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Published Nov 16, 2023

Lina Khan Is Sending a Message to the Private Equity Industry

Federal Trade Commission Chair Lina Khan addresses the challenges of enforcing antitrust laws against private equity, especially within healthcare, and redefines the agency's focus on fair competition and labor market protection, representing a significant regulatory shift.
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Episode Highlights

  • Competition Shift

    discusses the evolving perspective on competition within the context of antitrust laws. She emphasizes that antitrust is about setting fair market rules, distinguishing between lawful and unlawful competition methods, such as investing in facilities versus predatory practices 1. This approach challenges the longstanding belief that markets self-correct, a notion that has been questioned by the Biden administration, which argues that the lack of competition has led to higher prices and less innovation 2.

    Antitrust and competition policy is really about setting the rules of the market.

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    Khan argues for a reinvigoration of antitrust enforcement to address these issues and promote fair competition.

       

    Antitrust History

    The historical context of antitrust laws reveals their adaptability to changing markets. notes that foundational statutes like the Sherman Antitrust Act were designed to be flexible, allowing enforcers to address new monopolistic tactics as they arise 3. This adaptability is crucial as the FTC tackles modern challenges, such as private equity's influence in healthcare, under Khan's leadership 4.

    Our foundational statutes are over 100 years old, right? The Sherman Antitrust act was passed in 1890.

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    The FTC's approach under Khan is seen as a return to the core principles of antitrust, ensuring they remain relevant in today's economy.

       

    Labor Focus

    Antitrust laws are increasingly intersecting with labor markets, addressing issues like monopsony power and non-compete clauses. highlights how concentrated labor markets give employers undue power over workers, necessitating antitrust interventions 5. The FTC's recent actions against non-compete clauses reflect this focus, aiming to enhance worker mobility and competition 6.

    The antitrust laws protect everybody. They protect patients and consumers, but they're also supposed to protect workers.

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    Khan's approach represents a shift towards considering labor impacts in antitrust enforcement, a move supported by recent court decisions 7.

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