First Episode!! How to Fight Corporate Power with Lina Khan | #1

What is The Power You Have with Pramila Jayapal?

I'm Congresswoman Pramila Jayapal, and I'm here to have honest, eye-opening conversations with folks from every corner of politics.

How can we most effectively use our collective power to resist Trump's authoritarianism? What does the future of the Democratic Party look like? How do we truly deliver for the most vulnerable Americans?

I'll answer these questions in discussions with members of Congress, labor leaders, organizers, political scholars, celebrities, and more — all on The Power You Have.

Pramila Jayapal: 00:03

Hey, everyone. I am doing it. I'm starting a podcast. Many of you suggested this to me, so thank you. I am taking your advice.

Pramila Jayapal: 00:13

And anyway, since I was a kid, I was always super enamored with the idea of doing a radio or TV broadcast, so I feel like this is kind of in that vein. This is our episode of the power you have with Pramila Jayapal and for those of you who don't know me, I represent Washington's Seventh Congressional District in congress that is most of gorgeous Seattle plus some towns around Seattle. And on future episodes I'm going to start discussing some of the biggest news stories that are happening across the country but today since this is the one, I want to just start by introducing myself to you. I am a proud immigrant. I'm one of just 19 naturalized citizens to serve here in congress and I'm the and only South Asian American woman to serve in the House of Representatives.

Pramila Jayapal: 01:06

I was born in India and I came to The United States at 16 years old by myself on a student visa to go to college. Because here's the thing, my parents believed so much in America that they actually used their whole savings at that time of just $5,000 to send me here by myself so that I would have the best opportunity and the brightest future. And it took me seventeen years and an alphabet soup of visas to finally get my citizenship. I have been lucky enough in this country to live the American dream, a dream that is way too far out of reach for too many people. For immigrants, for working people, for vulnerable communities across the country.

Pramila Jayapal: 01:54

And so that's why I decided to spend a couple of decades long before coming to congress working both around the world on international health and development as well as here in The United States starting and leading a civil immigrant and human rights organization that fought hard for humane fair immigration policy that our country desperately needs. I was also on the committee that negotiated and implemented Seattle's $15 minimum wage law almost a decade ago and we were the major city to do so. We joined arms with labor, with community to push for policies that help working people and poor people get ahead. The truth is I never really wanted to be an elected office. I pretty much believed that change happened on the outside by organizing on the ground.

Pramila Jayapal: 02:48

But what I realized is that what we really needed to do was think about elected office as another opportunity to organize and return power to the people instead of the billionaires and millionaires. And that if we could work together as a movement on the outside and on the inside that we could take on the system that has been very carefully and very thoroughly rigged to benefit only the wealthiest 1% amongst us instead of the workers, immigrant, poor folks who are just struggling to get by. So that's why I ran for office and I see more than ever, especially with everything that we're facing today, how much we need people to use the power we have. Because when the system is so rigged against working people and poor people, that's exactly when authoritarians can use people's frustration about our own economic situations to turn us against each other. Even though it's not trans kids or immigrants who keep raising the rent or food prices or causing you to go into bankruptcy because you get cancer.

Pramila Jayapal: 03:55

It's the billionaires, it's the companies that profit and most importantly the power actually gets taken away from you and given to someone else to rig that system against you. It really doesn't have to be that way. The rigged system depends on our assent to it, our agreeing to it and we don't have to. We actually have a lot of power. We just need to use it individually and collectively.

Pramila Jayapal: 04:25

So that's what this podcast is all about, the power you have and how to use it. The big changes that need to be made to make this country a place where all people can thrive not just barely survive. The analysis of why the vast majority of Americans are getting poor and sicker while this tiny few group of people are getting richer and buying more and more luxury yachts. One thing I wanted to address on this very episode, I know that there's a lot of discussion out there about why the democrats lost the twenty twenty four election and that it was because of trans kids or immigrants because we were too far to the left. That's just a bad analysis because we didn't just lose the twenty twenty four election.

Pramila Jayapal: 05:14

We started losing more than a decade ago when democrats knowingly abandoned working people to push for free trade instead of fair trade during NAFTA. We reinforced that by bailing out big banks in Wall Street instead of working people in Main Street during the two thousand and eight recession. And suddenly, not so suddenly, the party of the working class became the party of billionaire mega donors, corporate packs, special interests. There are too many democrats that are defending a system that clearly isn't working for people and took way too long to make the kinds of structural changes that would actually allow us to do the things that are universally popular with democrats, republicans, and independents. Things like raising the federal minimum wage so that you can work one job instead of three and afford the damn rent.

Pramila Jayapal: 06:08

Or stopping the giant private for profit insurance and drug companies from profiting from your pain by capping the price of prescription drugs for everyone or stopping these drug companies from charging even more and more so that now one in three Americans have medical debt that totals more than $220,000,000,000 billion with a b dollars. On this podcast I'm going to bring on some of the smartest people I know who get that the system is rigged against working people and can start to explain to us some of the drivers behind that as well as people who are organizers, people who are gonna talk about how to change this. We're gonna talk about what regular people can do to make a difference, how to strengthen our very fragile democracy, and how to beat back authoritarians who wanna control every aspect of our lives, eliminating free speech, privacy rights, and due process to get there. I wanna do this not in some theoretical way but by actually talking about what you face. You, the person that's out there listening to this when you go to the grocery store, when you just see grocery prices continuing to go up.

Pramila Jayapal: 07:21

What happens when you have to choose between paying your rent or paying for prescription drugs that you need to treat your diabetes? What happens when childcare costs more than your rent and you really can't afford either? So let's get started with today's conversation which is all about corporate concentration and monopolies. And I have an amazing guest that's going to come on but I want to just set up that conversation for you and then I'm going to bring on the incredible Lina Khan. So I want to start by just talking about eggs.

Pramila Jayapal: 07:56

I like my eggs and apparently lots and lots of Americans do because the average American, I bet you didn't know this, eats about two eighty eggs per person every year. Scrambled, fried, poached, hard boiled part of our cakes and our cookies. It's just a staple in every household. Now I really didn't know until I started looking into why egg prices are so high that it's really just a handful of companies that dominate egg production in The United States. And one company, Calamine Foods alone controls roughly 20% of the market.

Pramila Jayapal: 08:36

That kind of dominance means that just a few giant corporations are setting prices and squeezing out competition. And by the way when there are supply chain problems like what happened during the pandemic just a couple of places supply everything and that means that they can profiteer even more. Before the pandemic prices were almost never over $3 But in recent years we have seen record high egg prices spiking up to nearly $7 earlier this year. And according to Farm Action that was because of price gouging by egg producers who had profit margins as high as 40% on a dozen eggs. Here's an example from 2023.

Pramila Jayapal: 09:25

The average price of a dozen large eggs at the grocery store soared to $4.82 That was more than double what it had been just a year before. Industry leaders blamed the avian flu but Calamine reported no cases of avian flu in its own facilities and by the way they still managed to post a 718% increase in quarterly profits making over $323,000,000 Here's the other thing, it is not just the shoppers who lose out from this, all of this corporate concentration also pushes out small farmers who just can't compete with the major producers because those major producers dominate every step of the supply chain from feed to distribution. And that means our entire food system is vulnerable on top of everything. This is a huge problem and it's repeating itself across multiple industries. Of course, the things you see in the grocery store like eggs, laundry detergent, diapers, but also in entire systems and markets like grocery chains and healthcare clinics and housing markets.

Pramila Jayapal: 10:41

And so that's why in congress, I just started a new caucus that I'm very excited about called the monopoly busters caucus. And we've got democrats across the ideological spectrum that are co chairing it with me. Angie Craig, the top democrat on the agriculture committee. Pat Ryan from New York who wins one of the toughest districts in the country and Chris DeLuzio from Pennsylvania who's also in a tough district right there in the heart of Pennsylvania. So this is what we have to talk about today and let me now bring in my guest of this podcast, the remarkable Lina Khan, former chair of the Federal Trade Commission.

Pramila Jayapal: 11:25

She has been a real superhero, going back to her days when she wrote a breakthrough law review journal at the Yale Law Journal that showcased how Amazon was abusing its monopoly power to the years when she was actually counseled in the House Judiciary Committee's Antitrust Caucus which I served on. And she advised our bipartisan six month investigation into big tech firms and our ultimate bipartisan package of bills that we pass through the committee to address the effects of corporate concentration on small businesses, communities, and our country. To the last four years when of course she was confirmed by the senate in a bipartisan vote as chair of the Federal Trade Commission. And she made the FTC relevant again in taking on corporate abuses of power, rampant antitrust violations and massive mergers that hurt consumers, workers and small businesses. Well, we are so happy to have with us the former chair of the Federal Trade Commission, the FTC, Lina Khan.

Pramila Jayapal: 12:30

Lina, thank you so much for being here.

Lina Khan: 12:32

Thanks so much for having me and thanks so much for being such a fierce champion for all of this work.

Pramila Jayapal: 12:37

Well, I feel like you've schooled us in all of it. And I wanted to ask you, you just do this so well. Explain to our listeners why monopolies and corporate concentration are just so bad for the American people and how this issue impacts everyone's daily lives.

Lina Khan: 12:56

So what we've seen is when you have more and more consolidation, you have fewer and fewer companies. And when companies don't have to compete as vigorously with one another, They can get away with abusing their customers. They can get away with abusing their workers. They can hike prices. They can lower wages.

Lina Khan: 13:17

They can really squash out opportunities for independent businesses. You know, just to take a concrete example, look at agriculture markets, where in areas like chicken farming, you have millions of consumers and tens of thousands of farmers, but just a handful of companies that connect them. And what that means practically is that these companies can get away with abusing their power, and farmers sometimes can only sell their chickens to a single company. And that power asymmetry lets it make all sorts of crazy demands. People have been paying more even as farmers are making less, and the middleman is taking a bigger and bigger cut.

Lina Khan: 13:56

But this isn't just happening in food and agriculture. It's happening in health care. It's happening in parts of housing. It's happening in areas like, cat food or contact lens solution or laundry detergent. I mean, you can go to any aisle in the grocery store, and there is a consolidation story there.

Pramila Jayapal: 14:14

You made the FTC relevant again in many ways. I really think that you took on fights that people had not been taking on and ways in which corporate consolidation was impacting workers and small businesses and consumers in a very aggressive and necessary way. Can you talk about some of the things that you're most proud of taking on during your tenure at the FTC and some of the real benefits that have accrued to Americans in those fights.

Lina Khan: 14:45

So we were really focused on the high cost of drugs, the high cost of medicine peep for people and figuring out why is that. One area we focused on is asthma inhalers, where in The US, people are still paying hundreds of dollars out of pocket even though in other countries, you can get an asthma inhaler for as little as $7. So we looked into this and found that some of the pharma companies were engaging in abusive patenting practices. So they would list a patent with the FDA for something like the little cap on the inhaler, a little piece of plastic rather than anything to do with the actual drug ingredients. And so we challenged them on these patent practices, and the companies ended up, agreeing to reduce the cost to just $35 by ending these abusive patenting practices.

Lina Khan: 15:37

So Americans who were paying hundreds of dollars out of pocket previously should now only be paying $35 or less. We also, took on these, noncompete clauses, which can trap workers and prevent them from easily switching jobs or starting their own business. We passed a rule to take that on, which is still in litigation. But through our lawsuits, we also saw hundreds of workers be freed from these abusive noncompetes, including, security guards that make close to minimum wage. And so those are just a couple of things that I'm really thrilled we were able to do.

Pramila Jayapal: 16:15

Well, as someone who's had lifelong asthma, I'm very grateful to you, and I think there's a lot of people who don't understand all the games that these giant corporations play in order to get around some of the ways in which we try to protect consumers. You also took on grocery stores and this is something that I was really proud of because a lot of the fight started on the West Coast around grocery store mergers. We had seen in 2015 already two grocery store chains, Albertsons and Safeway merging. For all the arguments that were made about why that merger was important and how it was going to be better for people, what actually happened is we saw all these dozens of stores closed and then a couple of years later Albertsons announces now a new merger with Kroger, but you and the FTC intervened and you worked to block this merger along with local unions across the West Coast that were very much a part of having workers tell their stories about what happens in these mergers. Talk about that case and why was an example of kind of how aggressive FTC enforcement around these issues needs to really be very proactive in mergers.

Lina Khan: 17:35

So this would have been the largest grocery merger in US history. And Kroger and Albertsons compete, in all sorts of communities across The US, which practically means that people have at least two options. And so they can look at the sale paper from each of these grocery stores. They can figure out, oh, there's a sale, you know, on on milk, so I can go to to Kroger. But if there's a better sale at Albertsons, they can go there.

Lina Khan: 18:03

This type of real competition helps people. It helps people when they're going to buy groceries. And there was a real fear, and the evidence backed this up, that if we allowed Kroger and Albertsons to merge, that competition would disappear, and so people wouldn't have as many options. And the companies, are right now somewhat incentivized to compete with one another in lower prices, that that competition would go away and they could instead get away with raising prices and not offering the same sales that they do right now. We also found that this merger would have been bad for grocery workers.

Lina Khan: 18:37

And so we heard from unionized workers about how these grocery mergers in the past had meant that people were, you know, not able to bargain as effectively when there's only one employer rather than two. People were worried about losing their seniority, about what would happen to their pensions. And so there was just a concrete way that this was gonna be bad for workers as well as families who are going to the grocery store every week. So the FTC filed to block this merger, which was different from what the FTC had done in the past where the agency had allowed mergers to go through and just required some divestitures, which ended up totally failing. So we learned from those mistakes and just outright sought to block this.

Lina Khan: 19:22

We had support from a whole set of state attorneys general, and we're really pleased that the court agreed with us and blocked this merger from going through. And so that means that communities around the country are still gonna have this competition between these two stores.

Pramila Jayapal: 19:39

And we were really proud. I led the amicus brief of members of congress along with Ron Wyden in the senate and members from across the country who understand why this competition is so important. But that is a different approach to mergers than has traditionally been taken and I'm just wondering how you assess the harms when companies will make the argument that that's not what's going to happen. And in this case we had the history of what happened in 2015 which I think was very useful. But do your, because you also proposed a set of merger guidelines, revised set of guidelines around how to assess this.

Pramila Jayapal: 20:19

How do you assess the harm before it's happened and take an approach proactive and prospective rather than trying to respond after it's happened when it's very difficult to change.

Lina Khan: 20:32

Mhmm. Yeah. It's a good question. I mean, we do deep investigations, and so we require these companies to, you know, share their documents, their internal communications, and we use that to understand, are these firms actually competing right now? You know, do we see Kroger saying, oh, Albertsons has a great sale on Berry's, and so we need to, you know, match that?

Lina Khan: 20:56

Or are they saying, oh, Albertsons is is, you know, increasing how much they're gonna pay their workers, and so we need to match that. That type of evidence competition of the firms kind of looking at one another and trying to do better for their customers or their workers because they have that competition, that ends up being so important. And that's what we saw here, that these firms were competing and that people were better off for it. And so that evidence is what we put in front of the judge.

Pramila Jayapal: 21:27

So you mentioned asthma inhalers and a favorite topic of mine is the broken healthcare system that we have and I just wanted to spend a couple of minutes on healthcare. We are seeing a tremendous amount of vertical integration basically these private health insurance companies dictating what kind of healthcare people get to have even above what their doctors are having, taking over clinics and the provision of clinic services at the same time that they are providing insurance. And just want to and then we are also seeing private equity come into the healthcare market more broadly. So if Americans are wondering why the hell is my healthcare so expensive and why does it keep going up even when I have healthcare? Why is it that my costs are so high?

Pramila Jayapal: 22:18

What would you say to them about how concentration consolidation in the marketplace is what is driving up their health care costs.

Lina Khan: 22:29

Yeah. I mean, consolidation is a big driver of higher health care costs. We've seen this in all sorts of areas, be it when hospitals merge. There's so much evidence that costs go up even as the quality of medical service goes down. We've seen that as these pharmacy benefit managers, these middlemen that are connecting pharmacies and health insurers and pharma companies, that they have been able to get away with marking up drugs, like cancer drugs, to the tune of thousands of percent.

Lina Khan: 23:02

So Americans are paying thousands of dollars more than they should be because of the conflicts of interest that some of these companies have. We've also seen big pharma companies engage in patenting tricks, but also all sorts of mergers where if there is a, you know, a a smaller innovator on the market that could be introducing a lower cost option, Sometimes the big pharma company will go and buy them up to prevent that lower cost option from coming onto the market. So there are all sorts of tactics here that are contributing to the ballooning cost of health care. And when it comes to private equity, I mean, this is something that I heard about time and time again, including from health care workers. I mean, I would hear from ER doctors whose practices had been taken over by private equity, and they would share that after private equity takeover, these ER doctors would have to think, do I even have time to console this parent that just lost their child, or am I gonna be punished because I'm on such a hard schedule where people would not have food breaks, they would not have bathroom breaks just because of how, extreme the quotas were that these PE firms were imposing?

Lina Khan: 24:16

That was bad for the health care workers. It was also bad for patients who saw the quality of care go down. And so this private equity takeover is a big, big issue.

Pramila Jayapal: 24:26

Yeah. And we're hearing it with all sorts of doctor's offices around the country. And there may be an opportunity for us to form some new coalitions here because you're seeing doctors also be pushed out if they have small practices. I mean there's lots of potential I think to put the blame where it is and allow us to create a different kind of system that doesn't put patients' health below profits, which is really what private equity is doing. I want to move housing because this is another place where you and I have talked over the years about private equity and I just think this is another place where Americans are feeling their housing costs go up and up and up and wondering what is happening.

Pramila Jayapal: 25:14

And I know that there have been attempts to take on some of the algorithms that are driving up prices, but can you explain a little bit about what's happening to the housing market, private equity in the housing market and how corporations and private interests are contributing to the rising rents that every American is feeling?

Lina Khan: 25:38

Yeah. I mean, there are a whole set of policy factors that are driving higher housing costs. We have seen in certain parts of the country, Atlanta, Dallas, other communities where institutional investors have a sizable share of the local housing stock. And sometimes they can put that on the market, but sometimes they can withhold it from the market to kind of strategically drive up rents because they don't want as much supply. We've also just heard about all sorts of abusive tactics.

Lina Khan: 26:09

I mean, the FTC, when I was there, we sued Invitation Homes, one of the biggest corporate landlords of single family homes because we found that they would advertise one rent. People would come, pay the application fee, start signing the lease, and then they would learn they were on the hook for hundreds, if not thousands of dollars more than what had been advertised for things like a portal fee or a mailbox fee. There was even, one company had a January fee that was just a new fee because it was a new month of the year. And so, these tactics really meant that people were having to pay more than what they thought they were on the hook for. And so we sued.

Lina Khan: 26:49

We got money back for people. We've also seen consolidation in key parts of the home building market. There was just a private lawsuit filed noting that there was potential collusion in home building equipment, which could have been driving up costs as well. So there are a lot of different pieces of the puzzle here.

Pramila Jayapal: 27:08

Yeah. And I think certainly in Seattle, which is the area I represent, we're seeing a lot of private equity coming in and buying up apartment buildings, single family homes. And so it's not even necessarily that there aren't units available but they don't rent them because they can charge so much on one unit that isn't even necessary for them to rent out all of their units. A lot of these efforts have had surprising bipartisan support even here in Congress. Know that they're supported by independents, Republicans, and Democrats across the country, but in Congress also where it's much harder sometimes to get bipartisan support, we saw back when you were a judiciary counsel for the House Judiciary Committee Democrats and we took on that big antitrust investigation of Big Tech.

Pramila Jayapal: 28:01

We passed a package of bipartisan bills. Why is it that you think that this issue has, does have bipartisan support And what do you think they are going to do as Republicans now control the FTC from what's left over from what you started?

Lina Khan: 28:23

Yeah. I mean, I think partly credit goes to to members like you who, you know, despite deep disagreements on a whole set of issues, have been willing to work with people on the other side of the aisle when there is broad recognition that allowing a handful of tech companies to control such key arteries of commerce and communications really threatens small businesses, really threatens free speech, allowing, you know, a handful of executives to get to decide who gets heard or seen on the Internet no matter what your views. I think we've seen kind of people on all sorts of the aisle feel that, you know, these these companies have too much power. I think there's just also a lot of kind of popular public support to have the government stand up to corporate lawbreakers even when it requires standing up to these powerful interests. I mean, I, as FTC chair, got to visit communities across the country, including very red areas, And I was stunned to see just how much popular public support there was for taking on corporate abuse because people see in their day to day lives, they don't feel like they're getting a fair shake.

Lina Khan: 29:29

And I think there's just a lot of opportunity for government to stand strong. In terms of this FTC, I mean, we've seen some con continuity with the actions that that we had started. My big worry is that companies are able to go to the White House and ask for a sweetheart deal or a special favor, and we know sometimes that call from the White House gets made to these agencies. And so my real worry is, you know, the FTC could end up making decisions not based on who's violating the law and what are the facts, but based on what is the

Pramila Jayapal: 30:04

What contributes to the campaign?

Lina Khan: 30:06

Yes. Yes. And we're already seeing some of that in terms of these investigations started that seem pretty politically motivated in a very troubling way. I mean, we don't want our law enforcement to be weaponized to just do the political bidding of the president. And so that is a real, real worry.

Pramila Jayapal: 30:23

So there's one last question before I let you go. It's tied to the title of the podcast, which is The Power You Have. And so what do you want to say to people across the country who are worried, maybe they don't call it antitrust enforcement, maybe they don't even call it monopoly power, but they're worried that they're getting screwed while big corporations are getting bigger and bigger and controlling more and more of their lives. How can people across the country participate in taking back the power on this issue?

Lina Khan: 30:57

I mean, I think continuing to convey that to your members of congress, to your local officials, you know, these these companies sometimes have so much power that anytime an official even hints at doing something, the level of pushback is so extreme. And so oftentimes, our elected officials need support from the people who want them to do this, and it lets them say, yes. You know, you may threaten to to kind of, retaliate, but guess what? I'm gonna stand strong for my constituents. I think for people who are working in a particular area like health care where they're seeing firsthand the effects of consolidation, kind of educating policymakers, educating your elected officials about what that effect looks like on the ground is so important because oftentimes we really need these stories, to be able to kind of make a broader case and and be able to take action.

Pramila Jayapal: 31:51

And really to know what's happening for many of our members of congress, they don't know how people are being affected. So it really matters, people's voice really matters and your voice is such a champion on this issue is so incredibly important. Thank you Lena Khan for being with us.

Lina Khan: 32:07

Thank you.

Pramila Jayapal: 32:07

Well, that's a wrap for today's episode. Please stay tuned for the next one. Look out on all my social media platforms. It's Rep Jayapal. And just thank you so much for joining us today.

Pramila Jayapal: 32:20

I look forward to a lot more conversations on the issues that matter and the power you have.