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Amazon is finally terrified of someone in Washington. That’s great news for America.

  • Amazon is so terrified of Federal Trade Commission Chair Lina Khan that it requested she recuse herself from matters related to the company.
  • It’s not the only company that should worry. 
  • Khan has already made moves to beef up the agency’s regulatory scope to go after anti-competitive behavior.
  • This is an opinion column. The thoughts expressed are those of the author.

It is not every day one of the most powerful companies in the world run by one of the richest men in the world shows its hand. But this week Amazon did just that when it filed a motion to request that Federal Trade Commissioner Lina Khan recuse herself from decisions regarding the company.

Amazon is anxious about Khan. This is good.

The FTC is currently reviewing both Amazon’s proposed acquisition of Hollywood studio MGM and its business practices in general,.This scrutiny has to potential to shine light on its predatory practices and blocking its ambition, especially with Khan at the helm of the FTC. As a law student at Columbia, Khan was well known for writing the definitive argument for Amazon’s monopoly status.

In its motion, Amazon argued that Khan should recuse herself because she’s made it clear that she believes the company is “guilty of antitrust violations and should be broken up.” Consider this a company’s ridiculous attempt to decide who gets to makes the rules for how it should operate. 

Amazon is not the only company that should be worried about Khan. In an open meeting of FTC Commissioners on Thursday — the five member commission has a Democratic majority of three to two — Khan moved to rescind an Obama-era rule limiting the scope of the FTC’s rulemaking, and the movement passed.

Specifically, the rule tied the FTC’s work to the consumer welfare standard, and discouraged the commission from making rules where existing laws — like the Sherman Antitrust Act or Clayton Act — would suffice. The consumer welfare standard directs courts and regulators to focus on the effect anti-competitive practices have on consumers, and ignore what they do to the broader ecosystem of competition in markets.

In Khan’s view this stands contrary to the FTC’s purpose. It was designed to identify and combat anticompetitive behavior whether that behavior is written in a specific antitrust statute or not. The agency was created in 1914 after a Supreme Court ruling on Standard Oil’s business practices left lawmakers worried that the courts had too much power in deciding antitrust cases. They wanted a separate body with specific expertise in antitrust to make decisions about what constituted anticompetitive behavior.

On Thursday Khan said that her hope is to restore the FTC to that mission after decades of it ceding authority to the courts.

“The broader lesson here and what’s actually exciting is that you have antitrust enforcers who are trying,” Matt Stoller, an anti-monopoly researcher and author of the book “Goliath, The 100 Year War Between Monopoly Power and Democracy”.

It’s beyond time for Washington to curb the anticompetitive excesses of companies all over the country, especially the tech giants in Silicon Valley. Their dominance has crushed mom and pop competitors, stifled innovation, and in some cases handed monopolistic pricing power to companies that once undercut their competitors to gain market share.

This won’t be easy. Beyond specific companies the FTC may target, Wall Street is already concerned that this new sheriff will make it harder to close mergers and acquisitions, a lifeblood for fee-hungry bankers. And it’s not just tech giants and finance types, the FTC’s more aggressive stances will be challenged in the very courts the agency is trying to wrest its power from.

Khan’s appointment has also managed to create some strange bedfellows in Washington Both Senators Bernie Sanders (I-VT) and Josh Hawley (R-MO) — who have both called for breaking up big companies, albeit for wildly different reasons — voted in favor of her leading the FTC. When that kind of weird bipartisanship happens, outcomes become uncertain — and CEOs of all stripes hate uncertainty, even the most seemingly untouchable ones in the world.

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