From the new york times, I'm catherine ben halt- this is the daily this week in san francisco. Quarter. Federal regulators are fighting to block one of the biggest deals in the history of silicon valley. Today my colleague David me came on the architect of that lawsuit, Lena com. and the growing campaign by the Biden administration to finally reign in big time. The it's thursday june. Twenty ninth

If this is only the second episode, I've hosted of the daily- and I think it is the first, the show was ever devoted to the federal trade commission, and that may be because, frankly, even saying those words just meet me, little sleepy tell me why I shouldn't be sleepy. You shouldn't be sleepy, because a federal trade commission is the regulator that is tasked with making sure that capitalism works in the united states, so cases that they bring, are bellwethers for how big companies end up getting regulated and how powerful they're able to become, and one of those cases is playing out this week. That makes a lot of sense, and that has woken me up good. Okay, so tell me about this case.

We are going to start with one of the biggest steals of the decade. Microsoft's long running, sixty one billion dollar acquisition of activision blizzard chill at the federal trade commission is trying to stop microsoft, which makes the xbox video game console along with being involved in a ton of other businesses from buying activision blizzard, which publishes some of the biggest video games in the world, including activations of first precedent at call of duty, probably Importantly, we call of duty franchise current one of the most popular lobal games of candy crush right now. in san francisco, a judge is deciding whether or not the FTC case is good enough, that they should temporarily block this deal from closing, so that this big challenge to this, this acquisition can go forward. After all, while it was pitched as an act position in some ways, is more of a merger between two of the five biggest gaming companies globally, and this cases actually important

bigger way, which is editor key indicator for whether or not government agencies like the federal trade commission, can stop big tack from getting big? So explain that? How do you mean so? Over the last five or so years? They ve been really mounting concern not just in washington but in world capitals at brussels, in london, over how big silicon valley companies have got in and we're talking really here about. Five companies, amazon, Google apple matter which, on facebook and instagram in and microsoft and the critics leave companies believe that they become a kind of insurmountable keepers for commerce and communications and basically like our whole lives on line and governments have responded by saying. There's a problem here, but now the question is: can anybody actually take action terrain these companies in or will they just get more powerful and it seems to be?

This rare issues where you actually of support on both sides of the isle way you kind of have mainstream figures. You know from Bernie sanders to Joe Biden and just holly, all of whom serve agree. Something needs to be done to regulate big tech. That's right! It's the rare by partisan consensus in washington right now that these companies have gotten really big and really powerful in the government? Maybe should do something about it. Put congress in particular have really struggled to figure out what that is. They propose a lot of laws. and they haven't gone anywhere and, and so, when congress can't make new laws to regulate the textiles means the only tool that the government has to pursue. These companies is the laws on the books, and that means that the questions about are these companies to powerful and watch Government do have really fall into regulators, like the federal trade commission, and that agency has started to take on these texts.

in a way that it hasn't before and the architect in and face of that. If it is the ftp new chair, Lena con. Okay, so tell me about lena can so we could have had a meteoric rise to lead the federal trade commission and it all really starts in twenty Seventeen yeah, I'm lina khan, had a visiting fellow at yale law school. So I think we in twenty seven team. I think not that long ago, lina khan was a lost, a competition and she was a yale law school. I wrote a piece called amazon's antitrust paradox that tells the story of amazons eyes, and she writes these essay for the low review with a lot allow students. Do you write about amazon? Am, I think, increasingly, Businesses are not able to compete on the merits with amazon and actually the way that she describes it in the paper is really instructive of how she views the company with her performance,

rights? In addition to being the retailer, amazon is now a marketing platform, a delivery and logistics network, a payment service, credit lender and auction house, a major but publisher, a producer of television and films a fashion designer hardware manufacturer in a leading host of clouds every space wow I mean we all know how huge amazon is in our lives, but is quite startling to hear this list of things that it does one company in this brand, so many industries and roles basically sell things, compete against other selling things and onto the platform where all of these transactions happen as well. That's right and this idea of a platform business is really crucial to understanding

We can't concerns because, if not just amazon amazon is a clear example of it, but apple runs a platform in the form of its absence or right apple felt apps. They also run the main store where other people sell. Apps Google runs a search engine that includes result from websites like say: reviews of a restaurant, Google also has its own review service. So what she's articulating is that be sort of mega platforms have grown without a lot of attention from government and are posing real problem for competition in the economy so David? What is the solution for this in this paper, so that is where we go back to the past a little bit of billina kind of telling a story about history. Anti trust rules were passed around the turn of the century. At a time when there were these big trusts that the of coffee which standard oil, which made the rockefeller family rich and over time, they were used to break up standard oil to break up other big company.

but the reality is that some of antitrust law is written down in alive and some of antitrust law is about how judges interpreted We know kind of thing is that in the nineteen seventy is conservative lawyers. Academics, economists were able to shift the way, anti trust laws understood by the courts and that, instead of considering a whole range of harms to competition to the economy, but the courts were now basically figuring in most cases, one factor to decide whether or not something violated antitrust law, and that is whether or not it hurt consumers and particularly whether nodded hurt consumers in the form of higher prices. So what are you saying is that, since nineteen, seventy is the definition of anti trust in a way was that as long as prices remained low and consumers happy regulators left big companies alone yeah for the most part. Until in this paper,

Lena kind is basically saying that the government and the court should widen the scope of what falls under anti trust laws in a way that she would argue basically returns it to the tool it once was american history that, even though amazon keeps prices very loud, it still engaging in all these practices that could harm competition potentially to the detriment of people, including other smaller companies whose on its platform. Surprise alone is no longer like the useful invaluable indicator for when to apply anti trust praxis. That's exactly what you think So David one way to think about this, as I'm listening to you is that, even though anti trust laws were originally designed to prevent the concentration of corporate power, ironically, its it seems that in recent decades is almost like their favorite market concentration by focusing so much on lower prices.

consumer happiness and now lena can, once the efta see to return To that original mission, that's right! That's how she sees the central failing of the government in the preceding year, thirty years that they essentially were asleep at the switch, while these companies got extremely vague and extremely powerful, and ultimately, I think the case that leading causes making is a yes. Consumers are one part of the world, but the government needs to think about the economy more broadly than it needs to think about, does concentration, in the economy mean workers get paid last does it mean that it harder to start a start up to make them up with some sort of genius innovative products, and that when you consider all of those things together. Do you have a healthier and more dynamic economy and, ultimately democracy, and how do people react to her paper? So, with the caveat that we're talking about a law review article, it goes,

yeah in a report for the ale law journal. Lina khan writes that amazon's dominance may soon challenge current anti trust laws. She joins us now to explain why and lina khan, who again is in her years at this time, has just finished up law. School is suddenly subject to a of media attention. This woman's name is Lena com, he's kind of rising to pray. Balance among the anti trust circles down in d c, she wrote a big paper for the yale moss and suddenly she's out of it. Liberty, she's profile in your ties by my colleague, David strike, felt just provide in the atlantic in the washington post a piece out at yale law school that arise sent around as well, but it would be a it would be a different approach to throw to anti trust doctrine to make it clear and part of what this article triggers is a big debate about whether or not leaning on his right or coming in with basically an attack on business for businesses sake, but actually won't be good,

for consumers. So we have a society that says: consumers come first right, messrs come second and workers. Come third and I think we're beginning to question that rubric and she becomes a phase of what is now kind of a ballooning movement of people who think that these big tech companies have gotten to being my is that amazon is challenging the current diamond anti trust which primarily books, consumer prices as a metric or whether markets are competitive and suddenly all of these people are paying attention to boost argument. Then the regulators for tasked with reining in american corporations have failed to do so. And what happens to Lena, can have tissue graduates from law school. So she goes into government. She ends up working briefly for the effort he see as an aid to a progressive commissioner. Then she goes to congress and chief of staff member on this big investigation that congress did

into the power of the tec platforms, and then she becomes a law professor at columbia. But then Joe Biden gets elected president and in twenty one he said thing up his administration and he names her as one of the five commissioners on the federal trade And- and an important thing to understand about the f t c- is that there are five commissioners who vote on whether or not they'll take actions against companies, and then one of them is the chair, and that person is the one who really decides The direction of the agency so she's been named one of those five commissioners, but not the chair, and, and so this is, on its own, a big win for the anti trust, reformers she's, this young, rising star and now here she is in a position of real influence and her nomination is approved by the senate, sixty nine to twenty eight. So she gets some republican support in that

same day, hours hours after the Senate vote Biden surprises everyone by announcing that she will in fact be named chair of the whole agency fascinating. So, just a few years after Lena can publish, paper criticising amazon and the yale law review as unknown law student, not even graduated, yet she is appointed to the ftc, the government body, that is tasked with actually regulating companies like amazon, that's right, she's, thirty, two years old and the most influential person at the federal trade commission and in fact Joe Biden, also names Big anti trust, reformers to key positions in the government so now been movement that in five years earlier, was largely per in scholarly and journalistic work about what they saw. As this big problem are in the seat of power in the agencies that can actually do something about it.

The We'll be right back. From new york times games. Make me feel, like I'm amazing whirl makes me feel things that I don't feel from anyone else. The times crossword puzzle busy companion that I've had longer than anyone outside of my immediate family you and k Ellie. Is that he's, but unfortunately, on the issue of her, I started word or a hundred ninety four days ago, and I haven't yesterday, I absolutely love spelling bee. I always have to get genius. I really like, where aids that use few letters, but give you a lot of points falaba

Lawful, I've seen you yell at it and say that I should be aware. You should be aware. My proudest crossword achievement is my four minute. Fifty four second saturday when I can finish a hard puzzle without kids, I feel like the smartest person in the world. I have to look up a clue to help me. I'm learning something new. It gives me joy. Every single day join us they all near york times games and why times dot com? Flash games subscribed by june twenty ninth to get a special offer so David at thirty two year. old lena can who has not been

I about our ambition of going after big tech is now the head of the ftc. So what does she do when she gets there well before she does anything? It won't shock you to hear that her appointment attracts the attention of the company as she has been criticizing, so both amazon and facebook, within about a month of her being named chair, asked that she be recused from any investigations into the companies. This sounds scared, while they certainly noticed that she's in charge now and ultimately. she has so far opted not to refuse from either matter so pretty soon becomes becomes clear. That economy is interested in running a more aggressive, f tc and it takes a while to build these cases, but where's. The big question is still: what are you gonna do about the big tat platforms, the once a cheat highlighted in her paper and we get the first hint towards the end.

of twenty twenty one. When method decides, that is going to buy a virtual reality, start up called within now meadow which on facebook and instagram, and what tab in recent years have been trained me this pivot to what they that the metaphor: cities like a virtual reality, world or augmented reality world. Where people hang out, They go to work, you know you and I record this podcast in virtual reality and it's a big part of their strategy and they produce virtual reality headsets as part of this until the buy this company that makes a virtual reality fitness game, it's a way to exercise. You know with one of these headsets on and these companies. The big tech companies recently have acquired a lot of start up, and this deal it reported to be around four hundred million dollars which had been in tourism may be too long or a billion dollars that people think of as a small. Certainly like not a a blockbuster deal right. This is a big company buying a small company, the small company gets paid out. The big company gets the virtual reality, fitness game and and

with that we're talking about virtual reality. It is a really indecent technology right. It's not proliferated throughout offices in schools, as some people think me, will, but in july of twenty twenty two the empty ceases to block this year, So how does lena can see this case? Why is she pursuing this particular case? So, even though The actual number value on the deal isn't that high. She said that by acquiring

The company meta is going to be able to try and dominate basically going forward this young market for virtual reality and remember how, like part of the concerns that she has, are that the regulators are basically asleep at the wheel, while these companies got too big. Yet if so yeah. It's really about doing what she says. The regulators had not done for decades, which is get ahead of tech companies and basically beat them to the future, and as you when she does not meta closes this deal, they declare victory and it's a difficult moment, because this is the first tech case that had really been developed totally under lina khan said the ftc suffers a loss, but the agency doesn't stop and what's the next case they go for so even before they lost in the meadow case. They had food to start microsoft from buying this video game, publisher, activism blizzard

the arguing that microsoft will use the popular activision games, namely this call of duty series which, just to give people a sense of scale here, has made like thirty billion dollars over the lifetime of the franchise and twenty eight. activision said the call of duty had earned more than the marvel cinematic universe louder. These are big games and the activity is saying that, basically, microsoft will with hold those games. These, like blockbuster titles, from the companies to compete with xbox the council itself, the physical platform that runs the game. Basically, there saying they're going to hold them from Sony which makes a play station and the disease have. Microsoft could also use this kind of new leverage through the deal to dominate,

how'd gaming, which is a nascent market for trimming game's over the web. So the emphases argument here is that there is a potential future where microsoft owns not just one of the biggest gaming consulting the world, the xbox, but also one of the biggest games in the world call of duty which could limit access to them. game from other councils exactly and in turn the refugees arguing, lore gamers right over to xbox any refugees, as a microsoft has done this before they fight. A studio and then made that's video games, xbox exclusive, but in this case microsoft, five back hard and they say we pray. as we won't do that, and we are willing to basically in contracts with other video game council makers, the guarantee that we will provide call of duty to them for a certain period of time.

Do you strike in some form? One of these deals with an intend. Oh, they say that they have made a similar offered to sony, but only has an accepted, and so they basically say this can earn you? How will we can alleviate without ever going to court but Lena kind of believe them exactly and from her perspective, all of this basically leads to a less competitive marketplace. So what are the chances David that she winced this case? So it's a tough cake, see any trust regulators have not brought a tone of cases in recent years in which you're dealing with two but he's at are merging one companies being acquired where they dont totally directly compete. It's it's more common. For them to challenge the deal like say, this is a total hypothetical, but to me packers, who are

urging into one me packet right and in that sense the case potentially could be difficult. Ok says you went after facebook, she went after microsoft. What about amazon, the company that has been the focus of so much of a work prior to coming to the effort to see? Well, that was for the first eighteen months over ten year, the big question

Those of us who track this every day it's like, when is the amazon case, gonna colleagues, it gonna come at all, and the efficacy actually has two sets of powers. They can bring these anti trust cases that are a view that there's some problem with competition in the market. They also in charge of stopping companies from doing things that they say are unfair or deceptive. So, like think about us day, I'm or a violation of your privacy and last week they did take amazon to court. They argued in a pretty sweeping complaint that amazon had tricked customers through using basically deceptive, designed into signing up without a total informed consent for their prime subscription service, and they say basically that

if these customers have been duped into signing up for prime and then when you went to cancel prime, it was like this maize to cancel it. They would bombard you with offers, saying well knows day stays day, and it was like a tide of screens you had to get through. If you wanted to cancel it. I feel like I've been there actually now having lived in different countries in signing up to different prime accounts and try to get out of them was not always easy, shall we say, yeah- and these are not uncommon right across the internet and critics of these practices call them dark patterns that their basically like trickster design, tactics that are to make your brain do something that totally understanding what is doing and the activity of promised they would go after the dark permanently bring this case. That argues that amazon has used these tricky tactics to pull consumers in to this really core part of its business, in the form of the problems of, and what's that,

weird that she wins this case. You know I ate a little up in the air, and amazon has signaled that they're going to fight this aggressively. They said in response to the lawsuit that, in fact things are designed to be, you know, easy to navigate and they are not going down. Without a fight, but it leaves the broader question unanswered, which is: is she going to bring he's against amazon. That is really about amazon's effect on competition in the market. An actual anti trust case against the company, because the case that they just filed wild about a service is very popular and deals with some sort of novel and interesting issues. It's not her paper turned in to a case is, it seems David from everything you ve laid out so far. That Lena kind is taken on three very difficult cases, none of them

as islam bank. Is it fair to say that her approach is not really going the way she thought it would well that's where it gets a little interesting, so we have to face in setting out to lose cases but Lena cod and her. How I believe that, in order to win in the long term, by shifting the law back in this direction, that they think you're Harkin's back to tat of the golden year of trust busting in america, that you have to be willing to leave Do you have be willing to bring risky cases? Gonna take big swings and no not all of them will pan out. Some of them might be losses that trigger congress to act in other cases. They might just be losses it, but you have to be willing to take those risks to shift the law back in a long term sent its interest in it. It looks like he's taken approach that doesn't make me think of liars. That take makes me think almost more of activists I mean she's, basically signalling we are paying attention to you

and we will come after you? It's almost like it's a deterrent to companies. I think the lina khan and her counterpart of that affirmative justice absolutely are sending a message re to industry that, in their mind, the cop is back on the beat that they should think twice before they do deals that might raise concerns, but I think that Lena khan and her eyes look back to the nineteen seventy when, in their view, the conservatives are really successfully the law in a direction that now and, in the view of the current damaged the lawn and made it a less useful tool that that was a process. It took a long time training that she is trying to precipitate a similar shift in the other direction, while still bringing a level of legal scrutiny bear they're, not filing cases that they know they're gonna lose, but they are willing to lose cases in order to win in the water. I guess one question is: can you lay the long game when you are political appointee.

And your time in office is limited, so that, if the tension at the heart of the accounts, effort in the effort by her allies, its powerful president Biden, will not be re elected. Can they precipitate the caution They want in a short period of time, or will they leave behind cases and and legal challenges that are continuing? without them there to fight them But isn't there another scenario here where Lena kind succeeds and there's risk there too? As customers, we love amazon because our books and our toothpaste or of the next day, so if Lena kind, does anything that changes that is there a chance at the very people. She's turned protect from market power will actually be very unhappy with her and the f DC.

Well, that's what the company you say will happen that moves like the kind that, when a car is making war, just make the internet a worse experience for consumers and increasingly there's been pushed back against lena, come from other companies across the economy. The chamber of commerce are the biggest and most prominent business lobby in America has been extremely aggressive in attacking her palace. Is, and the truth is. Sometimes it takes a long time to tell whether or not anti trust policy has worked. People argue that earlier antitrust cases paved the way for companies like google to start in the first place, but that again, is a long term view. What clear right now is that this is one of the greatest battles in recent memory over how corporate power is regulated in

america and leader khan, and our allies are right at the ceremony David. Thank you so much. Thank you. Did we also it? Yes, we're all awake where, with you we'll be right back. Here's what else you need to know today fix smoke from canadian wildfires, blanketed large parts of the united states on wednesday, moving from the east to the upper midwest Several major cities, including detroit and indianapolis, recorded some of the work air quality in the country? The smokers result of one of canada's worst wildfires seasons and decades and its expected to drift east

officials and several cities, including new europe, have warned of worsening conditions in the coming days and according the: u s: officials, a senior of russian general, had advanced knowledge of yevgeny precautions plans to rebel against russia's military leadership, which is prompted questions about what support the rebels hat, inside of russia's governing elite, the officials said they're trying to learn if general surges, A weekend, Russia's former commander in ukraine helped plan the rebellion which puts the most dramatic threat to president vladimir putin in his twenty three years in power. today, he's episode was produced by mooch safety, clear tennis, cutter and nina feldman withheld from rochelle vondra. It was edited by catch. Him and Michael been long contains

regional music by marian Lozano and alisha by e tube, and was engineered by Chris. What I was see, music is by Jim Bruin, burke and Ben lands. Work of wandering the that's it for the daily. I'm catherine buttonholed see you tomorrow.