The US Federal Trade Commission is increasing its focus on Big Tech, according to FTC Chair Lina Khan, who spoke at TechCrunch’s Strictly VC event in Washington DC on Tuesday.
Khan said the agency is focused on tracking the players who are causing the most harm, not just increasing the number of cases it brings forward. “One of the things that’s been important to me is making sure we’re actually tracking the places where we see the most harm,” Khan said. “Where do we see players who are systematically promoting these illegal behaviors? Tracking the ‘mob boss’ is going to be more effective than tracking the lower-level goons.”
The comments came days after the Wall Street Journal reported that FTC launches antitrust probe against Microsoft The FTC and Justice Department have taken action against Inflection AI over its partnership with entered into an agreement to investigate Microsoft, Open AI, and Nvidia have been accused of potential anti-competitive violations, according to The New York Times.
The FTC has also taken action on this. Meta, Amazon, Google, Apple and others over the past few years.
Khan says The FTC wants to be effective in its enforcement strategyThat’s why it’s pursuing lawsuits that are “against some of the big guys.” If the FTC succeeds, it could have a beneficial effect on the market, he said.
The types of cases the FTC chooses to take could act as a deterrent, he said, adding that the FTC is already seeing that happen. “Five or six or seven years ago, when you were thinking about a potential deal, antitrust risk, or even antitrust analysis, was not at the top of the conversation. And now, it’s front and center. And so, for an originator, if you’re getting companies to think about that legal issue upfront, that’s actually a good thing, because we’re not having to spend a lot of public resources to pick up deals.”
Addressing a group of startup founders and VCs who see exits as a way out, Khan said the law actually prohibits exits or acquisitions that would consolidate a monopoly or allow a dominant firm to pose a competitive threat.
In any given year, the FTC receives up to 3,000 merger cases brought to the agency, Khan said, and about 2% of those deals are reconsidered by the government.
“So you have 98% of deals that are mostly getting completed,” he said. “If you’re a startup or a founder who’s looking to get acquired, a world where you have five or six or seven or eight potential suitors is, I think, a better world than one where you just have one or two suitors, right? And so, actually fostering more competition at that level to make sure that startups have a more reasonable chance of getting better valuations, I think would be beneficial as well.”
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