The Corner Newsletter, November 30, 2018: Pressure on FTC Builds — Two Opportunities to Work With Open Markets — OMI Releases “America’s Concentration Crisis”

In this issue of The Corner, we report on the fast-building pressure on the FTC to address Facebook’s abuse and misuse of its power, and we share some more details from our new report, “America’s Concentration Crisis.” We also announce two opportunities for reporters and future lawyers to work with Open Markets.

November 30, 2018  |  by Open Markets

Supreme Court Hears Oral Argument in Apple v. Pepper and Open Markets Files Amicus Brief in Tennessee Wine v. Byrd

On Monday, the Supreme Court heard oral arguments in Apple v. Pepper, which asks whether iPhone users can sue Apple for abusing its monopoly over the sale of apps. The Open Markets Institute filed an amicus curiae brief in October in support of the class action filed by Robert Pepper, arguing that the law allows iPhone users to sue Apple for monopolizing the sale of apps against users.

Open Markets Legal Director Sandeep Vaheesan, in interviews with US NewsPolitico’s “Morning Tech” newsletter, and NPR, said that a ruling for Apple could hinder private antitrust enforcement by preventing consumers from suing tech monopolies for abusing their power.

Both liberal and conservative justices appeared willing to allow the class action to go through.

Last week Open Markets also filed an amicus brief in a different case before the Supreme Court, Tennessee Wine and Spirits Retailers Association v. Byrd, dealing with state regulation of the sale of alcohol. Open Markets supported the association’s argument that states have an absolute right to regulate the sale of all alcohol products within their border, in whatever way they see fit.

Open Markets wrote, “Government—federal, state, and local—constructs and structures markets. All markets therefore reflect the political and moral concerns of the sovereign of the state, which in this case is the people of the United States expressing their wishes through an amendment to the Constitution.”

That amendment, the Twenty-First, “grants expansive regulatory authority over alcohol to the states, including the authority to prohibit the production and sale of alcohol entirely.”

Senator Blumenthal Hammers FTC for Failure to Address Facebook and Other Monopolies

Sen. Richard Blumenthal, D-Conn., had sharp questions for all five Federal Trade Commissioners in a hearing Tuesday, especially about the FTC’s failure thus far to take any action against Facebook, despite the corporation’s blatant disregard for the terms of a 2011 consent decree. The senator’s comments were perhaps the strongest yet aimed at the enforcers tasked with protecting U.S. citizens from illegal actions by online platform monopolists.

“I have been frustrated that there has been no cost to Facebook for catastrophic failure to protect consumers,” said Blumenthal, the ranking member on the Senate Consumer Protection, Product Safety, Insurance, and Data Security Subcommittee. “Cambridge Analytica should never have happened,” he said, referring to the scandal revealed earlier this year where researchers at the data consultancy firm Cambridge Analytica successfully collected information on tens of millions of Facebook users without their permission. “It would never have happened if the consent order, reached by the FTC with Facebook, had been vigorously and adequately enforced.”

Blumenthal’s eruption came soon after the most recent reports of Facebook’s bad faith actions, including the corporation’s targeting of the Open Markets Institute, other members of the Freedom From Facebook coalition, and the Open Society Foundation, with an anti-Semitic smear campaign.

Blumenthal chided the commissioners for lagging far behind their counterparts in other nations. In the eight months since the FTC announced its investigation into whether Facebook violated its 2011 consent decree, the U.K. government managed to complete its own separate investigation and to fine the corporation for privacy violations. And on Sunday, a separate U.K. action by a parliamentary committee regarding Facebook’s privacy practices led enforcers there to seize documents from the company Six4Three.

To the U.K., Blumenthal said, “The urgency of this investigation could not be clearer.”

At one point FTC Chairman Joe Simons defended the commission. “Any time you see a press report of a significant potential privacy issue,” he said, “it’s safe to assume that we’re investigating it already or, shortly after the release, we will investigate it.”

Sen. Blumenthal demanded proof that the Commission is acting now. “It’s not safe to assume anything,” he said. “We need to know when you will have some results, because these continuing violations clearly show that we have something more than a simple bad actor problem … You have an obligation to tell us when you think this investigation will be done.”

Later in the exchange, Simons suggested that the FTC might not have put enough resources into investigating Facebook. Blumenthal asked, “Are you satisfied there are sufficient resources devoted to this investigation?” Simons paused and then replied, “That is my goal with respect to every investigation that the FTC is conducting, especially the most important ones.”

Blumenthal’s closing remarks served as a clear warning to the commissioners. “We’re expecting you to use the full range of your authority,” he said, making clear this should include investigations into “deceptive and misleading practices” by Facebook.

Blumenthal also wants the FTC to broaden its investigation to include Google, Amazon, Apple, and Microsoft. He asked the commissioners for “a commitment from you that you will assess the market share of the Big Tech companies, the top five, and that you will report back to us on what that market share is.”


  • The German Federal Cartel Office, Germany’s national competition authority, announced that they are investigating Amazon’s “double role” as both a seller of goods and host for other sellers.
  • The controversy sparked by The New York Times’ investigation into Facebook’s efforts to smear it critics helped push Joe Nocera of Bloomberg to endorse breaking up Facebook last week. When it comes to Facebook, Nocera wrote, “The simplest, most straightforward solution is usually the best way to solve a problem.”
  • CNN, meanwhile, responded to the story by taking a closer look at the history of representing monopolies as octopuses, with Matt Stoller explaining, “Facebook was looking for a way to discredit us so they weaponized false allegations of anti-Semitism to distract from the critique, which they’re actually quite afraid of, which is the critique of monopolization.”

Announcing the Open Markets Brandeis Legal Fellow Program

Open Markets this week announced that it will be hiring for its inaugural Louis Brandeis Law and Political Economy Fellowship for Summer 2019, intended for current first-year law students interested in using antitrust law, banking law and financial regulation, telecommunications regulation, corporate governance law, intellectual property law, and other legal tools to address concentrated power.

Interested in Working With Us? Open Markets is Hiring a Reporter-Policy Analyst 

The Open Markets Institute is hiring. We are looking a Reporter-Policy Analyst to cover concentration in the political economy and develop policy solutions to address private power.


  • The Open Markets Institute co-signed a letter with other public interest, consumer, and labor groups calling on the likely incoming House Judiciary and Energy and Commerce chairmen, Reps. Jerrold Nadler, D-N.Y., and Frank Pallone, D-N.J., to hold hearings on the proposed merger between T-Mobile and Sprint. Open Markets Executive Director Barry Lynn said, “Congress … needs to step up and hold hearings to show Americans – and the DOJ – that this next Congress is serious about combatting the rise of corporate power.” Read about the letter in The Hill and The Verge, and read the letter here.
  • Sandeep Vaheesan wrote an article in the ProMarket blog, of the Stigler Center at the University of Chicago, on the effect of monopoly on workers. “Since the 1970s, the US has seen a growing power imbalance between workers and employers,” he wrote. “This story was not inevitable, but the product of conscious legal and political choices.”
  • Matt Buck explained in the Washington Monthly how America’s railroads, and their Wall Street investors, are abusing their monopoly power to squeeze businesses and consumers.
  • Barry Lynn called on regulators to “fix Facebook” in an op-ed for The Daily Beast by addressing its exploitative business model. He said they should use the government’s taming of the 20th century communications giant AT&T as a guide to what policies and models to pursue.
  • Sarah Miller and Austin Frerick argued in BuzzFeed, “If [Democrats] want a shot to compete against Republicans in rural America, they can start by standing up for the right of rural Americans to compete against the corporate monopolies that have been left free to loot and plunder our communities.”
  • The New York Times quoted Matt Stoller in a front page article on the growing tensions between Silicon Valley corporations and the Democratic Party, saying, “As more and more information comes out about how these guys operate, it’s becoming conventional wisdom among Democrats that there is a serious policy problem here.”
  • Kara Swisher of The New York Times turned to Barry Lynn to point to the historical parallels between today and the Gilded Age when “people who commanded … corporations exploited the power within them to enrich themselves and to control other people in bad ways. And in every case, America said, ‘Hey, we know how to regulate this problem.'”
  • The HillBloomberg, and The Times covered the Freedom From Facebook coalition’s setting up a link for Facebook employees to anonymously submit concerns about their employer.
  • Open Markets advisory board member Tim Wu gave an interview to The Ringer about his new book, The Curse of Bigness. Anti-monopoly principles, Wu said, “speak[] to people’s desire for a sense of economic control over their own lives.” Wu also spoke to The American Conservative about his book, emphasizing that battling bigness should embrace breaking up corporations as an anti-monopoly tool.
  • Italian newspaper La Repubblica interviewed Barry Lynn about concentration in food systems and the need for favoring local producers.
  • Matt Stoller, talking to Bloomberg about slowing growth in technology corporations, said, “Wile E. Coyote has run off the cliff … He hasn’t looked down yet.”
  • University of Colorado media studies professor Nathan Schneider cited Sandeep Vaheesan and Phil Longman in his article in The Nation calling on antitrust enforcers to allow small entities to cooperate, especially against giant corporations. Sandeep is a co-author with Schneider on a working paper on the subject, and Phil recently made a similar case in the Washington Monthly.
  • Lina Khan spoke about Amazon’s HQ2 announcement with Anand Giridharadas for The New Yorker. “By running the search as a nationwide competition and receiving proposals from hundreds of cities, Amazon now has a database of information that gives it a further competitive advantage over rivals, as it’ll use this research to inform future expansion, and Amazon extracted the best deal through exercising its bargaining power over cities. The end outcome was to further enhance its dominance.”
  • Matt Stoller told The Huffington Post that there will “hundreds of staffers” fighting for progressive causes in the next Congress, marking a dramatic increase from previous Democratic House majorities.
  • Columnist Bill Crawford of the Daily Journal in Tupelo, Mississippi pointed to monopolistic drug companies as a major driver of high drug prices, and quoted Open Markets’ website explainer agreeing that the U.S. has “’largely abandoned the policies it previously used to foster healthy competition,’ causing ‘a highly dysfunctional pharmaceutical market that produces high prices and less and less innovation.'”

Open Markets Releases Report on “America’s Concentration Crisis”

Did you know that the three largest pharmacy owners control 67 percent of the U.S. market? Or that three manufacturers control 89 percent of the pacemaker industry? Or that only two corporations control 66 percent of the syringe market, and three corporations have 86 percent of the IV solution industry? Did you know that all of these numbers understate the full extent of the monopoly problem in those industries, because of cartelization among these corporations?

As David Leonhardt of The New York Times covered, Open Markets put out a new report on Monday titled “America’s Concentration Crisis,” which provides market share estimates for a wide range of industries. The figures are stark and illustrate that even though there are many brands, especially in beer and dry cat food, nearly all of those brands are owned by three or even fewer firms in the “scam economy” as Open Markets Deputy Director Sarah Miller put it to Vox.

The report also includes data on airlines, where four companies have a 73 percent market share, and social networking, where Facebook alone has a 72 percent market share.

The takeaway: Monopolies are everywhere.

These market share data come from a private market research firm called IBISWorld, which only makes them available for a price. The Federal Trade Commission used to collect this detailed data to inform its antitrust enforcement as part of its Line of Business annual report. But the Federal Trade Commission under the Reagan administration stopped collecting the information in 1981.

Open Markets is pressing for the FTC to revive its lines of business studies and do the essential job of tracking America’s monopoly crisis. This will also help the FTC actually do the job we created it to do, which is to break up or neutralize America’s monopolies.



Proportion of Americans who think that the government “should do more to break up corporate monopolies,” versus 19 percent who disagreed, according to a Public Policy Polling poll reported on by The Intercept’s David Dayen.

Similarly, Dayen reports, “[Seventy-six] percent of respondents were either somewhat or very concerned that ‘big corporations have too much power over your family and your community.’ The figure grew when asked whether big corporations have too much power over politicians: a stunning 88 percent were at least somewhat concerned, with 71 percent very concerned.”


  • “Best of Frenemies? Reflections on Privacy and Competition Four Years After the EDPS Preliminary Opinion” (International Data Privacy Law, Christian D’Cunha): D’Cunha argues for the importance of antitrust laws in checking the undemocratic power of technology platforms. He writes that in addition to privacy regulations like GDPR, strong antitrust enforcement must aim to break the power of large corporations. “Radical surgery” is in order, he concludes.
  • “The Human Toll of Instant Delivery,” (The New York Times): As companies compete with Amazon’s logistics empire, warehouse working conditions around the world are deteriorating. Workers suffer in 100-degree warehouses, unending shifts, even deaths, all to meet swelling demand for fast shipping.
  • “Predatory Lending Practices: Business Borrowers Hurt by ‘Confession of Judgment’ Filings” (Bloomberg, Zachary R. Mider and Zeke Faux): How a group of predatory lenders in New York take advantage of “confessions of judgments” to swindle money from small businesses across the country.
  • “We Are All Losing Out As Corporate Concentration Grows” (Financial Times, Jonathan Tepper): The author of a new book, The Myth of Capitalism, calls for rejecting the consumer welfare standard and reinvigorating antitrust enforcement by focusing on structural presumptions in reviewing mergers and breaking up companies that are too big.
  • “The Limits of Antitrust in Privacy Protection” (International Data Privacy Law, Eugene Kimmelman, Harold Feld, Agustín Rossi): Why anti-monopoly principles require not only the antitrust laws to check the power of and potential for corporate abuse, but other fields of law, like consumer protection and privacy.

Save the Date: December 12

On Wednesday, December 12, the Economic Policy Institute (EPI) and the Open Markets Institute are co-hosting a conference, “Monopoly, Monopsony, and the Labor Market,” from 10:30 a.m. to 12:30 p.m. at EPI’s offices in Washington, D.C. The event is free and open to the public, and will feature a panel of distinguished speakers including professors Sanjukta Paul of Wayne State University and Marcellus Andrews of Bucknell University, with a keynote address by FTC Commissioner Rohit Chopra. For those unable to attend, the event will be live-streamed on EPI’s website.

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In America today, wealth and political power are more concentrated than at any point in our country’s history.

The Open Markets Institute, formerly the Open Markets program at New America, was founded to protect liberty and democracy from these extreme -- and growing -- concentrations of private power.

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