Amazon had jumped the shark. It has just made a ludicrous demand, that newly appointed FTC chair Lina Khan needs to recuse herself on Amazon matters because she wrote academic papers about the retail giant that concluded that Amazon behaved badly. Mind you, Amazon didn’t just engage in normal big company huffing and puffing. It filed a motion with the FTC, which we embedded at the end of this post.
I am struggling to come up with anything even remotely similar in terms of a company eye-poking an important regulator. Even an egomaniac like Jamie Dimon never pulled a stunt like this. The closest I can think of is Charles Keating for a while winning in his war with the Federal Home Loan Bank Board, by virtue of owning five Senators.
Amazon apparently believes it can stare down the turn in opinion inside the beltway against the power of tech titans. Khan is a well known anti-trust hardliner. Per Amazon, her sins were having written a law review article as a student describing how antitrust law had not reined in Amazon, working for an antitrust organization where she again called for curbing Amazon, and later serving as counsel to the Senate Judiciary Committee during its investigation of technology platforms. Both Democrats and Republicans applauded Khan’s nomination.
Amazon’s heavy-handed move is not only almost certainly a non-starter, but it also comes at the cost of confirming the bad opinion that people in power increasingly hold about Amazon, as well as registering negatively with fence-sitters. Has the Seattle titan not worked out that at least some of the Congresscritters that it thought it had acquired didn’t stay bought?
Even the Wall Street Journal, which attempts to depict Amazon’s filing as something other than petty or stupid, conceded that efforts to force regulators onto the sidelines for having expressed opinions have generally bombed:
Wayne State University law professor Stephen Calkins, a former general counsel of the FTC, said there is “very little history of successful challenges” to commissioner participation in recent times. However, he added, some important government ethics cases have involved court rulings that vacated FTC enforcement actions on the grounds that a commissioner should have been disqualified.
The examples Calkins cited were from 1966 and 1970, when appearances were taken far more seriously than now.
The Financial Times was less equivocal and by happenstance pointed out that Khan had already addressed one of the two cases cited by Calkins:
During Khan’s Senate confirmation hearing in April, Mike Lee, Republican senator from Utah, raised the issue of impartiality, citing a 1966 court decision to disqualify then-FTC chair Paul Rand Dixon from a case due to his earlier work with a House subcommittee.
“Let me say upfront, I have none of the financial conflicts or personal ties that are the basis for recusal under federal ethics laws,” Khan said in response. “I would be approaching these issues with an eye to the underlying facts.”….
Government and agency ethics panels would have “examined these issues for Khan extensively when she was nominated”, said William Kovacic, a former FTC chair.
Quite a few of the normally pro business Financial Times readers weren’t buying what Amazon was selling:
strong>European American (formerly a good European)
Ok, well it seems Amazon has already made up its mind about that! They must have some very flakey lawyers to come out with a preference of such astonishing clumsiness?
David Edick Jr.
Truly breathtaking arrogance on the part of Amazon.
I wonder who handles government affairs for Amazon? Bezos? This is a political own-goal of the first order.
Of course, her work has a bias. All academic work does. But then she is not the judge and the jury where such an objection will be relevant. It is that bias which makes her a perfect candidate to lead the investigations, and courts will decide if they find her claims merit-worthy. Unless Amazon would like to accuse her of cooking up evidence, they just need to shut up and focus on preparing their legal defense. I for one find Amazon very useful but that is neither here nor there in fact-finding.
Amazon should be asked to provide a list of other commissioners that they have already bought, just for transparency’s sake.
A 1.7 Trillion dollar market cap company is afraid of Lina Khan. Love it. All the more reason she should absolutely stay in place.
Amazon running chicken, lol. By this logic, Planned Parenthood can petition the Supreme Court that Amy Coney Barrett recuse herself from Roe v Wade re-match?
The Twitterverse was up in arms. A few examples:
— Zephyr Teachout (@ZephyrTeachout) June 30, 2021
the amazon lina khan recusal thing is pretty much in line with the dominant strain of thought in tech these days which is that expertise is only valid if it supports the company objective and criticism is always founded in bias, ignorance, or attention seeking
— stephanie (@isosteph) June 30, 2021
I don't get this. I'm skeptical of Khan's take on Amazon, but the FTC isn't a court: it's a regulatory agency within the executive branch. The fact that FTC commissioners have particular policy views is part of why presidents appoint them. https://t.co/xlymo9jN5E
— James Surowiecki (@JamesSurowiecki) June 30, 2021
Interestingly, Lina Khan's article actually makes the case that Amazon isn't violating antitrust law–as the courts currently understand it. Her article could be submitted as a brief in defense of Amazon.
— John Carney (@carney) June 30, 2021
And contrary to Amazon's claims, Khan's work has not been oriented towards criticizing Amazon or alleging guilt, it has been oriented towards understanding why the current interpretation of antitrust laws facilitates the growth of firms like Amazon. It's about the law.
— Matt Stoller (@matthewstoller) June 30, 2021
Now having said that, there are two possible rationales for Amazon’s Hail Mary pass. First is to try to create a public perception that Khan is anti-Amazon. The problem is that public perception doesn’t count for much in this arena.
In addition, Khan has the solid backing of Congress. That likely reflects considerable unhappiness in many quarters in the US about how the retailing behemoth throws its weight around. The fact that Amazon found itself under attack during its effort to set up a second headquarters in New York City is another proof the company is not well loved despite being widely used.
The second reason, to paper the record for litigation, appears a tad more logical but I don’t see it as having good odds of having an impact.
As a regulator, the FTC issues enforcement actions and fines. Most companies settle but some get their dander up and force the regulator to proceed with a lawsuit. Amazon looks to be preparing the ground to fight. But it’s hard to see Amazon’s whining making any difference except with the sort of conservative judge who is also on board with the World According to Amazon. In other words, I don’t see this caviling by itself resulting in an FTC action being voided. But it could potentially serve as one of several arguments leading to that end.
And Amazon has just put Khan to be particularly careful about her statements and decisions. But regulators almost universally are; it goes with the terrain.
As quite a few observers pointed out, Amazon looks mighty worried about Khan. Let’s hope that she proves those fears to be well founded.00 Amazon recusal petition