazon wasn't done with him.

[Michael Wiesel]

They started to charge all these fees, like for advertising, huge amounts that just crept up.

[Cory Doctorow]

And the long shadow Amazon cast didn't merely fall upon Mike's Amazon listings, it affected every online sale he made.

[Michael Wiesel]

They will monitor prices on other websites like Target, Walmart, so unless you are selling for less than that, you will not even be seen. And the only way you'll see yours is if you drop your price enough. So what I had to do was lower my price. So all our profits got basically wiped out.

[Cory Doctorow]

The part that is perhaps the most shocking about all of this is that, yeah, even after everything that's happened to Mike, he's still selling on Amazon.

[Michael Wiesel]

I'm trying to not sell on Amazon, but it's like a drug addiction because you get this steady, you know, even though it's a shitty margin, you get a steady kind of income from it.

[Cory Doctorow]

When Amazon does something you don't like, there's this instinct to boycott, to stop selling or maybe stop buying. But have you noticed how hard it is to actually do that? That if you Go to buy something online. So many of the hits are from Amazon that the cheapest, easiest option is almost always Amazon. That is by design. That is the point. This is not your fault.

[Michael Wiesel]

Trust me. I buy from Amazon.

[Cory Doctorow]

I don't.

[Michael Wiesel]

You know, there's stuff that I have to buy that it's so easy to buy, you know, but like, it is bad for customers because it basically gives them less choice.

[Cory Doctorow]

We reached out to Amazon to ask them about Mike's situation. They didn't make anyone available to talk to us. So what does Mike want to see happen?

[Michael Wiesel]

To me, this is like just. It's simple monopolization. There doesn't even need to be new laws.

[Cory Doctorow]

And Mike is right. Robert Bork's influence didn't actually change America's antitrust law. The Sherman act still stands. Bork just changed how antitrust laws were interpreted and applied by generations of lawmakers. Clive Thompson, the Internet culture writer, saw up close what that meant not just for Amazon, but but for the Internet at large.

[CBC]

The government had been completely asleep at the till on antitrust for the longest time. And I think the abandonment of antitrust has been pretty disastrous for the Internet that we use today. And that's largely because it allowed all these Internet companies, all these social media companies, all these providers of online tools to grow huge and then to thwart any serious competition by simply buying any competitors that came along.

[Cory Doctorow]

One of Bork's articles of faith was that once monopolies started to throw their weight around, new companies would rush into the market to compete away their power. We hear so much about buzzy startups. Maybe that feels like what's going on. But those startups almost never seriously challenged the big entrenched tech monopolists. Not because their products aren't good and not because their users don't love those products. But because dethroning big companies is no longer the point today. The point is to get bought by the big companies.

[CBC]

You know, Facebook buys Instagram, they see it growing like mad. They see it becoming something exciting. They buy it. They see WhatsApp growing as a way to chat. They buy that.

[Cory Doctorow]

In 2012, when Facebook bought Instagram, Mark Zuckerberg sent an email that explicitly said that he was doing it just because he didn't want the competition. But the ftc, they waved that deal through. Google did build its legendary search technology in house, but it bought almost everything else. Android, G suite, maps, satellite, Waze, YouTube.

[CBC]

And the more power they amassed, the less they had to care about what their actual users really wanted. They could now focus on squeezing more money out of the overall ecosystem. And that to me is a really strong part of what took this amazing promise of software as kind of like a liberating tool, as a wonderful tool for expression and turned it more into a tool for control. I don't think anyone was even paying attention to how much power each of.

[Cory Doctorow]

These companies was amassing except for Lina Khan.

[Lina Khan]

There is a lot of just raw frustration and anger, candidly including at the government for decades of inaction. So that's the thesis of the piece and what I ended up writing.

[Cory Doctorow]

In 2017, in her last year at Yale, Lina Khan published her paper. In a cheeky reference to Bork's book, she called it Amazon's antitrust Paradox.

[Lina Khan]

I used Amazon as a vehicle to tell a broader story about antitrust and how this consumer welfare paradigm had become the Achilles heel where firms, especially in digital markets, could sing the tune of consumer welfare to monopolize in ways that was entirely antithetical to what the law is about.

[Cory Doctorow]

And something very out of the ordinary happened with Lena's paper. Something that does not usually happen with law review articles. It went viral.

[Lina Khan]

It was quite surprising, honestly. I mean I'd been a law student, you know, toiling away on this, was just excited to be done and that it had gotten published. So it was quite, you know, it was an honor and also just quite surprising to see that it seemed to really touch a nerve.

[Cory Doctorow]

Lawyers all over the world were reading Lena's paper. Not just lawyers. Normies all over the world were reading Lena's paper. I remember reading it. I was out on a book tour and I thought, God damn, I get it now. And there was one particularly powerful person who must have read it because Lina Khan was about to get an offer that would change her life and maybe the world. President Biden will nominate Lina Khan to serve as a member of the Federal Trade Organization. Firm's the youngest person to ever chair the Federal Trade Commission. The Senate approved 32 year old Lina Khan President. Biden's pick is a prominent critic of big tech. Tech companies might be a little nervous about this news.

[Lina Khan]

It has been a bit of a.

[Cory Doctorow]

Whirlwind in 2021 when Lena started as the chair of the FTC, she made it her mission to get back to the basics of the Sherman. No more corporations with the power of kings. From now on, the FTC was going to be about a hell of a lot more than just price go down. And there was a lot to clean up.

[Lina Khan]

The FTC ended up studying acquisitions by Bid tech companies and found that there had been, you know, over 600 that had just flown below the radar, and not a single one was challenged by antitrust enforcers.

[Cory Doctorow]

It was time to enforce the law. And Big Tech was about to feel the wrath of Lina Khan.

[Lina Khan]

Studying Amazon as an academic is very different from pursuing enforcement actions against Amazon as a law enforcer.

[Cory Doctorow]

But enforce the law she did in the fall of 2023. The FTC filed a major antitrust lawsuit against Amazon yesterday. They accused the company of illegally using its market power to. To raise prices and exclude competition. And that's how Lena became a star. Joining us right now is FTC chair Lina Khan.

[Lina Khan]

Thanks, Andrew. Good to see you.

[Cory Doctorow]

In your lawsuit, you say the FTC's lawsuit against Amazon took on many of the complaints of sellers like Mike, like steadily hiking the fees sellers have to pay to access customers.

[Lina Khan]

Sellers who now pay one out of every $2 to Amazon. So this is effectively a 50% tax that businesses pay to Amazon to reach shoppers.

[Cory Doctorow]

It nailed Amazon for punishing sellers when they sell on a different platform. And then there was this big one.

[Lina Khan]

Amazon has also deliberately degraded the quality of its platform.

[Cory Doctorow]

Yeah, that's right. And shitification strikes again.

[Lina Khan]

So this lawsuit is fundamentally about protecting free and fair competition. And the US Antitrust law laws prohibit firms from using their monopoly power to punish or preclude or prevent competition. And that's what our lawsuit lays out that Amazon has done. And that in turn inflates prices for consumers, not just on Amazon's own site, but actually across the Internet.

[Cory Doctorow]

And Lena was looking across the entire Internet. The FTC launched lawsuit after lawsuit aimed at company after company. When you look through them, they're like a bingo card of things that suck about being online. Things like privacy violations.

[Lina Khan]

We took on a whole set of data brokers that had been illegally surveilling people and then quietly selling their sensitive data.

[Cory Doctorow]

And a personal favorite of mine, subscription traps.

[Lina Khan]

We brought major lawsuits, including against Adobe and against Amazon for trapping people and subscriptions and making it just absurdly difficult to cancel.

[Cory Doctorow]

I always say there's a grease slide to get into a subscription and a grease pole you gotta climb to get out of it. Well, Lena, she degreased the whole thing.

[Lina Khan]

It felt very satisfying at the end of the day to be able to file something so that we could really vindicate the rights of the American people and the businesses and the consumers that have been harmed for years.

[Cory Doctorow]

Of course, Lina wasn't popular with everyone. Between 2021 and 2024, Rupert Murdoch's Wall Street Journal published over 100 editorials damning Khan. She was described as a crypto Marxist bent on nothing less than the total destruction of the American economy. One editorial even said that she should be disqualified from pursuing a case against Amazon because she had studied the company too thoroughly and her expertise in their business meant that she would be biased against them. But even though the Biden administration is most closely associated with the US Antitrust revival, there are plenty of conservatives who hate monopolists. Take J.D. vance and Matt Gaetz. They say they love Lina Khan. They even call themselves conservatives.

[Lina Khan]

So I think we do see a lot of bipartisan concern and a recognition going back to the original antitrust values that if we really believe in freedom, that has to involve protecting ourselves from autocrats of trade as well as creating safeguards in our political sphere.

[Cory Doctorow]

As we record this, a federal courthouse in D.C. is hosting two historic antitrust trials. A remedy trial to figure out how Google will will be punished for its monopoly over search, and a historic antitrust case against Meta. If Meta loses, they could be forced to sell off Instagram and WhatsApp. Google has lost three US antitrust trials in the past two years. Now Google is fighting to keep from being ordered to sell off Chrome, maybe Android. Apple meanwhile, is facing criminal sanctions for allegedly lying to officials federal judge about its monopolistic payment processing system, which takes 30 cents out of nearly every dollar collected in an app. Antitrust wonks have a name for this moment. Antitrust Woodstock and Amazon again. Amazon didn't make anyone available to speak to us for this podcast. But publicly the company has denied the FTC's accusation. Their council argues that Amazon's practices fuel innovation, bringing lower prices, faster delivery and more choice for consumers, all while helping small businesses access new customers. And what do you say to people who say that even if we win these court victories, that it's too late, that we're not going to unscramble these eggs that monopolies cook, that we're just like in an era of oligarchy and that's just going to be the way it is.

[Lina Khan]

Well, look, I'm somebody who doesn't subscribe to that type of inevitability, right? The markets that we have, the economy that we live in, that's not just the product of these inevitable market forces. It's really the result of policy choices and the legal regimes that we choose.

[Cory Doctorow]

Well, last November, the American people went to the ballot poor box and they made a choice. On January 31, 2025, Lina Khan resigned from the FTC soon after the Trump administration fired the two remaining Democrats on the commission. Or at least Trump claims he fired them because the law is pretty clear he can't. The FTC's case against Amazon is slated to be tried next year in 2026. A lot could happen between now and then.

[Lina Khan]

I do think there's an open question as to whether these tech executives are going to be able to notch these sweetheart deals that get them out of this litigation. And I think as we see a lot of these companies and their top executives trying to cozy up with this new administration, I think we just all have to be vigilant.

[Cory Doctorow]

The insidious scene is here as we careen into an era of climate chaos, rising authoritarianism, trade wars, and far too many real wars. We need an Internet that works for us. We need a billionaire proof Internet. But how do we get it? That's on the next and final, final episode of Understood. Who broke the Internet?

[Michael Wiesel]

Hi Donald John Trump, do solemnly swear. Behind the throne money always lurked a.

[Cory Doctorow]

Number of US Lobby groups talking as if this was a done deal. This was, you know, simply just get on with it. They have totally and utterly appropriated the Internet.

[CBC]

And those absolutists out there who are babies are people who frankly don't get it.

[Cory Doctorow]

I took that not as a warning to stop what I was doing, but rather to double down.

[Michael Wiesel]

If we don't stand up for Canadians, who will?

[Cory Doctorow]

How do we prevent ourselves from going down the same road yet again and having something that's really cool turn into something that's really evil? Understood is written and produced by Matt muse, our showrunner, A.C. rowe, and me, Cory Doctorow. In this episode, you heard clips from CBC and the Daily show with Jon Stewart, the Wall Street Journal, Senator Bernie Sanders, the Majority Report with Sam Seder, Congress.gov, the Capitol Forum, Bloomberg QuickTake, Fox59 News, and CNBC. Roshni Nair is our coordinating producer, mixing in sound design by Julian Uzieli. Our story editor is Veronica Simmons and our executive producer is Nick McCabe. Blokos. For more Internet history from Understood, check out season two, hosted by my friend Sam Cole, author of How Sex Changed the Internet, the pornhub Empire traces how a company born in Montreal came to dominate the adult industry until a global scandal shattered its reputation.

[CBC]

For more CBC podcasts, go to CBC CA Podcasts.