The Corner Newsletter: July 1, 2021
Welcome to The Corner. In this issue, we discuss CJL Fellow Nikki Usher’s upcoming book, Barry Lynn’s newest publication in Foreign Affairs, the consequences and potential impact of the Supreme Court’s decision on student-athlete compensation, and congressional legislation aimed at reining in Big Tech.
To read previous editions of The Corner, click here.
In New Book, CJL Fellow Nikki Usher Details How to Make Journalism More Inclusive
Nikki Usher, a senior fellow at Open Markets Institute’s Center for Journalism & Liberty, on July 6 releases her third book, “News for the Rich, White, and Blue: How Place and Power Distort American Journalism,” a frank examination of the inequalities driving not just America’s journalism crisis but also certain portions of the movement to save it. “We need to radically rethink the core functions of journalism, leverage expertise, and consider how to take the best of what the newspaper ethos of journalism can offer to places that have lost geographically specific news,” explains Usher, an associate professor at the University of Illinois-Champaign. “The news that powers democracy can be more inclusive.” The book can be preordered from Columbia University Press.
How to Use “Anti-Monopoly Power” to Build a More Democratic and Safe World
Open Markets’ Executive Director Barry Lynn published a feature article in Foreign Affairs that details how the United States can use anti-monopoly principles to restructure international trade in ways that “shock proof” industrial and financial systems, strengthen democracy, and rebuild a liberal world order. In the article, Lynn updates and expands Joseph Nye’s well-known concept of “soft power.” He also provides a new history of U.S. trade policy that details how the United States has always used anti-monopoly tools to achieve its strategic goals. “Applied to today’s conditions,” Lynn writes, America’s traditional strategy instructs us “to ensure that no other country controls more than… a quarter of the manufacturing capacity that supplies U.S. demand for any essential good, component, or service. Once any state fulfills 25 percent of total U.S. demand, Washington would require top-tier manufacturers and importers to turn to suppliers located elsewhere.”
House Judiciary Committee Advances Landmark Antitrust Legislation
Last week, the House Judiciary Committee, in a bipartisan vote, voted out of committee six antitrust bills targeting Big Tech companies such as Apple, Amazon, Facebook, and Google. The bills include measures that would give regulators the ability to sue tech companies in order to separate their lines of business on conflict-of-interest grounds and prohibit the practice of self-preferencing. The bills would also impose interoperability standards for products offered by tech companies, make acquisitions by these companies harder, increase merger filing fees for the largest acquisitions, and increase funding for antitrust agencies. (See our description of the bills here.) In response, Open Markets issued the following statement: “The Open Markets Institute commends the leadership of Chairman David Cicilline and Ranking Member Ken Buck, and members of the House Judiciary antitrust subcommittee, for voting out of committee several bipartisan bills that implement the recommendations of the subcommittee’s October 2020 report. We view these bills as the beginning of what will be a long national effort to establish rules of the road for how we share information and do business in the 21st century. We believe these bills — especially as they are further strengthened in the days to come — will serve as a cornerstone for that effort. We look forward to working with all members of Congress to further develop and drive forward this vital work in the days and months to come.”
Supreme Court Gives a Little to College Athletes and a Lot to Monopolists
Last week the Supreme Court, in a unanimous decision authored by Justice Neil Gorsuch, upheld a lower court ruling that invalidated the National Collegiate Athletic Association’s prohibition on education-related benefits to athletes. The Court, however, did not strike down the NCAA’s prohibition on paying a salary to players who generate billions for their colleges and universities. In NCAA v. Alston, Gorsuch included language that in the future will make it easier for corporations like Amazon, Tyson Foods, and Uber to impose restraints on workers, farmers, and other producers and then to defend themselves by pointing to purported benefits to consumers. Open Markets filed two amicus briefs on behalf of the players.
🔊 ANTI-MONOPOLY RISING:
Last week, the European Commission announced an antitrust investigation into Google’s AdTech stack and market power in the online ad market. The Commission is looking into whether Google engages in self-preferencing by favoring its own ad-display technology over other ad-tech service providers and publishers. The investigation will also look into Google’s restriction of access to user data for third-party publishers and ad companies. (TechCrunch)
Last week, Germany’s Federal Cartel Office launched an investigation into Apple’s market power and whether the company’s business practices are in accordance with Germany’s new competition law. The investigation will assess whether Germany’s market power, in areas such as the App Store, in-app purchases, and advertising and tracking, result in less competition. (DW)
The Department of Justice is beginning an antitrust probe into collusion by global banks following the collapse of hedge fund Archegos Capital Management. The probe involves an investigation into whether banks worked together to liquidate their portfolios at the fund. These banks may have pulled out of their positions in order to minimize losses after Archegos’ large positions on stocks like ViacomCBS, Discovery, and Baidu began to decline. (Bloomberg)
📝 WHAT WE'VE BEEN UP TO:
Open Markets Institute welcomed two important new team members: Alexis Goldstein, a financial regulatory expert and former Wall Street professional, will be joining the staff as our new financial policy director. Deepak Gupta, founder of anti-corporate law firm Gupta Wessler PLLC, will be joining our board of directors. Goldstein’s hiring was mentioned in Impact Alpha.
Sandeep Vaheesan was quoted in The Washington Monthly speaking about the Big Tech bills and opposing the consumer welfare standard. “The Supreme Court has consistently defined the consumer welfare standard as involving price and output, with sometimes taking into account quality and innovation,” Vaheesan said. “But the problem is that what appears to be a scientific inquiry is actually based on an impossibly subjective standard.”
Sally Hubbard was interviewed by Colorado Public Radio about the important victories embedded in the Big Tech bills. “If they want to acquire a company, they have to prove by clear and convincing evidence that it's not anti-competitive, that they're not acquiring a competitive threat or a company that is going to make them even more powerful monopolies,” she said. She was also quoted in Protocol.
Sandeep Vaheesan, Barry Lynn, and Sally Hubbard’s anti-monopoly writing was included in the Law and Political Economy Anti-Monopoly Summer School’s syllabus reading list and also mentioned in Tax Research and Postin Trend.
Johnny Ryan and his group, The Irish Council for Civil Liberties, continued to receive coverage on their privacy lawsuit against IAB Tech Lab for allegedly breaching EU privacy rules. "These secret dossiers about you — based on what you think is private — could prompt an algorithm to remove you from the shortlist for your dream job. A retailer might use the data to single you out for a higher price online. A political group might micro target you with [personalized] disinformation.” The coverage included Jurist and CPO Magazine.
Open Markets signed a joint letter with 30+ activist groups, including the Athena Coalition and Color of Change, calling on Congress to increase enforcement of existing workplace safety laws and create new ones to force Amazon to change its worker surveillance and productivity systems.”We call on lawmakers and regulators do everything in their power to end rate and time off task, ensuring Amazon cannot use this punitive system of surveillance to cycle through entire workforces in communities throughout the country.” It received coverage in Protocol, Common Dreams, and The Hill.
Brain Callaci published a report in The Journal of Law and Political Economy on the economic disadvantages of limited workplace flexibility that smaller businesses face under franchises in each industry. “Applying a simple model to a data set created from 530 franchise contracts, this article shows that the loosening of antitrust restrictions on vertical restraints—competition restrictions in agreements between firms at different levels of the production and distribution process—allows trademarked brands to control wages and working conditions across the boundaries of the firm, at legally separate franchised establishments.”
Sally Hubbard was quoted in a piece by The Markup speaking about Google’s decisions in search. “Imagine you go to the library, and the card catalog is picking and choosing what book to get based on what makes the library the most money.”
Open Markets continued to receive broad coverage about former legal director Lina Khan’s position as commissioner on the Federal Trade Commission. Recent coverage included The Financial Times, Yahoo! News, The National Law Review, Bloomberg Law, Washington Examiner, Citizen Times, Skadden, Investopedia, ITPro, Fremont News Messenger, DW, Study International, Media Play News, Mondaq, JD Supra, and Manatt.
Daniel Hanley was quoted in Forbes opposing vertical mergers by dominant firms. “Dominant firms can use vertical mergers to foreclose competitors from accessing essential inputs, distributors, or customers,” Hanley said. “This lack of access could lead to competitors exiting the marketplace, or shutting down their operations entirely, or deter future competitors from entering the market for no reason other than the fact that a firm increased its market power from a merger.”
Sally Hubbard was quoted in a Vox article speaking about how Big Business exploits small businesses: “'They use their power as gatekeeper to reach customers as a way to extract fees and unfair terms on small businesses, yet they will still use and create PR and claim that any regulation of them would hurt small businesses because they are this platform that has enabled all these small businesses to exist,’ said Sally Hubbard, director of enforcement strategy at the Open Markets Institute, an anti-monopoly think tank, who focuses on Big Tech.”
Sandeep Vaheesan was quoted in Competition Policy International speaking about the Supreme Court’s decision to decline to shut down claims that Comcast violated antitrust laws by refusing to do business with rival Viamedia. “’Monopolization claims are tough to win these days, they haven’t won yet but the Seventh Circuit has told Viamedia it has the right to take these claims to trial, and that’s a significant win,’ Vaheesan said.”
Barry Lynn was featured in the podcast TBD: Technology By Design speaking about his book, “Liberty from All Masters,” Big Tech, and antitrust. He was also featured in a similar interview in The Signal. As Lynn sees it, Google, Facebook, and Amazon pose a threat to democracy because they control the flow of speech — whether on social media, search, the book market, or online advertising — and they base decisions solely on their business interests about who will be heard in the public sphere.
Daniel Hanley was quoted in Bloomberg Law and Bloomberg speaking about U.S. District Judge James Boasberg’s decision to dismiss the FTC’s complaint accusing Facebook of abusing its dominance. “'What the FTC needs to do is come up with a much more specific methodology on what market Facebook is actually in,' said Daniel Hanley, an analyst at Open Markets Institute, an anti-monopoly organization in Washington. 'There’s a million ways to cut this, and the agency has a mountain of evidence to draw from to draw the appropriate market.’”
Open Markets released a statement about how the Supreme Court preserved the NCAA’s general collusive scheme against college athletes in its decision to uphold the district court’s decision in NCAA v. Alston. “Don’t be deceived: The Supreme Court just did the bare minimum that it could for college athletes. And, in doing so, it implicitly affirmed the lower courts’ use of cross-market balancing, which potentially opens the door for employers across the economy—whether colleges in the NCAA, Uber, or Amazon—to impose restraints on workers and escape liability by pointing to theoretical benefits to consumers.” The statement was also mentioned in The American Prospect, Sandeep Vaheesan published a piece in The Washington Monthly about it, and he was quoted speaking about it in Politico.
📈 VITAL STAT: $1 Trillion
After antitrust lawsuits against Facebook filed by the FTC and 46 states were dismissed by a federal judge Monday, “shares of the social-media company closed up over 4%, putting the company’s market value above $1 trillion for the first time and more than compensating for the value lost in the immediate days following the filing of the suits in December.”
📚 WHAT WE'RE READING:
“Primed for Pain: Amazon’s Epidemic of Workplace Injuries” (Strategic Organizing Center): The report explains how Amazon’s obsession with speed and operational efficiency pose significant health and safety risks to their workers. Amazon's practices have created an environment where workers are injured more frequently and severely than workers in similarly situated warehouse jobs.
The World’s Most Important War on Big Tech Comes From India (Washington Monthly, Daniel Block): When Facebook removed pages objecting to new agricultural acts in India, it spurred protests from the nation’s farmers. The piece describes the implications of the “first transnational, grassroots movement against monopolization.”
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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