FTC Chair Lina Khan on tackling big tech's 'mob bosses' | StrictlyVC DC

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FTC Chair Lina Khan on tackling big tech's 'mob bosses' | StrictlyVC DC

Lina Khan's Concerns about the Tech Industry

  • FTC Chair Lina Khan expressed concerns about the increasing concentration of power in the tech industry and its potential to stifle innovation and competition.
  • She highlighted the FTC's investigation into Microsoft, OpenAI, and Nvidia regarding their AI practices and the need to ensure open and fair access to key AI inputs.
  • Khan mentioned the FTC's scrutiny of strategic partnerships and investments in the tech sector to prevent privileged access, exclusionary practices, and undue control over business decisions.
  • She emphasized the historical significance of startups and entrepreneurs in driving breakthrough innovations and the need to prevent existing incumbents from controlling access to essential resources and raw materials.

FTC's Approach to Antitrust Enforcement

  • The FTC is currently handling dozens of antitrust cases and close to 100 consumer protection cases with a relatively small staff and budget.
  • The FTC is taking on big tech companies and using AI to improve its enforcement efforts.
  • The number of deals has dropped significantly while Lina Khan has been in charge at the FTC, but she emphasizes that the agency's focus is on preventing illegal deals rather than regulating deal volume.
  • The FTC's traditional consumer welfare standard, which judged monopolies based on price standards, has had to adapt to address companies that offer free products in exchange for data.
  • The FTC is rethinking its approach to antitrust enforcement to account for dimensions of competition beyond price, such as innovation and privacy.
  • Lina Khan emphasizes the importance of closing the gap between how antitrust regulators think about markets and how businesses actually operate and compete.

Challenges in Regulating Platform Businesses

  • The FTC is concerned about Section 230's impact on its ability to pursue consumer protection cases, particularly when platforms use the law to defend against liability for fraud and deception.
  • Lina Khan acknowledges the challenges posed by platform businesses in determining who is the product and who is the customer, especially considering the asymmetric knowledge about the value of data.
  • The FTC is learning from the lifecycle of platforms and the ways in which digital markets can tip, leading to dominant positions and changes in firms' incentives.
  • Lina Khan highlights the importance of ensuring that openness in the AI context is not just a branding exercise but truly open and accessible, avoiding the "open first, closed later" strategy seen in Web 2.0.

FTC's Focus on AI-Related Risks

  • The FTC is focused on protecting consumers from AI-related risks, such as fraud and scams, and is using various tactics to address these issues, including issuing guidance, using innovative tactics like the voice cloning challenge, and collaborating with other stakeholders.
  • The FTC is aware of the hype surrounding AI and is working to address false advertising claims related to AI products.

Lina Khan's Tenure as FTC Chair

  • FTC Commissioners can stay in their seat until their replacements are appointed and confirmed, so Chair Lina Khan may stay beyond her term until a successor is chosen.
  • Chair Lina Khan's focus has been on enforcing the law without fear or favor and protecting consumers, workers, and small businesses from illegal business practices.

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