Kamala Faces Her First Political Test: Defend Lina Khan, or Buckle to Corporate Power

Billionaires have launched a public campaign to axe their FTC adversary

Photo by Brendan Smialowski/AFP via Getty.

The first domestic policy contest over the direction of the Kamala Harris campaign has broken into full view, with major Democratic donors pressing the vice president to break with the Biden administration’s popular and populist antitrust policy by ousting Lina Khan from her post as chair of the Federal Trade Commission. “She’s a dope,” said Barry Diller, chair of IAC, a multibillion dollar global media and web company. 

Diller, who added that he would lobby Harris to dump Khan, made the comments on CNBC, with Paris’s Arc de Triomphe serving as a fitting backdrop for the restorationist push. His shove against Khan came a day after LinkedIn billionaire Reid Hoffman, who sits on the board of Microsoft, similarly urged Harris to fire Khan in a television interview. He did not mention, nor did he need to, that Microsoft has been in Khan’s crosshairs for anti-competitive acquisitions. A New York Times article about Harris earlier this week, headlined ominously, “Kamala Harris Works to Build Bridges to the Business World,” included an unnamed donor boasting that the veep “has expressed skepticism of Ms. Khan’s expansive view of antitrust powers.”

Hoffman’s intervention is unusually brazen. As The Lever reported, the FTC is engaged in multiple actions that directly impact Hoffman companies while Hoffman is funneling millions to a presidential campaign and its super PAC while also demanding the firing of a public official taking his companies to court.

The FTC also recently scrutinized a proposed merger between Microsoft and the firm Inflection AI, which was co-founded in 2022 and quickly flipped by Hoffman and other investors. Khan also recently slagged Microsoft’s monopolistic dominance in connection with the firm’s computer outage that stranded thousands of travelers at airports.

Diller told Bloomberg he plans to max out to the Harris campaign. CNBC’s Andrew Ross Sorkin, in response to Diller’s criticism, said he was surprised to hear it, given Diller’s own criticism of monopolies such as Google. Diller responded by saying Khan takes it too far. (The FTC scrutinizes roughly 1 percent of mergers and takes a hard look at far fewer than that.)

Update: On July 30, CNN reported that the FTC has multiple investigations into IAC and Diller walked back his comment that Khan is a “dope” to CNN. "She's smart but I believe overreaches in disrupting sensible business combinations," Diller told CNN.

A Harris campaign aide brushed off the question to CNN, saying only there had been “no policy discussions” about replacing Khan, complaining that Harris “has been the presumptive nominee for three days.” And a source described only as a Democratic operative by the FT told the paper the idea that Khan would be replaced is “wish-casting”: “Do you think that Harris is going to toss out a 35-year-old brown woman immigrant progressive icon?” A campaign spokesperson referred questions on the matter to the White House office of the vice president, which declined to comment. 

Declining to comment in the face of Hoffman and Diller’s attack, or noting that no discussion has been had, is itself a strategic decision on the part of the Harris campaign to not defend Khan, though multiple defenders of Harris told Drop Site News that the campaign being in such early stages means that no inferences can yet be drawn. 

Hoffman’s over-the-top intervention, coupled with Diller’s public comment, raises the stakes and makes the lack of reassurance from the Harris campaign on the question of Khan that much louder. Leaving open the question of Khan’s fate keeps open the spigot of money from her adversaries, but undermines the claim that she shares the current administration’s appetite for a fight with corporate America. 

Khan and Rohit Chopra, director of the Consumer Financial Protection Bureau, have been the bane of large companies who profit by exploiting market share to jack up prices on consumers and implement obscure fees, while they have also produced some of the policy wins most trumpeted by both the Biden administration and the Harris campaign. Harris has recently celebrated moves made by Chopra on medical debt and Khan on non-compete agreements. 

While monopolists have dubbed Khan “anti-business,” her skeptical approach to corporate consolidation has coincided with a booming stock market and finds a broad base of support among companies looking to compete against Goliaths, or firms tired of being ripped off by them due to a lack of competition. 

Initial public offerings, a sign of new business success and a key way for investors to cash out, are forecast to rise in 2025, undermining Diller’s argument that the FTC has been a “wet blanket” on corporate activity. FTC blocked a merger, for instance, between Nvidia and Arm, which led to a massive IPO by Arm and a surging valuation for Nvidia. Calling that a “war on business,” as Hoffman did, isn’t serious. 

Organized labor has been an outspoken supporter of Khan. Both Harris and Khan spoke at the annual American Federation of Teachers conference this week. “Americans didn’t overthrow a monarch to be ruled by technology tyrants,” Khan told the audience. 

Harris’s tightest relationship to organized labor is with the Service Employees International Union, which weighed in on the controversy Friday. “LinkedIn founder Reid Hoffman donated $7 million to the Harris campaign—then demanded she fire FTC Chair Lina Khan, who fights for workers and takes on corporate giants. Mr. Hoffman, that's not how democracy works, sir,” the SEIU said on Twitter. 

Khan was appointed FTC after an internal pressure campaign from Sen. Elizabeth Warren, D-Mass., who also urged former federal trade commissioner Chopra be named director of the CFPB. Antitrust has not been a major cause of Sen. Bernie Sanders, I-Vermont, but he slammed Hoffman for his attack on Khan. Her term expires in September, but she can serve indefinitely if no new chair is named. Sanders has withheld his endorsement until he wins assurances from Harris she will run a campaign on behalf of the working class, he has said.

A spokesperson for Khan made it clear she is eager to serve under a Harris administration, even as her record has been praised by Republican vice presidential candidate J.D. Vance. “Chair Khan is honored to serve in the Biden Harris administration, where she has protected consumers, workers, and entrepreneurs from illegal conduct and corporate abuse,” said Doug Farrar, an FTC spokesperson. “From banning junk fees and noncompete agreements to lowering prices for essentials like groceries, gas, and health care, Chair Khan has been a leader on the Biden Harris team’s fight to help working families across the country.”