Khan and the FTC have staked their credibility on challenging big tech

Federal Trade Commission Chair Lina Khan delivered a sharp warning to the technology industry in a speech at Stanford on Thursday: Antitrust enforcers are watching what you do in the race to profit from artificial intelligence. “Much is uncertain about what the future of this technology will look like,” said Khan. “But the FTC has made clear that there is no exemption from the [antitrust] laws on the books.” The agency, she continued, “will be clear-eyed in ensuring that claims of innovation are not used as cover for lawbreaking.” Speaking at the Stanford Institute for Economic Policy Research (SIEPR) on Nov. 2, Khan said the agency is seeing signs of market concentration in AI. She said the FTC is examining Big Tech’s role supplying key tools, like access to cloud infrastructure or data processing units, that AI startups and other developers need. She said the FTC is particularly worried about the prospect of “excessive” prices and “coercive” demands on buyers. “There’s a risk that some of the existing incumbents would use control over those inputs to undermine innovation and competition,” Khan said. Another concern: the turbocharging of AI-enabled scams without a clear “liability regime” for how to punish fraudsters. Khan’s prepared remarks and replies to audience questions at the event — which was co-sponsored by SIEPR, Stanford Graduate School of Business, and its Business, Government, and Society Initiative — touched on a range of hot-button issues confronting the FTC, whose mandate is to protect consumers from unfair competition and deceptive practices. Among the topics covered were the agency’s bid to outlaw non-compete clauses in employment contracts, its efforts to crack down on drug pricing practices, and a proposal released this summer along with the Department of Justice that would toughen guidelines for reviewing the antitrust implications of proposed mergers. Khan’s Stanford visit came at an especially momentous time for the FTC, noted Mark Duggan, The Trione Director at SIEPR, in introducing Khan to the packed room of business leaders, Stanford students, researchers, and alumni. Under Khan’s leadership, the FTC has boldly taken on some of the country’s biggest names in business while testing a new approach to antitrust enforcement after what her supporters say has been decades of weak government oversight. Her most high-profile challenge to business practices yet came in September when the commission and 17 states sued Amazon for allegedly abusing its e-commerce power to stifle competition, thereby harming consumers and other online retailers. The lawsuit is the FTC’s largest antitrust case since taking on Microsoft in the 1990s. ‘Firing on all cylinders’ While calling Stanford a “key catalyst of research and innovation,” Khan focused on a single message throughout the hour-long event: Antitrust enforcement going back to the 1950s and in the decades since has been a crucial driver of the breakthrough innovations that have allowed the U.S. to “lead as an economic powerhouse.” Antitrust watchdogs under President Joe Biden are intent on following a playbook that clearly works, she said. “The FTC is firing on all cylinders,” she said.