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InicioTechnology NewsLena Khan vs. Jeff Bezos: This is Big Tech's real cage match

Lena Khan vs. Jeff Bezos: This is Big Tech’s real cage match

jeff bezos Made his fortune with a really big idea: What if a retailer did everything possible to make customers happy?

His powerfully nurtured creation, Amazon, sold as many goods as possible as cheaply as possible and delivered them as quickly as possible. The result is that out of every $100 spent online in the United States, $40 goes to Amazon and Mr. Bezos is worth $150 billion.

Leena Khan Built its reputation with a very different idea: What if making the customer happy wasn’t enough?

He argued in 95 pages that prices are low Amazon check Yale Law Journal exposes behavior that stifles competition and undermines society. Published in 2017 when she was still a law student, it is already one of the most consequential academic papers of modern times.

These two very different philosophies, each fueled by an outsider unafraid to take risks, eventually lead to their long-awaited clash. Federal Trade Commission, now Powered by Ms Khan Following his astonishing rise from policy wink to policy player on Tuesday filed a lawsuit against amazon In federal court in Seattle. The lawsuit accused Amazon of being a monopolist that used unfair and illegal tactics to maintain its power. Amazon said the lawsuit was “wrong on facts and law.”

Mr Bezos, 59, is no longer in charge of Amazon on a daily basis. He handed over the reins of the Chief Executive andy jessie Two years ago. But make no mistake: Mr. Bezos is the executive chairman of Amazon and owns more of the company than anyone else. It is her innovations over 20 years that are challenging Ms Khan. He is cited repeatedly in the FTC complaint.

Silicon Valley spent the summer discussing the possibility of Elon Musk and Mark Zuckerberg literally fighting each other, Despite the chances of this actually happening being almost zero. However, Ms Khan and Mr Bezos are facing the real thing – a court confrontation that could have implications far beyond Amazon’s 1.5 million employees, 300 million customers and $1.3 trillion valuation.

If Ms Khan’s arguments hold, the competitive landscape for tech companies will look very different going forward. Such an impact occurs in cases of major antitrust. The government achieved only a confused victory in this Microsoft’s pursuit 25 years ago. Yet it still had enough power to derail and weaken a once-promising software empire that allowed 1,000 start-ups, including Amazon, to flourish.

It is largely due to Ms Khan, 34, that imposing major changes on the retailer is even conceivable. After interviewing him and the people around him for a few days A profile in 2018, I thought she understood Mr. Bezos because she was just like him. Very few people are able to see possibilities unseen by others and work on them successfully for years, and involve others in it too. But these were qualities they both shared.

“How does change occur in history?” asked Khan’s early collaborator Stacey Mitchell, who is co-executive director Local Self Reliance Institute, a research and advocacy group that promotes local power to fight corporations. “Lena has captured the imagination in a way that has enabled the reform movement to engage a broad group of people.”

Ms Khan and Mr Bezos were similar even in their silence. For years, every article about Amazon has featured “Amazon declined to comment”, another form of control. Similarly, Ms Khan also never voluntarily handed over a piece of personal data to me, even if it was irrelevant.

Amazon and the FTC declined to comment for this article.

The unlikely saga of Mr. Bezos long ago entered the realm of myth. He spent his childhood summers on his grandfather’s West Texas farm. He wanted to become a theoretical physicist but became a Wall Street analyst instead. He had no retail sales background. He was interested in ideas, not things.

Amazon wasn’t the first online store – it wasn’t even the first online bookstore. It foolishly spent a lot of money and mercilessly fired many employees. The entire enterprise almost failed in the dot-com crash of the early 2000s. But the media was fascinated by it, customers loved it, and it allowed Mr. Bezos to move forward.

A former Amazon engineer once memorably described Mr. Bezos as “the maker.”Simple control freaks look like stoner hippies, A company that puts “attendance reminder” signs in bathroom stalls, tells warehouse workers they will be “reviewed for termination” if they mess up keeping their time, is a company with extreme ambition.

Reformers are just like entrepreneurs: they too are fighting against reality, trying to make room for their vision of how things could be better. Ms Khan’s journey to face Amazon in federal court is in some ways an even less likely story than Mr Bezos’s. And so, like Mr. Bezos in Amazon’s early years, she has become a symbol of fascination.

The daughter of Pakistani immigrants via London, Ms Khan had the natural instincts of a good journalist. At Williams College, where she worked on the school paper, a friend described her as being particularly interested in understanding power, especially the way it conceals itself to gain more power. He was in his late 20s when he wrote his paper on Amazon — about the age Mr. Bezos was when he left his Wall Street job to drive west to Seattle with his wife, Mackenzie Scott, and his What was fate?

Antitrust laws were the traditional tool used to rein in companies that became too powerful. Antitrust played a major role in the 1890s, ushering in the Progressive Era, and again in the 1930s under the New Deal. But by the early 1980s, distrust was at low levels. The so-called consumer welfare standard reduces antitrust to one issue: the price customers pay. Had the prices been lower, there would have been no problem.

The Microsoft case was important and influential, but it was largely an aberration. In the early years of this century, the prevailing laissez-faire philosophy allowed not only Amazon but other start-ups to grow much faster than they otherwise would have. Facebook And Google didn’t charge users, and they were allowed to gain dominance. six out of eight Most Valuable American Companies If you consider Tesla as a technology firm then there are seven technology companies.

The government was slow; Silicon Valley was fast. The market will decide the fate of corporate empires. Until 2015, when Ms. Khan was entering law school, hardly anyone was interested in promoting competition through government intervention. Criminal justice reform, environmental law, immigration – these were the topics that attracted students. He chose disbelief, practically alone.

Anyone with radical views faces so many obstacles in Washington that it’s no wonder it happens so rarely. when ms khan was Nominated to chair FTC In 2021, Amazon complained that it was biased.

“She has argued on numerous occasions that Amazon is guilty of antitrust violations and should be broken up,” the company wrote in a 25-page petition seeking to recuse Ms. Khan from any decision on it.

The logic: If you are a critic of a company, you should not be allowed anywhere near it as a regulator. Ms Khan survived this challenge but this was only the first challenge. It requires relentless determination to go against the live and let live attitude of many bureaucrats.

Hostile media is another obstacle. Dozens of Wall Street Journal editorials, opinion essays and letters to the editor Ms Khan has been criticized over the past two years. They Called on Congress to investigate himargued that she does not understand monopolies were really good and accused him to let people die By blocking a pharmaceutical company merger.

Then there is advocacy. Amazon spent $10 million in the first half of this year, five times the 2013 level. got money from this in 2022 for hundreds of trade associations and nonprofits, some of which issue pro-Amazon reports without publicizing their funding. Under its “know your enemy” philosophy, Amazon is also working with Ms. Khan’s former FTC colleagues.

Going to court provides some relief. Well steeped in decades of consumer welfare standards, the judge is not particularly encouraging of Ms Khan’s arguments. Facebook’s parent company Meta and the recent cases against it Microsoft Have faltered. The Amazon case involves aspects of the consumer welfare standard, which could make it more attractive in court.

This is a tremendous amount of opposition. Even some of her ideological enemies are impressed that Ms Khan is still wielding so much influence. Using intelligence, she is starting a conversation about how companies are allowed to behave.

“Five years ago, if you challenged the consumer welfare standard, you would have been laughed at,” said Konstantin Medvedovsky, a former antitrust lawyer who is now a hedge fund analyst. “Now serious people make these arguments at major conferences and they are taken seriously. This is Lena’s victory.”

Mr Medvedovsky is not very sympathetic to Ms Khan’s enforcement agenda. He was one of the critics who derided the reform movement as a “hipster” mistrust. Still, he said, “It’s hard not to be somewhat in awe.”

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