The Antitrust Agenda: Khan Calendars; G7 Meeting Starts with a Bang as CMA Reportedly Set to Prohibit Facebook’s Acquisition of Giphy; New Yorker Profile Provides Insight into Khan’s Decision-Making Process

Published on Nov 29, 2021

Meeting of G7 competition authorities starts with a bang. Before the heads of the G7 competition authorities kicked off their summit today in London to discuss ways to coordinate their approach to digital markets, the Financial Times broke the news that the CMA is set to prohibit Facebook’s completed $315 million acquisition of online image platform Giphy.

The timing seems too perfect to be a coincidence, especially since the CMA is hosting the G7 meeting. With both DOJ antitrust division head Jonathan Kanter and FTC Chair Lina Khan attending the summit, the report sends a signal that the CMA is aligned with its American counterparts’ enforcement vision, rather than the much softer approach taken by the EC to date. The Capitol Forum expects the Biden administration’s FTC and DOJ to collaborate closely with other competition authorities that show a willingness to more aggressively confront Big Tech.

The G7 in advance of the meeting also published a “Compendium of Approaches” that exhaustively catalogs completed studies on digital markets and reforms that G7 nations have proposed or put in place. That document alone won’t have a significant impact on the policy discussion around digital competition enforcement. But it does include a section detailing “the importance of regulatory cooperation.” And in light of the Facebook/Giphy news, and with Kanter and Khan both in attendance, the G7 meeting could nonetheless mark an important catalyst for more coordination between—and more aggressive enforcement by—the group’s competition authorities.

Khan’s decision-making process. A recently-published New Yorker profile by Sheelah Kolhatkar on Khan doesn’t reveal much new information, but does provide an important window into her enforcement decision-making process:

“After years spent publishing research about how a more just world could be achieved through a sweeping reimagining of anti-monopoly laws, Khan now has a much more difficult task: testing her theories—in an arena of lobbyists, partisan division, and the federal court system—as one of the most powerful regulators of American business. ‘There’s no doubt that the latitude one has as a scholar, critiquing certain approaches, is very different from being in the position of actually executing,’ Khan told me. But she added that she intends to steer the agency to choose consequential cases, with less emphasis on the outcomes, and to generally be more proactive. ‘Even in cases where you’re not going to have a slam-dunk theory or a slam-dunk case, or there’s risk involved, what do you do?’ she said. ‘Do you turn away? Or do you think that these are moments when we need to stand strong and move forward? I think for those types of questions we’re certainly at a moment where we take the latter path.’”

Is labor providing political cover for Khan to block Amazon deal? The decision-making process laid out in the New Yorker profile does indicate that mergers like Amazon’s proposed $8.45 billion acquisition of MGM could be in line to attract FTC lawsuits. On that front, a coalition of labor groups on November 22 called on the FTC to oppose the deal, citing research that the takeover “may substantially lessen competition in the streaming video market” and adjacent markets.

The research “shows that Amazon already controls substantial video content distinct to its Prime platform at numbers that far exceed competitors, and is a leading in-house producer of content,” wrote the Strategic Organizing Center, a coalition comprised of the Service Employees International Union, International Brotherhood of Teamsters, Communications Workers of America and United Farmworkers of America.

Not only does this show a new level of sophistication in market analysis and lobbying by labor groups—historically labor has been largely agnostic on consolidation except when a company with unionized labor is buying or being acquired by a company with non-unionized labor—but it also provides important political cover for Khan if she does sue to block the deal. Of note, President Joe Biden has a long history of close ties to labor. Also of note, as disclosed below, Khan recently met with Athena, another group that’s been critical of Amazon’s market power.

FTC calendars. The Capitol Forum has been receiving FOIAs back for calendars of FTC commissioners and bureau leadership, and will continue posting them in the Antitrust Agenda.

Calendars received this past week:

· Chair Lina Khan (September 6-12 Calendar, September 20-26 Calendar)

Highlights:

· Khan met with Athena, a group whose mission is to “stop Amazon’s growing, powerful grip over our society and economy.”

· Khan met with Kate Bahn, Director of the Washington Center for Equitable Growth, who recently testified before the Joint Economic Committee on monopsony, workers, and corporate power · Khan met with Fatima Goss Graves from National Women’s Law Center

· Khan met with Derrick Johnson, President and CEO of the NAACP · Khan met with Fawn Sharp, President of the National Congress of American Indians (NCAI)

· Khan met with Matthew Boswell, Canadian Commissioner of Competition

· Khan met with Damon Hewitt, Lawyers’ Committee for Civil Rights Under Law

· Khan met with NHTSA

Personnel News

Nadler aide going to DOJ, Judiciary Committee staffers announced. Perry Applebaum, a top aide to House Judiciary Committee Chair Jerrold Nadler (D-NY), will become a senior counsel at DOJ’s antitrust division, said a Nadler release November 22. Aaron Hiller will serve as the committee’s new chief counsel and deputy staff director and Jon Doty will become senior advisor and deputy staff director.

Boies Schiller attorney Dennis now FTC senior trial counsel. Abby Dennis, previously a Boies Schiller antitrust partner, is now an FTC senior trial counsel, according to her LinkedIn page. Reuters reported that Dennis represented publishers suing Google for alleged anticompetitive advertising practices, and has also had United Healthcare and Delta Airlines as clients.

FTC still seeking technologists, engineers, data scientists, others. The FTC’s Office of Chief Technologist tweeted that the agency is “still looking for technologists, engineers, data scientists and others,” linking to its Technologist Hiring Program.

Top Events

Wednesday, December 1 at 10:30 a.m. EST. House Energy & Commerce Committee communications subcommittee legislative hearing on “Holding Big Tech Accountable: Targeted Reforms to Tech’s Legal Immunity,” with Facebook ex-employee and whistleblower Frances Haugen among the witnesses and four bills listed, including E&C Democratic leaders Justice Against Malicious Algorithms Act (H.R. 5596) proposing to relax some Communications Act Section 230 liability protections (release).

Thursday, December 2 at 11 a.m. EST. The Capitol Forum hosts a conference call with Jeff Hauser from Revolving Door Project on their new “Corporate Crackdown” project. The influential Revolving Door Project has been calling on the White House to crack down on illegal and anticompetitive corporate conduct as a political solution to President Biden’s falling poll numbers.

Thursday, December 2 at 3 p.m. EST. American Economic Liberties Project’s Virtual Town Hall with the White House National Economic Council to discuss President Biden’s competition executive order. Speakers: White House NEC Director Brian Deese, NEC Deputy Director Bharat Ramamurti, and Special Assistant to the President for Technology and Competition Policy Tim Wu.

Other Events

Today, November 29 at 9:30 a.m. EST (3:30 p.m. CET). Concurrences webinar, “Antitrust Judicial Review, Standard of Proof & Due Process.” Panel moderator is Douglas Ginsburg, senior judge of the U.S. Court of Appeals for the D.C. Circuit.

Today and Tuesday, November 29-30. Digital Competition Enforcers Summit in London with the heads of the competition authorities of the G7 (Canada, France, Germany, Italy, Japan, UK, USA, with the EU) and G7 guest countries (Australia, India, South Africa, South Korea) meeting to discuss competition across digital markets.

Tuesday, November 30 at noon EST. American Bar Association webinar, “Vertically Challenged: An AT&T/TWX Retrospective.” AT&T/Time Warner case participants will discuss what predictions about the marketplace have proven true and lessons that can be applied to other non-horizontal mergers.

Tuesday, November 30 at 3:30 p.m. EST. American Enterprise Institute webinar, “How Can Congress Act More Constructively On Antitrust?” Speakers include Baker Botts Partner and ex-FTC Acting Chair Maureen Ohlhausen.

Wednesday, December 1 at 10:15 a.m. EST. Senate Commerce Committee meeting, with an executive session to consider and vote on the nominations of Alvaro Bedoya to be FTC commissioner and Federal Communications Commission Acting and Designated Chair Jessica Rosenworcel to another term as commissioner, among others; followed by a hearing on the nominations of Gigi Sohn to be an FCC commissioner and Alan Davidson to be assistant secretary of commerce for communications and information (and NTIA chief), among others.

Wednesday, December 1 at noon EST. ABA webinar, “No-Poach and Wage-Fixing – Cross-border Convergence or Divergence?” Panel will discuss the civil-criminal enforcement dichotomy, economic rationales underlying no-poach and wage-fixing agreements, differing constitutional frameworks, and whether antitrust is optimally suited to handle labor relations issues.

Thursday, December 2 at 10 a.m. EST. House Science Committee hearing “Ensuring American Leadership in Microelectronics.” Witnesses: Ann Kelleher, EVP and general manager of Technology Development, Intel; Manish Bhatia, EVP of global operations. Micron Technology; Michael Witherell, director, Lawrence Berkeley National Laboratory; and Mung Chiang, EVP and dean of Engineering College, Purdue University.

Friday, December 3 at 10 a.m. EST. American Enterprise Institute webinar, “Examining the role of economic analysis in antitrust.” Panelists: Babette Boliek, Pepperdine University law professor; Bruce Kobayashi, George Mason University law and economics professor; Diana Moss, American Antitrust Institute president; Howard Shelanski, Georgetown University law professor; David

Sibley, University of Texas economics professor; Scott Wallsten, Technology Policy Institute president. Moderator: Mark Jamison, AEI nonresident senior fellow.

December 6-7, 9 a.m. EST both days. FTC and DOJ antitrust division joint virtual workshop (FTC, DOJ releases) on promoting labor market competition and worker mobility.

December 8, 1 p.m. EST. BakerHostetler webinar, “Legislating Fairness: The National Movement Toward Legislation Regulating the Use of Noncompetes.”

December 9. House Energy & Commerce Committee consumer protection subcommittee legislative hearing (announcement) on “proposals to enhance transparency, promote online safety, and hold Big Tech accountable.”

December 16. Charles River Associates Brussels’ “Competition & Regulation in Disrupted Times” conference (in-person and webcast). Speakers include FTC Chair Lina Khan, EC Competition Commissioner Margrethe Vestager and a number of other top global competition officials.

Recent Developments

Labor alliance calls on FTC to oppose Amazon’s purchase of MGM. A labor coalition on November 22 called on the FTC to oppose Amazon’s planned acquisition of Metro-Goldwyn Mayer Studios, citing research indicating the takeover “may substantially lessen competition in the streaming video market “and other markets. The research “shows that Amazon already controls substantial video content distinct to its Prime platform at numbers that far exceed competitors, and is a leading in-house producer of content,” wrote the Strategic Organizing Center, a labor coalition.

“Amazon’s broad-ranging tactics across its business, which the company has utilized to grow its market power in the [streaming video on demand] and other markets, in conjunction with Amazon’s immense content library, indicate that Amazon is striving to become not only the world’s largest retailer but also the world’s largest streaming video company,” the coalition wrote. “The MGM merger would bolster Amazon’s position in streaming content, which would augment Amazon’s power to exert even greater leverage over rivals and filmmakers in myriad ways,” including by excluding and discriminating against rivals. Amazon didn’t respond to a TCF query for comment.

GOP FTC members seek White House evidence of industry gas price machinations. FTC Republican Commissioners Noah Phillips and Christine Wilson urged the White House to back up allegations of industry wrongdoing cited by President Joe Biden in calling for the agency to investigate rising gasoline prices. Biden’s November 17 letter “suggests that illegal behavior is behind high prices at the pump,” said Phillips in a November 23 tweet thread. “He’s not the first President to suggest this, but similar claims in the past haven’t borne out.”

“We urge you to share with the FTC any and all such ‘mounting evidence of anti-consumer behavior’ and ‘potentially illegal conduct’ in your possession, so that we might consider how best to proceed,” they wrote to National Economics Council Director Brian Deese November 23. “We share the concerns of all American consumers” about rising gas prices, but “they could stem from a variety of factors.”

FTC’s Wilson praises Bedoya. GOP Commissioner Wilson said she would be delighted to welcome Democratic commissioner nominee Alvaro Bedoya to the agency. “His wealth of #privacy expertise would help guide the Commission as we tackle increasingly complex privacy issues daily,” she tweeted November 24. “Plus, he’s a really nice guy with whom I enjoy interacting!”

DOJ moves to stop U.S. Sugar takeover of rival Imperial Sugar. DOJ announced November 24 it filed a suit to block United States Sugar from purchasing rival Imperial Sugar. The complaint alleges the takeover would leave only two producers controlling “an overwhelming majority of refined sugar sales” in the southeast, said DOJ. “Their merger would eliminate aggressive competition in the supply of refined sugar that leads to lower prices, better quality, and more reliable service,” said Assistant Attorney General Jonathan Kanter of DOJ’s antitrust division. U.S. Sugar didn’t respond to a query but reportedly said it fully intended to litigate the matter.

Lawmakers demand Facebook respond to research on youth targeting efforts. Three lawmakers demanded answers from Facebook November 22 after “new research suggests that the company continues to facilitate targeted advertising to teens based on young users’ browsing history and preferences,” despite company assurances it would curtail such practices. “Facebook’s announcement that it would limit ad targeting to users under the age of 18 implicitly acknowledged the harms that targeted advertisements pose to young people, and Facebook explicitly stated it was committed to taking a ‘more precautionary approach’ in its advertising practices,” wrote Senator Ed Markey (D-MA) and Representatives Lori Trahan (D-MA) and Kathy Castor (D-FL) to Facebook CEO Mark Zuckerberg. “Unfortunately, new research suggests that harmful advertising practices on Facebook continue.”