April 29, 2024

News That Didn’t Make the Headlines

News that Didn’t Make the Headlines: FTC Chair Lina Khan

When we go to the polls, at the top of the ticket we don't choose between people. Our votes choose among different visions of the future, enacted by an administration put in power by a coalition. In 2020, our votes empowered FTC Chair Lina Khan to end Reaganomics and defend the economic rights of average Americans

The Biden-Harris Administration closed the neoliberal era opened by Reagan and Thatcher with a sharp break with austerity economics, the unraveling of 60 years of union-busting policy, the return of industrial policy and state capacity, and whole-of-government approaches to economic justice and fairness—in short, a concerted effort to rebuild the economy “from the bottom up and middle out.”

If this weren’t enough, as Gerard Edic writes, “nearly every day for the past month, the Biden administration has made an announcement about a finalized regulation. They have completed a minimum staffing ratio for nursing homes, conserved 13 million acres in the Alaskan Arctic, designated “forever chemicals” as hazardous substances, invested in rooftop solar panels in low-income communities, banned most noncompete agreements at U.S. businesses, directed federal agencies to purchase sustainable products, and closed the “gun show loophole,” to name just a few.”

And now it’s going after the neoliberal monsters the Reagan-Bork regime birthed.

On April 23, Lina Khan’s Federal Trade Commission banned non-compete agreements, allowing employees at all pay levels to change jobs more easily, which will raise wages and create jobs. Last September, the Biden-Harris Administration’s groundbreaking antitrust lawsuit against Amazon, led by Khan, cites degraded product quality as a sign of Amazon’s lawbreaking abuse of market power. Simply put, it is not possible to sell a quality product at a reasonable price on Amazon Marketplace, after paying the Bezos rocket tax. 

Khan, who is 35 and of Pakistani descent, is known around the world as the person whom the largest US companies – tech platform monopolies – fear the most. She remains focused on the quiet (or in the case of robocalls, loud) ways that average people get taken advantage of, from “greedflation” in grocery pricing to “drip pricing” as hidden fees get tacked onto everything from online travel booking to rent. She travels the country, seeking input from everyone being ripped off by the modern economy: gig workers, insulin patients, essential workers at grocery stores, and Hollywood writers. She solicits input by holding public meetings in affected areas and talking to podcasts listened to by workers in the affected industry.

A sampling of her work:

  • Challenging hundreds of drug patents. This move, combined with scrutiny from Sens. Bernie Sanders and Tammy Baldwin, has led most inhaler manufacturers to lower their price to $35 from many hundreds.
  • Working to open up the use of march-in rights so that drugs based on research originally funded by the public can’t be made inaccessible to the public via high prices, paving the way for a federal program to license the patents of drugs found to be priced excessively. (The Trump administration had tried to forbid this option to protect the profits of Big Pharma.)
  • Working to ban “click to subscribe, call to cancel” policies as well as the “junk fees” that get tacked on to everything from concert tickets to rent. 
  • Cracking down on the “you are the product” economy, which obliterates the right to privacy.
  • Instituting new guidelines that consider worker power and basic economic freedoms.

The pro-enshittification, pro-monopoly, pro-“junk fee” opinion page of The Wall Street Journal has written nearly weekly hit jobs on Lina Khan since she took office in 2021, as well as nonstop attacks from Congressional Republicans. This satire piece combines the text of a small sample (58) of these op-eds.

As Cory Doctorow, who coined the term “enshittification,” put it:

<blockquote>My god, they sure hate Lina Khan. This once-in-a-generation, groundbreaking, brilliant legal scholar and fighter for the public interest, the slayer of Reaganomics, has attracted more vitriol, mockery, and dismissal than any of her predecessors in living memory.</blockquote>

She sure must be doing something right, huh?

Why is Khan going after Amazon? Online shopping was supposed to make our lives easier, but the enshittification of the experience has made it more of a headache than it is worth. Search results on monopoly platforms like Amazon are cluttered with sponsored content, flagrant lies, knockoffs, and dropshipping scams from brands with inscrutable names and no address or customer service number. This enshittification follows immediately from how Amazon runs the search algorithm on its platform and how it uses its monopoly power to charge sellers exorbitant fees to appear in the search results and bully them into handing over their logistics to Amazon, which slows delivery on and charges more for sales off the platform. Wanting to replace customer loyalty to a manufacturer or seller with loyalty to the platform, Amazon hides sales information from sellers and rips off their products when they do well, using the data it collects from and fees it wrings from sellers to subsidize its own Amazon Basics products.

Amazon’s corporate greed and monopoly power are so extreme that Amazon collects about 45% of the sale price of a product on the marketplace platform it controls. To keep its prices competitive, Amazon must demote sellers who sell at fair prices consistent with quality and decent working conditions. Even if Amazon’s prices are reasonable, the quality isn’t.

This enshittification is a direct result of policy failures that can be traced back to the Reagan era. The Reagan Administration upended our notion of antitrust policy. Unchecked corporate greed and abuse of power was now welcome, so longer consumers experienced low prices. This allowed Walmart to make the Waltons the richest family in the country, with more wealth than the bottom 40% of Americans, by suppressing wages, squeezing producers, buying up competitors, displacing small businesses, and subsisting off government largesse for everything from local land and infrastructure to its workers’ healthcare and housing…while keeping prices low, so antitrust regulators need not scrutinize.