The Corner Newsletter: December 3, 2020
Welcome to The Corner. In this issue, we explain why the Justice Department should stop a proposed merger among giant publishers, and we discuss our new report on vaccines, which lays out a plan for the Biden administration to stop the next pandemic by reforming the vaccine production system.
To read previous editions of The Corner, click here.
Sen. Booker Joins Open Markets and Family Farm Action to Condemn Ag Monopolies
Sen. Cory Booker praised a landmark report on consolidation in the U.S. food and farming economy, co-produced by Family Farm Action Alliance and Open Markets, at an online event to mark the report’s release on Nov. 19.
“Consolidation in our food system is a grave threat to our family farmers and rural communities,” Booker said, adding that there is an “urgent need for Congress to take action to address corporate concentration and create a food system that is rooted in fairness and opportunity for all,” Mother Jones, The Counter, Ag Daily, Insider NJ, and Tri-State Livestock News covered the event and the report.
The report, titled “The Food System: Concentration and Its Impacts,” was written by Dr. Mary Hendrickson, Dr. Phil Howard, Emily Miller, and Dr. Douglas Constance. Dr. Hendrickson, a rural sociologist and leading food system scholar, discussed at the event the implications of a concentrated agrifood system. “Even with my years of examining consolidation in the food system, I am profoundly distressed by its ecological waste, the erosion of communities, and its callous treatment of human beings,” she said.
The report provides new data on our overly concentrated food supply chain. In the U.S., the top four corporations control 80% of soybean processing, 73% of beef processing, and 67% of pork processing. The report also made clear that such figures actually understate the problem, as the processors often enjoy strong monopolies across entire regions of the country.
The report calls for policies to democratize the food system through antitrust enforcement, prioritizing racial equity, transforming and redirecting production subsidies, and empowering alternative and localized food systems and economies.
Open Markets Demands DOJStop Bertelsmann’s Plan to Buy Simon & Schuster
Penguin Random House, which is owned by the German publishing conglomerate Bertelsmann and is the largest trade publisher in the country, announced plans on Nov. 25 to buy Simon & Schuster from ViacomCBS for $2.175 billion.
The deal would concentrate too much power over American authors and readers in the hands of a single corporation, so Open Markets called on the Department of Justice to block the proposed merger. Open Markets’ statement was covered by The Wall Street Journal, The Washington Times, Publishers Weekly, The Los Angeles Times, MarketWatch, and The American Booksellers Association.
“Bertelsmann’s plan to take control of Simon & Schuster poses multiple dangers to American democracy and to the interests of America’s authors and readers,” said Open Markets Institute Executive Director Barry Lynn. “The deal will make it harder for authors and editors to attract the support they need to research, write, and prepare the sorts of books Americans need to address the many serious political and economic crises we now face. It will also threaten the ability of independent booksellers — who are already reeling from the COVID-19 pandemic and other pressures — to stay in business.”
Through the 1970s, the U.S. publishing industry was home to more than 20 major publishers. By 2013, consolidation unleashed by the Reagan administration had reduced that number to six. If approved, the takeover of Simon & Schuster would bring three of these six under the control of a single corporation and would increase pressure on the remaining independents to consolidate.
Sally Hubbard, Open Markets’ director of enforcement strategy, explained to The Washington Post how consolidation in the publishing industry erodes freedom of expression. “Diversity of speech and a marketplace of ideas are incredibly important,” she said. “You start having a less pluralistic society, more concentration of ideas through fewer gatekeepers.”
The root cause of consolidation among publishers is Amazon’s dominant position among booksellers. Amazon’s monopoly allows it to dictate terms to publishers, who react by consolidating. “That’s an extortive and extortionary relationship,” Hubbard said, “not a healthy marketplace.”
To solve the problem, the Justice Department needs to address both the harmful consolidation among publishers and Amazon’s pernicious monopoly.
New Open Markets Report:How Monopolists Raided the U.S. Vaccine System, and How Biden Can Defeat Next Pandemic
Pfizer and Moderna recently announced extremely promising trial results for COVID-19 vaccine candidates, and millions of Americans are now looking forward to resuming their pre-pandemic lives. But as Open Markets explains in a new report, production of enough vaccine to protect the entire U.S. population will take much longer than it could have, because monopolists have degraded vaccine manufacturing capacity in recent decades.
In the Nov. 16 report, “Corporate Monopoly and the Decline of America’s Vaccine Industry,” Open Markets presents a comprehensive history of U.S. vaccine production and lays out how the Biden administration should fix the vaccine system and defeat the next pandemic. The report was covered by Axios, Fast Company, and Common Dreams.
For much of the 20th century, America’s vaccine system was the best in the world, thanks largely to strong government support. Since the overthrow of traditional anti-monopoly law in the 1980s, however, monopolists have concentrated control over the production of most vaccines and ancillary components. As a result, prices have skyrocketed, even for the most basic childhood vaccines, and many diseases we thought we had eradicated long ago have returned.
The report makes clear that new legislation is needed. Prosecutors can begin to reverse the problem simply be enforcing the law as it was originally written.
🔊 ANTI-MONOPOLY RISING:
The Department of Justice filed suit against the National Association of Realtors (NAR) on Nov. 19, alleging that the NAR had violated antitrust law by adopting “a series of rules, policies, and practices” that contributed to “a lessening of competition among real estate brokers to the detriment of American home buyers.” The department alleges that the NAR prohibits affiliates from informing prospective homebuyers about the amount of commissions that brokers earn on the sale of a home, which amounts to a restraint of free trade. (HousingWire)
Rep. Joe Neguse, D-Colo., called last week for a probe into how federal regulators evaluate pharmaceutical mergers, signaling lawmakers’ growing interest in investigating the relationship between rising drug prices and increased consolidation throughout the industry. (CNBC)
📝 WHAT WE'VE BEEN UP TO:
Garphil Julien published a piece in The American Prospect about the collapse of the U.S. retail sector under combined assault from Amazon, private equity, and real estate conglomerates. “Amazon is killing off much of remaining retail through predatory pricing, anti-competitive tactics, and its hardening monopoly over e-commerce,” Julien wrote.
Claire Kelloway published a piece in Civil Eats showing how California’s Proposition 22 allows food delivery companies to avoid paying employee benefits and protections. ”It still remains to be seen if other states will be able to do what California could not and stand up for food workers against powerful tech titans,” Kelloway wrote.
Daniel Hanley published a piece in Slate urging the Biden administration to appoint commissioners to the Federal Trade Commission (FTC) who are committed to banning exclusionary agreements, in order to restore the right to repair. He was also quoted in the Society for Human Resource Management making this argument.
Sally Hubbard published a piece in CNN Business asserting that the government can help make the U.S. more resilient after the pandemic by redistributing economic power and stopping monopolies. She was interviewed by KSRO on the same topic.
Barry Lynn participated in a panel discussion hosted by The New York Times‘ DealBook, along with Rep. David Cicilline, Assistant Attorney General for Antitrust Makan Delrahim, FTC Commissioner Noah Feldman, Colorado Attorney General Phil Weiser, author Shoshanna Zuboff, and Lina Khan, a House staff member and former Open Markets fellow.
Sally Hubbard spoke on KPFA about what the Biden administration can do now on Big Tech, monopolies, and antitrust.
Sally Hubbard was quoted in One Zero and The Markup commenting on Google’s practices for giving preference to pages using its mobile page technology, known as AMP. “I did always think AMP posed antitrust concerns,” said Sally Hubbard, author of the book “Monopolies Suck” and an antitrust expert with the Open Markets Institute. “It’s, ‘If you want to show up on the top of the search results, you have to play by our rules, you have to use AMP.’”
Sally Hubbard was quoted in Forbes explaining how the Department of Justice’s (DOJ) lawsuit against Google represents a landmark. “If the DOJ and other states didn’t bring this case against Microsoft in the ‘90s, there probably wouldn’t be a Google today,” Hubbard said. “Internet Explorer could have become a monopoly search browser.”
Sally Hubbard was featured in a Yahoo! Finance broadcast to discuss her book, Monopolies Suck, and to share thoughts about the outlook for Section 230, before the Facebook and Twitter CEOs testified before Congress. “What we really should be focused on is how to deconcentrate these platforms’ control over speech. That is the one point that both sides could agree upon,” she said. She also discussed her book on C-SPANand WAMC.
Sandeep Vaheesan was mentioned in Vox for his list of actions that the Biden administration could take to tackle corporate power even with a Republican-controlled Senate. “Even without new legislation, the next president can limit corporate power with the awesome anti-monopoly authorities already vested in the DOJ, FTC, USDA, and other federal agencies.”
Claire Kelloway and Barry Lynn were quoted in The Daily Beastcommenting on Open Markets Institute’s agricultural policy memo, which details the Democratic party’s history of failing to protect rural America from agricultural monopolies and which proposes a list of policy solutions for the incoming administration. ”Absent action now, the problem will only grow in the years ahead, making it that much harder to capture the Senate and to fix the fundamental problems in America’s economy and society,” the memo said.
Daniel Hanley was quoted in Washington Monthly noting why Spotify’s purchase of Megaphone is concerning. “We’re witnessing the foreclosure of this really dynamic industry that’s open and accessible,” said Hanley. We’re “really seeing it consolidated into the hands of just a few players.”
Johnny Ryan was mentioned in Private News Online for opposing Google’s use of real-time bidding systems for online ads in the UK and Ireland because of its privacy breaches.
Open Markets was mentioned in WIRED calling for antitrust enforcement in the U.S., and Open Markets was mentioned in TheIndependent and HR Digest for our Amazon worker surveillance report.
Open Markets signed a letter organized by Food & Water Action and Family Farm Action recommending Rep. Marcia Fudge, D-Ohio, for the position of secretary of agriculture. It was covered by Mother Jones, Newsbreak, and Common Dreams.
Open Markets signed a letter spearheaded by the Revolving Door Project asking President-elect Joe Biden to take a hard line against the influence of individuals with close ties to Google. The letter was covered by Business Insider, The Associated Press, The Observer, The Boston Herald, ABC News, and MSN.
Open Markets also signed a broader letter urging both the Biden administration and Democratic senators and senators-elect to reject the influence of Big Tech companies on the new administration. The letter was covered by Reuters, Business Insider, MSN, Yahoo! News, MarketWatch, Common Dreams, PYMNTS, and Morningstar.
Open Markets welcomed globally renowned financial journalist Rana Foroohar to our board of directors.
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📈 VITAL STAT: $500 Million
The amount of money raised by Liberty Media owner and founder John Malone and CEO Greg Maffei to create a special purpose acquisition company to pursue a merger in the media, telecom, and entertainment industry. Liberty Media has increased its influence in the media industry over the past few years, with controlling stakes in Sirius XM and Pandora, a 50% stake in iHeartMedia, and a 33% stake in Live Nation Entertainment.
📚 WHAT WE'RE READING:
“The Political Face of Antitrust,” by Spencer Weber Waller, Brooklyn Journal of Corporate, Financial, and Commercial Law: Waller, one of the premier antitrust scholars in the United States, provides an important and well-reasoned review of the rise of antitrust as a central topic in public discourse.
“Monopolization Remedies and Data Privacy,” by Erika Douglas, Virginia Journal of Law and Technology: Douglas argues that antitrust analysis should consider effects on user privacy when courts or enforcers consider and implement remedies to monopolization cases.
BARRY LYNN’S NEW BOOK:
Liberty From All Masters
The New American Autocracy vs. The Will of the People
St. Martins Press will publish Open Markets Executive Director Barry Lynn’s new book, Liberty From All Masters, on September 29. The book is Barry’s first since Cornered, in 2010. In it, he details how Google, Amazon, and Facebook developed the ability to manipulate the flow of news, information, and business in America, and are transforming this power into autocratic systems of control. Barry then details how Americans over the course of two centuries built a “System of Liberty,” and shows how we Americans can put this system to work again today. Purchase your copy here.
Open Markets Employment Opportunities
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