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Harris promised to be ‘pragmatic’ — that means dropping Lina Khan at the FTC 

The Biden administration’s most activist regulator may soon need a job — unless the next president taps Federal Trade Commission Chair Lina Khan to stay on for another term.  

With the controversial FTC chair’s tenure having ended on Sept. 26, it will be up to the next president to decide whether Khan will have another four years leading the agency tasked with antitrust enforcement and consumer protection. Vice President Kamala Harris vowed in front of the Economic Club of Pittsburgh last week to be “pragmatic” if elected and not be “constrained by ideology” in how she governs. Given this noble pledge, she must show Khan the door. 

President Biden’s choice of Khan to lead the FTC was an exciting one. Khan, now 35, was and still is young, energetic, and ideologically motivated. She is representative of a critical new generation of Democrats who want to take up the mantle of trustbusting, taking aim at large tech firms. 

Since then, Khan has taken the FTC to war against Microsoft, Meta, Google and Amazon, as well as against corporate mergers between handbag companies, hotels, and grocery stores.  

The most bizarre and revealing defeat for Khan came in court against Microsoft for its effort to merge with Activision-Blizzard, the video game company behind Call of Duty. The case came about because of the FTC’s shift in focus away from obvious harm to the consumer, modeled by her revamped mission statement for the agency. Khan’s FTC removed language stating its commitment to not hindering legitimate business activity while playing its role as watchdog.  

Put more simply, even if a corporate action is known to be legal, Khan will make you fight for it in court.  

When you watch Khan’s recent “60 Minutes” feature, this theme is front and center. Khan says “We’re doing our job, enforcing the law.” She is then interrupted by Lesley Stahl, who adds, “You are. [Businesses are] afraid you’re going to tie them up in court, cost them a lot of money, and they’re saying it’s just not worth it.” Khan nods along. Stahl also asks, “If someone just says, ‘I’m not going to go forward,’ that’s a win?” to which Lina Khan replies, “That’s right.”  

The FTC under Khan has made it the position of the federal government to oppose reflexively and antagonize all mergers, treating any market consolidation with hostility. That posture amounts to a corporate tax on mergers and acquisitions.  

Candidate Harris shares Khan’s proclivity for blaming inflation and higher prices of gadgets and groceries on corporate misbehavior. But if Harris wins the presidency, she will have done so on the promise of understanding middle-class concerns. You don’t see Harris campaigning in the suburbs against one-day Amazon Prime deliveries and Prime Day deals on televisions, which is exactly what Khan is up to in her case against Amazon.

Donald Trump, if he wins in November, will certainly fire Khan, but Harris would have to contend with a tough reconfirmation battle for Khan to keep the job. Khan would struggle to maintain the same level of Republican good faith she received at the start of the Biden administration. High-profile defeats in federal court and agency resignations, including a commissioner’s public rebuke in the pages of the Wall Street Journal, would be the main event of a confirmation hearing, and seriously degrade any wavering support for Khan to continue leading the FTC.  

Before grabbing the top spot for antitrust enforcement, Khan was a fresh face with a paper trail of hot takes on how to break up Amazon. Today she’s a federal official with spurned former colleagues willing to speak out against her “disregard for the rule of law and due process” and Federal Employee Viewpoint Survey results showing a dramatic drop, from 87 percent to 49 percent, on the question of whether “senior agency officials maintain high standards of honesty and integrity” within the FTC.  

Khan has broken trust and morale within the agency while simultaneously performing on “60 Minutes” and Comedy Central’s “The Daily Show” as a media darling and anti-capitalist icon.  

There is nothing “pragmatic” about Khan. It’s why she was hired — to throw the kitchen sink at corporations and test the constraints of congressional oversight of the FTC. She did just that. Were she to retain Khan, Harris would betray her message of common-sense government responsive to policy results.  

Biden brought Khan into the fold for what you could call “bold, persistent experimentation” around antitrust, and it has been a failure. Harris can be a fresh leader by correcting that mistake.  

Originally published here

The FTC should throw out its ‘junk fees’ rule and start over

Everything feels more expensive right now, and that’s because it is. Despite a notable decline from its peak of 9.1 percent in June 2022, inflation remains higher than the Federal Reserve’s 2 percent target. 

Since January 2021, prices have surged by an astonishing 17.6 percent. Grocery prices today are 21 percent higher than in January 2021, and while gas prices will tick down this summer, they’re still 10 percent higher than they were three years ago. Ask frequent flyers, and they’ll tell you airline travel is more expensive than ever, too. But on this, they’d be wrong.  

Airline tickets are beating the trendline on inflation, thanks to consumer-friendly trends in flexible pricing and budget flights — one of which the Federal Trade Commission (FTC) and Biden administration would like to end.  

The FTC’s new proposed rule, Trade Regulation Rule on Unfair or Deceptive Fees, takes aim at hidden fees in numerous industries, what Biden calls “junk fees.” The intent is to bolster price transparency for consumers and restrain business, but its effect will be clear: higher prices, more regulation and fewer options for consumers. 

If you’ve taken a flight recently, you may have experienced the kind of pricing structure the FTC seeks to stamp out. You find a good flight at an affordable price, then you’re inundated with fees for baggage, seat selection and priority boarding. Some seat sections are around $15, others are maybe $30, and in the back of the plane, you can pick between a few seats at no added cost. Instead of being guaranteed two checked bags at no cost, you pay a la carte for your single checked bag. Credit card deals are often a life saver. 

In the end, you’ve paid for what you need or value as a consumer, and nothing more. This is how your airline tickets stay relatively affordable in an inflationary economy. The principle isn’t dissimilar from how discount grocers like Aldi and Lidl offer lower prices to shoppers by removing bells and whistles like free bags or unlocking carts for a quarter. By not assuming the consumer’s needs and allowing customization, prices are more affordable. 

This is actually a good thing. But the FTC disagrees. 

The FTC’s primary role is to protect consumers from unfair or deceptive practices. Its bid to regulate so-called junk fees appears to be motivated by some high-profile instances of sticker shock, including last year’s Taylor Swift Eras Tour, which saw ticket prices resell via electronic vendors with steep markups. The Biden administration made hay of it and arranged companies including Live Nation, SeatGeek, Airbnb, TickPick and the Newport Festivals Foundation into an event where they’d pledge to provide “all-in” pricing that shows the total price of admission, including all fees, up front.  

Allies of the administration have also kept pressure on banks to eliminate processing and late fees that make generous rewards programs more available to credit card holders. Lessons should have been learned from the 2010 Durbin Amendment, which capped debit card interchange fees, intended to reduce costs for merchants and, ultimately, consumers. A study by the Federal Reserve Bank of Richmond found that only 1 percent of merchants lowered their prices as a result. Some banks responded by increasing overdraft and out-of-network ATM fees, as well as scrapping free checking account programs that benefited mostly lower-income people.

Many of us have tried to warn overzealous regulators about the economic consequences of caps and crackdowns on backend fees, but they continue forward in hopes of bullying companies into defying market logic.  

The narrative about junk fees is standard fare for President Biden: he blames it on corporate greed. 

It’s not inflation you’re feeling at the grocery store, it’s “greedflation.” After that it was “shrinkflation,” where brands shrink their boxes and raise prices for no apparent reason. 

Consumers tend to know better. They recognize that when companies face downward pressure on their business models, prices necessarily go up.  

The greed narrative doesn’t hold up. Studies have shown that revenues from extra fees in the banking, telecom and airline sectors are quite small compared to total revenues.  

The FTC’s intention to protect consumers from unfair fees is commendable, but its approach too often drifts into the failed policy of price controls. While eliminating back-end fees might push businesses to incorporate these costs upfront, the move can also reduce consumers’ ability to opt out of services they do not want or need. Instead of imposing broad regulations, a more nuanced approach would consider the specific dynamics of different industries and consumers’ desire for flexibility in their budgets. 

The FTC can better serve its mission by policing clear violations of consumer welfare and not meddling in pricing models that help give consumers options for lower prices on the goods and services they value. 

Originally published here

New Privacy Rights Act Exempts Government and Gives More Power to the FTC

Data privacy talk in Congress seems kind of ironic coming just a week after lawmakers rejected a proposal to make federal authorities get a warrant to search Americans’ electronic communications. But in keeping with that move, the American Privacy Rights Act—a draft data privacy bill that will be getting a hearing in the House Innovation, Data, and Commerce Subcommittee today—would exempt governments and entities dealing with data on behalf of the government from its protections.

The bill would also give more power to the Federal Trade Commission (FTC), and create an “unprecedented” private right of action to sue companies over data handling, according to Yaël Ossowski.

Ossowski is deputy director of the Consumer Choice Center, which bills itself as “an independent, non-partisan consumer advocacy group championing the benefits of freedom of choice, innovation, and abundance in everyday life.” I talked to him yesterday about the bill’s (few) benefits and its (myriad) drawbacks.

Read the full text here

Misinformed Jon Stewart Applauds FTC Chair Lina Khan

It’s not often that the head of a U.S. federal agency is given the red carpet treatment on Comedy Central, but for Jon Stewart, it’s to be expected.

Lina Khan, chair of the Federal Trade Commission (FTC), appeared on the revamped Daily Show featuring Stewart as host on Monday nights, to hype up the FTC’s work battling the “monopolies” of the current era. Khan was certainly in need of a pep rally, as even reporters at New York Magazine have taken note of her tumultuous tenure marked by mass resignations, continuous defeats in court and confused mission statement.

She championed efforts by the agency to scrutinize patents on medical inhalers, blocking ‘pharma bro’ Martin Shkreli from ever working again in pharmaceuticals and a tidal wave of lawsuits against Big Tech firms, namely Amazon, Meta and Apple.

Eager to add cases to the FTC’s docket, Stewart provided an anecdote about Apple allegedly blocking him from interviewing Khan on his now-defunct Apple podcast, The Problem With Jon Stewart.

Khan remained poised and professional in her response, but also revealed her ideology when it comes to modern business and competition.

“I think it just shows one of the dangers of what happens when you concentrate so much power and so much decision-making in a small number of companies,” she said.

The drawn-out interview reveals a contradiction in what the FTC is even supposed to do as a government agency. Is it about the consumer having choices and not being “bullied”? Or is the FTC just a bulwark against any and all corporate “bigness”?

To dissect her quote, there was no central decision to “concentrate” power or decision-making in Apple or any other tech company. Consumers voted to support these companies by buying their products and using their services to improve their lives. Because those companies now rake in billions and serve millions of customers, does that mean the FTC has to intervene?

The role of the FTC has never been to remedy concerns about higher prices, low wages or broader social ills. As stated in the eponymously named act signed by President Woodrow Wilson that created the agency in 1914, the FTC exists to prevent unfair competition and deception as it relates to commerce and to seek monetary redress when consumers are demonstrably harmed.

Stewart asks Khan to define monopolistic and oligopolist practices, and she downplays the traditional metric of “market share,” instead labeling “behavior” the most straightforward way to render judgment. That would explain her dismal win-loss ratio in both antitrust and mergers.

The FTC has struggled to demonstrate harm to the consumer under Lina Khan, because consumers are actually pretty pleased with the services she and Stewart loathe, like Amazon Prime. Khan is attempting to lead a revival of the Progressive Era antitrust movement, once spearheaded by former Supreme Court Justice Louis Brandeis, who long crusaded against the “curse of bigness” in America and sought more active policing of private enterprise by the federal government.

This “New Brandeis movement” includes academics and government advisors such as Tim Wu and Lina Khan herself, who was a leading anti-monopoly voice as a staffer at both the FTC and the House Judiciary Committee, as well as a fellow at Columbia Law School. Stewart and his old colleague John Oliver might be vying for membership cards as well. Their primary target is tech companies and their innovations, ranging from artificial intelligence to algorithms, and digital app stores.

Antitrust authorities are carving out new theories about why innovations by tech firms are harmful to consumers — even if it can’t be proven. As she did on The Daily Show, Lina Khan labels companies as monopolistic even after her accusatory lawsuits are defeated in court.

It’s telling that when Stewart asks Khan if she’s “had success: with her antitrust cases, she only cites the layup Martin Shkreli case instead of what she’s staked her tenure on, which is breaking up Amazon, Meta and Google.

No questions from Stewart about Khan’s failed cases such as blocking Meta from buying a VR workout app, or her bizarre effort to jam Microsoft’s purchase of the video game company Activision-Blizzard. Her lawyers were in court armed with flimsy arguments about consumer welfare related to access to the popular Call of Duty series, and what kind of in-game skins Microsoft could make exclusive to Xbox. Embarrassing defeats.

Every week, there are vast new breaches of personal data that put millions of consumers at risk and should be promptly investigated by the FTC and other federal agencies. There is plenty of deception used by online ad firms, crypto scams and other companies that harm consumers and lead them to pay more, lose privacy or even their identities. This is met with little action from Khan’s distracted, ideological FTC.

Instead, she’s laser-focused on consolidation. Why do we have fewer companies in certain sectors of the economy, whether it be in telecom, airlines or meat-packing, as mentioned by Khan?

Once you increase the compliance costs to do business in any given industry with heavy regulation, the result is less competition. Large firms are best positioned to comply because compliance is very, very expensive. The more you regulate, the fewer firms can compete.

Originally published here

The FTC’s cheering of a failed merger shows its disdain for consumers

Since when do government agencies applaud business deals that fall apart, resulting in hundreds of layoffs and loss opportunities for consumers who depend on those products?

That’s what happened earlier this month, when the Federal Trade Commission issued a press release applauding the failed $1.7 billion acquisition of the technology firm iRobot by the ecommerce giant Amazon.

The FTC, as well as Democratic Senators and competition regulators in the European Union, were hostile to the deal as they claimed it would “harm” competition for robot vacuum cleaners, one of the main consumer products made by iRobot, including its signature Roomba, one of the first products of its type. UK regulators disagreed and green-lit the deal back in June 2023.

Once the termination of the deal was announced, iRobot said it would be forced to lay off 31% of its employees – over 350 of them – and likely pause new projects. Their CEO also stepped down amid a falling stock price.

In response to the news, the FTC gloated that the transaction fell apart:

“We are pleased that Amazon and iRobot have abandoned their proposed transaction. The Commission’s probe focused on Amazon’s ability and incentive to favor its own products and disfavor rivals’, and associated effects on innovation, entry barriers, and consumer privacy. The Commission’s investigation revealed significant concerns about the transaction’s potential competitive effects. The FTC will not hesitate to take action in enforcing the antitrust laws to ensure that competition remains robust.”

–Federal Trade Commission Associate Director for Merger Analysis Nathan Soderstrom

The failure of business mergers and acquisitions aren’t uncommon. Whether it be because of stockholder pressure, regulatory concerns, or mismatch of company cultures, deals like this fall apart all the time as often as they succeed. This cycle, caused by market forces, is healthy for innovation, better allocation of capital, and more options available for consumers in the market.

However, if the failure of a business deal and then a company comes at the hands of a regulator, that’s an entirely different matter. One that should leave us asking hard questions of the officials at these agencies, and whether they’re really looking out for consumers’ best interest.

The impact of such failures on consumers should not be lost.

With the failure of this acquisition, and without new innovative products or injections of capital, the maker of one of the first robotic vacuums purchased by millions of Americans and global consumers will likely end up a shadow of its former self. One more product will disappear from physical and online retail shelves, giving consumers less choice than they had previously.

There will still be plenty of options for consumers who want a robotic vacuum in their home, but the significant blow to iRobot means fewer consumers will be able to benefit from the new products and services that could have spawned as a result of this merger.

Armed with Amazon’s vast inventory, its capital, and its supply chain, as well as the current demand for artificial intelligence products consumers can use in their homes, we can only imagine what this partnership could have produced.

This leaves us asking an important question: had Amazon been allowed to purchase iRobot, would it have put other companies at a disadvantage? Would it have squelched competition in robotic vacuum cleaners? Would it have reduced choice and options for consumers? Or would it have led to significantly more innovations and products that we could have benefited from?

Put simply, we just don’t know. But neither does the FTC nor the EU regulators who also shot this deal down. Rather than increasing competition or denying an advantage, the FTC has managed to kill off the opportunities for an American company to grow and succeed, as well as the consumers who benefit from these products.

This has been a key mantra of the FTC during this administration, seeking to put halts on mergers and acquisitions for grocery stores, technology companies, and even healthcare firms, as my colleague Kimberlee Josephson eloquently puts here. These are robust and competitive sectors that are continuing to deliver innovation to consumers, and would benefit from having more not fewer companies.

Instead of a win for consumers as the FTC claims, all we have now is a failed business deal, a company in shambles, and an uncertain path for the open market of robotic vacuums. All in the name of “protecting the consumer”.

Since when should our regulatory agencies, which act in our name, cheer and applaud when deals like this lead to layoffs, declining revenues, and fewer options for consumers? That seems like not only poor in taste, but harmful to our own economic prospects and choices as customers.

If consumers aren’t scratching their heads yet, they definitely should be.

FTC Goes After Amazon

Amazon is the target of a high-profile, high-stakes lawsuit, brought by the U.S. government through the Federal Trade Commission. Attorney generals from 17 states joined the legal action, contending that the retail behemoth is using unfair strategies in both its online supermarket market for shoppers and its market for online marketplace services purchased by sellers.

“Our complaint lays out how Amazon has used a set of punitive and coercive tactics to unlawfully maintain its monopolies,” explained FTC Chair Lina M. Khan. “The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them. Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”

In the filing, the FTC and state attorneys general argue that other retailers and suppliers are excluded from competing with Amazon through its practices related to pricing, product selection and other business aspects. The lawsuit also calls out Amazon’s Prime service, alleging that the company conditions sellers to obtain Prime eligibility for their products using the company’s “costly” fulfillment arrangements.

Read the full text here

Why does Ted Cruz want to empower Biden’s radical FTC?

Data privacy is an increasing concern for consumers and tech advocates alike. Lawmakers from both the Republican and Democratic parties know this, and it’s why the Informing Consumers about Smart Devices Act, being championed by Sen. Ted Cruz (R-TX), is receiving bipartisan support.

Cruz says this bill would “inform” consumers about smart devices with “spying” capabilities, but it is just another opportunity for politicians to expand their ever-growing paternalistic role in our daily lives.

Sure, users value their privacy, but only to a certain degree. Case in point: the smartphones that roughly 310 million people voluntarily keep on their person 24/7, even while they’re in the bathroom. Does it really matter if a smart refrigerator is equipped with the same technology as the smartphone present in your pocket (especially when the refrigerator has the added bonus of assisting with food management)?

Despite what Cruz may think, consumers aren’t dumb when it comes to smart products. We don’t need a warning label for the presence of audio-video software or internet-enabled capabilities. If a device needs to connect to WiFi or an app to function, clearly it is internet-enabled. If lights, thermostats, or music can be controlled by voice commands, then of course these devices have a listening function.

Many of us have come to accept the trade-off of data collection by companies we trust in order to use certain products, services, or websites. For some time now, internet surfers and online shoppers have become acquainted with pop-ups asking to enable cookies on their browsers. Digital cookies were always there, but what changed was the notification of them due to policy pressures. Have the cookie notifications really changed online activities? I doubt it. Have more pop-ups in the name of transparency improved online experiences? Also doubtful.

Organizations gather data to know their consumer base, not to stalk us and discover our dirty secrets. In fact, I’d appreciate it if my tech-enabled Traeger grill was “spying” on me — that way, I might receive some coupons based on my grilling history or suggestions on how to improve my barbecuing skills.

Firms are well aware that their reputation hinges on the comfort level of consumers when it comes to tech use and data collection: If consumers feel a company is infringing too much upon their privacy, backlash will surely ensue. As such, government deliberation over this matter is simply unnecessary.

If passed, the proposed bill will, at best, require warning labels to be affixed to the packaging of smart products and, at worst, place the Federal Trade Commission in charge of establishing disclosure guidelines and enforcement mechanisms. Any cost a company incurs related to regulatory compliance deemed necessary by the FTC will be felt in the marketplace, and manufacturers will take into account the potential for fines from the FTC when establishing their price points.

The expense of FTC interference will be borne by all taxpayers, and the cost to companies for new packaging and labels will spill over into higher prices for consumers.

It is unclear why members of the Republican Party would want to expand the regulatory mandate of the FTC, given that Chairwoman Lina Khan has proven her position as an anti-business ideologue ever since she was appointed by President Joe Biden. Our independent purchase decisions do not need to create an economic burden for all taxpayers nor serve as a means for furthering the FTC’s inquisition against corporate America.

At the end of the day, it is important to remember that every individual consumer has authority over what tech products are used within his or her home. Rather than increase the power of the regulatory state over our consumption habits, consumers concerned about their appliances having spyware capabilities should simply shop accordingly, and any nefarious activities should be handled by the court system.

The “Internet of Things” is meant to predict wants, persuade actions, and improve consumer experiences. Some in-home smart devices can even be literal lifesavers. Thanks to advancements in wearable tech and telehealth, real-time assessments can be transmitted to healthcare providers to allow for independent living at home. Take WalkWise, a smart mobility aid attachment benefiting those in need of senior care. Devices such as these shouldn’t be bogged down by FTC interference or government oversight.

Products that advance our well-being, and that we buy according to our preferences with our own money, should not be vilified by politicians and used to grow the nanny state. Although Cruz claims this bill to be “common sense legislation,” that assumes you (the consumer) have no common sense of your own.

Originally published here

Biden’s FTC is declaring war on consumer preferences in their latest Amazon antitrust lawsuit 

FOR IMMEDIATE RELEASE | September 26, 2023

The FTC’s latest Amazon antitrust case seeks to end your consumer preferences

WASHINGTON, D.C. – This morning, the Federal Trade Commission launched another antitrust lawsuit against the tech firm Amazon, claiming that unique offerings to Amazon Prime subscribers, including faster logistics, bundled services, and low prices, are somehow harmful to consumers and should result in the company being broken up.

Yaël Ossowski, deputy director of the Consumer Choice Center reacted to the lawsuit:

“Consumers know they’re getting a myriad of benefits with their Prime subscription, whether that’s faster delivery, cheaper prices, or bundled services like data storage and content streaming. That’s what consumers want, and why millions buy from Amazon everyday.

“I think many Americans would be appalled if they learned what Biden’s FTC is proposing with these lawsuits: that Amazon Prime, as it stands, should cease to exist.

“That the FTC would waste their resources going after an innovative company that consistently offers value for consumers reveals more about the agency’s political grudge than any perceived harm to consumers. Consumers have overwhelmingly had their welfare increased because of Amazon’s products and services. Government efforts to break that up are harmful to consumers.

“Behind the U.S. military, Amazon is the most favorable institution in the country, mainly because millions of consumers have had experience with Amazon’s platform, have been employed by the company, or have used their services in any way,” said Ossowski.

“It is well known FTC Chair Lina Khan has spent her career trying to build an antitrust lawsuit against Amazon, as is revealed in her 2017 article on “Amazon’s Antitrust Paradox, but those efforts fall flat with consumers who benefit and appreciate their services.”

“As we mentioned in our USA Today oped on this topic, consumers have voted with their wallets when it comes to Amazon’s services, including Amazon Prime. That an agency of the federal government would spend valuable time and resources trying to punish a company for offering too many affordable products and services in a unique way only seems laughable,” added Ossowski.

Contact

Stephen Kent, Media Director

Stephen@consumerchoicecenter.org 

The CCC represents consumers in over 100 countries across the globe. We closely monitor regulatory trends in Ottawa, Washington, Brussels, Geneva, Lima, Brasilia, and other hotspots of regulation and inform and activate consumers to fight for #ConsumerChoice. Learn more at consumerchoicecenter.org.

***Please send media inquiries to yael@consumerchoicecenter.org.***

FTC prepares to take on Amazon

The Federal Trade Commission is reportedly considering action against Amazon amid concerns it has grown into a monopoly. Stephen Kent of the Consumer Choice Center joins Jim on “The Final 5” to explain why he thinks it’s a losing proposition of FTC chair Lina Khan.

Watch the interview here

Split up Amazon, Prime and AWS? If Biden’s FTC breaks up Bezos’ company, consumers lose.

FTC and Lina Khan think consumers need to take one for the team when it comes to sacrificing their savings, in both time and money, that Amazon creates.

Lina Khan is not tired of losing. Fresh off her latest defeat in court in pursuit of antitrust enforcement against Microsoft, President Joe Biden’s Federal Trade Commission chair is reportedly ready to launch the fight of her career to break up Amazon.

Since Khan began work in 2021, the FTC has put Amazon on constant defense, but it has all been a prelude to her goal of forcing the company to split. 

To consumers, the entities of Amazon, Amazon Prime and Amazon Web Services are ubiquitous and synonymous. The overall business includes online retail, physical stores, subscription services, advertising services, cloud computing, logistics and third-party seller services. Each component supports and serves the others, resulting in incredible efficiency, lower operating costs and, in turn, steep price cuts for consumers. 

It’s no wonder that Amazon enjoys almost as high of public approval and trust asthe U.S. military, 72% favorable according to a 2021 Harvard-Harris poll. That’s a shocking statistic given the broader trend of institutional distrust in this era. 

Biden’s FTC thinks consumers need to take one for the team when it comes to sacrificing their savings, in both time and money, that Amazon creates.

Khan’s vision of what constitutes a monopoly is not what most people, or the law, recognize. Her antitrust framework, denounced by former Sen. Orrin Hatch, R-Utah, as “hipster antitrust,” considers predatory pricing, consumer rip-offs and a lack of competition as an old-fashioned way to think about antitrust.

It’s all well summarized in a 2018 profile in The Atlantic, where Lina Khan observes with disdain the lower avocado prices in an Amazon-owned Whole Foods. Consumers and their revealed preferences are the problem the FTC really seeks to solve in their coming attack on Amazon. 

Amazon has become a part of the American landscape

To most Americans, Amazon is no longer just a company; it’s part of the scenery where they reside. Amazon vans are in each neighborhood, and a box emblazoned with the Prime logo could be due on your own doorstep any minute now. This is what happens when you have 200 million consumers worldwide signed up for a service that makes their lives easier. 

Maybe you’re someone who resents the world that I’ve described; maybe you see Amazon’s omnipresence as dystopian. You’re entitled to that opinion, but fighting on those terms is not what the FTC was created to do.

The FTC of today is engaged in a war on “the curse of bigness,” a sentiment expressed by Supreme Court Justice Louis Brandeis in 1934, and it is true that Amazon’s business is very big.

Even if you’re not a loyal Amazon customer, though, we all know someone who has found work with the company, upgraded to a better TV at a better price on Prime Day, or used Amazon’s web services that power millions of websites for businesses worldwide. 

Khan’s lawyers at the FTC say Amazon “forces” merchants to use its distribution services and requires them to lower their prices to benefit from a coveted spot within the Amazon marketplace. They’ll have to prove it and prove that merchants have no other avenue by which to do business if not for Amazon’s terms. 

Some of Amazon’s practices may appear heavy-handed or self-preferential to regulators, but they don’t constitute anything remotely close to consumer harm, the rubric by which antitrust doctrine has been followed for a century. There are no cartels, no robber barons and no secret deals that raise prices for consumers. If anything, Amazon’s incentive system for vendors on its platform seems purposefully designed to deliver on founder Jeff Bezos’ self-described “obsession” with consumers. 

We’re all the winners here. Why can’t Khan and the FTC let it go? 

Federal Trade Commission should focus on Amazon’s real problems, not its popularity with consumers

Let’s give her agency some credit, however, as there are relevant and concerning issues that the FTC has addressed in cases where Amazon has been in the wrong.

Fake reviews pollute the online commerce platform and deceive consumers into buying things they wouldn’t otherwise buy. The FTC is taking worthwhile action there.

Ring, Amazon’s home security doorbell product, has supplied police departmentswith countless hours of neighborhood surveillance footage, raising important privacy concerns for consumers and unwitting neighbors. 

But rather than focusing solely on how consumers are harmed by specific bad practices, the FTC is overstepping its mandate. It’s part of a broader case against Amazon, with the goal of disassembling the company and its services so many of us enjoy. 

That’s because for Khan the FTC exists to fight “the curse of bigness,” and only sometimes will that overlap with consumer interest – as was the case with her failed bid to block Microsoft from acquiring Activision-Blizzard. 

American consumers deserve a free economy with robust competition, plentiful choices and services that add value to their lives.

If Khan and her fellow commissioners were mindful – rather than disdainful – of the choices that consumers willingly make, they’d focus on bad actors instead of such a trusted brand doing right by its customers. 

Originally published here

FTC loses case to block Microsoft Activision $69B deal

The U.S. Federal Trade Commission cannot stop Microsoft’s proposed $69 billion purchase of Activision Blizzard, a California judge ruled on Tuesday.

The deal, originally announced 17 months ago, can now move forward by the July 18 deadline. 

In her ruling, Judge Jacqueline Scott Corley said, “Microsoft’s acquisition of Activision has been described as the largest in tech history,” and “it deserves scrutiny.”

“Microsoft has committed in writing, in public, and in court to keep Call of Duty on PlayStation for 10 years on parity with Xbox,” she continued. “It made an agreement with Nintendo to bring Call of Duty to Switch. And it entered several agreements for the first-time to bring Activision’s content to several cloud gaming services.”

“The Court finds the FTC has not shown a likelihood it will prevail on its claim this particular vertical merger in this specific industry may substantially lessen competition, and “the motion for a preliminary injunction is therefore denied,” Corley added.

The Activision purchase will give Microsoft ownership of popular video game titles like Call of Duty, World of Warcraft and Candy Crush.

The FTC wanted to block the deal because the trade regulator believed Activision’s incorporation into Microsoft would hurt competition in the video game industry.

In an interview with FOX Business, Stephen Kent at the Consumer Choice Center, said “Judge Corley showed a deep respect for consumer interest, namely the gamers who will be most impacted by Microsoft acquiring Activision-Blizzard. 

“Biden’s FTC under Lina Khan has shown no interest in consumer protection, as illustrated throughout the hearings and pointed out on the final day by Judge Corley herself,” he said. “President Biden should be taking note of how poor FTC Chair Lina Khan has been at her job, and how far she’s strayed from the mission of consumer protection.”

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Judge Strikes Another Blow Against Biden’s Activist FTC With Ruling in Microsoft-Activision Merger

A federal judge in California struck another blow against President Biden’s activist Federal Trade Commission chief, Lina Khan, by denying a government request to block Microsoft’s pending acquisition of gaming giant Activision Blizzard.

Judge Jacqueline Scott Corley of California’s Northern District said Tuesday the FTC failed to make a compelling case that the $70 billion deal between the two tech giants would harm consumer choice in the video game market. She denied the agency’s request for a preliminary injunction blocking the transaction until it could fight the merger at an internal court.

“The FTC has not raised serious questions regarding whether the proposed merger is likely to substantially lessen competition in the console, library subscription services, or cloud gaming markets,” Judge Corley wrote.

Consumer advocates praised the ruling as yet another rebuke for Ms. Khan, one of the more activist FTC leaders in recent memory. A Biden appointee, Ms. Khan has been crusading against what she has called “exploitative,” “collusive,” and “abusive” tactics in the technology industry, using the FTC’s antitrust oversight as her primary bludgeon. Another judge blocked the FTC’s attempt earlier this year to stop Meta from taking over a virtual reality fitness company, Within Unlimited.

“The FTC set out, it seems, to protect the business interests of Sony’s PlayStation, completely ignoring their duty to regulate in the interest of American consumers,” the media director for the Consumer Choice Center, Stephen Kent, said. “President Biden should be taking note of how poor FTC Chair Lina Khan has been at her job, and how far she’s strayed from the mission of consumer protection.”

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