Monopoly Isn't A Game (with Lina Khan) - Stay Tuned with Preet

Kara Swisher: Hi, everyone. It's Kara Swisher. Pivot is off for the holiday, so we're bringing you an episode of Stay Tuned, featuring Preet Bharara's conversation with former FTC Commissioner Lina Khan. The two discuss all things antitrust, including whether the Trump administration will continue Khan's policies or abandon them. Preet also just launched a new Stay Tuned Substack. Sign up at staytuned.substack.com. Scott and I will be back on Friday with the latest breakdown of all things tech and business. And yes, probably a penis joke or two. Or three.

Preet Bharara: From CAFE and the Vox Media Podcast Network, welcome to Stay Tuned. I'm Preet Bharara. One of the biggest ways that we've seen anti-monopoly make such advances is because the evidence has been on our side. We had a shortage of infant formula in this country in the year 2022 from a single contamination in a single factory. That's Lina Khan. She made history in 2021 when President Biden appointed her as the youngest ever chair of the Federal Trade Commission at age 32. During her time at the FTC, Khan accused big companies of using their power to push out competitors and hurt small businesses. Today, Lina Khan joins me to discuss the influential paper she wrote in law school that launched her into the spotlight and paved her path to the FTC. We'll also explore the nature of fair competition, what she says defines a monopoly, and some of Khan's key cases. Later in the show, I'll answer your questions about the proper qualifications for Surgeon General, Kid Rock's Restaurant, and Bruce Springsteen. That's coming up. Stay tuned.

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Preet Bharara: How does monopoly power shape innovation and competition? Former FTC Chair Lina Khan joins me to discuss. Lina Khan, welcome to the show. It's really an honor to have you.

Lina Khan: Thanks so much for having me.

Preet Bharara: So this seems an odd thing to ask, given your relative youth. How's retirement?

Lina Khan: It's been pretty low-key. It's been quiet. Obviously, I wish we'd had more time in government, but it's been nice. I have a two-year-old, so it's been pleasant to just get to be around more. It's not relaxing.

Preet Bharara: Are you teaching antitrust law to your two-year-old?

Lina Khan: I'll be teaching antitrust law in the fall to law students. And my son has picked up on a lot of ambient meeting noise and that sort of thing.

Preet Bharara: Does he think there's an unlawful tying arrangement in the house?

Lina Khan: I think he is working on physical tying right now.

Preet Bharara: Yes, now I've exhausted all my knowledge of buzzwords and antitrust law. So he'll ask you to explain some things. I want to get into your biography, how you got to where you got relatively quickly in life, and talk about your views on antitrust enforcement for a lay audience. But let me start with this, and I'm sure this is how some people come at you. You were obviously a very high-profile chair of the FTC. In any government role, I had a government role for a long time, there are detractors and there are supporters. Often in our current tribal environment, you can guess in advance who the supporter will be and who the detractor will be. They line up tribally. But if I said, what do the following people have in common? Alexandria Ocasio-Cortez, Elizabeth Warren, J.D. Vance, and Matt Gaetz. What would they all have in common that would cause me to ask you that question, Lina?

Lina Khan: Well, they all profess to support for the work we were doing at the FTC and have shared real skepticism about extreme concentrations of economic power and monopoly power. So that is a through line that we've seen across people who otherwise have very different politics.

Preet Bharara: Right. And just to put a point on it, because you're modest in your answer, supportive of your work and particularly supportive of you, which is an unusual thing to see from that spectrum of folks. Do you think that antitrust enforcement naturally falls along ideological lines, or the fact that you have this strange set of bedfellows indicates that that's not the case or shouldn't be the case?

Lina Khan: Historically, we've seen pretty significant bipartisan support for antitrust. That's gone in multiple directions. Senator Sherman, who was one of the authors of the Sherman Act, was Republican. We saw, especially in the early decades of federal enforcement, strong support from both sides to take on the trusts, take on the robber barons. As we then in the 80s saw a reversion from aggressive antitrust, there eventually was another bipartisan consensus around the view that we should be enforcing the law with a very different set of goals and values. So we have seen significant bipartisan consensus on different sides of how you should be doing antitrust.

Preet Bharara: And where do you think we are today at this moment?

Lina Khan: It's an interesting question because it's too early to know what the full policy of the Trump administration is going to be on antitrust. One question for me when I was there was, how long will we have? The last time we had seen such a sharp pivot in antitrust was during the Reagan years, where we saw a radical reorientation of how they approached antitrust laws. They had eight years of Reagan plus four years of Bush to really create institutional durability for the project they were pursuing. I had three and a half years. So there was a real question around the institutional durability of what we were going to be able to achieve. But strikingly, we have seen less of a retreat from this administration on antitrust than we have in almost any other policy arena. They made a series of decisions to keep the merger guidelines, keep several of our major antitrust lawsuits going. So far, we haven't really seen any major break at all. Who knows if that will stay in place for the full administration or whether we'll see pretty overt weaponization of the antitrust laws so they're rewarding friends and punishing enemies. But so far, we have seen more continuity than I think anybody expected.

Preet Bharara: Does aggressive antitrust enforcement fall comfortably within a populist ideology in government?

Lina Khan: If you step back, the antitrust laws were founded on the view that extreme concentrations of economic power pose a threat to people's freedoms and liberties, much in the same way that we understand extreme concentrations of political power or state power to pose. There was a recognition that if what we really want is to create freedom for people in their day-to-day lives, you can't just have checks and balances in your sphere of governance and then allow monopolies or autocrats of trade, as they were called, to govern. There was a recognition that here Americans had overthrown a monarch and they weren't going to instead sign up to be ruled by monopolists. So there has been a real original understanding of how antitrust, but more broadly, an anti-monopoly ethos, is absolutely critical for some of our most cherished values.

Preet Bharara: Did you play Monopoly as a kid?

Lina Khan: I did.

Preet Bharara: And did you like the game?

Lina Khan: It was fine. And it's been interesting to learn.

Preet Bharara: The anti-monopolist says it was fine. It was fine. I mean, as a board game, it was fine. Do you think it's like gaming propaganda? Do you think we should eliminate? Obviously, you're not a censor, but I know it's a semi-serious question. Do we teach the wrong things about money and concentrations of power in this country?

Lina Khan: Antitrust and anti-monopoly as a philosophy fits comfortably within a capitalist system that we have. Much of the productivity, the innovations, and America's competitive advantage have been the results of the fact that you have an economy where people are able to pursue a good idea, bring it to market, and then enjoy great success. If you're undertaking the risk of bringing a product to market, you should be able to reap the reward. That type of motivation and thinking is absolutely critical. I do think that, and it's especially true for my generation and generations since, there has been a real disillusionment and a real question about who our economy is really working for. During the financial crisis, we saw an initial inflection point. Since then, we've seen episode after episode where for a lot of young people, what our policy and politics have shown is that our economy is really designed to work primarily for very wealthy, very well-connected people, while those who are trying to make rent, trying to make sure that they're not going bankrupt for medical bills, are having a much harder time. So I do think that there is a real skepticism and questioning about who our current economic order is really serving.

Preet Bharara: As a matter of political rhetoric, when people oppose antitrust enforcement, and when you say as an antitrust enforcer that monopolies are not good for the mass of people for various reasons, the people on the other side don't say we love monopolies, right? Nobody goes forth and waves the banner of monopoly happily, right?

Lina Khan: Well, some people actually do. Some people think monopolies are great.

Preet Bharara: Who are those people?

Lina Khan: They span thinkers, people kind of lineage of the Chicago school that thought monopolies oftentimes would actually deliver great benefits to people. Then you have people in the policy advocacy community, you could call them lobbyists or others, who are often advocating for those views. So you do have a legitimate pro-monopoly camp.

Preet Bharara: How large is that camp?

Lina Khan: It's gotten much smaller over the last decade, I would say, as anti-monopoly has really made great advances in our politics and as a mode of governing. I think one of the biggest ways that we've seen anti-monopoly make such advances is because the evidence has been on our side. As a country, we have seen evidence after evidence about how extreme concentrations of economic power actually lead to major problems for Americans. That can range from shortages of things like IV bags or gunpowder that arise from extreme concentration of production. We had a shortage of infant formula in this country in the year 2022 from a single contamination in a single factory. We've seen problems around planes falling apart in the sky. Some of the challenges that we're seeing in Boeing can be traced back to a major merger that they did in the late 1990s, where they were allowed to buy up their major competitor in the U.S., and that fundamentally changed their incentives. As a general matter, we've just seen market after market become more consolidated. Prices have become higher. Wages have fallen. It's become much harder for new businesses and entrants to actually enter and compete on a level playing field. As that evidence has become much more difficult to ignore and contest, we have seen the pro-monopoly advocacy community grow smaller, but they're still out there.

Preet Bharara: Can we define a term which is difficult in antitrust law? What is a monopoly? How do you define a monopoly and how should lay people understand what a monopoly is?

Lina Khan: There are different ways to define what a monopoly is. In court, there are different methods and mechanisms that enforcers use. Some are primarily trying to define what is the relevant market—who is in and who is out of this market—and then how do you calculate effectively the percentage that this one company has, and is it enough to trigger monopoly status? Which itself can range from 60 percent to 90 percent. Courts have come out different ways on what the right cutoff point is. To my mind, one of the most effective ways to be able to show a monopoly is through its behavior, what we call direct evidence of monopoly power. In short, a firm can behave like a monopoly when it's able to make its products worse or raise its prices for its customers without facing real consequences in the marketplace. You can understand this in some ways as a firm becoming too big to care. They have amassed not just a size but have also cut out competitors such that they can get away with making products more expensive or making products or services worse for their customers without the ordinary checks that you would expect in a competitive marketplace. Those are both just two ways of being able to show monopoly power, even market power. When we were bringing our cases, we would routinely deploy both methods.

Preet Bharara: And what's an example of an entity about which there would be consensus that they have monopoly power?

Lina Khan: There are major cases underway. We just saw a verdict from a judge in D.C. a few months ago ruling that Google had monopolized the market for generalized online search. The Justice Department in that instance used both indirect and direct forms of evidence to make that showing. So Google has now been found to be a monopoly in online search.

Preet Bharara: I want to talk about Amazon because Amazon looms large in your origin story as well. In 2017, you wrote what people call an article in the Yale Law Journal that had quite a response: "Amazon's Antitrust Paradox." For people who are not from or of law school, I will note that even though in the popular press your piece is called an article, it is in fact among law students and lawyers called a note because you were just a law student at the time. Obviously not just a law student, but thinking about these big issues. I will note for the record that when you're a law student and you write something that's important or not, it's called a note. When you're a law professor, it's called an article. So I just want to put that little piece of business beside us. As I understand it, the thesis of the article, the note, was in part that ordinarily, when we're thinking about what is good or bad with respect to monopoly power, as you were saying a few minutes ago, one of the things you look at is consumer welfare, and whether or not consumers are being helped or undermined in various ways, including with respect to price. So if one measure of monopoly power, as you were describing a few minutes ago, is the ability to, with impunity, increase prices such that people are at the mercy of those price increases, that indicates monopoly power. One of the things you say is, in the modern world, especially as epitomized by Amazon, prices are low. They have the ability to keep prices low. So this focus on consumer welfare, defined in part as a focus on price, doesn't actually uncover the monopolistic power of a big company like Amazon, which has other features that it can take advantage of and actions that it can engage in, including predatory pricing. You mentioned in various places a company near and dear to my own heart. My brother and his best friend from high school started diapers.com, which was the subject of a lot of discussion and angst in my family and also in the public at large because Amazon was engaging in a certain price tactic with respect to diapers.com. Anyway, that's a very long-winded, probably imperfect summary of your article. How did you come to think about it that way? And why was that such a revelation?

Lina Khan: One of my jobs after college was as a researcher and reporter where I was basically doing deep dives into various markets across the U.S. economy. I would do deep research into chicken farming, the aluminum market, rental cars, book publishing, and really document the ways that market after market had become so much more consolidated and how there were real gaps between how antitrust enforcers were thinking about market power and consolidation and what was really happening on the ground for everyday people. One of the last areas that I started looking into before I went to law school was online commerce. I spent several months talking to two sets of market participants about how they viewed Amazon in particular. One was the set of businesses that were selling through Amazon. The other was investors and financial analysts and people who were viewing Amazon through a more long-term proposition. It became clear through those conversations that Amazon was amassing structural power in the marketplace that was not being cognized through the antitrust prism that enforcers were using at that time. There was a very charitable view of Amazon where people thought, "Well, its prices are generally low, so therefore it must be good for competition," not fully tracking the business practices that Amazon was using to establish real structural dominance in the marketplace—both predation, predatory pricing, as you were noting, as well as vertical integration in various parts of the market that allowed them to then exploit certain conflicts of interest and certain information asymmetries. I really wrote the article and focused on Amazon more as a way to tell a broader story about the evolution of antitrust and this major reorientation and pivot that happened in the late 70s and early 80s that I believed had departed from what Congress intended when it wrote these laws, departed from what the laws actually said, and now was also creating major blind spots between how enforcers and potentially even courts were understanding what monopoly power looked like and how it was actually being exercised. That blind spot was especially acute in digital markets, where you just have a different set of economic dynamics. That's really what the article was looking to set out.

Preet Bharara: What's interesting to me is, Amazon began as nothing. It was an idea in a guy's head of relatively recent vintage. I don't know the exact year in which it started. And it very quickly got to the point that you're describing. As you wrote in a parallel New York Times piece in 2017, talking about Amazon, quote, "In building this vast empire, Amazon chased growth over paying dividends, pricing key goods and services below cost to chase out competitors. It invested heavily to buy out innovators like diapers.com, my brother's company, after waging price wars. Amazon followed its acquisition by raising prices." End quote. At the time, is there some argument that if you had the foresight to chase growth at the expense of paying dividends, and if the capital markets like that and want to invest in your company, because not everyone thought it was going to be a winning bet? I am old enough to remember lots and lots of people thought this was a losing proposition, ultimately, and that Amazon was overpriced and Amazon would fail because all it was doing was losing money and not making a profit as it added products and services and goods to its lineup. Is there some argument that they didn't cheat and steal to do that and they deserve a place of dominance by chasing growth over paying dividends? And that was a smart, innovative way to think about building a company? Or is that totally absurd?

Lina Khan: Chasing growth over profits is not illegal. Companies do it all the time, especially in digital markets, given the real premium of establishing scale, establishing the network effects, establishing the entry barriers that really pay off. It was specific practices that Amazon engaged in that ultimately the FTC and a whole bunch of state AGs determined were illegal. The predatory campaign that we saw from Amazon against a whole set of companies, including diapers.com, clearly could have been in that bucket. The Supreme Court jurisprudence has come to take a much more skeptical view of what counts as predation. They view predation itself as irrational and unlikely to ever exist. So practically, it's become very difficult to bring a predatory pricing case. But the lawsuit that the FTC ended up filing in 2023 laid out a whole set of business tactics where Amazon had not just become big, but they had actively blocked out competitors, which has now allowed them to actually make things worse for their customers—both the businesses that sell through Amazon as well as the consumers. The complaint details some of these practices. For example, Amazon had a policy that basically punished any business for listing a lower price on a website other than Amazon. It was doing this at the same time that it was dramatically hiking the fees that a business had to pay to sell through Amazon. Say you're selling coffee mugs and selling them for $10. On Amazon's website, you have to pay Amazon $5 for every $10 you make. There's a rival website where you only have to pay that company $2 for every $10 you make. You want to list your mugs for a lower price on that other website because it's cheaper to sell there. If you did that, Amazon could make you disappear from its webpage or it could punish you in all sorts of ways. That really matters for businesses because they rely on Amazon for so much volume, for so many sales. It was these types of practices that basically blocked out rivals, kept rivals from ever being able to achieve the same scale and momentum to really become a meaningful competitor to Amazon. Amazon does now take up to one out of every two dollars from businesses who sell through it. We also uncovered a whole set of pricing practices that have been inflating how much customers pay. It was very deliberately littering its search page with irrelevant ads. We uncovered documents from top executives saying, basically, yes, you could make search results worse for consumers because we know they don't have anywhere else to go. The complaint details a whole set of specific practices that are different from just taking a long-term view or chasing growth over profits, but specific anti-competitive acts that we believe ultimately violated the law and have made Americans worse off.

Preet Bharara: How do you square that with the fact, if you go back to the classic way of looking at consumer harm and consumer conditions, that I, like many other people, when I have my druthers, I order from Amazon. You're talking about particular ways in which the government has alleged they've engaged in anti-competitive practices. But if you're a bread and butter consumer just buying random stuff for your house or for your office, and you have low prices and you have immediate delivery and good customer satisfaction, and the company has not taken advantage of those things that you're describing with respect to the bread and butter consumer of stuff, does that not matter? Is that not a point in their favor? Or is part of the issue that at any moment, they can do something deleterious even in that landscape? I'm not sure how to think about how that thing, which is a net good, which you argue is maybe too much the focus, but it still should be some focus or not the focus or even of focus. How do you think about that?

Lina Khan: I'll answer this in two ways. One is, especially in digital markets, there's actually a life cycle of being a monopolist and exploiting your monopoly power. Phase one is when you are achieving and chasing scale. The goal at that moment is really to bring on as many sellers and as many buyers onto your marketplace as you can. In that mode, your incentives are to oftentimes make your service really great for both the sellers and the buyers. Even if that's done in the goal of achieving dominance that you may later exploit, mode two is once you've achieved that structural power and coupled that with tactics that are blocking competitors from the market, then you can make things worse. You can make things worse through higher prices, but also through coercion and bullying. A lot of the businesses and the market participants that the FTC heard from did allege all sorts of bullying tactics, candidly, as well as customer service for them getting worse. Antitrust is not about identifying some absolute price levels that we think are good or bad. It's really about competition. The assumption is that competition in markets is really what's going to drive firms to make products better for people and really innovate. That's been a key driver of America's growth and our innovation as a country. What Amazon did when it blocked out those competitors was interfere with that free enterprise system and with that competitive process. The lawsuit actually does allege that people are paying more because of this. Products could be even cheaper. You could have more innovative interfaces. You could have search results that are not cluttered with irrelevant ads. This is more about the alternatives that were foregone and lost because of Amazon's anti-competitive tactics. It can be difficult concretely to point to those counterfactuals. Amazon's case is interesting. The lawsuit actually points to other rivals that were on the cusp of taking off, that could have taken off, but for Amazon's tactics. So it's really about what could have been and how things could have been even better for Americans with more competition.

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Preet Bharara: I think one of your criticisms of monopoly power is that ultimately innovation gets stifled there. Because you have monopoly power and you don't have to innovate because you have a huge set of customers or clients or buyers or whatever the market would call you. I think you have given examples of cases, maybe you can give some examples for us here, where you talk about AI, for example. You can have somebody or a company in a place of complete dominance, but then some other innovative technology is overlooked or bypassed or given short shrift, and then this other thing happens. What's confusing about that is some people might take that as an admission that monopolies don't last forever, even without involvement and interference from the government. Even the most dominant figure is ultimately, the pejorative you can apply to that is they're ultimately not going to innovate and someone else will. And that will naturally reduce the non-innovator's market power and become less monopolistic. Is that fair or not?

Lina Khan: The innovator is going to need to know that if they produce something that is better, they actually have a chance of reaping the rewards of that innovation. That's what can get distorted when you have a monopolist that's running amok. These monopolists often have all sorts of levers that they can deploy to cut out that innovator from the market. That's what antitrust is about policing. If you don't have antitrust enforcers policing that, then that innovator may have that idea but may not think it's worth it. Why take on the big investment? Why take on the risk if ultimately you're just going to get locked out of the market?

Preet Bharara: And at the FTC, I know you would frequently talk to startups and founders. You would hear them grappling with this time after time. You would hear from founders creating various types of apps that needed to get access to the App Store on Apple or Google's devices. They would have to navigate all sorts of bureaucracy and controversy. Sometimes there would be a conflict of interest if one of these companies had their own app that they wanted to favor. That would create all sorts of problems for these innovators trying to get access to market.

Lina Khan: Similarly, this is something we see in merger enforcement. One of the mergers the FTC blocked was Sanofi's attempted acquisition of Maize. Sanofi is a major player in the pharmaceutical market, and they had been given an FDA-granted monopoly on treatments for Pompe disease. This is a really awful disease where your muscles degenerate. It exhibits in young kids and you need pretty expensive medicines. Maize was coming into the market with an alternative treatment for this same disease. Whereas Sanofi's treatment required going and getting hooked up to an IV biweekly, Maize's treatment could have been taken orally and could have really been a game changer. This was really good, healthy competition. This is the kind of innovation we expect to see in our markets. Sanofi was trying to buy out Maize. We thought that was anti-competitive, that it clearly violated the antitrust laws because here you had the existing monopolist that had not innovated this treatment, and they were trying to buy out the company that had. It would not really have the same incentive because it would risk cannibalizing its own sales. Maybe it would slow down this alternative treatment or bring it out in a way that was much more favorable to it, but not to its patients. That type of active policing of anti-competitive conduct and anti-competitive mergers is absolutely critical to make sure that the people who have an incentive to innovate actually have access to markets. Ultimately, it's the public that gets to benefit from that innovation.

Preet Bharara: Yeah, I guess all I'm saying is, maybe this is a silly point, and maybe it's not a good point, that monopolists are not immortal even in the absence of enforcement. Is that fair? Are there natural reasons in the life cycle of a company that becomes a monopolist, not enforcement based, but natural, ultimately over time, competitive reasons why a monopolist falls off their pedestal? If that's so, maybe that's an argument that the Chicago folks make, that ultimately the market in certain circumstances, not every circumstance, is able to right itself. Otherwise, you would predict that once you achieve monopoly power, you persist in that monopoly power position in eternity. But that doesn't happen. Why doesn't that happen?

Lina Khan: Well, this is exactly the argument that the Chicago people made. They basically said that monopolies are unlikely to ever be able to fully exercise monopoly power because there's so much competition in markets. But even if they do, once they start exploiting that monopoly power, they are ultimately going to be disciplined in the market because you are going to see new entrants that come in. You're going to see new innovations that displace them. There have been reams of evidence over the last few decades that have shown that's not actually how markets work in reality. Oftentimes there are meaningful barriers to entry in those markets, some of which are controlled by the existing monopolist. The other thing is, even if after 20 years of incumbency a monopolist could ultimately lose its throne because there is some innovator in the market, that could have happened much sooner if the monopolist's illegal tactics were checked. As enforcers, we have an obligation to ensure that the public is not being denied those benefits of a free enterprise system of competitive markets while we sit on the sidelines and see if maybe it'll be a few decades and this monopolist will naturally meet its end.

Preet Bharara: Is there such a thing as a perfectly lawfully operating and lawfully achievable monopoly status? We're talking a lot about companies engaging in monopolistic behavior and predatory pricing. Maybe there's not an example of this because naturally people engage in conduct that can be characterized that way. But are there or have there been examples of companies that just got to that status by doing things well and better than everybody else and innovating better than everybody else and not running afoul either legally or in principle of anti-monopolistic thinking?

Lina Khan: Well, you do see companies that enjoy monopoly status because, for example, they've been given a license from the government. You see this in the pharma space routinely. You see this in areas like utilities where firms are given certain privileges or certain exemptions or certain licenses to operate. You see a very active market-making role by the government in that instance. Those are monopolies that are clearly sanctioned, and oftentimes that comes with other obligations or other prohibitions on their behavior that is supposed to act as the check that competition will not be serving in that instance.

Preet Bharara: I'm just – look, this is not my main expertise as a lawyer – but I just wonder if the theory is that a company can't really attain and persist in being a monopoly absent some conferral of a benefit or a license by the government or absent some nefarious conduct because the market will always topple that kind of monopolist.

Lina Khan: Maybe that's an interesting question or thought experiment. As an enforcer, that's not something you need to have a view on because the law doesn't say being a monopoly itself is illegal. It's only when it's attached with certain types of monopolistic behaviors that the law kicks in.

Preet Bharara: Obviously your tenure was not without controversy. I mentioned a set of strange bedfellows that was not only supportive of your work but supportive of you. As always happens – I used to be an enforcer of a different type – the one kind of work that we didn't do in the Southern District of New York and that we deferred to Main Justice on, even in our own district, was antitrust enforcement. Is there a particular criticism or category of criticism that you took more seriously than others, even if you disagreed with it?

Lina Khan: Well, I think one charge that would sometimes get levied at the FTC was that the FTC was somehow categorically antagonistic to corporate America, or somehow it was anti-business. That was really surprising to me because oftentimes some of the biggest supporters of the FTC's antitrust work was the business community. In D.C., there can be this tendency to view business as a monolith, not recognizing that the Fortune 100 or even the Fortune 500 are not representative of the full panoply of businesses in America. We would hear a lot of concerns from independent grocers or independent pharmacists or startups and founders – people who make up the majority of businesses in America – about how they too often felt like they were not facing a level playing field, that they were really struggling to compete because of the potentially predatory or coercive or abusive tactics of some of the existing incumbents. That was a disconnect that I worried sometimes was not appreciated, especially in how the FTC was discussed or portrayed. That strong support among businesses, both for our antitrust work and for our consumer protection work, was real. One example here is the FTC's work taking on Made in USA fraud. Made in USA fraud had been rampant. This was an area where the FTC had been keeping some of its powder dry, really not using the full set of tools that it had to disincentivize companies from lying about their products being made in America. This really hurt consumers who were being deceived about where their products were being made. But it also really hurt honest businesses. If you're a business that wants to produce in America, you're investing in a factory here, you're taking on the additional cost of doing that. If you're then ultimately just going to lose business to a company that's shipping stuff from China or somewhere else and then just slapping a Made in USA label, that's unfair. That was just one example of how the FTC's work was really about creating a level playing field in ways that benefited consumers and workers, but also honest businesses.

Preet Bharara: Do you have a view of the president's firing of the two democratically appointed commissioners and the legality of that and how that will play out?

Lina Khan: Well, the president's firing of Commissioner Bedoya and Commissioner Slaughter is directly and clearly in contravention of prevailing Supreme Court precedent. In Humphrey's Executor, you had FDR fire an FTC commissioner. Ultimately, that FTC commissioner sued and said, "The FTC Act says we can only be fired for malfeasance, inefficiency, neglect of duty. None of those things is being charged here." Ultimately, the Supreme Court held that those removal protections in the FTC Act were lawful, were legal. Since then, the Supreme Court has had several opportunities to revisit Humphrey's Executor, including cases implicating the CFPB and their removal protections of the CFPB director, which ultimately were changed. The court has stuck by Humphrey's Executor, no matter what kind of dicta they may have been in various types of footnotes. The law of the land is Humphrey's Executor, and the administration's decision to fire these two commissioners is clearly at odds with that. I know they have filed suit. They are contesting their firing. There are also some parallel cases involving the firing of NLRB commissioners. We're going to have to see how this shakes out. But there's no debate around the fact that Humphrey's Executor, the law of the land, says one thing and the administration has done another.

Preet Bharara: But do you believe that will remain the law of the land?

Lina Khan: I don't know. Clearly this is the Supreme Court. Roe v. Wade was the law of the land for a while, too. The Supreme Court is very comfortable revisiting precedent and throwing it out the window, even a 90-year-old precedent in this sort of way. So I don't know what's going to happen. I do think there are strong arguments for why these removal protections are not only good but lawful, but we'll have to see what happens.

Preet Bharara: What do you think of the new chair and how do you think that this reconstituted, partly constituted FTC will handle issues and what their priorities will be for the next three and a half years?

Lina Khan: Well, the current FTC, as well as the antitrust division, has continued with several of the initiatives that we had pursued on the antitrust front. We had promulgated new merger guidelines, for example, that laid out a more rigorous approach to viewing whether a merger would violate the Clayton Act. They had kept those on the books despite a lot of speculation from the dealmaking community that those would be rescinded right away. We have major lawsuits against not just Amazon but also Facebook. There's a current trial underway. There was a lot of speculation as well as reporting that Mark Zuckerberg was trying to convince the administration to pull the suit, to settle the suit on the eve of trial. They did not do that. They are still litigating that case. So we are seeing a whole bunch of continuity. I do worry about the consumer protection side. That is where we have seen some real retrenchment. I do worry that we're going to see people suffer all sorts of unfair, deceptive practices if this FTC becomes much less vigilant. For example, they just decided to delay a rule that was set to go into effect last week. This is a rule that would require that companies make it as easy to cancel a subscription as it is to sign up for one, taking issue with a lot of these unfair and deceptive subscription traps that have proliferated. We had finalized this rule last October. The rule was set to go into effect last week, and then they just announced on the eve of it that they were going to delay it by another two months. I don't know what's going on there, and we'll have to monitor closely to make sure we don't see further retrenchment there, too.

Preet Bharara: What's next for you?

Lina Khan: Well, I'm figuring out what is the next phase of a lot of this work and movement. The speed with which a lot of this work went from reformist ideas on the outside to being given the opportunity to govern was breathtakingly fast. There is actually still a lot of work and infrastructure to be built. One thing that I'm really excited about is just the enormous amount of energy and enthusiasm among young people for this work. I get dozens of emails weekly from even high schoolers who say they want to be a trust buster and are studying Ida Tarbell, let alone from college students and law students who really want to enter the arena and make sure we're using the laws to take on illegal monopolies and check unfair methods of competition. I'm going to be figuring out how to make sure we can fully harness and direct that energy so that if there is another opportunity, we have a real standing army to be ready to come in and help with that.

Preet Bharara: You used the word "arena." Was that a deliberate callback to Teddy Roosevelt?

Lina Khan: Not deliberately, but maybe so, consciously.

Preet Bharara: Oh my gosh, this is on your brain. Teddy Roosevelt is on your brain. You've been very generous with your time, Lina Khan. It's been a real pleasure to speak with you. Thanks so much.

Lina Khan: Thanks for having me.

Preet Bharara: My conversation with Lina Khan continues for members of the Cafe Insider community. In the bonus for insiders, we discuss how companies grow into monopolies. "In order to be able to exploit your monopoly power in mode two, you need to figure out how to keep out competitors." To try out the membership, head to cafe.com/insider. Again, that's cafe.com/insider. Stay tuned. After the break, I'll answer your questions about the proper qualifications to become Surgeon General, Kid Rock's Restaurant, and Bruce Springsteen.

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Preet Bharara: Now let's get to your questions. This question comes in a tweet from Lillian who asks, "How can someone be nominated to be Surgeon General with no medical license?" And the record will reflect that the question has three question marks. Thanks for the question, Lillian. You're referring, of course, to the controversial appointment of Dr. Casey Means to be Surgeon General. After Means' appointment was announced, the internet, as it is wont to do, exploded with articles dissecting whether she is eligible for the role. So it's a good question. But first, let's take a look at what the Surgeon General actually does. Most of us know the Surgeon General from health warnings on products like cigarettes, but the position encompasses far more than that, though not surgery. The Surgeon General technically serves as the operational leader of what's called the U.S. Public Health Service Commissioned Corps, one of America's eight uniformed services. Its primary mission is to protect, promote, and advance public health and safety across the country. Their responsibilities include providing health care to medically underserved communities, preventing and controlling diseases, and ensuring the safety and effectiveness of drugs and medical devices, just to name a few. In prior episodes of Stay Tuned, we've discussed appointed positions like the Attorney General and Supreme Court Justice. Under the laws that authorize those appointments, there are no specific professional qualifications required, which may seem odd. But the Surgeon General is different. There, the law actually outlines the qualifications an appointee must meet. The law states, quote, "The Surgeon General shall be appointed from individuals who, one, are members of the regular Corps, and two, have specialized training or significant experience in public health programs," end quote. So to go to your actual question, does Dr. Casey Means meet those qualifications? Let's see. Dr. Means arguably has an unconventional medical background. According to NPR, she earned her medical degree from Stanford University, but left her surgical residency partway through, citing, among other things, her disillusionment with mainstream medicine. She went on to open a functional medicine practice, a form of alternative medicine, and later co-founded a company called Levels, which focuses on continuous glucose monitoring. So although she didn't complete her residency, she did complete enough postgraduate training to qualify for a medical license in the state of Oregon. However, according to public records, that license is at this moment, while her nomination is pending, inactive. So does Dr. Means meet the first legal requirement, being a member of the regular Corps, the formal name for the Public Health Service Commission Corps, which the Surgeon General is supposed to oversee? In the past, some Surgeon General appointees were not already members of the Corps, but they used a workaround. They were first appointed to the Corps just before being named Surgeon General. But that loophole may not work in Dr. Means' case. To be appointed to the regular Corps, and to even utilize the loophole, you need a valid medical license. And Dr. Means' license in Oregon, as I mentioned, is currently inactive and needs to be renewed, which can sometimes take a while. And does she meet the second requirement, requiring specialized training or significant experience in public health programs? She does have a medical degree, and she does have experience running a functional medicine practice. But is that enough? I'm a lawyer, not a physician. But some physicians, including former Surgeons General, have said it's not enough. So based on the law and past precedent, unless Dr. Means can demonstrate sufficient public health experience and probably quickly renew her medical license, she probably doesn't meet the qualifications to serve as Surgeon General. But will the Trump White House try to push the nomination through anyway? That remains to be seen. Stay tuned.

This question comes in an email from Rick, who writes, "Last weekend, Kid Rock temporarily shut down his Nashville steakhouse because many of his workers are undocumented and didn't show up for work because they were scared of ICE raids. But why is law enforcement targeting the undocumented workers and not their employers? Shouldn't they be held accountable? Isn't it illegal to hire undocumented workers?" That's a great question, Rick. I want to state at the outset that Nashville has become one of my favorite cities in the country. And I've actually been, briefly, to Kid Rock's restaurant. In any event, I believe you're referring to a recent report in the Nashville Scene about a wave of temporary restaurant closures across that city due to fears of ICE raids. One of the most notable was Kid Rock's restaurant, which is, of course, called Kid Rock's Big Ass Honky Tonk Rock and Roll Steakhouse. It reportedly shut down last Saturday, typically its busiest night, because many of its workers who were undocumented stayed home out of fear of being detained. Interestingly, the article makes no mention of ICE investigating the owners or management of the restaurants for hiring undocumented workers in the first place, which is probably what sparked your question. So Rick, if you take a look across presidential administrations, different presidents have approached illegal immigration enforcement in different ways. Some have focused primarily on punishing undocumented immigrants themselves, believing it would deter others from entering illegally. Others have emphasized targeting employers, arguing that holding businesses accountable for hiring undocumented workers would be more effective and also be a deterrent, because if there are no jobs available, immigrants would lose the main incentive to come here illegally. George W. Bush's administration focused primarily on the immigrants, conducting numerous workplace raids aimed at arresting and deporting undocumented workers. The Obama administration took a very different approach. Obama's team moved away from workplace raids, instead opting for what they called "paper raids," which were audits of employer paperwork to verify compliance with employment eligibility laws. Under Obama, the number of physical workplace raids dropped sharply, while paperwork audits increased significantly. These audits resulted in consequences for employers. One paperwork raid led to a $1 million fine against Abercrombie & Fitch for failing to properly verify their employees' eligibility. The Biden administration continued in the same vein. Donald Trump's two administrations, on the other hand, took George W. Bush's policy of workplace raids and turned them up to 11. Trump has focused primarily on immigrant workers rather than employers, often conducting highly publicized, attention-grabbing operations, like the ones we've recently seen making headlines, including in the Nashville Scene. So Rick, to answer your original question, yes, the law clearly allows for punishing employers who hire undocumented workers, and that's been done in the past. However, I doubt that this administration plans to aggressively pursue those penalties, and I think it's even less likely against Kid Rock, given his vocal support of Donald Trump. By the way, what did Kid Rock have to say about this story? Kid Rock himself responded by saying, quote, "I 100% support getting illegal criminals out of our country, no matter where they are," end quote. So one might be able to say to Kid Rock, "Listen, it was your restaurant's management who chose to hire those, quote unquote, illegal criminals to work in your kitchen. It might have broken the law when it did so." And you could also ask him, "When will you hold those people accountable, since the restaurant has your name on it?"

This question comes in a tweet from Hannah, who asks, "Can you please break down Trump's latest rant about Bruce Springsteen? #AskPreet." Well, Hannah, based on the timing of your tweet – because there have been a couple of things that Trump has said about Bruce Springsteen – but based on the timing of your tweet, I assume you're referring to Trump's post on Truth Social, where he called Bruce Springsteen things like "highly overrated," "a pushy, obnoxious jerk," and "a dried-out prune of a rocker." My response is this: Who are you calling a dried-out prune, you f***ing f***er? Let me say also, compared to Bruce Springsteen, you're a f***er. And finally, f***er. Now, more seriously than childish name-calling, after you tweeted this, Hannah, Donald Trump put out a post that says he wants to order a major investigation of Bruce Springsteen for reasons that don't make much sense. If you want to hear a substantive conversation about that threat, that crazy threat by the President of the United States against the Boss, Joyce Vance and I did a live stream for Substack, which you can find for free on Substack or on our YouTube page.

Well, that's it for this episode of Stay Tuned. Thanks again to my guest, Lina Khan. If you like what we do, rate and review the show on Apple Podcasts or wherever you listen. Every positive review helps new listeners find the show. Send me your questions about news, politics, and justice. Tweet them to me at Preet Bharara with the hashtag #AskPreet. You can also now reach me on Blue Sky, or you can call and leave me a message at 833-997-7338. That's 833-99-PREET. Or you can send an email to [email protected]. Stay Tuned is presented by CAFE and the Vox Media Podcast Network. The executive producer is Tamara Sepper. The technical director is David Tattashore. The deputy editor is Celine Rohr. The editorial producers are Noah Azulay and Jake Kaplan. The associate producer is Claudia Hernandez. And the CAFE team is Matthew Billy, Nat Wiener, and Leanna Greenway. Our music is by Andrew Dost. I'm your host, Preet Bharara. As always, stay tuned.