The US Federal Trade Commission has recently blocked Tapestry’s $8.5 billion purchase of Capri Holdings. This brings Chair Lina Khan’s strict antitrust policies back into the spotlight.
Khan’s uncompromising stance against monopolistic takeovers often raises concerns in business circles. She is also frequently targeted by congressional Republicans who accuse her being too aggressive when it comes to enforcing the antitrust laws.
In the run-up the US elections, Khan was also seen at events with prominent Democrats. While Democratic Senate candidates in Arizona, Texas, Illinois, and elsewhere are vocal about their support for the FTC chairperson, Democratic nominee Kamala has refrained from campaigning alongside her, creating tensions within the party.
The progressive wing of the party blames Harris for not publicly siding with Khan, or defending her, even though the FTC Chair is facing opposition not only from Republicans but also influential businessmen who support the Democrat Party.
Khan’s opponents, the tech moguls, are opposed to Khan.
In a letter sent to a GOP legislator last year, Khan noted the FTC had taken action against 38 mergers under her supervision since June 2021 and that 14 mergers were abandoned during FTC investigations.
Included in this list are tech giants such as Nvidia Meta, Microsoft Apple and Amazon.
Mark Cuban, the billionaire and LinkedIn cofounder Reid Hoffman are at the heart of Harris’ dilemma. They have both expressed their opposition to Khan.
Cuban recently said that he believes the Democratic nominee should succeed Lina Khan as the head of the Federal Trade Commission.
These influential supporters argue that Khan’s approach could stifle investment and innovation in the tech industry.
Cuban told Semafor that “the bigger picture is she hurts more than she helps.”
Hoffman, who has donated millions of dollars to the Democrat’s campaign, said that Khan was “waging a war on American business.”
Hoffman is being investigated by the FTC for his involvement with companies such as OpenAI and Inflection AI and a Microsoft Investment that allegedly avoided FTC scrutiny.
Harris’ decision to keep a safe distance from Khan has been interpreted as a reaction to the influential figures who expressed their hope that Harris would dismiss Khan if elected president.
Harris would be signaling a shift towards a more business friendly stance and distancing her from the stronger antitrust laws enacted by President Joe Biden.
Harris’s distancing himself from Khan has sparked a backlash.
On the other hand Khan’s supporters – largely from the Democratic Party’s progressive faction – see her agenda as crucial to reining corporate power.
They argue that Harris’ refusal to align herself with Khan’s antitrust mission may weaken the base of the party, especially among voters who are frustrated by economic inequality and large corporations’ influence.
Hal Singer, an economics professor at the University of Utah who was quoted in a POLITICO report, warned that Harris’ refusal of to defend Khan could “zap the life out of progressive base” and be a missed chance to claim a popular stance.
Jeff Hauser, of the Revolving Doors Project, echoed these concerns and warned that Harris’ attempts to attract moderate Republicans could undermine the populist energy Democrats require to counter Donald Trump.
Analysts warn that Harris’ stance could lead to populist votes
Harris’ campaign has been centered on balancing the interests of her donors and populist demands for corporate accountability.
The campaign team for Harris maintains that Biden’s economic platform includes measures to increase taxes on the billionaires and reduce price gouging.
Progressives, however, argue that these measures might fall short of the bold antitrust position represented by Khan, who they see as a necessary counter to corporate power.
A Lake Research Partners poll showed that more than 65% of voters from key swing states supported lawsuits to curb monopolies. This indicates a wider public support for the FTC’s goals.
Critics warn that Harris’ approach could allow Trump capture the populist narrative, positioning himself as an defender of ordinary Americans in opposition to corporate excess.
Some experts have tried to dismiss the importance a Big Tech pushback has as a valid concern in polls.
Adam Kovacevich is a former Google executive who now heads the tech lobbying organization Chamber of Progress. He disputed the idea that voters were rallying around Lina Khan’s aggressive stance towards Big Tech’s market power.
Kovacevich stated that the anti-corporate left underestimates its voter base.
He told POLITICO the Biden administration had “lost alignment” with the median voter in economic issues, and that Harris now tries to win over moderates that are wary of Trump, but also see her as potentially too radical economically.
Kovacevich explained that “swing voters want to hear her message and business approach in a different way.”
The future of antitrust in a Harris Administration
Harris, despite her reluctance in the campaign to openly support Khan’s policies, is expected to retain Khan as FTC chairman if she wins.
Analysts say that Harris’ platform still reflects a large part of the Biden administration’s anti-corporate agenda even if it is not a priority in her campaign rhetoric.
Dan Geldon, the former chief of staff of Senator Elizabeth Warren, stated in a POLITICO article that the “success” of Bidenomics would encourage a Harris Administration to maintain the legacy of Khan’s tenure at FTC.
Harris’ critics argue, however, that by not rallying behind Khan now, Harris risks alienating progressives voters and could miss an important opportunity to differentiate herself from Trump in issues of corporate accountability.
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