What FTC versus Amazon reveals about Biden's plan to takeover the economy

Over the past five years Big Tech firms have been the target of antitrust lawsuits from many sources. Among them are the states, the U.S. Department of Justice, the U.S. Federal Trade Commission, and the European Union. 

Now "Big Tech" has a new adversary, FTC Chair Lina Khan.

The FTC’s Chair Lina Khan is at the vanguard of progressive economic policy. With many left-wing economic reforms stalled in Congress, Chair Khan has taken unprecedented steps to expand the role and authority of her agency. 

Khan’s professed goal is to expand the FTC beyond the precedent of protecting victims from fraud, monopolistic prices, and other direct consumer harms.  Now her vision is focused on the FTC becoming a government agency set on restructuring American industry. It’s not about protecting consumers from harm, but about exerting control over anything that can be called big business. 

Lawsuits brought against Big Tech reflect a resurgent populist sentiment across the globe, and especially in the U.S., embracing politicians in both the Republican and Democrat parties in a mistrust of large corporations. 

Meta (Facebook), Alphabet (Google), Apple, Microsoft, and Amazon have caught the attention of government antitrust lawyers and the elected officials who support them under the populist mantra that "big is bad."  

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Against this social phenomenon is the economic reality that big-tech has brought huge advantages to consumers and supply chains across the world. Amazon has led much of the growth of e-commerce in the US and other western economies. Almost 80 percent of customers of Amazon report they are extremely or very satisfied with Amazon. Evidently, customers actually like the hugely expanded scope that online purchases have provided. 

Antitrust activists, however, justify their crusade with a populist world view:  It’s bad when a bigger business out-competes a smaller rival. The complaints they raise are broad and numerous, but for the activists the issue isn’t Amazon’s business model, it’s the fact that they’re a business – and they’re big.

AMAZON SUED BY FTC AND 17 STATES FOR ALLEGEDLY INFLATING ONLINE PRICES

This perspective is woven throughout Chair Khan’s new lawsuit against Amazon.  In considering FTC’s specific claims, it’s important not to lose sight of the larger economic debate of which this case is a major part.   

This is a departure from the direction taken by President Ronald Reagan. He envisioned a consumer welfare standard for antitrust.

I was the first director of the FTC’s Bureau of Competition in the Reagan administration. The FTC's Chairman was Jim Miller; and we implemented a direction that gave clear guidance to industry not to harm consumers, rather than offer amorphous criticisms of companies because they out-competed smaller rivals. 

Amazon Logo (Beata Zawrzel/NurPhoto via Getty Images)

The redirection of antitrust away from consumer welfare and toward achieving social goals is inconsistent with decades of U.S. Supreme Court rulings, including specific Courts composed of a majority of Justices appointed by Democrat as well as Republican presidents. 

The Court has long interpreted the antitrust statutes as having ultimate consumer welfare as their primary objective. Competition, not competitors, is what the antitrust laws protect—for the eventual benefit of the consumer. If a company brings goods and services to market at a lower price and higher quality, antitrust should not stand in the way. 

It is between these two visions of antitrust that our elected officials can choose. The Reaganite consumer welfare standard in antitrust was part of an approach that led to an historic burst in economic growth. It allowed for the flourishing of the most innovative and world-leading industries anywhere in the world. 

Chair Khan’s alternative suggests that we entrust antitrust agencies like the FTC to restructure and regulate the broader American economy, in the interest of an amorphous concept of fairness to competitors of big tech firms -- whether consumers are helped or not. It leaves other big tech companies to guess where the next blow will fall. 

Breaking up Amazon is part of President Biden's administration push towards a centrally planned economy, lionizing the role of big government. Despite Chair Khan’s concerns about centralization of power, her statements show that there is one place she’s comfortable accumulating huge, unchecked power: the federal government. 

Tom Campbell is a professor of economics and a professor of law at Chapman University, where he served as Dean of the Fowler School of Law. He served as head of the FTC's antitrust enforcement bureau in the Reagan administration. Professor Campbell provides antitrust advice in Washington, D.C., to Netchoice, an association of tech firms.