FTC Chair Lina Khan recently addressed the agency’s focus on targeting Big Tech, emphasizing the importance of tackling the players that cause the most harm. Rather than just increasing the number of cases, Khan believes it is crucial to go after those who are systematically driving illegal behaviors. She compared it to going after the “mob boss” rather than the henchman at the bottom.
This approach aligns with recent news that the FTC is opening an antitrust probe of Microsoft, Open AI, and Nvidia over potential antitrust violations related to their partnership with Inflection AI. The FTC has also taken action against other tech giants like Meta, Amazon, Google, and Apple in recent years.
Khan explained that the FTC wants to be effective in its enforcement strategy by taking on lawsuits against the “big guys.” If successful, this can have a positive impact on the marketplace. The cases selected by the FTC also serve as a deterrent for other companies, as antitrust risk is now a top consideration in potential deals. This shift in mindset benefits the agency, as it reduces the need for extensive resources to address such cases.
During her talk, Khan addressed startup founders and venture capitalists who view exits as a significant path. She highlighted that the law prohibits exits or acquisitions that strengthen a monopoly or allow a dominant firm to form a competitive threat. This indicates that the FTC aims to prevent consolidation that hinders competition and limits opportunities for startups.
Khan shared that the FTC receives up to 3,000 merger filings each year, but only around 2% of those deals undergo further scrutiny. This means that the majority of deals are approved without intervention. However, Khan believes that promoting more competition at the acquisition level would benefit startups and founders. Having multiple potential suitors increases the chances of obtaining a better valuation and provides a fairer playing field.
In summary, the FTC under Lina Khan’s leadership is prioritizing actions against Big Tech companies that cause the most harm. By focusing on the “mob boss” rather than the henchman, the agency aims to have a significant impact on the marketplace. The FTC’s approach serves as a deterrent for other companies and encourages more consideration of antitrust issues in potential deals. Additionally, the agency is committed to promoting competition and providing startups with fair acquisition opportunities.