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With four days left now in the Biden administration, the transition is in full swing, but they are still working at the FTC. Case in point, filing suit today against one of the largest ag equipment companies in the world, alleging Deer In Company restricted the ability of customers to make repairs. Joining us now for an important conversation on this and a lot more, including her four years at the helm of the agency is FTC Chair Lena Khan. Wonderful to see you in person.
Thanks for coming in, Thanks for having me.
An important action today that you're rolling out here, and some of your critics are calling this partisan ship in terms of its timing, why is it happening now?
Well, Look, the FTC has been focused these last few years in making sure that Americans can enjoy the right
to repair. I've met with farmers numerous times over the last few years, and one of the biggest pain points they share is that they're no longer able to easily repair their own equipment or even be able to take their tractors and combines to independent repair shops, and instead they've been steered into Deer's network of authorized dealers, which practically means they're paying more, and especially for farmers that live in rural areas, it means they sometimes have to
drive hours to even get to the nearest dealer. Practically, we all know that farming is a very time sensitive business, and so we've even had farmers that have lost their crop faced ruinous delays, and so we think there's real harm here. There's a law violation, and we want to make sure farmers can enjoy the right to repair well.
And you and two other commissioners did vote to bring this claim forward. Yet the two Republican commissioners did not, including the man who will be FTC chair, just stays from now, is it your expectation that Andrew Ferguson is actually going to see this through or was it just brought today to make a point knowing that that may not happen under new leadership under the FTC.
Well, look, I can't speak to what any new leadership will do, but this did have the support of the majority of the commission. This follows a multi year investigation, and I always think it's important that we act with urgency and swiftly, and if there is real harm, we shouldn't let politics get in the way of delivering real relief to farmers.
You've got a lot of things on the works right now that you're going to be leaving behind, including court actions against Facebook, I believe in the spring Amazon next year. Will we expect those to continue?
Well, Look, we are set to go to trial against Facebook this spring, set to go to trial against Amazon in fall of twenty twenty six. Those actions are only going to trial because the FTC was victorious along the way, defeating motions to dismiss, and so we are on strong grounds and I fully expect that we'll be able to
see these trials go forward. Of course, whenever there's a new administration, defendants may want to see if they can come in and get a cheap settlement, but I hope we wouldn't see that here.
Well, and from people we've talked to who've just observed the FTC from the outside, the suggestion has been that your leader ship and Andrew Ferguson's leadership when it comes to big tech specifically, may not be that different. Do you see that as an area in which you've been most aligned in your time serving together on the Commission.
Well, look, there's no doubt that there is strong bipartisan concern about the economic power of large technology companies and how that can undermine fair competition, undermine people's free speech rights. And so we'll of course have to see what the next administration does, but it's certainly been an area of strong bipartisan concern during my tenure.
Social media has created a whole new realm of possibility here, and we're considering the potential for a sale or a divestment of TikTok right now. Even Elon Musk has been floated as a potential buyer. He's got a pretty large presence on social media. Are you concerned about consolidation as a result of divestment of TikTok if it happens.
Well, look, as you know, there is a TikTok specific build that we just heard an argument at the court around, so you.
Know, this is a very live issue.
Of course, we have seen these antitrust lawsuits filed in part because we've seen a lot of illegal monopolization in these markets, and so of course we wouldn't just want to forget or ignore all the lessons of those harms and repeat those mistakes.
But we'll have to see what happens.
Well, and considering that you really had your claim to flame flame fame as an academic looking at Amazon specifically from an academic landscape, when you look at large tech companies like this, can you see a world in which it wouldn't be anti competitive for a big tech company to absorb a company that has one hundred and seventy million users in the US and a valuation our analyst suggests could be north of forty billion dollars without it raising antitrust concerns.
Well, look, all of these questions and investigations are highly fact specifics. You'd want to look at all sides, but at a high level, if you have a firm that is dominant in one market that's going out and b buying a rival or another company in that same market by ordinary standards, that often raises at least initial concerns.
You've talked about how extreme a concentration of economic power can have great political influence. You could correct me if I'm not getting the words perfectly right there. You've talked about this as potentially the beginning of another Gilded Age. Elon Musk is reportedly taking an office in the White House complex in the old executive office building, even as
one of the most prolific government contractors out there. Is this the kind of example you're talking about, and should that be in the purfew with the FTC?
Well, look, the FTC's mandate is squarely looking at commerce in our economic realm, and so we're very focused on the specific facts. Do we see monopolization, do we see mergers that are illegal, rather than waiting into kind of big picture political questions. But it's certainly true that for the lawmakers who passed the antitrust laws over one hundred years ago, one of the animating concerns was the way in which concentrated economic power can be translated into political power.
We're not seeing it now.
Well, look, certainly we've seen, you know, time and time again, including you know, over the last few years, efforts by dominant companies to use political sway.
Well, when we consider companies and their behavior and what they might be gearing up to do in the coming years, we have bank earnings today, including some big investment banks like Goldman Sachs talking about what they see is going.
To be a better deal environment.
It actually echoed what the CFO of Goldman, Dennis Coleman had to say last month about the new direction the FTC specifically could be taking in this upcoming administration.
Let's listen with Fergen's nominee. There could be a new direction at the FTC. Obviously as a as a sitting commissioner dissented with the current leadership on a number of cases, and so we could see a more favorable environment heading into twenty twenty five that could act spur more by way of CEO confidence and in turn unlocking more investment, more activity, and provide a more favorable strategic backdrop.
People are kind of expecting chair con it seems what could be a tidal wave of m and A. Do you think it's actually that simple.
Well, look, we certainly heard over the last few years directly from deal makers, directly from anti trust lawyers who acknowledge that several years ago they wouldn't even think about anti trust risk when initially putting together some of these deals, but under the Biden administration they had to think very early about whether a certain merger would pose legal risk. And as a law enforcer, of course, that type of
deterrence is good for the public. It leads to more efficient outcomes and so I would hope that we wouldn't see a backsliding, a return to an environment where flagrantly illegal deals are being proposed and deal makers are thinking, well, maybe we can get this one through even though it violates the law. So we'll have to wait and see. We have had several merger lawsuits filed with unanimous support at the Commission, and so we'll have to wait.
And see what happens.
Well, it may not be flagrantly illegal, but we keep hearing about the pipeline, the backlog, animal spirits. How do you envision the next one hundred days looking.
In that realm?
Well, look, we'll have to see, you know, what actually ends up being proposed. One interesting fact that we've seen in some of the data is instances in which firms, especially large technology firms, have known that they can't just go out.
And buy their rivals.
We've actually seen them have to invest, invest more in innovation and actually try to organically expand and improve their business rather than just go.
Out and snuff competition.
So I think we want to see markets where firms are fairly competing and being incentivized to really compete on the merits rather than just buy out their rivals.
And if we were to look at this kind of on an industry by industry basis. Obviously we've talked about agriculture already in this conversation about technology, But is there an industry in which you see the potential for potentially aggressive consolidation that you maybe not during your tenure had a chance to address that gives you concern going forward?
Well, look when we put out a request for comment from the public about our new merger guidelines and ask people where have there been waves of consolidation that you're worried about.
We've really heard it across the board.
I mean, healthcare came up over and over again, including from healthcare workers, including from patients and patient advocates. We've heard a lot of concern about consolidation in media. We've personally had to file several lawsuits against big hospital mergers that we know result in higher costs and worse quality. So you know, my approach was to focus on the markets that can have a huge impact on people's day to day lives, and healthcare really sort to the top of the list.
While I was at the home.
The FTC took a particularly assertive approach to farmer mergers, making sure that we were not just looking strictly at what is the overlap today, but understanding more from a business perspective, could this deal undermine even potential competition and make things worse for Americans over.
The long term.
We talk about technology as this big, squishy thing, but specifically when it comes to AI, we're seeing technology advance so quickly that we're having trouble keeping up with it. If you were staying in this job, or to the extent that you'll be in this space in your next role, how concerned are you about the way AI is actually changing the rules?
Well, the FTC has been very focused on understanding across the stack, where are areas where there may be bottlenecks or choke points that some of the incumbents might be able to exploit in ways that undermine competition. And so we've been going later by hi layer, looking at the chips, looking at the cloud, looking at some of the models.
We have an active inquiry examining the active investments and partnerships between some of the hyperscalers, big cloud computing providers and some of the newer AI firms to try to understand is this undermining competition. I think historically we've seen that these moments of technological inflection points are ones where enforcers have to be extraordinarily vigilant because there's huge opportunity here for real competition, real innovation, real growth.
But those are also.
The moments where the incumbent monopolists can panic because they can imagine themselves becoming overtaken or disintermediated. And so those are just some of the concerns we have to keep in mind.
All Right, we'll leave it on that note. Chair con thank you so much for joining us here on Balance of Power. That is the outgoing chair of the FTC Lenacon