Yesterday, the Biden administration named Lina Khan, a 32-year-old Columbia Law professor, as the new head of the Federal Trade Commission. Khan, who will be the youngest FTC head ever, is known as a fierce critic of big tech monopolies like Amazon. While there’s often a knee-jerk resistance to regulation and regulators among blockchain advocates, Khan’s concerns make her a potential ally on big issues like privacy. Her antimonopoly work could also create substantial market opportunities for new kinds of tech businesses – including those building decentralized systems and “Web 3.0.”
David Morris is CoinDesk’s Chief Insights Columnist. This article is excerpted from The Node, CoinDesk’s daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here.
Enforcing U.S. antitrust law is a major part of the FTC’s mandate, and Khan is probably best known for helping redefine just what a “monopoly” is. She has been crucial, including during seven years at the Open Markets Institute, in developing and promoting the idea that a company can be a monopoly even if its practices drive prices down – even, in fact, if its product is free to consumers. That theory largely hinges on how the firms gather and use data: Khan has been among the loudest critics of the way Amazon uses data gathered through its storefront, such as by leveraging sales data to compete with third-party sellers who are, no less than shoppers, its customers.
Khan may also have a higher chance of advancing her own legislative and regulatory agenda than some other members of the Biden administration. At the most divisive moment in American politics since the 1960s, Big Tech has managed the neat trick of bringing everyone from the progressive Left to the Trump-nationalist Right together in shared hatred and fear. Khan’s own confirmation was bipartisan, with the Senate voting in favor of her 69-28.
That bipartisanship will be tested by looming legislation that would seriously reshape the tech industry, which is coming fast and furious in both houses of Congress. A huge bipartisan Senate package includes a data portability provision of particular interest to Web 3.0 projects, because it could erode Facebook’s ability to lock customers into its walled-garden version of the internet. Such a mandate could also create new demand for a distributed platform for social data.
Such measures are steps toward unwinding the surveillance economy that has allowed companies like Google and Facebook to leverage network effects to build the new kind of data monopoly that Khan helped diagnose. That unwinding would, to whatever modest degree, help people retake some control of their personal data and privacy. Just as important, the antitrust elements of Khan’s agenda could create more space for small startups pursuing novel ideas – almost certainly including more experimentation with privacy-preserving data structures and business models.
But now that she’s in charge of the FTC, antitrust shouldn’t be Khan’s only priority: The FTC also sometimes plays an important role in fighting deceptive investment schemes. In particular, I’ve been writing quite a bit lately about a new wave of celebrity crypto endorsements, some of which may have been undisclosed paid promotions. It’s the FTC’s job to stop such touting activity, but recent actions have been slow and reactive, creating an atmosphere of permissiveness. More aggressive enforcement of those rules could help keep more money in legitimate projects, advancing the timeline for real alternatives to the tech monopolies.