FTC Targets “Mob Bosses” in Big Tech: Lina Khan Leads Efforts

The U.S. Federal Trade Commission (FTC) is shifting its focus towards taking on Big Tech. According to FTC Chair Lina Khan, who spoke at TechCrunch’s Strictly VC event in Washington, D.C., on Tuesday, the agency is prioritizing tackling the biggest players rather than just increasing the number of cases brought forward.

“One thing that’s been important for me is to make sure that we’re actually looking at where we see the biggest harm,” Khan stated. “Where do we see players that are systematically driving these illegal behaviors? Being able to go after the ‘mob boss’ is going to be more effective than going after the henchman at the bottom.”

These comments come shortly after a report from The Wall Street Journal revealed that the FTC is launching an antitrust investigation into Microsoft’s partnership with Inflection AI. The FTC, along with the Department of Justice, have reached an agreement to also investigate Open AI and Nvidia for potential antitrust violations, according to The New York Times.

The FTC has recently taken legal action against other major tech companies such as Meta, Amazon, Google, and Apple.

Khan emphasized that the FTC’s enforcement strategy is focused on effectiveness, which is why they have been taking on cases against the “big guys.” She noted that a successful outcome can have a positive impact on the marketplace.

“The types of cases that the FTC selects can act as a deterrent,” Khan explained. “Five or six or seven years ago, when you were thinking about a potential deal, antitrust risk, or even the antitrust analysis, was nowhere near the top of the conversation. And now, it is up front and center. So, for an enforcer, if you’re having companies think about that legal issue on the front end, that’s a really good thing because we’re not having to spend as many public resources taking on deals.”

At a TechCrunch event attended by startup founders and VCs who view acquisitions as a major exit strategy, Khan alerted participants that “what the law really prohibits is an exit or acquisition that’s going to fortify a monopoly or allow a dominant firm to form a competitive threat.”

Khan also revealed that in any given year, the FTC receives around 3,000 merger filings and only about 2% of those deals are given a second look by the government.

“So you have 98% of deals that, for the most part, are going through,” she said. “If you are a startup or a founder that is eager for an acquisition as an exit, a world in which you have five or six or seven or eight potential suitors, I would think, is a better world in which you just have one or two, right? And so, actually promoting more competition at that level to ensure that startups have a fair chance of getting a better valuation, I think would be beneficial as well.”