The Corner Newsletter: February 11, 2021
Welcome to The Corner. In this issue, we discuss how efforts by the European Union to regulate Big Tech are failing, Senator Klobuchar’s newly proposed antitrust law, and how a new bill amending Section 230 strikes a careful balance in the regulation of online speech.
To read previous editions of The Corner, click here.
Open Markets Helps Detail How European Efforts to Regulate Big Tech are Failing
Members of the Open Markets team contributed to two new reports that demonstrate how the European Commission’s top-down, state-centric regulatory approach to Big Tech is failing to protect democracy and business entrepreneurship on the Continent.
On Tuesday, Open Markets fellow Johnny Ryan and the Irish Council for Civil Liberties released a report that details how Europeans have failed to invest in IT systems that would provide even a rudimentary understanding of how tech corporations are complying with Europe’s General Data Protection Regulation regime. The ICCL/Ryan report was covered in the Financial Times, TechCrunch, and elsewhere.
Last week, the European Parliament released a 167-page report that sharply criticized Europe’s Directorate General of Competition for moving too slowly to rein in Google, Facebook, and other platform monopolists. The report was especially critical of antitrust chief Margrethe Vestager for approving Google’s takeover of FitBit late last year. Open Markets’ Executive Director Barry Lynn, along with Lina Khan, last fall met with the leading members of Parliament and warned them about the consequences of the FitBit deal. Then in December, Open Markets led public criticism of the FitBit decision. The Parliament’s report was covered in the FT and elsewhere.
Senator Klobuchar Proposes Fundamental Overhaul of Antitrust Law
Last week, Sen. Amy Klobuchar (D-MN) introduced the Competition and Antitrust Law Enforcement Act to reform current antitrust law. The bill marks a dramatic step forward in efforts to address America’s monopoly crisis, and is a clear signal to the Biden Administration that the Democratic Senate wants to see action on this issue. The bill builds in important ways on the Cicilline Committee report from last October. Proposed changes include a new merger standard that would require merging parties to prove that their merger will not violate the law. The bill would also ban any mergers that risk weakening competition in a market and substantially increases the budgets of both the Federal Trade Commission and the Antitrust Division of the Department of Justice. (CNBC)
Warner-Klobuchar Bill Strikes Careful Balance in Regulation of Online Speech
Senators Warner, Klobuchar, and Hirono last week proposed a variety of changes to Section 230 of the Communication Decency Act of 1996, one of the foundational laws governing the structure and actions of online businesses. They introduced the new bill - called the Safe Tech Act - less than a month after President Trump used various forms of social media to promote a violent attack on the U.S. Capitol, and after Facebook, Twitter, Google, and Amazon all took unilateral and unregulated actions to suppress certain forms of speech and certain speakers.
The new bill is short, but will go a long way to addressing some of the most egregious threats to democracy posed by the business models of dominant platform monopolists. The bill:
Makes platforms liable for any speech they promote in exchange for payment.
Makes it easier for individuals to force a platform to remove certain material.
Makes the platforms liable for all violations of civil rights and international human rights legislation by users of their services.
The point of the bill, Senator Warner said, is not to interfere with free speech. Rather, the goal is to hold the platforms “accountable for harmful, often criminal behavior enabled by their platforms.”
The bill would be far less disruptive of the existing legal regime than a set of reforms proposed last summer by Senators Hawley, Rubio, Braun, and Cotton, which would have formally established the platform monopolists as publishers by giving them the power to actively moderate the content.
Even so, many criticized the new bill for being overly broad. Scholar Evan Greer, for instance, said that “As far as I can tell this bill as written would essentially destroy Bandcamp, Patreon, Wikipedia, Craigslist, Etsy, any individual musician or artist or nonprofit online seller with a store on their website, crowdfunding platforms, etc, etc. it’s a mess”
🔊 ANTI-MONOPOLY RISING:
HD Media, a West Virginia based media organization filed an antitrust lawsuit against Facebook and Google at the end of January. The lawsuit is the first filed that focuses on news publishing. HD Media claims that Google and Facebook have illegally monopolized the ad market and have engaged in price-fixing. This loss of revenue, according to the lawsuit, has led to the decline of the local newspaper industry. (Associated Press)
The European Commission settled an agreement with South African pharmaceutical company Aspen after the corporation dramatically hiked the price of drugs intended to treat hematological cancers, despite the fact that they had been off patent for 50 years. Aspen agreed to cut the price of its drugs by an average of 73%. (Reuters)
The Federal Trade Commission ordered Amazon to pay over $61.7 million to flex drivers, who are independent contractors making deliveries for Amazon, after allegations that the company stole tips from drivers. According to the FTC, Amazon engaged in this practice for two and a half years. (Tech Crunch)
📝 WHAT WE'VE BEEN UP TO:
The Open Markets Institute’s letter with the Authors Guild, and six other writers associations calling on the Justice Department to move immediately to block the conglomerate Bertelsmann from buying book publisher Simon & Schuster was covered in The Los Angeles Times, The Washington Post, MSN, Yahoo! News, Publishers Marketplace, Publishers Lunch, Publisher’s Weekly, Competition Policy International, Book Browse, MuckRack, Universal Personality, and World Pro News. “The time has come for law enforcers to do their job, and rebuild an open and competitive marketplace for books. Our democracy hangs in the balance.”
The Open Markets Institute published a statement condemning Google and Facebook for bullying Australia with threats to block the entire country from search services and news link sharing abilities. The statement was mentioned in Tech News World, Internet Cloning, and Estar Informado. “Today Google and Facebook proved in dramatic fashion that they pose existential threats to the world’s democracies. The two corporations are exploiting their monopoly control over essential communications to extort, bully, and cow a free people.”
Sandeep Vaheesan published a piece in Bloomberg Law detailing how President Joe Biden can make good on his past statements condemning the use of noncompete clauses for American workers by making good appointments to the Federal Trade Commission. “Regardless of whether Congress enacts legislation, the Biden administration has the power to ban noncompetes for all workers.”
Claire Kelloway published a piece that ran in The Fence Post about Tyson, JBS, and other packers paying millions to settle poultry and pork price-fixing suits. “While hundreds of millions for cheated customers is nothing to sneeze at, it is not clear if these payments will discourage future collusion.”
Sally Hubbard was quoted in Retail Dive emphasizing the dangers of Google’s power over online search ads. She was also quoted in Times of India and Eminetra. "There's no competition for search ads because Google has a monopoly on search. What does that lead to? Higher prices for consumers, less money available for [advertisers'] employees, less money for innovation," Hubbard said.
Daniel Hanley was quoted in Teller Report commenting on Jeff Bezos handing over Amazon’s management to Andy Jassy, previous head of Amazon Web Services. He was also quoted in News Beezer, News Splinter, Variety Info, and Welt. “Corona,” says Daniel Hanley, tech analyst at the Washington-based think tank Open Markets Institute, “has led to an almost total dependence on Amazon's cloud. A significant part of our professional and social life is in the hands of a single corporation.”
Open Markets’ report on Amazon’s surveillance was mentioned in The American Prospect in relation to new documentation that shows Amazon plans to install surveillance cameras in its “last mile” delivery vehicles. The report, released last September, was also mentioned by OneZero, eSellerCafe, and News Break.
Claire Kelloway was interviewed in The Check Out Radio podcast about proposition 22, Big Tech, and the antitrust movement overall. “At its core, [antitrust] is a way of regulating industry and it’s about balancing market power in the economy, setting fair terms of conduct, leveling the playing field, and outlawing things like tying, bundling, and exclusive dealing.”
Daniel Hanley was quoted in S&P Global commenting on the propensity of President Joe Biden’s administration to scrutinize fintech megadeals “Hanley believes [the administration] will take a more aggressive approach to antitrust issues."
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📈 VITAL STAT: $8 Trillion
The combined market capitalization of Big Tech in 2020.
📚 WHAT WE'RE READING:
“Mandating Digital Platform Support for the Press” (Harvard Journal of Law &Technology, Neil Weinstock Netanel): Netanel proposes a series of legislative initiatives that mandate support for journalism from digital platforms. Some of the author’s solutions include mandating that platforms include links to a publisher's website and display third party media watchdog trustworthiness rating on posts. The author concludes that the proposed solutions should survive First Amendment scrutiny.
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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