Lina Khan’s Final Farewell
Photo by Elise St. Clair on Unsplash
By Shreya Doreswamy
As the second Trump administration looms over the future of the American government, many agencies that have enjoyed expanding their domains under President Biden are now in their eleventh hour– facing their final stretch of agency before their departments risk being gutted, radically reinvented, or thrown out entirely. And there is no exception to this risk when it comes to the FTC–which has been transformatively progressive under the aggressive antitrust policies of its prodigal chair and Biden appointee Lina Khan.
Lina Khan practices what is known as the Neo-Brandeisian School of antitrust law, a departure from the Chicago School approach which had previously dominated the field. The Neo-Brandesian approach departs from the Chicago School’s primary focus on mitigating consumer harm due to increased prices and broadens its mandate to enforce more proactive measures that could harm competition. This broader scope is controversial, as many critics argue that the Neo-Brandesians’ ideological ambitions actually harm future innovation, particularly in Big Tech.
Some of Lina Khan’s distinctly preemptive Neo-Brandeisian work includes the FTC’s 2023 updated merger guidelines, and her various attempts at blocking both vertical (across multiple sectors) and horizontal (in the same sector) mergers. A brief foray into her various victories and losses underlines the controversial nature of them and why many on both sides of the political aisle favor her removal, likely indicating a strong return to the Chicago School governed FTC starting January 2025. This past July, multiple large Democratic donors publicly urged then-nominee Harris to replace Khan. LinkedIn founder and current Microsoft board member, Reid Hoffman disparaged Khan as a “person who is not helping America.” Despite winning over J.D. Vance, and the broad support for antitrust regulation, the players holding the purse strings are likely to facilitate her exit.
As her departure looms, Khan is siccing her resources back onto Microsoft, a personal favorite of hers and a company which she has an embarrassing track record with in court. The FTC has opened a broad investigation into Microsoft via a “wide-ranging probe” ( a document spanning hundreds of pages requiring Microsoft to hand over large amounts of information to cooperate with the FTC) that was first reported by Bloomberg on November 27, 2024. The focus of the investigation is centered around the company’s bundling of Office 365 services and Azure cybersecurity features with use of the cloud.
Looking back into Khan’s last attempt to strike the tech giant for anti-competitive practices, we turn ourselves back to 2023 when the FTC attempted to block the merger through filing administrative complaints of Microsoft Corp. and Activision Blizzard Inc., a video game development company that has spawned Call of Duty, Diablo, and Overwatch, to name a few. The deal, which was proposed in 2022, which immediately raised antitrust concerns over the potential for bundling the games with Microsoft’s Xbox gaming consoles, was notably initially reviewed by the FTC instead of the DOJ. In July 2023, a federal judge rejected the preliminary injunction brought forth by Khan to delay the merger, ruling that the FTC had not provided substantial evidence that the merger would be engaging in anticompetitive practices. Judge Corley, who presided over the case, wrote in her decision on the FTC’s claim that Microsoft would restrict access to games: “To the contrary…the record evidence points to more consumer access to Call of Duty and other Activision content.” This defeat certainly fed the fire of Khan’s increasing base of critics, calling her threats empty and accusing her of wasting the time and resources of the FTC.
Many could say that Khan was simply biding her time, and swallowed the public defeat as ammunition for her future endeavors, which we are currently bearing witness to. Many are drawing a parallel to the 2001 United States v. Microsoft Corp case–that the United States Government also lost–where Microsoft was accused of tying Internet Explorer to Windows, and thus perpetuating the demise of Netscape and other web browsers. The settlement was widely seen as a victory for Microsoft, a capitulation and watered-down condemnation of their activities with the hope that restricting tying practices would open up the market to run competing software on Microsoft devices. The limited scope of the ruling is a testament to the unwillingness to install regulators that would constantly scrutinize the company’s practices. In other words, at the time people suspected that the ruling would have little effect on the determined company’s future monopolistic plans. As we can see, the company merely pivoted to exercising dominance over other markets. It is likely that Khan is attempting to remedy the DOJ’s long standing failure, but it might be too late. Not just for her, but for all those attempting to regulate the information economy.
Furthermore, the current probe has likely picked up traction due to outrage over Microsoft's recent cybersecurity failures, most notably the failed CrowdStrike update. Additionally, Microsoft also has a stronghold over being a top government contractor for militaristic cloud computing, notably receiving the 10 year JEDI (Joint Enterprise Defense Infrastructure) contract over Amazon, who was seen as the presumed front runner– holding 45% of the market share at the time. Microsoft’s immense power over the US government and the world’s functionality is indisputable, and the FTC has been openly critical of such problematic, unchecked dominance.
The probe also digs into other areas, such as Microsoft’s substantial stake in OpenAI, and the alleged anti-competitive impact of Teams on competitors like Zoom, Slack, and other video conferencing applications. One thing is clear, this case will not fit neatly within the bounds of the Biden administration; its fate rests with Trump and his increasingly growing band of eclectic policy makers who are not likely to carry out the same vision as Khan. As much as one can admire her iconically bold debut at Yale Law School (Amazon’s Antitrust Paradox) establishing her as a foremost authority in antitrust law, at this point it is undeniable that her reign as chair is veering too close to the abyss. In other words, the point of wasting resources that the critics who disparaged Khan back in 2023 over losing the Activision-Microsoft case made, seems to resonate more with her unrelenting approach during these last few days in office. However, an overzealous appointed government official is nothing revolutionary, and I gather that we have much more in store for us in the coming years in the ever changing space of antitrust enforcement. Meanwhile, it is with equal certainty that I say that we certainly have not seen the last of Lina Khan.
Shreya Doreswamy is a second year student at NYU studying Economics and Bioethics. She is interested in medical malpractice law, specifically concerning fertility cases. In her free time you can find her browsing the aisles of Trader Joe’s looking for gluten free delights.
