Offline with Jon Favreau - Lina Khan on Fighting Big Tech

Episode Date: January 12, 2025

Offline’s favorite foe of Big Tech, FTC Chair Lina Khan, joins the show to talk to Jon about standing up to Meta and Amazon, how the internet has changed the way monopolies operate, and why her work has made her an unlikely folk hero. Plus: Max and Jon sit down to talk about the misinformation spreading about the Los Angeles fires, Meta’s decision to abandon fact checking, and the last ditch efforts to save TikTok before the US ban takes effect next week.

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also don't want to be ruled by autocrats of trade. Because how people experience the economy in their day-to-day life has huge impact on whether they feel free. And so if you have a democracy, but you're allowing people to be bullied and coerced in their economic life, that's not really going to lead to freedom. And so that's why I think on both sides of the aisle, there's a recognition that we need to take these laws seriously.

I'm Jon Favreau. I'm Max Fisher. And you just heard from today's guest, chair of the Federal Trade Commission, Lena Kahn. If you're a regular offline listener, you probably heard us talk about Lena Kahn. She's the youngest FTC chair in history, appointed by President Biden at just 32 years old. As chair, she has led a reinvigoration of antitrust action and enforcement. She's taken on big tech monopolies with pending lawsuits against Meta and Amazon. She's gone after Big Pharma, successfully

forcing manufacturers to lower the price of inhalers to $35. She's even tackled price gouging at grocery stores, blocking the Albertsons-Kroger merger just last month. I invited her on because we've talked a lot on this show about what it takes to hold Big Tech accountable. And Lina Khan is probably the single person who's had the most success doing that. So we get into her, right? I mean, it's it we talk so much about the harms of big tech and it's this big structural problem and how could we possibly deal with it. So it is amazing to see someone who not only has the will to take it on but is able to do it on a

level that like I really didn't think was possible like four years ago I would have said it is not possible for a regulatory agency to do this much good in reigning at Big Tech, not to mention the many other things that she's done in her short time in office. So I'm really excited to hear from her. Yeah, just by dusting off a few old laws that maybe the past FTC commission chairs weren't using to the to the fullest of their ability. So it's great. We got into her work We also talked about how the internet has changed the way monopolies operate what she expects from her Trump appointed Successor and why her work at the FTC has made her an unlikely folk hero It was a great conversation. You'll hear in a bit. But first Max you're currently joining us remotely from Where are you right now? I know you and Julia left town earlier this week because of the fires

How are you guys doing? I know you and Julia left town earlier this week because of the fires. How are you guys doing? We are all good. We are in Joshua Tree which I know sounds pretty lux and kush for sheltering but it was literally the closest place where we could find housing by the time we bugged out late on Wednesday night like a lot of people. We ended up in an Airbnb that was maybe unlisted because it is actively under construction, but it was therefore available, which is great. And we're here now with our two cats plus two friends who are sheltering with us. Their cat, their dog, and their toddler.

Any combination of whom you may hear on this broadcast. Wow, wow. Welcome to life with a toddler in the background. I'm getting a sample now, but we're not on fire. That's the important thing. So everything is great. I talked to Dan about this on Pod Save America a little bit, but I found that the current information environment, especially platforms like Twitter, has made it so much harder than

it should be to get good, reliable information about the fires over the past week. And it's not just misinformation though that there's plenty of that. It's also the, um, takes to information ratio. Everything, everything on social media is, is plat politics and conflict and blame. And people are just, you know, looking looking for help and ways to help I said this on Pod Save America but watch duty is this great nonprofit app that everyone

in Los Angeles now has probably downloaded that has just up to the minute information about evacuation orders fires how it's going nothing else no chatter no takes I've been I've been looking at it and I'm like, more apps like this would be great. I'm like, what are they? Oh, that would be news. Yeah, news is valuable. Just plain old news and information

and not your fucking opinion, which is what we're offering right now, of course. That's right. It is wild to see an app literally from Silicon Valley that is useful, that does good. It's a reminder that technology actually can be a wonderful force that is so helpful. And it doesn't have forward-facing viral videos on it, so therefore it's not the font of... I mean, it's been... I know you guys talked about it. We don't have to rehash it.

But it's just infuriating to see the way that people are behaving in this moment. And there really was a time not that long ago, three, five, eight years ago, when during a crisis, you would see mostly reliable and useful information on social media. And you know, there'd be some engagement bait hot takes sprinkled in, but it would be the minority and that is completely flipped now, which I think is something that we're learning from this. That's, you know, there are people trying to put out good information. There are agencies on there. There are news reporters, but they are getting totally drowned out by the hot takers.

And the thing that really gets me is in a lot of cases, it's the same people. Like it's the same individual people who, a few years ago, would have been sharing news articles and on the ground updates are now posting these like the same smug, self-righteous takes about how the fires confirm all of their political opinions before they even know what's happening, pushing whatever quote-unquote evidence lets them frame this disaster as my views are vindicated, everyone who disagrees with me is proven to be evil and stupid, which goes to show it's not like, it's easy to blame this and like, oh, it's the trolls, it's the bad people online. Like, no, this is all of us collectively have been encouraged by these social platforms

to become our worst selves in moments like this and a lot of us have chosen to indulge that because it feels good to get smug and self-righteous online and we tell ourselves that we're helping because if I'm retweeting something or sharing of you know viral infographic that confirms my politics it must be righteous and good. Yeah and when you said it's the same people who would have been sharing helpful information, it's also the same people that I don't know how many months ago when we were dealing with the aftermath or even during Hurricane Helene, were putting out the same misinformation and conspiracy and stuff like that, which is the owner of the platform, Elon Musk, a bunch of his pals,

who are like, some of whom are headed into the next administration and the next of the platform, Elon Musk, a bunch of his pals, who are like, some of whom are headed into the next administration, and the next, and the incoming president. Right? That doesn't help, yeah. Yeah, when you've got those people doing it, then it's going to filter down to everyone else. So, you know, all we can say about that is, you know,

if you're in LA or the area, you know, download Watch Duty, but also just, you know, before you share something, there is, I should say, there is some heroic reporting going on Local journalism is in Los Angeles is thriving right now Not financially unfortunately, but the people who put their themselves at risk to report this local news LA Times Places like that that have been doing a fantastic job So it's unfortunate that it's all being a lot of it's being drowned out by the assholes on social media Which is which is to your point? It can be all of us

I think it's such an important thing to remember like I can't tell you how many people who I know who want to be doing The right thing who I saw sharing something some viral rage bait that confirmed their politics on their Instagram or whatever, because if it's what everybody around you is doing, it feels like it's the right thing to do. So it's, you know, don't, as easy as it is, don't mentally separate yourself out and say, well, it's just the people on the other side who do it. When I do it, it's actually good and righteous.

Like really think about it before you share it. Well, also it just takes everyone's, takes up everyone else's time, right? When we can be focused on it. I went through like line items in the Los Angeles city budget To try to figure out who what happened with this like accusation fire budget was cut No, you know when you go to the New York Times have a good piece on it today And there's plenty of fact checks and you know, we talked about on Pod Save America But it's like you really have to you really have to do your own research,

which is part of the problem. Right, right. The fire department thing is a perfect example of it because this is a claim that got started as a viral post from, ironically of all people, the right-wing owner of the Los Angeles Times, who shared it, to push it as an attack on Democrats, and then

went viral a second time when it was shared by literally that same guy's daughter which is just a crazy ironic twist all of this who put a left-wing spin on it by saying that oh these fire department cuts were to fund the LAPD I and so it's the same claim that is being seized on by both the right and the left is vindication of their politics which should be a reminder to you that when you think you're advancing your politics by sharing this like being seized on by both the right and the left is vindication of their politics, which should be a reminder to you that when you think you're advancing your politics by sharing this like rage-baity stuff online,

all you're doing is advancing the same like cynicism and culture of social distrust and political distrust that is so much the rot at the heart of our culture. Well, and once again, it obscures what is always a complicated and sort of bigger debate to be had which is like there's a totally legitimate debate about whether like for a decade or more that LA Fire Department has been underfunded and now that we're dealing with More fires and more extreme fires

Do we need to rethink how the department of staff what resources it has like all of that is like fair and People can argue that but we're not arguing that right now, we're We're just into the weeds on one budget request and the and the mistake someone made by not Figuring out that the finalized budget was actually more than the original budget. Oh, right. It's just a math there Yeah, although it ain't like perfect ironic capstone to all of this Is that it turns out that the number of firefighters, whether or not that has been reduced by budget cuts, is actually not determinative at all at the scale of this fire.

That it turns out it was just the extreme winds that made it impossible to fight the fire, which we learned when the winds lifted, all of a sudden all these helicopters and airplanes can fight the fires. And the one big fire that sprung up around the one near my house got put out immediately, which was great. Yeah. Speaking of misinformation and dying platforms, we have a lot of news to catch up on. We're going to run through it all quickly before we get to Lena Conn.

First up, in a strange direct-to-camera video featuring a bad haircut, a gold chain, and a million dollar watch, 90s rapper Mark Zuckerberg announced that the company would be ending fact checking and content moderation on its platforms, including Facebook, Instagram, and WhatsApp. In the video Zuckerberg says, quote, the recent elections feel like a cultural tipping point towards once again, prioritizing speech, which to me reads as we're giving Metta a, a, a mega makeover before the Trump inauguration. You and I were just talking right before the recording. Uh, there's an axiom piece that they're also ending all DEI programs, hiring everything else.

Uh, Max, what do you make of this? Uh, you think, uh, Trump and the incoming pressure from Republicans about quote free speech is guiding this decision. I mean, Trump thinks so Trump was asked about it and they're like, do you think that Mark Zuckerberg did this because, uh, you threatened him and he's like, yeah, probably. I know it's, I almost appreciate Trump putting out there. What we all know is happening, which is that Trump threatened the company and the

company bowed to it because they know it's going to be good for them. I mean, the idea that this is free speech. Yeah. Trump, the free speech champion who threatens to jail reporters, who threatened to punish CNN and the Washington Post reporting on him who's Because they put out a poll that showed him losing when he then won He's he's doing CBS He wants to take away CBS's broadcast license because he didn't like the way they cut a Kamala Harris interview

It has nothing to do with him this is is free speech. Mark, tell us about the free speech. Tell us about what exactly happened in this election that makes you think we are in a cultural tipping point towards prioritizing free speech. I would love Mark Zuckerberg, if someone can get him to answer that question. Tell me about Donald Trump's platform. What about the platform?

What about his actions make you think that, and the outcome of the election makes you think we are now prioritizing free speech? Please, please provide us your answer, Mark Zuckerberg. Well, it's, I mean, it's obviously part of it is just like, it's indulging the Trump narrative because he wants to send a big signal to Trump that, hey, we're on your side. And it wasn't just Zuckerberg, right? Joel Kaplan, who is the Republican Party operative, who just got elevated to met his vice president for public policy, was the one who first rolled out these changes, which he did, of course, on Fox and Friends, where he said that they had been

inspired by Trump's commitment to free speech. And then Zuckerberg, I think, like, really tipped his hand a little bit when he said that they were part of it was also that they are Ending fact-checking because fact-checkers are biased. I mean, it's really it's giving away the game Mark when you're telling us that factual accuracy is biased against the kinds of content that Facebook would like to be Serving us. So I think it's really it's not just like we're going to indulge the Trump narrative because we want to make Trump happy so that he won't put our CEO in jail. I think there is a really sincere alignment here and a really sincere belief that, you know, all these fucking fact checkers and all these civil rights groups and all these

watchdogs that keep telling us that we're pumpering dangerous misinformation and hate speech into the global media ecosystem. We're tired of hearing from them. We don't like it. So we're just going to tell ourselves that they're biased in the sense that they have opinions that we don't like and are going to shut them down or they're going to serve people whatever slop they want in a way that frankly the platform hasn't since 2016 was the last time that it was this unregulated, maybe not even then.

And the platform was much less powerful than a muscle, less influential. So we talk a lot about like, meta is bad, meta makes bad decisions, they're craven, they're cynical, all of which is true. So don't hear this and think like, oh, this is just kind of more of the same bullshit from Zuckerberg and meta. These changes are really substantial. And the openness which with they are now signaling, hey, we are a pro-Trump platform.

We are a MAGA-aligned set of platforms, I think is a really, really big deal that is going to have huge shockwaves in our culture. One other thing about the video, at one point, he's like, if you want to leave Metta, leave Facebook, that's fine. That's just virtue signaling. I'm like, oh, oh, okay, Mark, that's fine. That's just virtue signaling. I'm like, oh, oh, okay, Mark, you're gonna talk about people virtue signaling when you've just recorded a hostage video

that literally has everything but you wearing a MAGA hat in the video, dude. You look like a fucking moron. And like, whatever, he's, Mark Zuckerberg is about making money for Mark Zuckerberg. He is someone who, whatever, he's made a ton of money he wants to keep making money he wants to stay rich he has accumulated a whole bunch of power he sees no obligation to use that power responsibly even if he accumulated it

accidentally right he's always like the sort of I didn't I didn't expect to be this powerful I just like coding and building things right it's like okay even if that's true you've gained a whole bunch of power. You run this huge platform. You have decided that you have no obligation to do anything, um, to use that power responsibly, you've made a whole fuckload of money, one of the richest people in the world. Great.

Hundreds of billions. You have a foundation, you donate some of it to good causes. That's nice. But like, let's not pretend that you, that the purpose of your company is to do anything, anything other than make money. There that you, that the purpose of your company is to do anything, anything other than make money. There's no, all the bullshit that Facebook has said over the years, connecting people, this, that,

there's nothing, it just is purely about making money at this point. Yeah, I think that there was a time when they believed that making money was the same as helping the world, and when they really believe that like, there is a natural alignment because the more people we reach with our inherently liberating platform,

the more we're going to connect people, the more that we will elevate a realm of pure ideas and democracy and that will be helpful to everyone. And what they learned over the last five years is that that's not true. People want AI slop, that's what they want. That's right. They want more AI chatbots,

which they are now promising to shovel more and more of into our feeds. Is it because they're going to replace all those people with AI chatbots that are going to have just weird slop they're going to give us? It's going to be horrible, but I guess they think it's going to be good for engagement. But they saw all this evidence, including from their own internal researchers, saying actually your platform in the way that you have structured it is harmful and they just decided that they don't care. And we should talk about the biggest change of the many that they rolled out here, which is that they are going to bring politics back to your feet. Remember starting in I think 2021, they said we're going to de-emphasize politics across all of the platforms. And it worked in the sense that you did encounter

a lot less politics on Facebook and on Instagram. And I worked in the sense that you did encounter a lot less politics on Facebook and on Instagram. And I think that that is a big reason that this most recent election had much less influence from social media misinformation than I think in 2016 or 2020 remember, I'm sorry, 2016, yeah, 2016, 2020, where we had a conversation where I argued that like, actually the structure of social media in this election is maybe the least harmful it's been in a major presidential election in quite some time. I actually think that was true.

And now they've said, you know, now that the Democrats are out of office and Trump is back, we want politics all over our platforms because they did say this, but I think the implication is they know that the way that their platforms promote politics promotes division, hate, misinformation, conspiracies in ways that structurally serve the MAGA right. Not because they wanted to serve the MAGA right, that's just the effect that it has. And they've gone from saying that we want to limit that because we don't want the heat to saying, you know what, Trump's in office and it's going to make him happy if we promote all of this stuff into people's feet again.

Mark Zuckerberg has become a more pathetic version of Elon Musk and that is saying something. He's seen everything Elon Musk has done with regard to politics, content moderation, everything else, relationship with Trump. And he was like, I'll try to do that, but in a much lamer way. That's Mark Zuckerberg. At least Elon is trying to get something out of it. He's getting some concessions for Tesla, and he's pushing the H1B visa stuff, which I don't think

makes him a good guy. But he's leveraging that for something, where, yeah, Mark is basically just saying, I'm your little app dog, and I'm going to do whatever you want. Good for him. Hope he's happy. This show is sponsored by BetterHelp. What do you want your 2025 story to be, John? Boy.

More of a thriller, a romance novel? Hey, you know what? I think I'd like to move from- Nonfiction? I'd like to move from workplace comedy- Workplace tragedy? I'd like to move from a workplace comedy and- Workplace tragedy? And yeah, and first act of romantic comedy to sitcom.

I'd like to move to situational comedy. I like that. Just pure sitcom. I'll co-star with you. Every January brings you 365 blank pages waiting to be filled. In 2025, maybe you're ready for a plot twist, or maybe there's a part of your story you've been waiting to revise. Life isn't about resolutions that fade by February.

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and it's just great to have someone that you can sit down with and talk to. I've tried therapy. I really enjoy it. I look forward to it every week. BetterHelp is fully online, making therapy affordable and convenient, serving over 5 million people worldwide.

Access a diverse network of more than 30,000 credentialed therapists with a wide range of specialties. Easily switch therapists anytime at no extra cost. Write your story with BetterHelp. Visit betterhelp.com slash offline to get 10% off your first month. That's betterhelp.com slash offline. In other news, two long shot attempts to save TikTok from a US ban are underway. The first is an investment group led by billionaire Frank McCourt and shark tank investor Kevin O'Leary, who has delivered a proposal to ByteDance to purchase TikTok's US assets. The second is oral arguments before the Supreme Court that are I think still going on as of

this recording. They will determine whether to overturn a lower court's decision to uphold the TikTok ban. Of course, we are recording this Friday, January 10th. It is 1030 a.m. Pacific. I was just checking the oral, I was checking X for updates on the oral arguments. And I'll tell you, it doesn't seem like it's going too well for TikTok. No, it doesn't. It's from both the conservative justices and even Sotomayor and Kagan.

I've seen, had some questions that probably aren't so helpful to TikTok. So it does not seem to be going that well for them. At the moment, ByteDance has not publicly expressed interest in the offer from the McCourt or Leary group. And it's unclear when we'll get a decision from the Supreme Court, though we do expect something before the TikTok ban takes effect on January 19th, which is as of this recording nine days from now. Max, what do you think? Do you think that the deal has a chance? It seems like the Supreme Court is not going to save them, at least whatever, we could be wrong, but from the oral arguments doesn't seem like that. But what do you think about the deal?

I was very surprised to see this offer come together. I was very skeptical that anyone could get the kind of capital for this. I mean, we're talking about assets worth probably in the hundreds of billions. So even with a lot of loans, even if you have a big TV show about being an investor, it's hard to know how you could come up with the money. So maybe they did it, and maybe they think it is actually gettable for less than that. A couple of big caveats, ByteDance has insisted that they will not sell and that they legally cannot sell under Chinese law.

Now maybe that's just a position. They might be saying that because they want to signal to the Supreme Court, you know, Frank McCourt is not going to bail you out for making a hard decision here. So we really want you to intervene because their first choice obviously is that the Supreme Court overturns the law. So maybe they just want to downplay the deal. I will say if a deal does go through, it would be a big L for me personally, because I said that it would be impossible for that to happen, which is what's important here. Yeah, that's right. It's what we're focused on. Like you said, the Supreme Court really sounds like they are not going to side with TikTok, but Trump has been, um, getting noisier and noisier that he does want to save TikTok.

Um, and he has a lot of power. He can come in and obviously the law goes into effect the day before his inauguration, but the law doesn't, it doesn't like delete TikTok from your phones. It just means you can't get updates for it or you can't download the app so even if the law goes into effect he comes in and sometime in his first week he tells the Justice Department not to enforce it or he takes you know says we need to do a 90-day review and then gets Congress to repeal a bat or roll back or something it's it's possible that TikTok could effectively be saved with maybe a little

disruption along the way. Yeah, everyone always predicted that the savior of TikTok would be PanBonded. That's what everyone thought would happen. It's a weird winding road we took to this. I also think if the deal comes together and then ByteDance says no deal because the Chinese government says no deal. That should tell us a lot about the influence of the CCP on TikTok. If they refuse to sell even for a fair purchase because they just do not want to give up that

algorithm for some reason, then I do think that says that says a lot. And we should, you know, that's something we should all process. That's a good point. I had been very skeptical of the national security grounds of this law. But if if Beijing puts a big stamp of disapproval on it, that is pretty telling. Yeah. All right. Onto Twitter. Over the holiday break, Elon Musk announced an incoming quote algorithm tweak to Twitter that would begin prioritizing quote entertaining and informational content on the platform. In the announcement, Musk said his goal at Twitter

was to quote maximize unregretted user seconds. So far I don't have any of those. What about you? Unregretted is such a. Haven't found an unregretted second yet. It's really, are really putting our finger on, Haven't found an unregretted second yet. It's really putting our finger on, if I had to come up with a word that defined my experience with social media, it would be regret.

So he understands the problem, I guess at least, which is that none of us feel bad about the time we're spending on these apps. I don't know. I mean, look, obviously the most cynical interpretation is he just wants to have another excuse to promote his content and content that he agrees with. But could there be something else here? I don't know. was literally Elon getting in a Twitter fight with Laura Loomer, the far-right MAGA, wackadoo, white nationalist, and maybe Trump girlfriend, which simply makes my skin crawl, where they got in an argument over this... Oh, that is, of course, just a...

That is just a rumor that some people have, uh... have read online. We cannot confirm that at all. Please don't sue us. Of course not. Nor do I want to confirm it, frankly. I would prefer that this one remain unconfirmed. They got in a big fight, you know,

and then he started stripping blue check marks and people who disagreed from the like MAGA side of the argument. Laura Loomer said something like, now I understand Luigi Mangione, which was funny at least I thought. I miss that. But yeah, I think it's like, you know know if it is a real thing and not just

a thing he said in the moment my read of it is that now that the Democrats are leaving office and Trump is back there's much less incentive for Twitter to do what it normally does which is to make everybody feel angry and despondent and terrible about the world and now he's got more political incentive to say well my guy is in office, and now we're all gonna feel positive and happy. Yeah, I mean, I think it was like less than 24 hours after he said that he agreed with the post calling

most Trump voters retarded. So I don't think that's the kind of, I don't know that that's the kind of informational or entertaining content I would like to see on my platforms is the owner of the platform approving that word to call people. You're not feeling unregretted? No, not at all. As of that moment. It's really surprising to me that he's still in the inner circle, I have to tell you.

Speaking of Max taking ills on this podcast, I was so sure that he was going to be out by now. You know, that was, I think, my last prediction I made before he went out on the break. And it turns out that over the break, he became the president-elect. You know, I think that Donald Trump understands celebrity and reach and influence.

And look, Donald Trump's never running for president again. He might be president again, Donald Trump's never running for president again he might be president again but he's not running for president again and I think he knows that but despite that I think he knows that Elon has a huge reach and he wants him yeah he wants to keep these so even if he is personally ticked off by Elon he needs to keep him inside the tent at least for now. Rex Tillerson didn't have three million followers on Twitter or whatever. That's why I got fired on the toilet. Um All right Finally last week Apple agreed to pay 95 million dollars to settle a class action suit claiming that Siri violated users privacy by routinely

recording private conversations and selling data to advertisers Also noticed the thing almost everyone with an iPhone assumed was happening. Fuck you Siri. How could you? He trusted you. You've been a big your phone isn't listening to you advocate. Are you ready to admit you were wrong or is this lawsuit more complicated than it seems? It's it's another L for your boy. I'm really I'm racking up quite a few as as if fleeing my home from a natural disaster were not enough. It's just really insult to injury. So, okay, yes. Forever and ever what I have always said to people when they say,

you know, people say, oh, I think my phone is listening to me is eavesdropping because, you know, I had a conversation with my friend about basketball, whatever, and then I opened up my Instagram and it was full of ads for LA Lakers tickets. And I would always tell people, no, no, that's not what's happening. What's happening is that your friend went home and Googled Lakers tickets, or your cousin Googled Lakers tickets, and these ad networks, they know who your friends are

because they buy your personal data from Facebook, wherever, and they also know that you were in the same location because they track your location data, and they also know that you were in the same location because they track your location data, and they put that together to serve you the ads, which is, I think, not any better than your phone eavesdropping on you, but it was just like, I would say, no, no, it's not eavesdropping on you.

And it turns out that your phone was eavesdropping on you. And at least some number of cases, according to this lawsuit, which Apple has not conceded is true, but they are settling, which tells us something, what was happening was that in some, some number of cases after 2014, Siri was triggered to listen when it should not have been, uh, your phone is very, I mean, I, apparently, I've seen, I've said something and like, I don't, I don't

always hear you ever, but like I've said something and all of a sudden the Siri thing pops up and you're like, no, said something, and I don't know if Siri ever, but I've said something and all of a sudden the Siri thing pops up and you're like, no, go away, Siri. So according to this lawsuit, which is based on testimony from a whistleblower who spoke to the guard in 2019, Siri was being triggered without that even popping up on your phone. So you would just be going about your business, having a conversation with someone and your phone would be recording it as if you were talking to Siri and It would sell that data to advertisers There's some indication that it was maybe triggered if you have an Apple watch when you were lifting up your phone and

The president had an Apple watch for a while. So that's fine. And definitely not disconcerting at all The settlement is only 95 Million which is really low. really low for something like this. So it's hard to know how to read the tea leaves in this. Did Apple get such a low settlement because they played hardball in their trillion dollar company with a lot of lawyers? Did they get such a low settlement because the evidence for the case was actually shaky? I don't know, but it is definitely a pretty meaningful data point in favor of maybe your phone is listening to you sometimes. Cool, cool. Well, let's see what else we get after this. Alright, some quick housekeeping before we jump to my interview with Lena

Kahn with the Justin Baldoni and Blake Lively drama, dominating headlines. It's clear it didn't end with them. Oh my gosh. On the latest episode of Hysteria, Erin and Alyssa dive into the PR and legal fallout around the film's release. They also break down the latest political drama from Vice President Harris certifying the election to Meghan McCain's latest jab at Meghan Markle. Catch Hysteria for the latest in pop culture and politics every Thursday, wherever you get your podcasts. Up next, my conversation with the chair of the FTC Lena Cup. Offline is brought to you by Lumen. Did you know 80% of resolutions fail by February? You can beat the odds with Lumen and improve your health.

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Thank you Lumen for sponsoring this episode. Lena Kahn, welcome to Offline. Thanks for having me. So you are just finishing up a term Lina Khan, welcome to Offline. Thanks for having me. So you are just finishing up a term as chair of the Federal Trade Commission, maybe the most famous chair in history. You've become something of a hero to progressives, something of a villain to corporate America. And most Americans have probably never heard of you or the Federal Trade Commission.

So for those people who may be listening, especially those of us who aren't lawyers or economists, can you talk about what laws you've been trying to enforce as Federal Trade Commissioner, as the chair of the Federal Trade Commission, and sort of how your approach to enforcement has differed from past FTC chairs. So the Federal Trade Commission enforces the nation's antitrust and consumer protection laws. And what that's really about at a basic level is making sure that our markets are fair and honest and competitive.

So if we see corporate law breaking, because of monopolization or because of frauds and scams that's usually in our wheelhouse. My approach to this job has been A, to make sure we're actually using all of the tools that Congress gave us. You know, the FTC is a small agency, but we've been given a big job and we've been given a lot of tools, especially during the Reagan administration. There was a view that

it was better to be more hands-off. I think we've been living with the consequences of that across our economy. Markets have become more consolidated. People are worse off in a whole range of metrics. So it was really important to me that A, we're using all the tools we have, and B, that we're doing our work based on a realistic understanding of how our economy works. Sometimes doing this work, people can become very dependent on economic models

and assumptions and theories that are actually at odds with the realities of how markets actually work. I actually got my start in all of this as a business reporter and journalist where I would just call up farmers and say, hey, this big seed merger happened a few years ago. The company said it would be great and seed prices would be lower. Is that what happened?

And just hear that gap between how experts were thinking about and understanding these issues and what was happening on the ground. And so I would say those have been kind of two pillars of my approach. Use all the tools we have, make sure we're talking to real people to understand how does the economy really work. Why do you think that past FTC chairs from Reagan on haven't quite used the tools in the way that you've tried to use them? It's a good question.

And I have to say, the Reagan administration was very effective in charting out a new path and having that path be durable on a bipartisan basis. Partly that was because they had time. They had eight years of Reagan and four years of Bush. And so what started off seeming kind of fringe and radical 12 years on was just the new common wisdom and how everybody did things. And that approach just persisted for some time.

But the other big change, I think, is that the Reagan administration folks set us out on a natural experiment where they said, okay, let's just become very hands off. Let's just assume that illegal monopolization will fix itself. That generally big is better and maybe prices will be lower. And we're 40 years into that natural experiment. And there's just reams of evidence that their theories did not pan out. And we've seen instead that extreme concentration can mean not just higher prices and lower wages, but our markets are really fragile. So you have a single glitch, you

know, cybersecurity wise, and you see thousands of flights grounded or a single natural disaster and shortages of essential products. And just overall, our economy is weaker and more fragile when you don't have competition So I think it's partly just that reckoning with reality that has really set us up at this moment to change course so obviously Trump administration is coming back into office and Agencies like yours and people throughout the federal government throughout the Biden administration are You know gonna see some of their accomplishments, you know attempted to be rolled back yours and people throughout the federal government, throughout the Biden administration are going to see some of their accomplishments attempted to be rolled back.

What are some of the actions you've taken that you feel confident will endure beyond your tenure? So the big caveat is I can't predict what the new administration is going to do. I will say though, it's been very striking being in D.C. these last few years, seeing a lot of disagreement between the parties, to see actually some agreement that unchecked corporate power and unchecked monopolization is dangerous for Americans and we need to have aggressive enforcers to take that on. So I do see that some of this work is set up for continuity rather than backsliding.

We've brought big cases against dominant technology companies. We have major litigations ongoing against big middlemen in the healthcare sector. We've taken on illegal patenting tricks that have been inflating the costs of everything from asthma inhalers to EpiPens. That is all work that is underway right now. I hope a future administration wouldn't be on doing that because I think it's right on the law and the facts and it's doing real good for American people. We spent a lot of time on this pod talking about all the ways that the internet and the tech industry are reshaping our society and how little progress has been made in reining in their excesses

and mitigating some of the harms they've caused. You've been focused from the beginning on what you believe to be big tech monopolies, Amazon, Meta, Google, Microsoft, Apple. How do these digital age monopolies look different than previous monopolies? And what are some of the unique challenges they pose to regulators like yourself?

Yeah, it's a good question. And I think one core way in which there is an analogy is these tech monopolies are actually middlemen. And the original monopolies that led to the passage of the antitrust laws were the railroads. And so what we see with these tech era firms is they've become gatekeepers. So they're connecting consumers and shoppers. And what's allowed them in part to become so dominant is the way that digital markets work. You have things like network effects and the reinforcing advantages of data

that really put a primacy on chasing scale. And once you've gotten that critical mass of scale, there are these flywheel effects that kick in and really result in accelerated growth and momentum. That said, what we've also seen with several of these companies as a whole set of lawsuits now allege is they engaged in illegal tactics to double down on their monopoly, to protect their monopoly, to squash out rivals when they were threatened.

And that's been a contributing factor too. When I came in and you know, in the last few years, there's been this question about can the government really do this work? We have these laws, they were passed in 1890 and 1914 and the economy looks really different. It can be frustrating, these litigations can take some time, but what we've already proved is that yes, the law does apply, there's no big tech exemption from the laws on the books. If you put in the work to show the judges how it is that these laws apply in this new context,

you could win, right? The Justice Department got a landmark victory finding that Google had illegally monopolized parts of the search market. We have a big trial starting up against Meta in the spring. We have a trial starting against Amazon in fall 2026 we only got there after defeating their emotions and prevailing and so It's been really thrilling to show that this can work. You've you sort of

became Notable when you wrote a paper about Amazon a piece about Amazon in the law review About I think it was called the Amazon Antitrust Paradox. And now, of course, as FTC chair, you brought a lawsuit against Amazon. You know, I think for a lot of people who don't follow politics closely, they might see Amazon and think, okay, well, I get to go on Amazon and buy stuff for pretty cheap and it comes quickly to my house and so it's great and so why is that a problem and And what are they doing illegally?

Yeah, it's a great question and what we found when we investigated when we the FTC investigated Amazon was we found that Things could actually have been even better if Amazon hadn't engaged in certain illegal practices. And so just to give you a few examples, one thing Amazon does is if sellers on their platform offer lower prices anywhere else on the internet, Amazon punishes them. And so what that means is Amazon is basically contributing to inflated prices across the internet. Amazon has also been steadily increasing the fees that sellers have to pay. And so Amazon now takes up to 50% of the cut from a business. So Amazon is inflating the prices that these sellers have to pay Amazon, but also making it impossible for these sellers to lower their prices anywhere else.

And functionally, that means that people are paying more than they would. The reason Amazon's been doing this is because they don't want any other online platform to gain scale. We also found that Amazon actually made a very concerted decision once they realized they had kind of captured a whole set of sellers and a whole set of shoppers to start monetizing their platform through ads, which a lot of platforms do. But our lawsuit found that they've been littering their search results page even with irrelevant ads, because they know they can. And so the product is actually becoming worse for people and they can get away with it.

And you know, sometimes I get asked, well, how do you know if a company's a monopoly? Like what's the right way to calculate it? There are a lot of different technical answers to that. But at its core, if a company can get away with making things worse for you as a customer, either hiking up prices, making the service worse, and you're kind of stuck,

there are no ramifications for it in the market. That kind of too big to care mentality is oftentimes a direct indicator of monopoly power. There are other allegations in the complaint. We found they used this secret algorithm called Project Nessie, which was explicitly designed to inflate prices. So it can sometimes be hard as a consumer to be like, well, what's the counterfactual and the alternative? And what our lawsuit says is things could be even better if Amazon

hadn't broken the law. You mentioned in your earlier answer, old economic models. One of my hobby horses over the past few years has been economists and policy experts, some of them liberal, or at least center left, who argue that focusing on corporate price gouging is misguided since it wasn't a significant driver of inflation. Kamala Harris's proposal to ban price gouging during the campaign and empower the FTC to impose harsher penalties on companies that fix prices were criticized by a lot of economists during the campaign. My old Obama administration colleague, Jason Furman, said it's not a sensible policy and

has no upside and potentially some downside. What do you think about that? So it's been really interesting to follow a lot of these debates and what was really driving up the high prices. From where we sit at the FTC, I think we've observed a few things. A, we've seen that when you have less competition in a market, it's easier for firms to kind of coordinate. And one thing that we heard on earnings calls, for example, when executives were talking to their shareholders, is that they were acknowledging that, look, during the pandemic, input costs

that look, during the pandemic, input costs rose and they had to keep their prices up. But as those prices fell, as those costs fell, the prices didn't come down concurrently. And in some cases, executives on these earnings calls were boasting about the fact that they could keep prices high even as those costs fell and keep their inflated margins. Do you want to call that gouging? Do you not want to call that gouging?

I think that's a separate debate. But this question of was corporate power contributing to inflated prices? I think there is some evidence there. I think more generally we've seen just generally inflation could give companies cover to not just raise prices when costs go up, but then keep them more inflated unless they're being checked by competition.

The other connection we've seen is when you put your eggs in one basket, you have a pretty fragile situation, right? And so the more we've seen consolidation, including in areas like infant formula, all it takes is that single contamination or that single disruption for the whole supply chain to seize up and then prices go up. So even structurally, if nobody's trying to do anything wrong, just more consolidation

and centralization can make things fragile. The FTC recently successfully blocked the Kroger Albertsons merger, we did listening sessions around the country, and people were really concerned, and they were thinking that if this merger were to go through, these corporations would get even more power to inflate prices. Do you think that if Congress were

to pass a federal ban on price gouging, that that is a workable policy? Do you think that the FTC sort of has the power to stop price gouging with the tools that it has right now? Do you think a federal ban would be an additional tool that would be helpful? I mean, a lot would depend on the specifics. We don't have that. Congress has not explicitly given us that authority. Oftentimes at the state level, these price gouging bans are very much tied to specific

natural disaster or kind of intervening events that create unique dislocations in the market. So I think we would need to understand is this kind of just supplies in very special circumstances or is something that's more sweeping. We do have the antitrust laws, we have consumer protection laws. And so, we've certainly gone after law breaking when it was inflating prices, when we had the authority to do so.

The other big criticism you received is that, your actions to block various mergers and acquisitions have helped create a climate that's hostile to startups and innovation and job creation. And some of this has come from CEOs and founders and investors no surprise there they have certain financial self-interests but then some from economists Larry Summers criticized your antitrust policy a few years ago warning quote policies that attack bigness can easily be inflationary if they prevent the exploitation of economies of scale or limit superstar firms

And of course you hear this a lot from the the folks in Silicon Valley Do you think that criticism has any validity? So the law prohibits mergers that may substantially lessen competition or or tend to Create a monopoly. That's a very specific legal standard. It's not that all mergers under the sun are illegal. It's really a subset where you see rivals buying up one another in ways that would deprive people of options, deprive them of choices. It's interesting, deal makers over the last few years have certainly been very vocal about the fact that the FTC has been aggressive.

We've won our cases and have chilled some of those illegal deals that sometimes people propose because they're saying let's roll the dice and see if we can get this through even if there are legal problems. You know, the economy has done pretty well. There have been mergers that the FTC has blocked, including the Nvidia arm deal, where each company independently has done phenomenally well since the FTC took action several years ago, and they've actually been incentivized to invest in growing independently flourish.

And so I think you really have to look at the evidence here rather than make kind of hyperbolic claims. Offline is brought to you by Zbiotics Pre-Alcohol. Let's face it, after a night with drinks, I don't bounce back the next day like I used to. I have to make a choice. I can either have a great night or a great next day. I'm not choosin'. I choose pre-alcohol.

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Great, Emily. How'd you feel the next day? Oh, that didn't leave a mark at all. Oh, great. Well, honestly. No, I was gonna say about the drinking. Well, when it lands on the floor, it doesn't really hurt your morning. But no, you know what the worst part about that is drinking. Well, when it lands on the floor, it doesn't really hurt your morning.

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Remember to head to zbiotics.com slash offline and use the code offline at checkout for 15% off. So Trump is named Andrew Ferguson to replace his chair. He's currently a commissioner on the FTC who you've served with so you know him. Do you think he'll continue the FTC's cases against Metta and Amazon? It's a great question. I don't know what his intentions are. It has been interesting though to see, including on the Republican side, concern about big

tech platforms, right? And concern about these digital gatekeepers and monopolies that are getting to pick and choose who gets heard, who gets seen online. You know, I've heard from a lot of small businesses that basically live in fear of are they gonna wake up one day and have been demoted from the top of the search results page to page seven for some opaque reason and that's devastating to their livelihood and there's no accountability. I think there is a deeper sense that the amount of concentrated power and decision making

that we see in a very small number of companies and sometimes even just a handful of executives is really anathema to what our system of governance is about, right? And one of the reasons we have the antitrust and anti-monopoly laws is actually as a complement to our constitution. The constitution recognized that we need checks and balances, right? And if we want people to be free, hey, we just overthrew those monarchs, so let's create some systems to have checks and balances

and not have people subjected to tyranny. There are analogous principles in the economic sphere, right? There's this great quote from the history of the Sherman Act, which is, you know, if we're not gonna be ruled by monarchs, we also don't wanna be ruled by autocrats of trade. Because how people experience the economy in their day-to-day life has huge impact on whether they feel free.

And so if you have a democracy, but you're allowing people to be bullied and coerced in their economic life, that's not really going to lead to freedom. And so that's why I think on both sides of the aisle, there's a recognition that we need to take these laws seriously. You mentioned the autocrats of trade. It certainly seems like that is what we might be getting as we head into another Trump administration and not necessarily because of anything I know about Andrew Ferguson or how he might run the FTC, but you know, all the big companies that you've taken enforcement actions against they're all making donation to Trump donations to Trump's inauguration Some of them personally some of the founders and CEOs personally Mark Zuckerberg just announced that they're they're getting rid of the fact-checkers Amazon is paying Melania Trump 40 million dollars for a documentary, which I didn't know you could get that for a documentary

and I do wonder if a lot of these for a documentary, which I didn't know you could get that for a documentary. And I do wonder if a lot of these founders, CEOs, titans of industry are thinking, you know what, the law is the law. I'm going to forget about the law, forget about enforcement. I want a system where favors and relationships can get me what I want. And in Donald Trump, I have someone who if you flatter him or you have a relationship with him or you do what he wants, if you praise him, then maybe they can get what they want economically for their businesses.

How much does that worry you? It's a really good question, and I think there's a really live debate about the future of populism and what does each party stand for? And I think more generally we see some of the concerns that the founders had, that the kind of supporters of the antitrust laws had, which was that if you allow so much concentration

of economic power and you have oligarchs and plutocrats, that means they have economic power, but it also gives them political power. And that's what's fundamentally so dangerous. So I think you're right. We're seeing right now in real time some of the real dangers of what happens when you have so much concentrated power. I know your job isn't strictly political, but obviously politics has affected your job.

It's one of the reasons you're leaving it. What, I wonder if you have a take on what happened in this last election and sort of the broader political moment we're in right now. You're right, I will defer to the kind of election analysts to fully get into that. We've been focused on governing and using our policy and enforcement tools. That said, I did make it a real priority to, in this

job, go out across the country and really engage with people across all walks of life. It's very easy in these types of roles to become very insulated and just hear from a handful of policymakers and powerful companies and their lawyers. As I listened to people across the country, I think there was a real sense that all too often people are not getting a fair shake in our economy. People might not then say, hey, we need to bring a Sherman Act lawsuit, but I think oftentimes in a raw, fundamental, visceral way, people know that some corporation is kind of screwing them in some way and they want the

government to fight for them. And that's what the FTC has been on the front lines of, is kind of using the tools when we see law breaking, be it a monopoly that's illegally inflating drug prices, or even companies making it hard to cancel your subscription or tricking you with junk fees so that you thought rent was gonna be one amount, but then later there are all these additional fees. We've been taking on these problems big and small and just making sure that there's a basic sense

of fairness and dignity in our economy, and that really resonated with people. From both sides of the aisle, I mean, we propose this ban on non-compete clauses, these contractual provisions that basically prevent you from going to work for a rival or starting your own business. We got 26,000 comments from people across the country, people just, you know, taking time out of their day to go submit a comment to this obscure federal agency. And we heard from people in all 50 states talking about how these clauses had kept them stuck

in abusive jobs, prevented them from taking higher salaries. People who ended up having to do five hour commutes every day and missed out seeing their kids grow up. We had comments from people saying, I'm a lifelong Republican, I'm a lifelong conservative, but if you guys ban non-competes, that'll be the best thing government's ever done in my lifetime. I think there's a real hunger out there to see government fighting for people, even when it means taking on powerful corporate interests. I remember back in 2012 when President Obama was running for reelection

and he wanted to give a big speech about economic inequality before the race started. And one of the points he was really focused on making in that speech is one reason that economic inequality is quite damaging and harmful is because it makes democracy itself much harder and it actually robs people's faith in democracy. And I thought about that in this election because, you know, there's this whole debate on Democrats are making it about Donald Trump as a threat to democracy and defending democratic institutions.

And after the election, I think there's been some reflection that it's tough to defend democratic institutions when people don't feel that those institutions are actually working for them and giving them a fair shake. Is that something that you heard from people when you had those listening sessions across the country? Yes, absolutely. And candidly, people would say, I appreciate you're here

from the FTC, but I've never heard from this agency before, and guess what? The last time there was a big grocery merger, you guys let it go through a decade ago and that man, I got laid off and now I live in a food desert. Right? I mean, I do think that people have been disillusioned, candidly, because for many years they didn't feel that the government was fighting for them. Of course, we tried to change that and we have changed that, but we have to be aware that we're working against this trust deficit in many ways and it takes time to build that

trust and build that faith. That's why we went out across the country and really engaged with people both to learn from them and listen from them. I think the other thing we see sometimes in economic policy circles is that there can be a privileging of just a particular type of expertise. People are experts too, in terms of what's happening in their day to day economic life. life and it was really important to me that we not just get stuck in these blind spots and engaging with people and really knowing how markets fundamentally worked was a key part of that. If you were sitting down with the next FTC chair and they asked you for advice on you know future enforcement actions or rules or or potential scams that you wanted to go after what's your

what's the next big inhaler issue that you would advise them on? I mean, there's so much more to do in healthcare. I mean, we have some big litigations underway, including a litigation against these pharmacy benefit managers, these middlemen and the healthcare supply chain. There's a lot more to scrutinize

in terms of why our drug price is so high and you know, we've done a lot of work there but more to happen. I do think we have to take seriously some of the risks with AI. There's opportunity here, there's benefit here, but at least where the FTC sits, we've seen how these AI tools are turbocharging fraud, right? Be it the voice cloning scams, be it the fraudsters who can use these tools to now just disseminate fraud on a huge scale. So we've been using our tools to make sure

we have rules in the road to stop that and to go after lawbreakers. But that's definitely going to be an area to stay vigilant on. You have about a week left as FTC chair. I know you're focused on running through the tape, but you must be thinking about what you want to do next. What interests you? Well, I will first be catching up on sleep, and then after that, figuring out, you know, what does the next phase of this work look like? I do think there's a lot of excitement and enthusiasm, especially among kind of younger generations

who candidly live through the financial crisis, who kind of have always wondered, you know, is government really fully fighting for us? And so it'll be interesting to think through how can we harness that and make sure if we have another opportunity to govern in this sort of way, we have kind of even more people ready to come help us. Have you ever thought about running for office?

No. I mean, we need good people. I don't know if you've seen the party these days. Lena Khan, thank you so much for everything you've done these last several years. And really, really hope you stay in the fight. Thanks so much for having me. Take care. Offline is a Crooked Media production. It's written and hosted by me, John Favreau, along with Max

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