Welcome to The Corner. In this issue, we discuss the implications of the Epic Games v. Apple decision and our recent webinar on the power, potential, and fragility of the news industry.

To read previous editions of The Corner, click here.

Epic Games v. Apple Demonstrates Power of State Antitrust Rules

In a blockbuster decision, Judge Yvonne Gonzalez Rogers held on Sept. 10 that Apple’s restrictive contracts, which require software developers to use Apple’s payment system and pay Apple 30% for all in-app transactions, do not violate the Sherman Act. The case was filed in August 2020 by Epic Games, a video game developer most known for creating Fortnite. The decision provided mixed results, and Epic has decided to appeal the decision. But it did make clear that state regulations are increasingly a tool that private actors can use to take on the world’s biggest corporations.

Epic’s case against Apple centered on a claim that the corporation was attempting to leverage its dominance of smartphone operating systems to force developers to use other Apple services — in this case, to payment platforms. Epic has also filed a similar case against Google.

Advocates for stronger antitrust enforcement viewed the decision as a partial victory. The court’s holding that Apple’s actions did not violate the Sherman Act might endanger other antitrust cases against Big Tech. But many believe that the court’s decision to allow Epic to encourage consumers to use alternative payment systems outside of Apple’s digital environment may have big long-term effects.

Epic filed the suit based on the federal level Sherman Act and California state law (in this case, California’s Unfair Competition law).

The Supreme Court has repeatedly acknowledged that Congress meant for the Sherman Act to bolster and supplement state law rather the displace it. In one case, the Supreme Court stated that “Congress intended the federal antitrust laws to supplement, not displace, state antitrust remedies.” The court’s justification is derived from the concepts of federalism, lack of a clear congressional directive to supplant state efforts, and, as current Attorney General Merrick Garland stated in a prominent law review article from the 1980s, “judicial respect for the political process.”

Sen. John Sherman — the namesake of the act — stated that the law was to “arm the Federal courts ... [so] that they may cooperate with the State courts in checking, curbing and controlling the most dangerous combinations that now threaten the business, property, and trade of the people of the United States.”

In May 2021, the Open Markets Institute released a database tracking many of the state anti-monopoly efforts covering policies such as municipal broadband, prohibitions on worker noncompetes, and mandates on minimum privacy protections. In that report, we detail, for instance, how Massachusetts has required car manufacturers to provide access to vehicle repair and diagnostics information to owners and independent repair shops. The Massachusetts law (which was expanded in 2020 to include telemetric data) shows the true depth and robust capability of state laws to regulate the industry.

The Epic Games decision underscores how citizens can expand their use of state regulations to make it easier for individuals and independent businesses to fight unfair, predatory, and exclusionary business conduct, even by the most powerful global corporations.

At Open Markets event, Usher and Thompson discuss news industry’s influence, inequity, and fragility

Open Markets senior fellow Nikki Usher, in discussing her new book during a Wednesday webinar with a leading editor, asserted that ensuring the news industry’s transformation and survival requires not only overcoming its economic fragility, but also acknowledging its role in perpetuating inequities and the status quo. 

The New York Times’ Matt Thompson, a news leader with experience in radio, daily newspapers, magazines, and nonprofits, addressed the dissonance between individuals represented in the newsrooms and the news, as well as the role of place as a proxy for journalists’ power and influence. Both topics are major themes in News for the Rich, White and Blue: How Place and Power Distort American Journalism, published in July. 

Usher stressed the importance of making news organizations more competitive to ensure their survival. This could mean, for example, intervention from the executive branch in eliminating anti-competitive barriers. “Some of the ways for leveling the playing field is breaking down monopolies,” she said, which would span from hedge funds taking over local media to Big Tech platforms such as Facebook, Google, or Amazon. 

The pair also discussed the need to challenge today's “culture of the press” that bears an ideal of professional success tied to geographic centers of power, and the negative impact of the pandemic in distancing journalists from people of different backgrounds. 

For more, order the book, read reviews or learn more about the discussion.

Monopolies Suck: 7 Ways Big Corporations Rule Your Life and How to Take Back Control, by Sally Hubbard, is now out in paperback

Sally Hubbard’s 2020 book, Monopolies Suck: 7 Ways Big Corporations Rule Your Life and How to Take Back Control is now available in paperback. Hubbard, Open Markets’ director of enforcement strategy, wrote Monopolies Suck as an accessible quick-read to help people understand how monopolies make their lives harder every day, and what they can do about it. To order the book or see the reviews, click here.

🔊 ANTI-MONOPOLY RISING:

• On Sept. 13, President Joe Biden nominated privacy expert and Georgetown University law professor Alvaro Bedoya to the Federal Trade Commission. Bedoya is the founding director of Georgetown Law’s Center on Privacy & Technology. In a statement, Open Markets applauded the nomination as indicative of Biden’s “commitment to breaking Big Tech’s power and control over the U.S. economy and democracy.”
  

• Last week, the FTC stepped up scrutiny of mergers and acquisitions by withdrawing support for the FTC’s lax Trump-era approach to vertical mergers, as detailed in guidelines adopted in 2020 by the FTC and Department of Justice. The guidelines discussed the benefits of vertical mergers and its pro-competitive effects. The vote to withdraw fell along partisan lines, 3-2. (The Wall Street Journal)
  

• The Justice Department and attorneys general for six states and the District of Columbia filed an antitrust lawsuit Tuesday against American Airlines and JetBlue, arguing that a partnership between the two airlines is anti-competitive and would hurt customers. The partnership would allow the companies to sell each other’s seats on routes at airports in the Northeast. (The Washington Post)
  

• On Tuesday, Lupin Pharmaceuticals, an Indian generic drugmaker, agreed to settle antitrust claims with grocery stores and drugstores for its role in a pay-for-delay scheme with pharmaceutical companies Bausch Health Cos. and Assertio Therapeutics. The scheme involved Lupin delaying the introduction of a generic drug to treat Type 2 diabetes that would have competed with Bausch and Asserio’s drug Glumetza. The lawsuit claims Glumetza’s price rose by 800%. Lupin will pay $150 million to the defendants. (Reuters)
  

• Last week, District of Columbia Attorney General Karl Racine amended the District’s antitrust complaint against Amazon. The amended complaint goes into further detail on the anti-competitive effects of a practice carried out by the company known as Minimum Margin Agreements. The new complaint explains how the practice results in sellers increasing prices when selling products outside of the Amazon platform. (CNBC)

📝 WHAT WE'VE BEEN UP TO:

• Claire Kelloway was featured on NPR’s “Morning Edition” commenting on the dangers of food supply consolidation. “Between these recent price shocks and the pandemic and ongoing allegations of price-fixing, that argument for consolidation is falling apart. And there's increasing evidence and suspicions that this market power has gone too far and is beginning to hurt consumers.” Kelloway’s quote was also included in a subsequent NPR written story, on WLRN, and on WITF.
  

• Barry Lynn was quoted in The Financial Times asserting that Big Tech’s recent buying spree and increasing market consolidation is detrimental and was predictable. “This was entirely foreseeable — in hard times, the companies which are already entrenched get that much more entrenched…This dealmaking is bad because it makes these corporations that much more powerful. It increases their power over the people who work for them, over capital markets and investors, and it blocks off the kind of competition that can bring innovation.” The story also ran in Insider Voice, Knews UK, News 7H, and Newsbreak.
  

• Nikki Usher continued receiving wide coverage on her book, News for the Rich, White, and Blue, including an interview with Mike Stephen at WGN Radio and a Medium story by A Road to Pluralism’s Joy Mayer: “I’ve been reading Nikki Usher’s fantastic new book, News for the Rich, White, and Blue: How Place and Power Distort American Journalism. It points out some key, unavoidable truths about newsrooms. Journalists are of course whiter than their communities — a well-established problem that is not getting better nearly fast enough.”
  

• Alexis Goldstein was quoted in The Washington Post about Janet Yellen failing to use the financial review process to advance measures to curb polluting banks. “’Climate risk impacts all the firms that the financial regulators supervise. As a convener of regulators, Treasury needs to do more than acknowledge it — it should urge each financial regulator to use every tool at its disposal to tackle climate risks,’” she said.
  

• Sandeep Vaheesan was quoted in ProMarket for his description of the movement to stop monopoly power and protect democracy. “The term ‘transformation’ expresses the movement’s main ambition: what Sandeep Vaheesan has called a ‘root and branch reconstruction’ that aligns doctrine and policy with an egalitarian vision of citizen welfare and strives to dissolve monopoly power.”
  

• Barry Lynn’s 2010 book, Cornered, was mentioned in Open Democracy as a keystone of early efforts to change the public conversation about corporate power.
  

• Alexis Goldstein was cited in a Truthout podcast about what has changed 10 years after the Occupy Wall Street protests: “But in thinking about where we were in the pre-Occupy days and where we are now, I remember something from your book, Necessary Trouble, when Alexis Goldstein who worked in the financial industry back then said she kind of marveled out loud at work at the destruction the industry had caused and said, ’How will the public ever forgive us?'”
  

• Johnny Ryan was mentioned in The Irish Examiner, The Financial Times, and EMarketer for calling on the European Commission to intervene on the EU’s failure to regulate data protection along with his group, the Irish Council for Civil Liberties. “Johnny Ryan said Ireland was the ’worst bottleneck’ for enforcement of the EU’s General Data Protection Regulation (GDPR).” Ryan was also interviewed about the report in Una and Andrea’s United Ireland podcast.
  

• Daniel Hanley was quoted in Mashable maintaining that the Epic v. Apple lawsuit both reinforces the need for more sweeping policy reform instead of cumbersome lawsuits, and proves that there is major energy for stopping Big Tech’s monopolistic practices, especially on the state level. "’I think this case will have huge implications on state regulatory efforts,’ Hanley said. ‘The case clearly shows that state regulations matter and they can have a real effect on what practices are allowed or prohibited, despite any shortcomings of federal regulations.’"
  

• Nikki Usher was featured in a Washington Post article about how Fox News’ Sean Hannity show has created a platform for Trump supporters as a means of testing out political messages and holding the interest of conservatives.
  

• An Open Markets’ Food and Power report from 2019 continued to receive coverage in outlets such as My Stateline after the Biden administration relied on it when forming its food chain policy. “The Biden administration points to a 2019 study from the Open Markets Institute, which found the four largest beef packing companies control 82-percent of the market.”

📈 VITAL STAT: $3.6 trillion

The value of global deal volumes, which are on track to hit an annual record. 

📚 WHAT WE'RE READING:

• “The Alston Case: Why the NCAA Did not Deserve Antitrust Immunity and Did not Succeed under a Rule-of-Reason Analysis” (Michael A. Carrier and Chris Sagers, George Mason Law Review): The authors discuss the Supreme Court’s recent holding in NCAA v. Alston and analyzes the faults in the arguments put forth by the NCAA to justify its conduct. 

Nikki Usher’s New Book:

News for the Rich, White, and Blue: How Place and Power Distort American Journalism

Nikki Usher, a senior fellow at Open Markets Institute’s Center for Journalism & Liberty, has released her third book, News for the Rich, White, and Blue: How Place and Power Distort American Journalism. In her latest work, Usher offers a frank examination of the inequalities driving not just America’s journalism crisis but also certain portions of the movement to save it.

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. 

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