The Corner Newsletter: November 12, 2020
Welcome to The Corner. In this issue, we examine Nov. 3 ballot initiatives that aimed to rein in corporate power, and we break down the European Union’s groundbreaking lawsuit against Amazon.
To read previous editions of The Corner, click here.
Election 2020 Takeaway: Ballot Initiatives BoostPrivacy Protection and Right to Repair, but Harm Gig Workers
Corporate power was on the ballot on Nov. 3, in referenda from coast to coast, with a few important victories for the anti-monopoly movement and one major defeat.
In California, the approval of Proposition 24 marked a major victory for breaking Big Tech’s ability to gather and wield data in dangerous ways. OMI Senior Fellow Johnny Ryan helped draft the language of Prop 24, which established the California Privacy Rights Act (CPRA) as an update to the California Consumer Privacy Act. The CPRA mandates the creation of a new privacy enforcement agency and provides $10 million to fund the agency. Crucially, the CPRA gives internet users the right to opt out of any sharing of their data by the corporations that collect online data. The new legislation sets a benchmark definition of behavioral advertising, using the term “cross-context behavioral advertising,” to identify the kinds of data harvesting that pose the greatest potential for harm. Building on this definition, the CPRA bans all organizations from using personal data except for the specific purpose for which the organization collected the data. This policy should prevent Facebook, Google, Amazon, and other dominant platforms from selling data to other corporations and from transferring data among internal corporate divisions.
In Massachusetts, voters overwhelmingly approved Question 1, which amends and broadens state law that gives car owners the right to repair their vehicles. The new law requires carmakers who produce cars with telematic systems to include a standardized, open data platform, which will give owners and mechanics direct access to a car’s data. This access will allow owners and independent mechanics to retrieve mechanical data, to run diagnostics tests through a mobile platform, and to send commands to the vehicle for maintenance, diagnostics, and repairs.
In California, Uber, DoorDash, and other dominant gig-economy platforms led a successful campaign for Proposition 22, which gave these corporations an exemption from classifying their workers as employees and allowing their workers to organize. The corporations spent more than $200 million to support the referendum, a record on referendum spending. By classifying their workers as independent contractors, gig platforms do not have to pay minimum wage or overtime, or provide any other form of employment benefits, and they can maintain their disproportionate power over the workers who depend on these jobs. Moreover, labor advocates point outthat Prop 22 perpetuates racial power imbalances, because the workers of gig corporations are disproportionately people of color, who will continue to be denied their basic labor rights.
EU Sues Amazon for Harvesting Rivals’ Data to Gain Unfair Competitive Advantage
European Union regulators on Tuesday filed the first major antitrust lawsuit against Amazon, accusing the online retail behemoth of violating competition laws by spying on companies that sell on its platform, and then using that information to copy their products and services.
The European Commission also announced on Tuesday that it had begun a parallel investigation into Amazon’s practices with its “buy box,” examining whether Amazon gives preferential treatment to its own products and to those of sellers that pay to use Amazon’s logistics and delivery system. This new probe will explore the criteria that Amazon uses to decide which products get chosen for the “buy box” and for its Prime membership service.
The suit by the Directorate-General for Competition follows more than a decade of work by the Open Markets team to expose Amazon’s self-dealing and extortionary practices and to propose remedies. Key works include:
Barry Lynn’s February 2012 article in Harper’s detailing how Amazon exploits its dominant position as a bookseller to squeeze and manipulate authors, readers, and publishers.
Lina Khan’s seminal law review article on Amazon’s monopolistic practices, “Amazon’s Antitrust Paradox,” which detailed many of the practices targeted by DG Comp.
Daniel Hanley and Sally Hubbard’s report last month titled “EyesEverywhere: Amazon's Surveillance Infrastructure and Revitalizing Worker Power,” which examines how Amazon spies on its own employees.
To solve the problem of Amazon both owning the marketplace and acting as a participant in that marketplace, EU regulators could follow the toolkit laid out by Open Markets Legal Director Sandeep Vaheesan in his articleexplaining the American tradition of using bright line antitrust rules to structure markets and govern the behavior of platforms. One of the foundations of this tradition is an outright ban on platforms competing directly with the companies that depend on them to get to market.
🔊 ANTI-MONOPOLY RISING:
The Department of Justice announced last week that it was suing Visa to block the corporation from acquiring fintech startup Plaid for $5.3 billion. The agency alleges that the merger violates antitrust laws by enabling Visa to achieve monopoly power in the market for online debit transactions. (CNN)
The Competition Commission of India opened an antitrust investigation into Google this week to examine whether Google uses its app store to privilege its payments service to the detriment of its competitors. (TechCrunch)
📝 WHAT WE'VE BEEN UP TO:
Barry Lynn and Lina Khan briefed the Working Group on Competition Policy in the Committee on Economic and Monetary Affairs of the European Parliament, discussing recent developments in U.S. antitrust enforcement, with a special focus on Google, Facebook, and Amazon.
Sally Hubbard was quoted in Yahoo! Finance saying that the Department of Justice’s lawsuit against Google will remain strong regardless of the coming Biden administration. “The Department of Justice case against Google is an incredibly strong case. I don’t expect any change in administration to impact that case,” Hubbard told Yahoo! Finance.
Sally Hubbard was also quoted in AdWeek, MacDailyNews, Fudzilla, and Editorials 360, commenting on how the election will affect antitrust enforcement. “Regardless of who wins the presidential election, antitrust enforcement against Big Tech will continue,” said Hubbard. “If anti-monopoly candidates of either party gain congressional seats, then the likelihood of robust legislative reforms, like those proposed in the House Judiciary Antitrust Subcommittee’s Big Tech report, increases.”
Barry Lynn was quoted in New York Pilot asserting that the anti-monopoly movement will continue to grow, regardless of the outcome of the presidential election. “No matter who wins in November, this fight against Google, Facebook and Amazon, this anti-monopoly movement, has reached a level of maturity,” said Lynn. “There’s almost nothing the folks in Washington could do to stop it.”
Sally Hubbard was quoted in Business Insider and Bloomberg Lawcommenting on the Justice Department’s antitrust lawsuit against Visa’s acquisition of fintech startup Plaid. Hubbard compared the proposed deal to Google's 2010 acquisition of travel industry vendor ITA Software, a deal that eventually led to the end of free access to ITA's flight data. "They should have never let that deal happen," she said.
Sandeep Vaheesan was quoted in Which-50 Media for his statement condemning the passage of California’s Proposition 22. Vaheesan labeled the outcome of Proposition 22, which denied gig workers the right to collectively organize, a “slap in the face of American democracy.”
Barry Lynn was quoted in The Center for a Stateless Society discussing antitrust. “The rapid rise in monopolization has increased inequality in all sorts of ways,” Lynn said.
Sally Hubbard’s new book, Monopolies Suck, was reviewed by CBS Local. “The book for me was kind of cathartic because it is what I’ve been working on for my whole career,” said Hubbard, in an interview with CBS Local’s DJ Sixsmith. “I started as an antitrust enforcer back in 2005. There was a lot of stuff that I wanted the average person to understand, the person who is not an economist or antitrust lawyer.”
Barry Lynn’s book Liberty from All Masters was reviewed by Polly Cleveland in the Dollars & Sense Blog. “As Barry Lynn shows in Liberty from All Masters, the consumer protection movement unintentionally bolstered longtime opponents of antitrust and other restrictions on big business and big banks,” Cleveland wrote.
Steve Waldman’s paper on replanting local journalism was featured in an online conference hosted by Harvard Kennedy School Shorenstein Center.
Open Markets Institute, along with 36 public advocacy organizations and six scholars, sent the Federal Trade Commission a letter requesting a status update on their joint petition for rule-making to ban exclusionary contracts.
Barry Lynn spoke about his latest book, Liberty from All Masters, with Zephyr Teachout at a virtual event hosted by Harvard Book Store. Lynn also spoke about his book on Wednesday on the radio program In Deep with Angie Coiro, on San Francisco public radio. He also gave interviews about the book to New Books Network and Readara.
Sally Hubbard discussed her new book, Monopolies Suck, with Sarah Frier at a virtual event hosted by Politics & Prose bookstore.
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📈 VITAL STAT: $235 Million
The amount that Spotify will pay to purchase Megaphone, an ad tech company focused on podcast advertising and publishing. Spotify’s own ad tech business will be able to expand to include thousands of podcasts, using Megaphone’s services. Spotify has been on a buying spree of podcast companies, acquiring Gimlet Media, Anchor, the Ringer, and Joe Rogan during the past few years. The company is the nation’s biggest podcasting platform, with a 25% U.S. market share.
📚 WHAT WE'RE READING:
“Less Restrictive Alternatives and the Ancillary Restraints Doctrine,” by Thomas Nachbar, Virginia Public Law and Legal Theory Research Paper: Nachbar analyzes a critical aspect of antitrust jurisprudence that the Supreme Court created in its 2017 Ohio v. American Express decision, which increased the burden on plaintiffs to prove antitrust violations. He concludes that the way the court analyzed that case is problematic and obfuscates traditional antitrust analysis.
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.
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