No joke: FTC boss goes on the Daily Show and is told Apple tried to block her

Land of the Free has lost its way in quest for profits

Comment Generally the head of US government agencies and comedy don't mix, but on Monday night Lina Khan, boss of the Federal Trade Commission, was on the Daily Show recounting how the agency is going after Amazon, Facebook and others over monopolistic practices. She also got evidence of her persona non grata status with Cook & Co.

Khan was welcomed onto the telly news commentary show, chaired once again by Jon Stewart, with cheers from the crowd - again not something many US government officials hear. The exception to this is possibly Rob Joyce, the former White House cybersecurity coordinator and recently retired NSA cybersecurity director, who got a standing ovation at the Shmoocon infosec conference after a presentation on how he hacks Christmas tree lights for fun.

In the 20-minute interview, Khan gave details on an ongoing lawsuit against Amazon's behavior - notably allegedly spamming search results pages and hiking fees on small businesses, which she said was "harming customers."

You can replay her appearance on the Comedy Central / Paramount+ / kinda YouTube program below.

Youtube Video

It was going to be a tough fight, she said, since her watchdog agency has just 1,200 staff and Amazon has "monopoly money," and can throw ten times that number of lawyers at the case. "We're pretty out-gunned but not out-matched," she asserted.

But then Stewart dropped his bombshell: After a two-season podcast series with Apple he told Khan he wanted to get her on the show but Cupertino really wasn't keen.

"Apple asked us not to do it, to have you. They literally said 'please don't talk to her'... I didn't think they cared for you," Stewart said. Khan made an admirable, and nearly successful, attempt to keep a straight face.

Stewart also alleged that Apple refused to let his team make jokes about AI. He quit the podcast abruptly last October, reportedly citing Apple's heavy handed approach to censoring certain topics and guests.

"This just shows the dangers when you concentrate so much power and so much decision-making in a small number of companies," she argued.

"Going back all the way to the founding there was a recognition that in the same way that you need the Constitution to create checks and balances in our political sphere, you also needed the antitrust and anti-monopoly laws to safeguard against concentration of economic power because you don't want an autocrat of trade in the same way you don't want a monarch."

The amount of consolidation in the tech industry is harming competition, she argued. The FTC's case against Meta (started before Khan got the top job) was a case in point - Facebook realized it couldn't defeat Instagram and WhatsApp, so just bought them, she asserted.

So, how's that working out? Pretty good it seems

When Khan was appointed FTC chair in 2021 it must have sent shivers down the spine of many in the tech industry, particularly in Seattle.

Her 2017 paper [PDF] titled "Amazon's antitrust paradox" lays out the case that too few players exert a disproportionate amount of power in the tech industry.

And while traditionally monopolies were thought of as a single company dominating the industry (cough, Microsoft in the 1990s), customers are still shafted if even a few businesses corner a market.

As an immigrant to Silicon Valley and the San Francisco Bay Area it is astonishing to this humble vulture that this free-market nation is anything but in so many areas. Though it depends on where one lives, good luck getting a decent, healthy choice of ISP or cellphone carrier. And for a region that is a major tech hub of America the internet speeds and prices came as a rude shock.

Coming from Europe where telcos fight for your business, the change was remarkable. This hack may have been somewhat terse with a Verizon staffer trying to tell me that paying for text messages (an engineering function that carries the most minimal of data loads) was cheap at the price of just $5 a month. But with so little choice such predatory pricing is possible.

So far, the FTC appears to be getting much more muscular in going after alleged monopolistic practices, and it's about time. Frankly it's insane that an agency with such an important role in ensuring fair and open markets has such tiny staffing levels and funding.

But while the regulator is small it does have legal powers, and is increasingly asserting them. The question is how far can they be pushed, and with what consequences.

On The Register, when folks get fined we generally cite the sometimes large figures involved as a proportion of current profit, to give some perspective. When the FTC imposed a $5bn fine on Facebook back in 2019 over the Cambridge Analytica scandal, for example, that amounted to one percent of its market cap. Zuckerberg must have been shaking in his sneakers.

And this was the point Khan made: "Over the last couple of decades we've seen how businesses can just treat fines as a cost of doing business. And we need to make sure we're actually deterring illegal behavior."

The Tl;dr: Businesses only obey the bottom line. ®

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