Michael Brochstein/Sipa USA via AP Images
Lina Khan, chair of the Federal Trade Commission, at a hearing of the House Committee on Appropriations Subcommittee on Financial Services, May 15, 2024
The billionaires have come for Lina Khan.
On three occasions in the past two days, donors have taken to the media to either call for Khan to be fired from the Federal Trade Commission if Kamala Harris is elected president, or suggest that Harris differs from Khan on her approach to corporate power. Reid Hoffman, the billionaire co-founder of LinkedIn who also funds the centrist polling outfit Blueprint, told CNN that Khan is “waging war on American business” and that Harris should replace her. A bunch of anonymous donors told the Financial Times that Harris would in fact dump Khan, and another unnamed donor said in The New York Times that Harris “has expressed skepticism of Ms. Khan’s expansive view of antitrust powers.”
All of this is based on wishes and hopes, and nobody would put their names to it except Hoffman, who pointedly was not on camera when CNN read out his views. However, it is nakedly transactional, an example of the ham-fisted way that the donor class tries to rule Washington. Hoffman has given $8.6 million to super PACs that are now supporting Harris; one of those super PACs is already on the air with a Harris biographical ad. He helped convince Netflix co-founder Reed Hastings to give $7 million to the main Harris super PAC just this week, and he’s going on a fundraising swing with Harris that’s part of an effort to raise $100 million from tech interests.
With all of that influence, Hoffman feels that gives him the right to dictate a potential future president’s regulatory policy. Sen. Bernie Sanders (I-VT) said plainly that it’s “unacceptable” for a donor to use money to influence Harris’s personnel decisions.
I probably don’t have to recount Khan’s record for Prospect readers, so I’ll outsource the nickel summary to Sen. Elizabeth Warren (D-MA), who sent over this statement to the Prospect: “Chair Khan has done an excellent job as part of the Biden-Harris administration’s broader competition agenda and should of course continue her work lowering costs, protecting workers, and supporting entrepreneurs—it’s a big reason the economy is growing strong as we saw with today’s GDP data.”
This gets at an important point: A successful government actually depends on people who know how to work the levers of power to serve the public interest. You can’t get a whole lot done on what Joe Biden and Harris profess to be their agenda without people like Khan and her colleagues managing to govern.
We know this because when Harris needs to find something in the administration’s record to tout, she inevitably turns to the populist left policymaking faction. When Harris spoke at Zeta Beta Phi Sorority’s annual conference in Indianapolis on Wednesday, she touted: “We are finally making it so that medical debt can no longer be used against your credit score.” That was an initiative of the Consumer Financial Protection Bureau, led by Rohit Chopra, who brought Khan into the FTC as a legal fellow when he was a commissioner.
A successful government actually depends on people who know how to work the levers of power to serve the public interest.
Just yesterday, Chopra’s CFPB released a stunning report on how K-12 public school students are relentlessly gouged by junk fees in electronic payments for class supplies and even school lunches. We’re talking about corporate thieves literally taking away up to $100 million a year in kids’ lunch money, by charging transaction fees (in violation of federal law) when money is added to cafeteria accounts. Every dollar of school lunch payments can incur as much as 60 cents in fees for those on reduced-price lunch, which is completely ridiculous. You’ll be utterly surprised to know that this market for school lunch e-payments is dominated by three companies (MySchoolBucks, SchoolCafé, and LINQ Connect).
If protecting children from having their lunch money stolen constitutes “waging war on American business,” Reid Hoffman should say that’s what he believes. And Kamala Harris should pick a side as well: with the school lunch bullies, or with kids.
Also this week, a judge in Pennsylvania upheld the FTC’s noncompete ban, saying that the agency plainly has the authority to write rules prohibiting unfair methods of competition. Reid Hoffman should be up-front about whether he thinks workers should be locked into jobs and have their wages suppressed as a result. And then Harris can decide if this pillar of the Biden-Harris agenda should be something she throws overboard.
Khan’s FTC has sought to block the Kroger-Albertsons merger that would further consolidate the grocery market, one of the biggest areas cited by consumers concerned about inflation. Yesterday, a judge in Colorado blocked the merger until a separate case brought by the Colorado attorney general is heard. The FTC’s administrative review on the merger starts next week. If Reid Hoffman wants to stand on the side of grocery giants that boost prices on shoppers and make it harder for workers to engage in collective bargaining, I’d like to see him make that specific case to Vice President Harris directly.
Hoffman in fact has been a direct adversary of Khan, something not mentioned on CNN. After LinkedIn was purchased by Microsoft, Hoffman got a board seat. And Khan’s FTC attempted to block Microsoft’s merger with gaming company Activision; the lawsuit lost, but the matter is under appeal. The FTC continues to protest the “degraded” gaming subscription service that came out of the Microsoft-Activision deal. And as The Lever reported, the FTC is investigating Microsoft’s purchase of Inflection AI, a company co-founded by Hoffman, in an “acquihire” arrangement where nearly everyone at Inflection AI was hired by Microsoft to avoid antitrust review.
Curiously, the fact that Hoffman may have an personal stake in Khan’s position at the FTC didn’t come up in the CNN segment.
The other amusing part of this is that the billionaires always manage to go after the young woman of color when attacking the restoration of competition policy, and not the older white guy who is Khan’s full partner in this approach. The Antitrust Division of the Justice Department, under the direction of Jonathan Kanter, has notched victory after victory enforcing the competition laws. Why don’t Reid Hoffman or any of the more cowardly donors who won’t attach their names to anything ever bring up Kanter?
If Harris aligns with some of her donors—not the ordinary small donors who have given record amounts in her first three days as a 2024 presidential candidate—and attacks a core policy plank of her own administration on competition policy, she would also be going against the wishes of Democrats in Congress.
Earlier this year, House Republicans demanded a significant budget reduction for the Antitrust Division of the Justice Department, contrary to a new law signed by President Biden that was intended to allow all increased merger fees to flow to the division. As the Prospect reported at the time, Senate Democrats shamefully went along with it to get a budget passed, but a week later the White House agreed to fix this for the next fiscal year, allowing DOJ Antitrust to keep merger fees even above the appropriation level. Sen. Jeanne Shaheen (D-NH), who chairs the appropriations subcommittee that deals with the Justice Department’s budget, made the same promise, in response to internal pressure.
Yesterday, Shaheen’s subcommittee passed the appropriations budget for the next fiscal year, and she followed through on her promise. The Antitrust Division will get $288 million, a 24 percent increase over fiscal year 2024, and can use all the merger filing fees it gets throughout the next fiscal year, even if it exceeds $288 million.
In other words, Democrats in the administration and Congress have taken the side of Kanter, who is functionally on the same side as Khan, in a budget fight with Republicans. If Reid Hoffman wants to line up with Republicans and defund the agency that enforces the antitrust laws to ensure everyone gets a fair shake in the economy and costs remain low, he should say it out loud. But does Harris really want to go against the entire party and take the side of her rich benefactors instead?
My point is that this is about more than one competent chair of the Federal Trade Commission. There’s Chopra and Kanter and Jennifer Abruzzo at the National Labor Relations Board and Julie Su at the Department of Labor and even Transportation Secretary Pete Buttigieg, who is holding Delta accountable for failing to compensate passengers after the CrowdStrike meltdown.
Over the past four years, the fight against corporate power has been embedded into the architecture of Democratic policy. The people pumping out the headlines that benefit the American people are all part of that architecture. The president whom Kamala Harris spends half her stump speech praising ushered in that architecture and fully supports it. The vision of America that Harris sketches out in those speeches—lower costs, better opportunity, a middle class that isn’t squeezed but can get ahead—is inseparable from that architecture. Is Harris really going to betray this vision because of one lousy donor?
My view is that Harris is such an unknown quantity that we’re seeing the mother of all lobbying efforts, with people on all sides trying to convince, persuade, and wishcast whatever ideological or personal preferences onto her candidacy. Anyone claiming certitude about how it will end up is lying. The only person who knows what she’s going to do if she becomes president is Kamala Harris. But the Reid Hoffmans of the world have overreached. By coming out so conspicuously and making these demands, they are going to make it difficult for Harris to remain silent. She could end this speculation tomorrow, and make the obvious point that the agenda she’s running on cannot be fulfilled without strong regulators who protect the public from corporate predation.
