Harris caught in fight between donors, progressives over Big Tech power

Vice President Harris is in the middle of a fight between major Democratic donors and progressive activists who want to rein in Big Tech companies whose business practices have become a political lightning rod.

Big donors are pressuring Harris to replace Federal Trade Commission (FTC) Chair Lina Khan, who has led the Biden administration’s antitrust agenda.

But progressives warn that Harris will face a “furious” response from the party’s left wing if she pushes Khan out from the FTC or pulls support from the agency’s aggressive efforts to block what it views as anticompetitive mergers.

“Tech figures as well as general Wall Street mergers and acquisitions people are definitely applying as much pressure as they can on Harris,” said Jeff Hauser, the founder and executive director of the Revolving Door Project, a group that scrutinizes executive branch appointees to counteract the influence of corporate America on the rulemaking process.

“Reining in the people like Lina Khan and [Assistant Attorney General] Jonathan Kanter who have a strong reputation taking on corporate price gouging would be extremely off-message for Harris,” he said.

Hauser warned Harris would face a strong backlash from the left if she lets big donors push Khan and other officials leading efforts to crack down on Big Tech out of power.

“It would be furious. Khan is considered to be one of the best decisions that Joe Biden has made as president. She has turned around an agency that had been dormant for almost half a century,” he said. “They are beginning to get some wins in court. They’re also deterring a bunch of mergers that would have otherwise been initiated but for the FTC being on the beat.”

A spokesperson for the Harris campaign declined to comment on possible personnel decisions if she is elected.

In a letter to a GOP lawmaker last year, Khan noted that under her watch, the FTC has taken action against 38 mergers since June 2021, and that companies have abandoned 14 mergers during FTC investigations.

The Justice Department and the FTC won a major victory earlier this month when D.C. District Court Judge Amit Mehta ruled Google violated the Sherman Act, an antitrust law, by having a de facto monopoly over Internet search services and advertising.

The FTC filed a friend-of-the-court brief in another case involving Google, urging the court to use its power to restore competition in the marketplace and suggesting the search giant should be broken up.

Google’s parent company, Alphabet Inc., ranked as one of the top contributors to the Biden-Harris campaign in 2020, with employees giving more than $5 million to help Biden win election to the White House, according to OpenSecrets.org, a website that tracks campaign fundraising.

Some progressives are leery of Harris’s tech ties as a former senator from California, the home of Silicon Valley. Harris raised more than $12 million at a recent fundraising event at San Francisco’s Fairmont hotel, where tech billionaires, CEOs and venture capitalists shelled out between $3,300 and $500,000 for tickets.

“She hasn’t been an independent politician in about four years. As the party has gotten more and more angry and more and more broken up with Big Tech, she has been Joe Biden’s loyal vice president. Is she still the California Democrat that she was, or has she changed, is an open and contested question,” Hauser said.

“It’s a problem that parts of the Democratic Party remain dependent on Silicon Valley, but I like to believe that Harris understands herself to have interests independent from California and the parochial California interests she maybe used to represent,” he added.  

Harris’s campaigns have taken money from tech industry moguls such as LinkedIn co-founder Reid Hoffman, former Facebook Chief Operating Officer Sheryl Sandberg, Melinda French Gates, and Barry Diller, the chair and senior executive of IAC and Expedia Group.

Hoffman and Diller have led the calls for Harris to replace Khan as FTC chair.

Hoffman, who sits on Microsoft Corp.’s board, accused Khan of “waging war on American business” and said he wants Harris to replace her as head of the FTC if elected. He has donated $7 million to help the Biden-Harris campaign and has organized a fundraising effort for Harris in Silicon Valley.

Microsoft, OpenAI and Nvidia are facing antitrust investigations by the FTC and Department of Justice related to their dominance in the emerging artificial intelligence market.

The FTC is also suing Microsoft over its acquisition of Activision Blizzard Inc., a gaming company.

Diller, who has pledged to donate the maximum to Harris, said he would also urge her to replace Khan if elected president.

“In California, you’re always close to tech, because it’s the home state of Silicon Valley,” said Gil Duran, a journalist who has written critically about the tech industry and who served as Harris’s communications director when she was California’s attorney general.

Duran said “it’s not surprising” that Harris has close relationships in the tech industry but said the vice president, as a politician who came up through San Francisco and California state government, “understands the need to balance your relationships with your responsibilities.”

“Not every idea out of Silicon Valley is bad. There’s a lot of ways in which tech has transformed our lives for the positive and created jobs and important innovation, but we’ve also seen that as these people get richer and richer, their egos inflate to a massive size and they can go way too far,” he said. “I think Vice President Harris has the wisdom to know better than to allow a handful of donors to pay her to fire someone who’s doing a great job of holding Silicon Valley accountable.

“It would be a disastrous move to fire someone who is a regulator doing a great job of regulating,” he added. “It shows the ego of these guys that they think they can sign a check and publicly demand someone’s head at the same time.”

Ashley Woolheater, a Democratic strategist who previously worked for Sen. Elizabeth Warren (D-Mass.), pointed out there was “a lot of backlash” to Hoffman’s comments, and he later walked back the suggestion that he would have influence over the Harris administration’s policymaking.

And Woolheater noted Harris will unveil her agenda Friday for cracking down on high costs and junk fees, which she called “pieces that are part of the anti-monopoly, fair-competition agenda that Lina Khan has been one of the leaders of.”

But she acknowledged “it’s definitely concerning when you’ve got a major donor out there trying to presumably [influence] an important appointment.”

“I’d be surprised if [Harris] were to reverse course” on the FTC’s crackdown on tech monopolies, she added.

Harris has stayed mum about Khan’s future, as well as other key personnel decisions that will have a major influence on her administration’s policies if she beats former President Trump in November.

Harris is scheduled to deliver remarks in North Carolina on Friday calling for a federal ban on corporate price gouging in the grocery and food industries and pledging to direct the FTC to impose penalties on companies that exploit consumers to boost profits. She is also expected to lay out an agenda to bring down the high costs of prescription drugs and housing.

But Democratic lawmakers and progressive activists are wondering if Khan will still have the same latitude to take on the tech industry, a major source of Democratic donations, in a Harris administration, especially given mounting pressure from tech titans.

One senior Senate Democratic aide said Harris has to “show that the industrial policies that are the hallmark of Biden are going to continue, because that’s the backbone of building out the care economy.”

“Let’s see how the teams change,” the source said.