The Corner Newsletter: February 25, 2021
Welcome to The Corner. In this issue, we discuss President Biden’s executive orders addressing the resiliency of U.S. supply chains and the spinning off of Maryland newspapers to the Sunlight for All Institute.
To read previous editions of The Corner, click here.
President Biden’s executive orders addressing the resiliency of U.S. supply chains is a long-needed action
President Biden signed an executive order this week to shield the U.S. from supply shortages of critical imported components and build a resilient domestic supply chain. The order would begin a year-long investigation into critical but vulnerable U.S. sectors. The review would include products such as semiconductors, high-capacity batteries, pharmaceuticals, and critical metals.
Also this week, a bipartisan group of senators revived a bill that would direct the administration to create an interagency task force to track and respond to Chinese government efforts to control what U.S. corporations say and do.
The Open Markets Institute was the first to warn of both of these risks, beginning with the article “Unmade in America” in Harper’s in July 2002 and with the book End of the Line published by Doubleday in August 2005. In the years since, the Open Markets team has devoted a large portion of our time to understanding the nature and magnitude of the threats posed by such supply chain bottlenecks. In September 2016, Open Markets hosted a major conference on both of these issues, called Trade, War, and China in the 21st Century.
Read the Open Markets article about the history of supply chain risk, which we published in response to President Biden’s order.
Watch the Open Markets-OECD Conference on Supply Chain risk, from April 23, 2020.
Read the Open Markets primer on Supply Chain risk.
Plan to Protect Baltimore Sun Offers Hope at a Dark Moment for U.S. Newspapers.
Last week’s news that Tribune Publishing had agreed to sell itself to Alden Global Capital for $630 million led to despair throughout America’s journalism community. Alden, a privately run hedge fund that already controls the Denver Post and San Jose Mercury News, has made itself infamous for gutting local newsrooms. The new deal would bring such once robust papers as the Chicago Tribune, New York Daily News, and Hartford Courant fully under its control.
As Margaret Sullivan of The Washington Post put it, “Being bought by Alden is the worst possible fate for the newspapers and the communities involved.”
Yet Tribune Publishing also delivered some good news as well, agreeing to a separate deal that would transfer ownership of the Baltimore Sun and a half-dozen smaller Maryland papers to the Sunlight for All Institute, a non-profit established by billionaire hotelier Steward Bainum Jr. If that deal is completed, the Sun would be locally owned for the first time since 1986.
Even more important, the proposed plan for the Sun would mark the fusion of two recent approaches to saving local newspapers. Like the Boston Globeand Los Angeles Times, a local billionaire is financing the paper’s rescue. Like the Philadelphia Inquirer and Tampa Bay Times, it will be run as a non-profit enterprise.
Journalists at the Sun were quick to embrace the plan. “It appears the Sunlight for All Institute would treat our journalism as a public good, as opposed to one for the benefit of Wall Street,” said Scott Dance, who has served as chair of the Sun unit of the Washington-Baltimore News Guild.
But Dance also emphasized that no matter what the ownership structure, more remains to be done in order to ensure the survival of America’s newspapers. “Nonprofit status would not be a cure-all for the Sun,” he said. But “it's a more sustainable model than the current one.”
Journalists at the other Tribune papers targeted by Alden are watching events in Baltimore so closely. Writing in the Chicago Tribune itself, columnist Eric Zorn made clear that he’d like to see a similar outcome for Chicago. “It remains the hope of me and many of my colleagues that a local investment group of some sort — business or philanthropic— will decide that the civic health of this region is too reliant on a healthy Chicago Tribune to turn it over to investors…”
But the job of ensuring the sort of robust local journalism American democracy needs in the 21st century won’t be finished until U.S. policymakers and law enforcers break the stranglehold that Google and Facebook have captured on advertising in America. That’s why the recent series of lawsuits by the federal government, state governments, and private actors are so important.
For more on this issue, read this article by Nikki Usher, a fellow at the Center for Journalism and Liberty, published last summer.
🔊 ANTI-MONOPOLY RISING:
Pilgrim’s Pride, a poultry producer owned by Brazilian meatpacking giant JBS, was sentenced to pay a $107.9 million fine after pleading guilty to price-fixing. Pilgrim’s pride conspired to fix poultry prices between 2012 to 2019. The company’s price-fixing scheme is estimated to have had an effect on $361 million of broiler chicken products. (Reuters)
Telecommunications providers had their request denied this week to delay California’s planned enforcement of net neutrality laws. The U.S. District Court for the Eastern District of California denied an injunction that would have stopped the law, passed in 2018, from going into effect. The law prevents internet service providers from paid prioritization, zero-rating of content, and requires speed and data transparency. (TheNew York Times)
In a unanimous decision, the Supreme Court of the United Kingdom last week dismissed an appeal from Uber that argued its drivers were independent contractors not entitled to basic employment rights, such as pensions, minimum wage, and other rights. The court ruled that Uber drivers were workers because of the company’s control in setting the terms of their work. (The Guardian)
📝 WHAT WE'VE BEEN UP TO:
Daniel Hanley and Jackie Filson were featured in The University of Connecticut Magazine for their participation in the anti-monopoly movement and working at Open Markets Institute. “In essence, monopolies pose a direct threat to democracy and to the autonomy of each of us, no matter what you do, who you are, or where you live.” Jackie and Daniel are pictured above at the UConn Law School in Hartford, Connecticut last December.
Claire Kelloway published a piece in Vox on the need to include Big Meat and Big Ag in the anti-monopoly movement. The piece also ran in TeknoDate. “The meat industry is bad for farmers, workers, consumers, animals, and the environment. It should be the next target in Democrats’ antitrust push.”
Sandeep Vaheesan and Robert Lande published an editorial in the Atlantic called “Ban All Big Mergers. Period.” Vaheesan and Lande note that the U.S. Congress and U.S. states are publishing a variety of plans for revamping antitrust laws. “At the top of this agenda,” they wrote, “should be a law that simply and unambiguously prevents all megamergers—which we would define as transactions in which the acquirer and the target each has more than $10 billion in assets.”
Claire Kelloway published an article in Civil Eats on Big Meat’s price-fixing schemes. “While $221 million may seem like a steep penalty, it likely dwarfs what the corporation made in illicit profits. One study by antitrust scholars found that in approximately 80 percent of private price-fixing settlements the plaintiffs did not take back the full value of overcharges.”
Open Markets Fellow Johnny Ryan and the Irish Council for Civil Liberties published a study detailing how the Irish Data Protection Commission is using outdated IT systems to enforce EU antimonopoly laws. Ryan was quoted in Euractiv and was also mentioned in IT Pro, Decision Marketing, and Tech Daily, among others. ““What we have discovered indicates that it cannot run critically important internal technology projects. How can it be expected to monitor what the world’s biggest tech firms do with our data?” (Also see the related Open Marketsstatement condemning the EU for moving too slowly against Big Tech.)
Sandeep Vaheesan published a piece in Bloomberg Law about how President Biden can make good on his past statements condemning the use of noncompete clauses by making good appointments to the FTC. The administration, Vaheesan said, “should make the FTC a friend of working people by prosecuting employer cartels, stopping mergers that further concentrate labor markets, and freeing workers from noncompete clauses.”
Barry Lynn published a piece with William Hynes of the OECD in Politeiaon how a more pragmatic and strategic competition policy can make countries and their economies more resilient. “A more pragmatic and strategic competition policy… would make for a more resilient international production system and promote sustainable economic growth.”
An Open Markets report by Sandeep Vaheesan and Matthew Buck, Non-Competes and Other Contracts of Dispossession, was one of the top downloads on Law Professor Blogs Network. “Employers have used non-compete clauses to deprive tens of millions of workers of the freedom to change jobs or start their own businesses.”
An Open Markets report, Eyes Everywhere: Amazon’s Surveillance Infrastructure and Revitalizing Worker Power, was cited in Wall Street Window. “The Open Markets Institute report cited devices such as the aforementioned wristbands as part of this internal surveillance regime. The report also alleged the use of heat maps and meta data regarding employees’ attitudes toward the company.” The report was also mentioned by Inside.
Sandeep Vaheesan was quoted in The Progressive pushing back on mergers. “Major chunks of the windfalls that corporate execs pocket come from engaging in endless merger games that leave workers without jobs and consumers without choices. A Justice Department and a Federal Trade Commission so inclined, says Sandeep Vaheesan, a former regulations expert at the Consumer Financial Protection Bureau, could put the kibosh on mergers that only enrich the already rich.”
Barry Lynn’s piece about how Biden can transform America in The Washington Monthly, was included by The Editorial Board as a “required reading for fans of trust-busting.” The Washington Monthly also promoted the article in a new blog post.
Barry Lynn was mentioned in The Wire for his book, Cornered: The New Monopoly Capitalism and the Economics of Destruction, as a good guide for understanding merger enforcement. “The US government did bring out the Sherman Antitrust Act in 1890 to prevent monopolies in the beef, meat, etc. industry, but the Ronald Reagan administration changed this to accommodate relaxations if the “proposed merger promised to lead to greater marketplace ‘efficiency’.”
Garphil Julien was quoted in Business Insider commenting on the Reddit day trading and GameStop action. He was also quoted in MSN, Ampgoo, About You, and Unfold Times. "Is the market really fair for individual investors? Is it really competitive? What we're seeing is that it's not," Julien said.
Open Markets Institute’s concentration data was cited in ProMarket, Truthout, Iowa Herald, and JD Supra. “We have a monopoly problem in the U.S. Data compiled by the Open Markets Institute across a range of industries graphically show how fewer and fewer firms control more and more industries. This is true from airlines to washers and dryers, from diapers to coffins.”
Barry Lynn was quoted in New Statesman cautioning against seeing Google’s reduction in lobbying spending as the company minimizing its political activity, but rather just targeting it more tactically. “Google has actually had an extremely sophisticated operation ever since they built it,” Lynn says. “It’s not just aimed at Washington, it’s aimed at states, it’s aimed at localities, it’s aimed at companies, and it’s aimed at academics.”
Sally Hubbard partnered with SheEO for an event about monopolies, featuring her new book “Monopolies Suck. “Monopolies are amplifying existing inequities in our society, while underlying many of the pain points we all experience on a daily basis. SheEO’s model of decentralized and cooperative entrepreneurship is an antidote to monopoly rule, part of a new vision of an economy that works for all.”
Sally Hubbard was featured in a Stigler Center event about how to possibly develop new methods for antitrust laws to identify the political power of conglomerates with economy-wide concentration.
Barry Lynn was mentioned in GQ for a piece he wrote in The Guardianabout Google and Facebook threatening local news. He was also mentioned in Sydney News Today. “The citizens of the world’s democracies face a choice. We can allow Google and Facebook to continue to strangle half our free press to death, and turn the rest into cowed pets. Or we can demand that our governments act now to protect the journalists who protect our most fundamental liberties.”
Open Markets Institute was included in a piece in Law 360 about the need for federal action to ban noncompete clauses. “The Biden administration has pledged to do a pretty thorough rewrite of the employment laws, tilting the playing field back in the direction of workers.”
Sandeep Vaheesan spoke at a Penn Law Students for Democratic Societylecture series on disrupting contract law. “Vaheesan outlines the role of contract law, and noncompete clauses in particular, in entrenching corporate power at the expense of workers and consumers. He interrogates the conventional understanding of contracts as voluntary, noncoercive agreements that informs how 1L Contract Law courses are taught, and identifies opportunities for comprehensive legislative and regulatory reform.”
Barry Lynn was quoted in The Los Angeles Times, Yahoo! News and Gazette Xtra warning that it could be difficult to scale up manufacturing of semiconductors.“ It won’t get fixed overnight. This is one of the reasons it’s so dangerous,” he said. “It’s not like water in the tap. You can’t just turn a spigot.”
DONATE
📈 VITAL STAT: 500
The amount of newly signed paid licensing deals Google made with publishers across dozens of countries.
📚 WHAT WE'RE READING:
“What Kind of Finance Should There Be” (Cornell Law School, Saule Omarova): The paper identifies the importance of asking what the goals of the financial sector should be and explores the tension that exists between more speculative and more productive investment goals. Omarova argues for a public institution that could channel private capital held by financial institutions to more long-term public infrastructure projects.
“The Terrible T-Mobile/Sprint Merger Must Be Undone” (Wired, Hal Singer): Singer argues that the approval of the merger between T-Mobile and Sprint has been a failure to providing increased competition and cellular service options for consumers. The author argues that federal regulators should use their antitrust enforcement power to undo the merger.
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
You can find the full job listings here.
🔎 TIPS? COMMENTS? SUGGESTIONS?
We would love to hear from you—just reply to this e-mail and drop us a line. Give us your feedback, alert us to competition policy news, or let us know your favorite story from this issue.