The Technology 202: Here are the top takeaways from Lina Khan’s nomination hearing

Khan, a law professor and former FTC staffer, signaled in her testimony that she would bring an aggressive approach to regulating tech giants. That would mark a major reversal from the Obama era, when the agency took a largely hands-off approach to big mergers and acquisitions in the tech sector.

Khan told senators in the last few years, new evidence has come to light that there shows there were “missed opportunities” for enforcement actions under the last Democratic administration. She said new findings show the FTC has to be “much more vigilant” when it comes to large acquisitions in digital markets. She also said that she was particularly concerned about the ways that companies use their dominance in one market to give themselves an upper hand in other markets, an issue that’s been a matter of intense scrutiny as lawmakers weigh updates to ensure antitrust laws are up to date in the digital age. 

Regulators around the world are scrutinizing how Silicon Valley giants amassed size and power through acquisitions. My colleagues made a graphic to show how Amazon, Apple, Facebook and Google acquired hundreds of companies over decades. 

Here are top takeaways from Khan’s testimony that signal where tech regulation might go if she scores a top position at the federal government’s top Silicon Valley watchdog: 

Khan is just one of several tech critics the Biden administration has tapped to serve in senior roles. Tim Wu, who has been critical of the industry, works on competition and technology policy on the National Economic Council; and Vanita Gupta, who has advocated for civil rights change in big tech, was just confirmed to serve in a top role at the Justice Department. Yet it remains to be seen if Biden will bring in more business-friendly Democrats to serve in other key roles, including in the top spot in the DOJ antitrust division.

Democrats painted the 32-year-old’s rise as a powerful immigrant story and noted her academic writings, particularly on Amazon’s power, have already had a major influence on Washington’s approach to antitrust policy. Khan served as counsel for Democrats during the 16-month-long House antitrust investigation into large tech companies’ power that concluded last year, as well as a legal fellow for FTC Commissioner Rohit Chopra (D). She burst onto the scene in 2017, after publishing an article called “Amazon’s Antitrust Paradox” in the Yale Law Journal, which argued for regulators to take a broader approach to considering how a company’s dominance impacts consumers, beyond just prices.

(Amazon CEO Jeff Bezos owns The Washington Post).

Sen. Amy Klobuchar (D-Minn.), who chairs the Senate Judiciary antitrust subcommittee, said the country needs Khan at the FTC to address large mergers and other displays of corporate power that have gone unchecked.

“We’re in a competition crisis, and no one has described it better than you have,” Sen. Richard Blumenthal (D-Conn.) said.

And a friendly exchange with Sen. Ted Cruz (R-Texas) signaled Khan might be able to work with conservatives also eager to address tech’s power. When it was Cruz’s turn to question Khan, he emphasized his major concerns about the tech industry’s growing clout. Khan told Cruz she was particularly worried about the way companies with ad-based business models potentially violate privacy laws, as well as how large companies use their power to expand into new markets.

“I look forward to working with you, and I think there’s a lot more the commission can do in terms of ensuring transparency from Big Tech, which right now is incredibly opaque,” Cruz said.

Sen. Marsha Blackburn (R-Tenn.) questioned whether she had enough experience to serve on the commission, and she called on Khan to share in writing what she would have done differently during the Obama era regarding large tech mergers. Sen. Mike Lee (R-Utah) questioned whether Khan would need to recuse herself from the FTC’s investigations of large tech companies, given her previous work on the House probe.

She raised particular concerns about the ways a single algorithm change can tank readership for any publisher. She also expressed concern about the concentration of the digital advertising market.

Lawmakers have increasingly homed in on the ways Facebook and Google’s product changes and algorithms can affect the news business, which has become increasingly reliant on tech giants for web traffic. The issue has been front-and-center since the companies used aggressive tactics in Australia to push back on proposed legislation requiring them to pay a fee to publishers for news stories appearing in a search engine or social media. In the United States, lawmakers have introduced legislation allowing publishers to band together to better negotiate with tech giants.

Because Apple and Google are the only major app store operators in the United States, Khan contended they have wide leeway to set advantageous terms.

“In those cases we need to be especially skeptical and really look closely,” Khan said.

Her comments came just hours before a Senate Judiciary subcommittee chaired by Klobuchar heard testimony from small companies about alleged anti-competitive behavior in Apple and Google’s app stores that stifle smaller players.

Morning Consult’s Sam Sabin on Khan’s exchange with Cruz:

There’s reason to be hopeful, Gautam Hans, an assistant clinical professor of law at Vanderbilt Law School, argued:

Match Group executive Jared Sine said Google called the company on Tuesday night, after Match’s testimony went public. He said a Google employee asked a Match employee why its testimony about app store fees did not match up with statements made about Google in a previous earnings call. Sen. Richard Blumenthal (D-Conn.) called the phone call a “threat” and “potentially actionable,”  and Klobuchar promised the committee would look into it. “Whenever you receive something like that from a company that can turn you off overnight, you’re always a little intimidated,” Sine said.

The exchange came at a hearing where executives from Tile, Match and Spotify aired wide-ranging concerns about tech companies app store practices, and Apple and Google sought to defend their practices. Tile called on lawmakers to draft legislation to specifically address the competition issues in app stores. 

Sen. Edward J. Markey (D-Mass.) and Rep. Kathy Castor (D-Fla.) say that FTC should examine the marketplace’s compliance with a federal law protecting children. They say the FTC, in failing to act after a 2018 letter by Markey and two other senators, “may have resulted in unnecessary harm to children and families.”

“During a period in which children’s technology use has skyrocketed, our renewed call for the FTC to investigate the Google Play Store is even more urgent,” they wrote, giving the commission three weeks to respond to the letter. In a statement, Google spokesman Dan Jackson said the Google app store “is committed to providing a positive and safe environment for children and families” and that it has “taken significant steps” in recent years, including by updating its policies with tighter requirements. He added that “we will continue to make the protection of children on our platform a priority.”

Congressional lawmakers from both parties are increasingly scrutinizing how big tech companies might endanger children’s privacy and considering updates to a decades-old law protecting children online. 

The legislation would ban the U.S. law enforcement agencies and the government from buying personal data without a warrant, Drew Harwell reports. It was introduced by Sens. Ron Wyden (D-Ore.) and Rand Paul (R-Ky.) amid scrutiny of the personal data brokers’ practices.

“Doing business online doesn’t amount to giving the government permission to track your every movement or rifle through the most personal details of your life,” Wyden said in a statement, adding that the bill “ensures that the government can’t use its credit card to end-run the Fourth Amendment” rights against unreasonable searches.

• The Cisco Foundation, whose endowment is funded by Cisco, committed to spend $100 million over ten years to work to reverse the impacts of climate. 

White House press secretary Jen Psaki said in a statement the Endless Frontier Act, which proposes $10 billion for regional technology hubs, is “one more encouraging sign of the bipartisan support for investing in America’s competitiveness.” 

The bipartisan bill, which lawmakers have touted as a way to counter China’s technological advances, would also expand the National Science Foundation and give a new Technology Directorate within the foundation $100 billion for research on advanced technology like artificial intelligence and robotics.

• A Senate Judiciary Committee panel holds a hearing on social media amplification and algorithms on April 27 at 10 a.m.
• A Senate Homeland Security and Governmental Affairs Committee panel holds a hearing on federal IT management on April 27 at 10 a.m.
• Federal Trade Commissioner Christine Wilson discusses digital markets at a NetChoice event on April 27 at 1 p.m.
• The Senate Commerce Committee holds a nomination hearing for Eric Lander, President Biden’s pick to lead the White House Office of Science and Technology Policy, on April 29 at 10 a.m.
• Shira Perlmutter, the Register of Copyrights and Director of the U.S. Copyright Office, discusses the implications of a recent software-related Supreme Court decision at a Center for Strategic and International Studies event on April 29 at 12:30 p.m.