Mayor-elect Zohran Mamdani has a potentially powerful tool in executing his affordability agenda: the woman who went after junk fees and stopped megamergers as one of President Joe Biden’s top consumer watchdogs.
Mamdani’s appointment of Lina Khan, the former head of the Federal Trade Commission, to his transition team last month immediately drew excitement on the left but consternation in business circles.
Progressives began to imagine how her aggressive approach to regulation could play out at the local level. The city’s executives, meanwhile, wondered if Khan’s appointment signaled that Mamdani’s outreach to corporate leaders during the general election wasn’t genuine.
"I'm going to be especially focused on things like 'how do we make sure that we have a full accounting of all of the laws and authorities that the mayor can unilaterally deploy,'" Khan said in a clip of a “Pod Save America” podcast interview that’s set to be released next week.
Under her direction, the FTC, which is tasked with protecting the public from deceptive or unfair business practices, effectively blocked a nearly $25 billion merger between two grocery giants that it said would have raised prices and harmed labor markets. It also banned junk fees for concerts and hotels, a key Biden initiative, and capped prices on asthma inhalers, among other actions.
“In the business community, she has the unfortunate reputation of being an ideologue, but a smart one,” said Kathy Wylde, who heads the business advocacy group Partnership for New York City. “Tactics that encourage litigation will not help New York become more affordable.”
James Parrott, a veteran economist who worked for Mayor David Dinkins, said he’s been eagerly listening to Khan talk about how levers of government can protect consumers against questionable or illegal business practices. “This is a debate that's taking place around the country,” he said.
So what exactly could Khan do? Here are ideas she’s considering.
Cheaper hot dogs and beer at sporting venues
Earlier this month, Semafor reported that Khan is interested in cracking down on what every sports fan has groused about: the high cost of food and drinks at stadiums and arenas. The outlet said Khan had identified a 56-year-old New York City law that prohibits "unconscionable" business practices.
What’s more unconscionable than a $20 beer or a $7 hot dog?
According to Semafor, the last time the law was used was during the outset of the 2020 pandemic, when businesses jacked up the price of facemasks.
The city also has leverage over sports owners. It leases the land for the Mets’ Citi Field and Yankee Stadium. Madison Square Garden, which is home to the Knicks and Rangers, requires an operating permit that the City Council must approve.
Parrott told Gothamist that City Hall could look into controlling the price of concessions by inserting new provisions into those agreements.
The high cost of health care
Khan has also said the government can do more to protect consumers in the health care industry.
“Are these markets where if we just take on illegal monopolistic practices, that’ll be enough to make sure that companies aren’t price gouging?” she said during an interview with Jon Stewart.
Similarly, Semafor reported that Khan was interested in targeting hospitals that overcharge for drugs that can be purchased cheaply at drugstores.
During her time at the FTC, Khan accused three big pharmaceutical companies of inflating the cost of insulin.
Algorithmic pricing by landlords, Uber and Lyft
Khan has previously voiced concerns that algorithmic pricing — which allows prices to fluctuate based on real-time data on demand, competitors’ prices and personal information — is anticompetitive, price-fixing and an invasion of privacy.
New York recently passed legislation regulating the use of algorithmic pricing. One law forces companies like Uber, Lyft and DoorDash to reveal when they use algorithmic pricing.
In her interview with Stewart, Khan cited another law that prohibits landlords from using algorithmic pricing, saying, “We want to make sure that those new laws can be enforced vigorously, too.”