FTC’s tunnel vision of Big Tech puts consumers at risk

Federal Trade Commission Chairwoman Lina Khan has set herself the goal of breaking up Big Tech. Three years later, little has come of it.

Khan still has a chance to recalibrate his priorities and enact meaningful reforms for consumers, such as cracking down on scammers and rip-offs. But that will mean coming to terms with a reality of today’s consumer environment that Khan refuses to acknowledge: Americans are happy with their technology products.

Khan took the reins at the FTC in 2021, promising to crack down on the world’s biggest tech companies. In Khan’s eyes, the FTC had become a weak antitrust cop. That was all supposedly changing with a new sheriff in town.

But the sheriff’s role isn’t to write laws; it’s to enforce the laws on the books. With no legal evidence of wrongdoing, Khan saw her plans fall apart.

Under Khan, the FTC has weathered a series of defeats in Big Tech cases where evidence was lacking. A federal judge threw out the FTC’s attempt to block Microsoft’s acquisition of Activision Blizzard last year, saying the agency failed to prove the deal would reduce competition and harm consumers. Months earlier, the agency lost a lawsuit against Meta over its acquisition of Within, a virtual reality startup. The only tech merger the FTC has successfully blocked was between two biotech companies, neither of which are household names.

The FTC’s case against Amazon is riddled with legal flaws, earning it the dubious distinction of being the “weakest” of all major antitrust cases brought by big tech companies, according to a recent survey of antitrust professors.

So why is the FTC doubling down on a losing strategy? Khan’s theory is that even losing court battles will help it win the war on technology. Khan says it needs to take tech companies to court—regardless of the outcome—to pressure Congress for new antitrust laws that can be used against the industry.

Ultimately, it is consumers who lose the most in these types of scenarios.

A scan of all federal agencies by spending budget shows that the FTC lands just below the Peace Corps and above the Gulf Coast Ecosystem Restoration Council. It’s not an agency with cash to burn, but as Khan told The New York Times in an interview about her tech losses, “We’re definitely focusing our resources on litigation.”

Outside the courtroom, the FTC is using even more of its limited resources to expand its power over the tech industry. As if its failed lawsuits weren’t enough, the FTC recently announced investigations into more leading tech companies, including OpenAI and Microsoft.

But antitrust enforcement in the technology sector is only one part of the FTC’s mission to protect consumers.

Khan’s focus on Big Tech leaves the FTC with fewer resources to pursue scammers and fraudsters who cause serious, unmistakable harm to consumers. A quick look at the FTC’s 2023 Annual Performance Report shows that identity theft and investment fraud are on the rise. Yet the FTC issued fewer consumer refunds, cooperated less with states, and issued fewer consumer protection reports last year.

And when it comes to consumer advocacy, America’s biggest problem is food prices. The food-growing, processing, and packaging industries are rife with anticompetitive practices, like meatpacking consolidation and tractor monopolies. These practices are objectively hurting the bottom line of American families. But instead of prioritizing these issues, the FTC spent months litigating the internal organization chart of a fitness app with fewer subscribers than the unofficial Instagram First Cat.

Instead of focusing on extensive lawsuits and resource-intensive initiatives, the FTC can provide real protection to consumers by going after outright scammers.

Adam Kovacevich is a technology policy strategist in Washington. He wrote this for InsideSources.com.