The New York Times reports that at its annual DealBook Summit yesterday, moderated by columnist Andrew Ross Sorkin, Federal Trade Commission (FTC)b chair Lina Khan “defended the agency’s aggressive strategy despite a series of losses in court cases challenging deals involving Microsoft and Meta, the owner of Facebook and Instagram. ‘Whenever we bring a case, we want to win it,’ she said.”
Here’s how the Times described her appearance:
“‘Big picture, there is a fundamental question in antitrust enforcement, which is, ‘When faced with uncertainty, how do you balance the error costs?’’ she said. ‘Is it better to get it wrong in the direction of acting, or is it better to get it wrong in the direction of not having acted?’
“Ms. Khan said that a longtime ‘bias in favor of inaction’ had significant costs for the economy. Now, there is a ‘rebalance’ occurring, whereby the government is reversing course, she said.”
The Times notes that ther FTC filed “a lawsuit against Amazon in September arguing that the ecommerce giant had squeezed small merchants and artificially inflated prices for consumers. Ms. Khan defended the agency’s argument that Amazon competes in the market for ‘online superstores,’ rather than facing a broader set of competitors — a distinction that could be crucial to how a judge analyzes the lawsuit.”
KC’s View:
Three things.
1. Seems to me that a bias toward action points to the FTC trying to block the Kroger-Albertsons deal.
2. I’ve argued here for some time now that I am entirely comfortable with a nuanced public policy discussion about the nature of competition – it should not be evaluated on the basis of rules originally crafted during Teddy Roosevelt’s trust-busting administration, nor should it be judged based on rules crafted 20-30 years ago. This is a good thing, and we should all welcome it.
I’m not sure I completely buy Khan’s suggestion that it is better to get it wrong through action vs. getting it wrong through inaction. That’s sort of a broad brush with which to paint – and “getting it wrong” carries risks.
Is it possible that policies that try to even competitive playing fields could actually raise consumer prices? Sure. Is it more important to help consumers or maintain fair competition, if a choice has to be made? I’m not sure – except that it probably not and black-and-white proposition.
3. Sorkin asked Khan a question that I’ve asked here several times, and he got an answer – no, Lina Khan is not an Amazon Prime member.
(I understand why. philosophically, she is not – but I wonder if she can really appreciate the consumer benefits if her understanding is purely academic.
The post FTC Chair Lina Khan’s Bias Toward Action appeared first on MNB.
View Original Article