Harris juggles Silicon Valley, progressives on Lina Khan issue

“There are a number of factors that can influence the vice president’s thinking,” said William Kovacic, a former FTC chairman and current law professor at George Washington University. “One of them is what kind of policies do I want to pursue.”

At this point, it doesn’t seem like anyone is really sure of the answer.

Since President Joe Biden nominated Khan to lead the commission in June 2021, she has embraced an ambitious antitrust agenda, using seemingly forgotten federal laws to reign in monopoly power and corporate mergers. Her actions have drawn the ire of some Silicon Valley bigwigs, including billionaire Democratic megadonor Reid Hoffman. At the same time, economic progressives like Elizabeth Warren have praised Khan’s positions. Harris finds herself caught between the two camps, struggling to figure out how to be both a pro-business candidate and sufficiently progressive.

Hoffman gained attention on CNN in late July when he said Khan was “waging war on corporate America” and would prefer Harris replace her. Barry Diller, a media mogul, called Khan a “moron” and said he would advocate for her impeachment if Harris won in November.

Khan’s term as chair ends in September, though FTC rules state that she will remain in office until the president nominates and the Senate confirms someone else. The confirmation process is complex and lengthy, according to Kovacic, who has experienced it firsthand. Although Biden will be in office at the end of his term, Kovacic anticipates he will take Harris’ wishes into account when deciding who to replace Khan. Presidents are not required to nominate a new chair within a certain time frame.

“My hunch would be that, as is the general protocol, the president in these circumstances would respect the prerogatives of the vice president,” Kovacic told Business Insider. “Another approach the president could take would be to say, ‘I’m not going to fill the position. I’m not going to act on this because the FTC chairwoman is going to be chairwoman until her successor is qualified, so I’m not going to act. And Kamala, it’s all yours after you take the oath of office.’”

As with most of her specific policy positions, Harris has remained relatively tight-lipped about her plans for Khan and has so far avoided upsetting too many people. Kovacic anticipates she may try to move more toward the center on mergers, but will avoid moderating the administration’s stance on monopolization.

Asked for comment for this article, Harris’ campaign team told Business Insider that Harris plans to propose a federal ban on corporate price gouging and give the FTC the power to investigate companies that break the rules during a speech on Friday. They did not comment on whether she would replace Khan as FTC chair.

“In general, at this point, the candidate would have had to make more specific policy proposals, because he would have had to do that to gain support from various factions within his party’s coalition,” said Sanford Gordon, chairman of the politics department at New York University. “Harris didn’t really have to do that.”

Her vagueness probably comes from the awkwardness of her positioning: she is close to Silicon Valley while trying to appeal to progressives. Harris raises money from venture capitalists, has named her brother-in-law and Uber executive as a campaign adviser, and is from the San Francisco Bay Area.

While some on Wall Street complain about Khan, members of the business and tech communities hope Harris will be open to restoring a more relaxed relationship between the FTC and big business. Yet that same belief is a source of concern for economic progressives, whom Kovacic called the “Warren faction,” referring to the Massachusetts senator.

Compared to Biden, Harris has more freedom to soften the FTC’s regulatory stance, Kovacic said. In 2020, the president promised Warren significant decision-making power over economic regulatory agency appointments, and he has stuck to his word.

“That was Biden’s promise. That’s not Harris’ promise,” Kovacic said, noting that Harris must assess her relationship with the Warren wing of the party. “How loyal does she feel to them? How much does she feel she has to cater to their tastes in order to maintain a harmonious political relationship?”

A coalition of progressive and consumer advocacy groups sent a letter to Harris’ campaign in response to Hoffman and Diller’s comments and urged her to keep Khan.

Hoffman and Diller have since toned down their positions, but Harris still appears caught between the risk of alienating donors and inflaming economic progressives in her party.

In a lengthy message on X, Hoffman said he had never spoken to Harris about Khan and would support her campaign regardless of her FTC appointments. Diller qualified his comments to Bloomberg, saying: “I said she was an idiot. She’s not. She’s smart, but I think she’s going too far in disrupting sensible business combinations.”

Harris will likely continue to try to find some almost invisible middle ground between the two wings of her party by avoiding specific issues, Gordon said.

“I don’t think (Hoffman) is going to put her on the record, asking her to make any commitments,” Gordon said. “I think that would be extremely politically awkward for her.”

Despite Hoffman’s public comments, it’s still unclear what Silicon Valley as a whole thinks. The world of venture capitalists and tech billionaires has suffered from partisan divisions this election cycle, and it appears that opinions are also diverging among Democrats in the region. Kovacic said some tech companies are likely endorsing Khan precisely because she targets their enemies.

“We know that Reid Hoffman has been in the headlines, but we also know from our own work that there is a diversity of opinion in Silicon Valley and among venture capitalists and entrepreneurs who want to encourage innovation and fairness in the industry,” said Taylor Jo Isenberg, executive director of the Economic Security Project, a progressive nonprofit focused on economic issues and antitrust action.

“It is tempting to m“There’s a sort of progressive wing of the Democratic coalition, and then there are the donors, and those donors come from those kinds of people, like venture capitalists with ties to Silicon Valley,” Gordon said. “However, as with many regulatory issues and particularly antitrust issues, it’s not particularly clear to me that there aren’t divisions within the corporations and within venture capital.”

To complicate matters further for Harris, this issue is one of the few areas where the two parties are still unclear. Sen. J.D. Vance, the Republican vice presidential nominee who himself has ties to Silicon Valley, praised Khan, who won the bipartisan endorsement by a 69-28 vote.

As Harris struggles to define herself as a candidate and be specific enough in her policy proposals, the Khan issue looms as a particularly sensitive one, and it remains unclear how she will approach this thorny issue on the campaign trail.

“It’s possible to pay attention to the diversity of voices that are being expressed on this issue,” Isenberg said. “But election campaigns are hard to nuance.”