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Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
October 19, 2020
By Jonathan Rubin
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
Art Wilmarth will be speaking about his recently-published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, during a virtual program hosted by the Peterson Institute for International Economics on Wednesday, Oct. 28th, at 9 a.m.
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Biotech supports Fauci
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
Like Comment
Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
Like Comment
Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
A D.C. State-level case decision puts a surprise crimp in federal designs to control public broadcasting
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
Ingram on the Google case
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Antitrust v. Regulation (NYT)
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
The Babylon Bee on electronic money security risks
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
DOJ To File Google Antitrust Suit Without Dem Support
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
DOJ Adds Six New Defendants to Price-Fixing Boiler Chicken Conspiracy
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
DAR Comment on the news about the antibody treatment that apparently worked well for President Trump:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
Gottlieb: antibody drugs are good, but not widely available
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
The U.S. government has awarded $486 million to AstraZeneca Plc to develop and secure supplies of up to 100,000 doses of Covid-19 antibody treatment
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
Regeneron’s stock price rose after the company submitted an “emergency use authorization” request to the U.S. Food and Drug Administration for its Covid-19 antibody treatment.
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Taxpayers are subsidizing 80 percent of Regeneron’s COVID-19 treatment’s R&D costs
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Regeneron conference call and press release on its COVID-19 antibody cocktail
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
alexandra.bowie@regeneron.com
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
mark.hudson@regeneron.com
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
invest@regeneron.com
Media Relations
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
- As hypothesized, patients in the study consisted of two different populations: those who had already mounted an effective immune response, and those whose immune response was not yet adequate. These populations could be identified serologically by the presence (seropositive) or absence (seronegative) of SARS-CoV-2 antibodies, and/or by high viral loads at baseline.
- Serological status highly correlated with baseline viral load (p<0.0001). Seropositive patients had much lower levels of virus at baseline, and rapidly achieved viral loads approaching lowest levels quantifiable (LLQ), even without treatment. In contrast, seronegative patients had substantially higher viral levels at baseline, and cleared virus more slowly in the absence of treatment.
- Serological status at baseline also predicted how rapidly patients had alleviation of their COVID-19 clinical symptoms. In the untreated (placebo) patients, seropositive patients had a median time to alleviation of symptoms of 7 days, compared to seronegative patients who had a median time to alleviation of symptoms of 13 days.
- REGN-COV2 rapidly reduced viral load through Day 7 in seronegative patients (key virologic endpoint). The mean time-weighted-average change from baseline nasopharyngeal (NP) viral load through Day 7 in the seronegative group was a 0.60 log10 copies/mL greater reduction (p=0.03) in patients treated with high dose, and a 0.51 log10 copies/mL greater reduction (p=0.06) in patients treated with low dose, compared to placebo. In the overall population, there was a 0.51 log10 copies/mL greater reduction (p=0.0049) in patients treated with high dose, and a 0.23 log10 copies/mL greater reduction (p= 0.20) in patients treated with low dose, compared to placebo.
- Patients with increasingly higher baseline viral levels had correspondingly greater reductions in viral load at Day 7 with REGN-COV2 treatment. The mean log10 copies/mL reduction in viral load compared to placebo were as follows:
- Viral load higher than 105 copies/mL: high dose (-0.93); low dose (-0.86) (p=0.03 for both); approximately 50-60% reduction compared to placebo
- Viral load higher than 106 copies/mL: high dose (-1.55); low dose (-1.65) (p<0.002 for both); approximately 95% reduction compared to placebo
- Viral load higher than 107 copies/mL: high dose (-1.79); low dose (-2.00) (p<0.0015 for both); approximately 99% reduction compared to placebo - Patients who were seronegative and/or had higher baseline viral levels also had greater benefits in terms of symptom alleviation. Among seronegative patients, median time to symptom alleviation (defined as symptoms becoming mild or absent) was 13 days in placebo, 8 days in high dose (p=0.22), and 6 days in low dose (p=0.09). Patients with increasing viral loads at baseline had correspondingly increasing benefit in time to symptom alleviation.
- There were a small number of medically-attended visits given that most non-hospitalized patients recover well at home. Patients in the seronegative group were at higher risk of medically-attended visits: 10 of the 12 medically-attended visits (defined as hospitalizations, or emergency room, urgent care or telemedicine visits for COVID-19) occurred in patients who were seronegative at baseline. In the seronegative group, 15.2% of placebo-treated patients, 7.7% of patients treated with high dose and 4.9% of patients treated with low dose required additional medical visits.
- Both doses were well-tolerated. Infusion reactions were seen in 4 patients (2 on placebo and 2 on REGN-COV2). Serious adverse events occurred in 2 placebo patients, 1 low dose patient and no high dose patients. There were no deaths in the trial.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
alexandra.bowie@regeneron.com
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
mark.hudson@regeneron.com
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
invest@regeneron.com
Media Relations
Reprise: Tony Picadio on gun rights
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
Douglas Ginsburg explains Constitutional originalism on PBS
By Don Allen Resnikoff
Amy Coney Barrett, the president’s choice for the U.S. Supreme Court, is often described as a disciple of Justice Antonin Scalia and an advocate of an interpretation of the Constitution known as originalism.
For those interested in a popular TV presentation explaining and defending Constitutional originalism, Public Broadcasting Service’s (PBS) fits the bill. “A More or Less Perfect Union, A Personal Exploration,” featuring Judge Douglas Ginsburg, offers an interesting, albeit mostly one-sided presentation.
PBS is admirable because of its independence from direct political control of content, but independence does not mean that particular PBS programs will meet standards of objectivity and balance that are suggested by the Corporation for Public Broadcasting’s enabling statute. The Ginsburg series, particularly the last of the series, called “Our Constitution at Risk,” veers sharply in the direction of supporting the Constitutional originalist ideas of Justice Scalia[i]
The Ginsburg PBS show is excellent in the sense that it is intelligently presented and interesting. But it is also an advocacy piece supporting a political viewpoint that includes a narrow “originalist” view of the Constitution, and strong condemnation of government action (such as action in support of labor unions) that many defend as highly desirable.
An article describing the video program for the American Bar Association Journal accurately explains that “Ginsburg, who is an originalist in his interpretation of the Constitution, points out how the balance of powers has shifted over the years. He contends elected officials have degraded the Constitution, and now there are agencies that do the work of all three governmental branches.” [ii] Ginsburg’s opinion is that regulatory agencies often act inappropriately in taking on the multiple tasks of making law, judging whether law violations occurred, and prescribing punishment.
Judge Ginsburg explains his “originalist” views of Constitutional interpretation in a companion book to the PBS video series called Voices of Our Republic.:[iii] The Constitution has also been “interpreted” by the Supreme Court to make certain clauses meaningless and to give other clauses new meaning. That evolution at the hands of the Court has been celebrated by many as a testament to the needed flexibility of the Constitution to respond to new circumstances, and lamented by others, myself included, as a betrayal of the ideals and principles that animated the Constitution in the first place. It also gave rise to the debate . . . : Should a court read the words of the Constitution as those who wrote and ratified them understood them? Or is a court authorized to give those words a new and different meaning in response to new and different circumstances?
The PBS show on the Constitution focuses at length on examples of government regulatory overreach into the business of very small entrepreneurs, such as easily criticized stringent city rules for licensing of tour guides. The show also refers to the history of the Tennessee Valley Authority as an example of government overreach, a bigger and more politically controversial story. The TVA was part of a regional development authority, famously including building of a huge hydroelectric dam that supplied electricity to a large geographic area. It was a centerpiece of Franklin D. Roosevelt’s New Deal programs, and was later opposed by politicians such as Ronald Reagan and Barry Goldwater.
Judge Ginsburg opposes FDR’s New Deal programs and its successors based on the Constitutional interpretation points explained in the PBS program.
Ginsburg explains in an earlier article that “the Great Depression and the determination of the Roosevelt Administration placed the Supreme Court’s commitment to the Constitution as written under severe stress in the 1930s, and it was then that the wheels began to come off [of correct commitment to the Constitution as written].” [iv]
Judge Ginsburg’s examples of the “wheels coming off” the Court’s interpretation of the Constitution include the New Deal era court decision NLRB v. Jones & Laughlin Steel Corp., [v] upholding the power of the Congress under the Constitution’s Commerce Clause to require companies to recognize labor unions. Ginsburg says that the Supreme Court thereby wrongly “threw open the door to national regulation of employment relations—and much more. Not only interstate commerce but anything that affects interstate commerce came within the reach of the Congress.” [vi]
Judge Ginsburg’s views are politically controversial. Financial and intellectual support for the Ginsburg presentation comes from groups that are themselves controversial. The PBS website for the television program on the Constitution credits production to “Free to Choose Media, in association with Thirteen [the New York PBS station WNET].” The Free to Choose website explains that the Freedom to Choose media efforts evolved from a broadcasting collaboration with economist Milton Friedman.[vii]
Milton Freidman is frequently associated with the political arguments that the Great Depression of the 1930s was a consequence of inept monetary policies of the Federal Reserve, and that the large bureaucracies of the Roosevelt New Deal were unneeded and inappropriate as a matter of Constitutional policy. [viii]
Media watchdog Sourcewatch’s characterizations of Free to Choose Media as “right-wing” and “extremist,” and “partisan” suggest, at minimum, that Free to Choose is associated with controversial political views. [ix]
If views expressed in the PBS show “ A More Or Less Perfect Union” are politically controversial, it seems fair to ask whether public broadcasting network PBS and its local affiliate WNET could do more to protect objectivity and balance. I think that the answer is yes, they could do more.
PBS and WNET do not make it clear that the views expressed in the program on the Constitution are the responsibility of the producer, and not PBS. Instead, PBS affiliate WNET appears to take shared credit for the content. As mentioned earlier, a PBS website for the show credits production to “Free to Choose Media, in association with Thirteen,” “Thirteen” being the New York PBS station WNET.
The PBS promotional material for the program is mainly an endorsement of Judge Ginsburg’s views: “Judge Ginsburg skillfully weaves the story of . . .how we may risk freedom today by ignoring the words of the Framers. . . .Business owners and American citizens relate stories both of protection and of overreach by the government – as with the USDA regulating the care of Hemingway’s cats! The Bill of Rights is explored . . . [including] momentous issues surrounding the freedom of speech, religion, press, and assembly, the Second Amendment [guns], eminent domain, the separation of powers, and civil rights.”
How could PBS do better? The answer is simple: Where a program advocates politically controversial positions, PBS should provide context for viewers. That need for context applies to the recent PBS program on the Constitution featuring Judge Ginsburg, if only because the Constitutional originalist ideas the program advocates are controversial. Those originalist ideas are in opposition to regulations and government agencies that many people believe necessary, including regulations necessary to save our country from the ravages of financial depression and Covid.
Don Allen Resnikoff 10-1-20
[i] A video preview is at https://www.pbs.org/video/our-constitution-risk-preview-z4ai48/
[ii] See https://www.abajournal.com/web/article/pbs-a-more-or-less-perfect-union-aims-to-boost-understanding-of-the-Constitution
[iii] Simon and Schuster, Jan 28, 2020
[iv] Cato Supreme Court Review, 2002-2003, James L. Swanson, Cato Institute, Oct 25, 2003
[v] 301 U.S. 1 (1937), a United States Supreme Court case that upheld the constitutionality of the National Labor Relations Act of 1935, also known as the Wagner Act.
[vi] https://www.cato.org/sites/cato.org/files/serials/files/supreme-court-review/2003/9/constitutional.pdf
[vii] https://www.freetochoosenetwork.org/about/
[viii] Franklin Roosevelt and Presidential Power, John Yoo, Chapman Law Review, Vol. 21, No. 1, 2018
[ix] See https://www.sourcewatch.org/index.php/Free_to_Choose_Network
From The Hill: To restore financial stability, bring back Glass-Steagall
By Arthur E. Wilmarth, Jr
Excerpts:
The global response to the pandemic confirms that we have not solved the problems that brought us the Great Recession more than a decade ago.
To break the global doom loop and restore financial stability, we must adopt a new Glass-Steagall Act. The original Glass-Steagall Act of 1933 supported stable financial markets and prevented systemic financial crises for more than three decades after World War II. Glass-Steagall separated banks from the capital markets and prohibited nonbanks from accepting deposits. It established risk buffers that prevented financial disruptions occurring in one sector of the financial markets from spreading to other sectors and triggering systemic crises. Regulators could respond to problems arising in one sector without being forced to bail out the entire financial system. Regulators could also encourage strong financial institutions in one sector to support troubled institutions in another sector. The undermining and repeal of Glass-Steagall’s prudential buffers helped to ignite the subprime mortgage boom that led to the Great Recession.
A new Glass-Steagall Act would greatly improve financial stability. It would prevent banks from using government-protected deposits to finance speculative trading in the capital markets. It would prohibit banks from underwriting securities other than government bonds. It would stop nonbanks from offering short-term financial instruments (like money market mutual funds) that masquerade as “deposits” but are not covered by deposit insurance and other banking regulations.
A new Glass-Steagall Act would reestablish risk buffers and prevent contagion across financial sectors. It would improve market discipline by preventing banks from transferring their public subsidies to affiliates engaged in capital market activities. Regulators would no longer be compelled to prop up securities markets because of concerns about massive securities exposures held by banks. Shadow banks would shrink substantially, as they could no longer finance their operations with short-term financial instruments. Bank regulators could more effectively monitor and control levels of short-term claims in financial markets because those claims would be issued only by banks.
A new Glass-Steagall Act would create a more diverse and competitive banking system by breaking up universal banks. Banks would return to their traditional roles of providing deposit, credit, fiduciary and payment services to businesses and consumers. Banks would have much stronger incentives to serve all segments of business and society, instead of focusing their efforts on Wall Street speculators, multinational corporations and the wealthy.
Securities markets would once again become true markets because they would not be linked to the fortunes of “too big to fail” universal banks and shadow banks. Our political, regulatory and monetary policies would no longer be held hostage by financial giants. Banks and securities firms would return to their proper roles as servants – not masters – of commerce, industry and society.
In 1914, Louis Brandeis warned the American public, “We must break the Money Trust or the Money Trust will break us.” Congress acted on his advice in 1933 by enacting the Glass-Steagall Act. Brandeis’s warning is just as timely today as it was in 1914 and 1933.
Arthur E. Wilmarth, Jr. is a professor emeritus of law at George Washington University in Washington, D.C. This op-ed is based on his book, “Taming the Megabanks: Why We Need a New Glass-Steagall Act (Oxford University Press),” which will be published on October 2.
https://www.msn.com/en-us/money/savingandinvesting/to-restore-financial-stability-bring-back-glass-steagall/ar-BB19A4L3
A&P:
September 2020
California’s Mini CFPB Among Innovations in a Trifecta of New Consumer Protection Laws
September 25, 2020 was a momentous day for the regulation of consumer finance in California—Governor Newsom signed into law three important bills: the California Consumer Financial Protection Law, the Debt Collection Licensing Act and the Student Borrower Bill of Rights.
In doing so, the Department of Business Oversight once again has a new name. Formerly the Department of Corporations, the Department of Business Oversight will now be renamed the Department of Financial Protection and Innovation. Some are calling it a "mini-CFPB"—meaning a California version of the federal Consumer Financial Protection Bureau. The new name and the establishment of a new Financial Technology Innovation Office signals California's renewed focus on financial innovation in the state and commitment to regulatory enforcement.
Read Advisory;https://comms.arnoldporter.com/e/niuiw04bwlagbha/e83a538d-6b1b-4475-afb5-5780d31ea1ab
September 2020
California’s Mini CFPB Among Innovations in a Trifecta of New Consumer Protection Laws
September 25, 2020 was a momentous day for the regulation of consumer finance in California—Governor Newsom signed into law three important bills: the California Consumer Financial Protection Law, the Debt Collection Licensing Act and the Student Borrower Bill of Rights.
In doing so, the Department of Business Oversight once again has a new name. Formerly the Department of Corporations, the Department of Business Oversight will now be renamed the Department of Financial Protection and Innovation. Some are calling it a "mini-CFPB"—meaning a California version of the federal Consumer Financial Protection Bureau. The new name and the establishment of a new Financial Technology Innovation Office signals California's renewed focus on financial innovation in the state and commitment to regulatory enforcement.
Read Advisory;https://comms.arnoldporter.com/e/niuiw04bwlagbha/e83a538d-6b1b-4475-afb5-5780d31ea1ab
PBS: Voice of America politicized?--could U.S. public TV be next?
https://www.pbssocal.org/programs/pbs-newshour/controlling-the-message-1600974186/
Michael Pack, CEO of the U.S. Agency for Global Media, ignored a congressional subpoena over concerns he has politicized and mismanaged media outlets that helped the U.S. win the Cold War. One of those outlets is Voice of America. Nick Schifrin reports.
DAR Comment:
The Voice of America story is that the Trump Administration installed Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America. Press reports indicate that Pack previously ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon. Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired the heads of three other networks — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund.
Pack reportedly dissolved the networks’ bipartisan advisory boards and replaced them with new panels composed of people widely considered to be Trump loyalists.
The Guardian newspaper opined that “The action by Michael Pack appeared to confirm fears that Trump wanted to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
The statute relevant to the Voice of America is the International Broadcasting Act, which critics argue was weakened in several ways by Congress in 2016, including weakening job security of broadcast network heads.
Is there reason for concern that public broadcasting could in the future be made a tool of a partisan or narrow ideological point of view? To use the language of the Guardian newspaper editorial, could the U.S. Public Broadcasting Service stations at some future point be turned into loyal state broadcasters of the kind normally found in authoritarian societies?
Past experience suggests reason for concern. The Voice of America experience in particular suggests that public broadcasting can be an attractive target for aggressive politicians who wish to take control of the information available to the public.
Another source of concern lies in constitutional requirements articulated by the U.S. Supreme Court in its 2020 decision in the case of SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU. The case concerns the status of the CFPB as an independent regulatory agency. The U.S. Supreme Court explained in SEILA that as a general matter, leaders of federal agencies serve at the discretion of the President. The Court then applied that principle to the CFPB.
Commenters have pointed out that in clipping the independence of the Consumer Financial Protection Bureau, a conservative majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. Cass Sunstein says that “The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.”
That constitutional cloud applies as well to the independence of the Corporation for Public Broadcasting, which is responsible for public broadcasting in the United States.
Posting by Don Allen Resnikoff, who is responsible for the content.
https://www.pbssocal.org/programs/pbs-newshour/controlling-the-message-1600974186/
Michael Pack, CEO of the U.S. Agency for Global Media, ignored a congressional subpoena over concerns he has politicized and mismanaged media outlets that helped the U.S. win the Cold War. One of those outlets is Voice of America. Nick Schifrin reports.
DAR Comment:
The Voice of America story is that the Trump Administration installed Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America. Press reports indicate that Pack previously ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon. Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired the heads of three other networks — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund.
Pack reportedly dissolved the networks’ bipartisan advisory boards and replaced them with new panels composed of people widely considered to be Trump loyalists.
The Guardian newspaper opined that “The action by Michael Pack appeared to confirm fears that Trump wanted to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
The statute relevant to the Voice of America is the International Broadcasting Act, which critics argue was weakened in several ways by Congress in 2016, including weakening job security of broadcast network heads.
Is there reason for concern that public broadcasting could in the future be made a tool of a partisan or narrow ideological point of view? To use the language of the Guardian newspaper editorial, could the U.S. Public Broadcasting Service stations at some future point be turned into loyal state broadcasters of the kind normally found in authoritarian societies?
Past experience suggests reason for concern. The Voice of America experience in particular suggests that public broadcasting can be an attractive target for aggressive politicians who wish to take control of the information available to the public.
Another source of concern lies in constitutional requirements articulated by the U.S. Supreme Court in its 2020 decision in the case of SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU. The case concerns the status of the CFPB as an independent regulatory agency. The U.S. Supreme Court explained in SEILA that as a general matter, leaders of federal agencies serve at the discretion of the President. The Court then applied that principle to the CFPB.
Commenters have pointed out that in clipping the independence of the Consumer Financial Protection Bureau, a conservative majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. Cass Sunstein says that “The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.”
That constitutional cloud applies as well to the independence of the Corporation for Public Broadcasting, which is responsible for public broadcasting in the United States.
Posting by Don Allen Resnikoff, who is responsible for the content.
PBS's Hacking Your Mind
The official "teaser" for the three part series is here:
https://www.youtube.com/watch?v=Hs0lEP6r2Ig
DAR comment: The show offers an interesting analysis of how behavioral manipulation strategies are used to persuade consumers concerning products like antacids, and voters concerning support for particular parties and candidates.
A consumer product example is the advertising campaign that successfully persuaded people to switch from Prilosec to the more expensive prescription-only Nexium, even though the two are functionally very similar.
In the world of politics, similar strategies are on steroids because of Facebook, which profits by selling information on user interests. The PBS program suggests that strategies of politicians and those wishing to influence politics are often the result of careful research on voter biases, rather than random off-the-cuff thinking.
For example, "us v them" biases are exploited by groups seeking to influence political thinking. One illustration offered by the PBS program involves a Russia troll group that created two different web sites in the U.S. -- one anti-Muslim, and the other promoting defense of Muslim interests. The troll group used both websites to announce a public demonstration for both groups at the same time and place, which succeeded in creating a real world large and angry crowd confrontation between anti-Muslim people and Muslim defenders. The Russian political goal? To promote political discord in the U.S.
Broad use of behavioral manipulation techniques is more than a little concerning, both with regard to consumer product promotion and politics. I recommend the PBS series.
-Posting by Don Allen Resnikoff, who is responsible for the content.
The official "teaser" for the three part series is here:
https://www.youtube.com/watch?v=Hs0lEP6r2Ig
DAR comment: The show offers an interesting analysis of how behavioral manipulation strategies are used to persuade consumers concerning products like antacids, and voters concerning support for particular parties and candidates.
A consumer product example is the advertising campaign that successfully persuaded people to switch from Prilosec to the more expensive prescription-only Nexium, even though the two are functionally very similar.
In the world of politics, similar strategies are on steroids because of Facebook, which profits by selling information on user interests. The PBS program suggests that strategies of politicians and those wishing to influence politics are often the result of careful research on voter biases, rather than random off-the-cuff thinking.
For example, "us v them" biases are exploited by groups seeking to influence political thinking. One illustration offered by the PBS program involves a Russia troll group that created two different web sites in the U.S. -- one anti-Muslim, and the other promoting defense of Muslim interests. The troll group used both websites to announce a public demonstration for both groups at the same time and place, which succeeded in creating a real world large and angry crowd confrontation between anti-Muslim people and Muslim defenders. The Russian political goal? To promote political discord in the U.S.
Broad use of behavioral manipulation techniques is more than a little concerning, both with regard to consumer product promotion and politics. I recommend the PBS series.
-Posting by Don Allen Resnikoff, who is responsible for the content.
From New America:
Protecting the Vote
RSVP
Following the 2016 U.S. presidential election, internet platforms have come under increased scrutiny for how they tackle the spread of election-related misinformation and disinformation, particularly content that aims to suppress voter engagement and that targets communities of color. As the 2020 U.S. presidential election draws near, concerns that these platforms are being used by both foreign and domestic actors to exploit users and spread misleading information are growing, especially given that this election is taking place amid an unprecedented pandemic.
Join New America’s Open Technology Institute (OTI) for a virtual panel that will explore how internet platforms are addressing the spread of election-related misinformation and disinformation on their services, and how these efforts can be improved.
This event builds off of OTI’s work which evaluates how companies are tackling the spread of COVID-19 related misinformation and disinformation, and our forthcoming report on how platforms are addressing the spread of election-related disinformation.
Speakers:
David Brody
Counsel & Senior Fellow for Privacy and Technology, Lawyer’s Committee for Civil Rights Under Law
Yosef Getachew, @ygetachew2
Director, Media & Democracy Program, Common Cause
Spandi Singh, @spandi_s
Policy Analyst, New America’s Open Technology Institute
Ian Vandewalker, @IanVandewalker
Senior Counsel, Brennan Center for Justice
Moderator:
Sam Sabin, @samsabin923
Tech Policy Reporter, Morning Consult
Protecting The Vote: How Internet Platforms Are Addressing Election-Related Misinformation And Disinformation Online
THURSDAY, OCTOBER 1, 2020
1:30 PM – 2:30 PM ET
ONLINE
LINK: https://newamerica.cvent.com/events/protecting-the-vote-how-internet-platforms-are-addressing-election-related-misinformation-and-disinf/registration-359054d33cc24f58b053175983cd898e.aspx?i=06bb9732-d58b-421e-baa1-9304dc065010&fqp=true
RSV
Rand Paul v. Dr. Fauci at Senate hearing
From The Hill
https://thehill.com/policy/healthcare/517801-fauci-rand-paul-is-not-listening-to-the-cdc-director-about-covid-19-data
Paul, who has frequently criticized lockdowns aimed at preventing the spread of the coronavirus while questioning their effectiveness, asked Fauci if he had second thoughts over his support for such measures given statistics in other countries.
He claimed mitigation measures like closing movie theaters, bars and limiting restaurant capacity had no impact, because the New York tri-state area had the highest coronavirus death rate in the country.
"It's important that we the people not simply acquiesce to authoritarian mandates on our behavior without first making the nanny state prove their hypothesis," Paul said. "What we do know is that New York and New Jersey and Connecticut and Rhode Island still allowed the highest death rates in the world."
Fauci said New York got hit "pretty badly" but the state has managed to bring its positivity down to about 1 percent because New Yorkers have been following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors.
When Paul floated the theory that New Yorkers have now developed enough immunity that they are no longer at risk, Fauci appeared irritated and said the senator was completely off base.
"I challenge that, senator," Fauci said, before asking for more time to finish his response "because this happens with Senator Rand all the time."
"You are not listening to what the director of the CDC [Centers for Disease Control and Prevention] said, that in New York [the infection rate is] about 22 percent. If you believe 22 percent is herd immunity, I believe you're alone in that," Fauci said.
DAR Comment: The debate is about a libertarian approach to government regulation, the "nanny state" concern. For Paul, the "nanny state" must prove very strong justification before imposing lockdown mandates. Fauci does not argue with the point that justfication is needed, but does argue with the idea that justification has not been strongly shown. He points out that New York has brought its positivity rate down by following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors. As a matter of fact, what Dr. Fauci refers to as New York recommendations were mandates. See https://www.nytimes.com/2020/04/15/nyregion/coronavirus-face-masks-andrew-cuomo.html
From The Hill
https://thehill.com/policy/healthcare/517801-fauci-rand-paul-is-not-listening-to-the-cdc-director-about-covid-19-data
Paul, who has frequently criticized lockdowns aimed at preventing the spread of the coronavirus while questioning their effectiveness, asked Fauci if he had second thoughts over his support for such measures given statistics in other countries.
He claimed mitigation measures like closing movie theaters, bars and limiting restaurant capacity had no impact, because the New York tri-state area had the highest coronavirus death rate in the country.
"It's important that we the people not simply acquiesce to authoritarian mandates on our behavior without first making the nanny state prove their hypothesis," Paul said. "What we do know is that New York and New Jersey and Connecticut and Rhode Island still allowed the highest death rates in the world."
Fauci said New York got hit "pretty badly" but the state has managed to bring its positivity down to about 1 percent because New Yorkers have been following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors.
When Paul floated the theory that New Yorkers have now developed enough immunity that they are no longer at risk, Fauci appeared irritated and said the senator was completely off base.
"I challenge that, senator," Fauci said, before asking for more time to finish his response "because this happens with Senator Rand all the time."
"You are not listening to what the director of the CDC [Centers for Disease Control and Prevention] said, that in New York [the infection rate is] about 22 percent. If you believe 22 percent is herd immunity, I believe you're alone in that," Fauci said.
DAR Comment: The debate is about a libertarian approach to government regulation, the "nanny state" concern. For Paul, the "nanny state" must prove very strong justification before imposing lockdown mandates. Fauci does not argue with the point that justfication is needed, but does argue with the idea that justification has not been strongly shown. He points out that New York has brought its positivity rate down by following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors. As a matter of fact, what Dr. Fauci refers to as New York recommendations were mandates. See https://www.nytimes.com/2020/04/15/nyregion/coronavirus-face-masks-andrew-cuomo.html
From the Daily Beast: "Red State" troll of Fauci worked in Fauci's agency
The managing editor of the prominent conservative website RedState has spent months trashing U.S. officials tasked with combating COVID-19, dubbing White House coronavirus task force member Dr. Anthony Fauci a “mask nazi,” and intimating that government officials responsible for the pandemic response should be executed.
But that writer, who goes by the pseudonym “streiff,” isn’t just another political blogger. The Daily Beast has discovered that he actually works in the public affairs shop of the very agency that Fauci leads.
William B. Crews is, by day, a public affairs specialist for the National Institute of Allergy and Infectious Diseases. But for years he has been writing for RedState under the streiff pseudonym. And in that capacity he has been contributing to the very same disinformation campaign that his superiors at the NIAID say is a major challenge to widespread efforts to control a pandemic that has claimed roughly 200,000 U.S. lives
.
Under his pseudonym, Crews has derided his own colleagues as part of a left-wing anti-Trump conspiracy and vehemently criticized the man who leads his agency, whom he described as the “attention-grubbing and media-whoring Anthony Fauci.” He has gone after other public health officials at the state and federal levels, as well—“the public health Karenwaffen,'' as he’s called them—over measures such as the closures of businesses and other public establishments and the promotion of social distancing and mask-wearing. Those policies, Crews insists, have no basis in science and are simply surreptitious efforts to usurp Americans’ rights, destroy the U.S. economy, and damage President Donald Trump’s reelection effort.
“I think we’re at the point where it is safe to say that the entire Wuhan virus scare was nothing more or less than a massive fraud perpetrated upon the American people by ‘experts’ who were determined to fundamentally change the way the country lives and is organized and governed,” Crews wrote in a June post on RedState.
“If there were justice,” he added, “we’d send and [sic] few dozen of these fascists to the gallows and gibbet their tarred bodies in chains until they fall apart.”
After The Daily Beast brought those and other quotes from Crews to NIAID’s attention, the agency said in an emailed statement that Crews would “retire” from his position.
From https://www.thedailybeast.com/redstate-covid-troll-streiff-is-actually-bill-crews-and-he-actually-works-for-dr-anthony-fauci
The managing editor of the prominent conservative website RedState has spent months trashing U.S. officials tasked with combating COVID-19, dubbing White House coronavirus task force member Dr. Anthony Fauci a “mask nazi,” and intimating that government officials responsible for the pandemic response should be executed.
But that writer, who goes by the pseudonym “streiff,” isn’t just another political blogger. The Daily Beast has discovered that he actually works in the public affairs shop of the very agency that Fauci leads.
William B. Crews is, by day, a public affairs specialist for the National Institute of Allergy and Infectious Diseases. But for years he has been writing for RedState under the streiff pseudonym. And in that capacity he has been contributing to the very same disinformation campaign that his superiors at the NIAID say is a major challenge to widespread efforts to control a pandemic that has claimed roughly 200,000 U.S. lives
.
Under his pseudonym, Crews has derided his own colleagues as part of a left-wing anti-Trump conspiracy and vehemently criticized the man who leads his agency, whom he described as the “attention-grubbing and media-whoring Anthony Fauci.” He has gone after other public health officials at the state and federal levels, as well—“the public health Karenwaffen,'' as he’s called them—over measures such as the closures of businesses and other public establishments and the promotion of social distancing and mask-wearing. Those policies, Crews insists, have no basis in science and are simply surreptitious efforts to usurp Americans’ rights, destroy the U.S. economy, and damage President Donald Trump’s reelection effort.
“I think we’re at the point where it is safe to say that the entire Wuhan virus scare was nothing more or less than a massive fraud perpetrated upon the American people by ‘experts’ who were determined to fundamentally change the way the country lives and is organized and governed,” Crews wrote in a June post on RedState.
“If there were justice,” he added, “we’d send and [sic] few dozen of these fascists to the gallows and gibbet their tarred bodies in chains until they fall apart.”
After The Daily Beast brought those and other quotes from Crews to NIAID’s attention, the agency said in an emailed statement that Crews would “retire” from his position.
From https://www.thedailybeast.com/redstate-covid-troll-streiff-is-actually-bill-crews-and-he-actually-works-for-dr-anthony-fauci
From Buzzfeed: secret government documents reveal how the giants of Western banking move trillions of dollars in suspicious transactions, facilitating the work of terrorists, kleptocrats, and drug kingpins.
And the US government, despite its vast powers, fails to stop it.
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world.”
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In the rare instances when the US government does crack down on banks, it often relies on sweetheart deals called deferred prosecution agreements, which include fines but no high-level arrests. The Trump administration has made it even harder to hold executives personally accountable, under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “piling on.”
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
Suspicious payments flow around the world and into countless industries, from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants. They filter into the companies that make familiar items from people’s lives, from the gas in their car to the granola in their cereal bowl.
The FinCEN Files expose an underlying truth of the modern era: The networks through which dirty money traverse the world have become vital arteries of the global economy. They enable a shadow financial system so wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy. Banks with household names have helped to make it so.
From: https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks?ref=hpsplash&origin=spl
And the US government, despite its vast powers, fails to stop it.
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world.”
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In the rare instances when the US government does crack down on banks, it often relies on sweetheart deals called deferred prosecution agreements, which include fines but no high-level arrests. The Trump administration has made it even harder to hold executives personally accountable, under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “piling on.”
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
Suspicious payments flow around the world and into countless industries, from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants. They filter into the companies that make familiar items from people’s lives, from the gas in their car to the granola in their cereal bowl.
The FinCEN Files expose an underlying truth of the modern era: The networks through which dirty money traverse the world have become vital arteries of the global economy. They enable a shadow financial system so wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy. Banks with household names have helped to make it so.
From: https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks?ref=hpsplash&origin=spl
Daimler AG and Mercedes Benz Settle with US for $1.5 Billion for Emissions Cheating
by Michael Volkov · September 21, 2020
The Justice Department, the Environmental Protection Agency and the California Resources Board announced a joint settlement totaling roughly $1.5 billion with Daimler AG and its US subsidiary Mercedes Benz to resolve violations of the Clean Air Act and California law from the emissions cheating scandal.
The EPA and CARB discovered the violations by conducting tests in the wake of the original Volkswagen emissions cheating scandal. The Mercedes emissions systems included defeat devices and were intended to increase fuel mileage and performance and boost sales to the detriment of compliance with applicable emissions standards.
Daimler agreed to recall and repair the emissions systems in Mercedes diesel vehicles sold in the US between 2009 and 2016 and pay approximately $945,300 in penalties. Also, Daimler agreed to extend the warranty period for parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxide (NOx) emitted from the vehicles and implement new internal audit procedures to prevent a recurrence of the cheating scandal. The recall program and federal mitigation project are expected to cost Daimler around $436 million.
Daimler also will pay another $110 million to fund mitigation projects in California. Added together, the settlement is valued at approximately $1.5 billion.
From 2009 to 2016, Daimler manufactured, imported and sold more than 250,000 diesel vans and cars with undisclosed emission control devices and defeat devices designed to circumvent emissions standards set by the EPA. These devices caused the vehicles to generate results that complied with emissions tests. However, when not being tested, the vehicles had programmed emissions controls to operate differently, and less effectively, resulting in an increase in NOx emissions above the mandated maximum standard.
NOx emissions play a significant role in ground-level ozone production and cause harm to human health. Breathing ozone may damage lung tissue in children and adults, and cause further harm to humans with conditions like asthma, emphysema and bronchitis. recent scientific studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue, and premature death.
Under the settlement, Daimler will implement a recall and repair program to remove all emissions defeat devices at no cost to consumers. The repair includes a software update and replacement of hardware for different years and models. Mercedes vehicles will be brought into compliance with Clear Air Act requirements.
Daimler is subject to a requirement that it repair at least 85 percent of the vehicles within two years and 85 percent of certain vans within three years. Daimler has to extend the warranty for the new software and hardware, and it must test repaired vehicles each year for the next five years to ensure compliance with the emissions standards. Daimler will face set penalties if it fails to meet the applicable recall rates.
As part of the settlement, Daimler has to implement systemic corporate compliance enhancements to detect and prevent eliminate violations in the future. These reforms include use of a portable emissions measurement system, install a robust whistleblower program, enhance training and perform internal audits subject to review by an external compliance consultant.
From: https://blog.volkovlaw.com/2020/09/daimler-ag-and-mercedes-benz-settle-with-us-for-benz-1-5-billion-for-emissions-cheating/
by Michael Volkov · September 21, 2020
The Justice Department, the Environmental Protection Agency and the California Resources Board announced a joint settlement totaling roughly $1.5 billion with Daimler AG and its US subsidiary Mercedes Benz to resolve violations of the Clean Air Act and California law from the emissions cheating scandal.
The EPA and CARB discovered the violations by conducting tests in the wake of the original Volkswagen emissions cheating scandal. The Mercedes emissions systems included defeat devices and were intended to increase fuel mileage and performance and boost sales to the detriment of compliance with applicable emissions standards.
Daimler agreed to recall and repair the emissions systems in Mercedes diesel vehicles sold in the US between 2009 and 2016 and pay approximately $945,300 in penalties. Also, Daimler agreed to extend the warranty period for parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxide (NOx) emitted from the vehicles and implement new internal audit procedures to prevent a recurrence of the cheating scandal. The recall program and federal mitigation project are expected to cost Daimler around $436 million.
Daimler also will pay another $110 million to fund mitigation projects in California. Added together, the settlement is valued at approximately $1.5 billion.
From 2009 to 2016, Daimler manufactured, imported and sold more than 250,000 diesel vans and cars with undisclosed emission control devices and defeat devices designed to circumvent emissions standards set by the EPA. These devices caused the vehicles to generate results that complied with emissions tests. However, when not being tested, the vehicles had programmed emissions controls to operate differently, and less effectively, resulting in an increase in NOx emissions above the mandated maximum standard.
NOx emissions play a significant role in ground-level ozone production and cause harm to human health. Breathing ozone may damage lung tissue in children and adults, and cause further harm to humans with conditions like asthma, emphysema and bronchitis. recent scientific studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue, and premature death.
Under the settlement, Daimler will implement a recall and repair program to remove all emissions defeat devices at no cost to consumers. The repair includes a software update and replacement of hardware for different years and models. Mercedes vehicles will be brought into compliance with Clear Air Act requirements.
Daimler is subject to a requirement that it repair at least 85 percent of the vehicles within two years and 85 percent of certain vans within three years. Daimler has to extend the warranty for the new software and hardware, and it must test repaired vehicles each year for the next five years to ensure compliance with the emissions standards. Daimler will face set penalties if it fails to meet the applicable recall rates.
As part of the settlement, Daimler has to implement systemic corporate compliance enhancements to detect and prevent eliminate violations in the future. These reforms include use of a portable emissions measurement system, install a robust whistleblower program, enhance training and perform internal audits subject to review by an external compliance consultant.
From: https://blog.volkovlaw.com/2020/09/daimler-ag-and-mercedes-benz-settle-with-us-for-benz-1-5-billion-for-emissions-cheating/
Antitrust Experts Assess New Data on Private U.S. Antitrust Enforcement, Highlight Trends in Compensating Victims and Deterring Illegal Conduct
September 21, 2020
Private Enforcement , Section 1 of the Sherman Act , Competition Policy
The American Antitrust Institute (AAI) and the University of San Francisco School of Law (USF Law) released a commentary (Commentary) on a new annual report examining antitrust class actions in federal court from 2009 to 2019. The 2019 Antitrust Annual Report (2019 Report) finds that cases settled since 2009 have recovered more than $24 billion on behalf of victims of antitrust violations. The 2019 Report, which expands on last year’s 2018 Antitrust Annual Report (2018 Report) was jointly produced by USF Law and Huntington National Bank.
Private enforcement actions are brought under two main federal statutes—the Sherman Antitrust Act and the Clayton Antitrust Act—and various states’ laws. The laws prohibit collusive agreements, monopolization, and mergers that are likely substantially to lessen competition. Federal courts oversee many private enforcement actions.
“With increasing concerns over the ill effects of high market concentration in critical sectors and markets, private enforcement is more important than ever,” said AAI President Diana Moss. “We see strong evidence of increased filings and recoveries in antitrust class actions from 2009-2019, and at the same time we see federal antitrust enforcement action, particularly against illegal conspiracies, in decline. Private enforcement remains a critical tool in the U.S. enforcement system and can deliver meaningful compensation to victims and deter future illegal conduct. The 2019 Report and Commentary together highlight the significant results achieved through private antitrust enforcement,” explained Moss.
“The 2019 Antitrust Annual Report is the second installment in this pioneering annual research effort,” Professor Joshua Davis, Director of the Center for Law and Ethics, University of San Francisco School of Law, noted. “The law firms prosecuting private antitrust enforcement actions play a crucial role in the public interest as private attorneys general, particularly when enforcement by federal agencies is waning. The U.S. system relies almost entirely on private enforcement to compensate victims. Moreover, private damages often dwarf the sanctions imposed by government actors, providing a critical deterrent to wrongdoers,” Professor Davis explained.
“The depth and breadth of the data assembled in the 2019 Report provides critical perspective for understanding trends in public and private enforcement over time,” said Laura Alexander, AAI’s Vice President of Policy. “With this report, we can better understand the real impact of pivotal court decisions on the ability of private enforcers to bring cases and recover compensation for victims illegal anticompetitive conduct.”
The AAI-USF Law Commentary highlights a number of key takeaways from the 2019 Report’s data on antitrust actions over the period 2009-2019. These collectively signal the efficiency and effectiveness of private enforcement — and the antitrust class action in particular.
- Private enforcement resources are focused efficiently on violations that harm victims, such as consumers and businesses. The 2019 Report reflects, among other things, considerable overlap between the industries where private and public enforcers find misconduct. “The data demonstrate that the congressional plan for parallel private and public enforcement works efficiently, often against well-resourced defendants,” commented AAI’s Moss.
- Private antitrust enforcement continues to be effective. From to 2009 to 2019, there was robust growth in total annual settlement amounts, with smaller settlement providing the backbone for private antitrust enforcement. Total settlement amounts showed robust growth over the period, which was particularly driven by an increase in very large settlements (around or above $1 billion). But smaller settlements of up to $50 million per case also held steady over the period, notwithstanding increasingly challenging law and procedure facing enforcers. “This growth in recoveries overall signals that private enforcement is effective, and that smaller settlements continue as the strong core of private enforcement” noted Moss.
- Private enforcement focused on victims directly harmed by large, often global antitrust conspiracies remains critical, but enforcement on behalf of indirect purchasers and victims of illegal monopolization also plays a crucial role. While the vast majority of the recoveries over the period 2009-2019 came from conspiracy cases brought by direct purchasers, both indirect purchaser cases and monopolization cases played an important role. “Monopolization and attempted monopolization cases—so-called conduct cases—are often thought to be unicorns. This data shows that, far from it, these cases result in substantial recoveries and may represent an overlooked area where more enforcement would be fruitful,” observed Professor Davis.
“The Commentary uses the occasion of the 2019 Report to step back and observe the U.S. private enforcement system and the antitrust class action device through a broader lens, both empirically and qualitatively,” Alexander stated. Davis noted further that the 2019 Report “Highlights fruitful areas for further academic work in studying private antitrust enforcement actions, their deterrence effect, and compensation for victims of illegal activity.”
###
Based in Washington, D.C., the American Antitrust Institute is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. It serves the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Founded in 1912, the University of San Francisco School of Law provides a rigorous education – from intellectual property law to litigation and more — with a global perspective in a diverse, supportive community. It is fully accredited by the American Bar Association and a member of the Association of American Law Schools.
From PBS: Doctors who are musicians, and play together virtually and in person in socially distanced settings
See https://www.facebook.com/newshour/videos/385047986220855
Among other things, the PBS shows physician-musicians playing together outdoors is small, socially distanced groups. The doctors have often experienced the stress of treating very ill patients in the time of COVID. They well understand the current rules and principles of social distancing, but they have found ways of participating in happy activities. It can be done, and playing in socially distanced music groups is something happy I've done myself (although I am not a physician). Don Resnikoff
See https://www.facebook.com/newshour/videos/385047986220855
Among other things, the PBS shows physician-musicians playing together outdoors is small, socially distanced groups. The doctors have often experienced the stress of treating very ill patients in the time of COVID. They well understand the current rules and principles of social distancing, but they have found ways of participating in happy activities. It can be done, and playing in socially distanced music groups is something happy I've done myself (although I am not a physician). Don Resnikoff
From PBS: Wired's Nick Thompson on Tik-Tok and WeChat
The Trump administration is going ahead with plans to ban two popular Chinese social media apps. Soon Americans will no longer be able to download TikTok or WeChat from Apple or Google app stores, although current versions of TikTok will still be usable. Nick Thompson, editor-in-chief of WIRED Magazine, joins PBS's William Brangham to discuss.
In this observer's opinion, Thompson (who is skillfully questioned by Brangham) is adept at explaining the relevant technology of protecting the privacy of personal information, and the problem of Chinese Government access to personal data. Also, he puts the privacy protection issues in the broader context of a long term tech rivalry between U.S. and China.
Thompson suggests the value of a broader set of U.S. policies and rules on tech issues with China rather than seemingly ad hoc attacks like that on Tik-Tok.
From a lawyer's perspective, Thompson's suggestion of well formulated and generally applicable policies and rules connects well with the due process idea that the Government's expectations on questions of legality be well laid out in advance, not developed on an ad hoc basis or after the fact.
Proceedings of the relevant government agency The Committee on Foreign Investment in the United States (CFIUS)
tend to be quick and carried out without great transparency, and do not typically involve court review. There are reasons for the difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters -- national security matters can be emergencies requiring particularly swift resolution. But Thompson's suggestion of generally applicable and clearly articulated policies and rules on matters like media privacy rights seems a sensible one.
Posting by Don Resnikoff, who is responsible for the content
The Thompson interview is here: https://www.youtube.com/watch?v=Q49RO2kd1u8
The Trump administration is going ahead with plans to ban two popular Chinese social media apps. Soon Americans will no longer be able to download TikTok or WeChat from Apple or Google app stores, although current versions of TikTok will still be usable. Nick Thompson, editor-in-chief of WIRED Magazine, joins PBS's William Brangham to discuss.
In this observer's opinion, Thompson (who is skillfully questioned by Brangham) is adept at explaining the relevant technology of protecting the privacy of personal information, and the problem of Chinese Government access to personal data. Also, he puts the privacy protection issues in the broader context of a long term tech rivalry between U.S. and China.
Thompson suggests the value of a broader set of U.S. policies and rules on tech issues with China rather than seemingly ad hoc attacks like that on Tik-Tok.
From a lawyer's perspective, Thompson's suggestion of well formulated and generally applicable policies and rules connects well with the due process idea that the Government's expectations on questions of legality be well laid out in advance, not developed on an ad hoc basis or after the fact.
Proceedings of the relevant government agency The Committee on Foreign Investment in the United States (CFIUS)
tend to be quick and carried out without great transparency, and do not typically involve court review. There are reasons for the difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters -- national security matters can be emergencies requiring particularly swift resolution. But Thompson's suggestion of generally applicable and clearly articulated policies and rules on matters like media privacy rights seems a sensible one.
Posting by Don Resnikoff, who is responsible for the content
The Thompson interview is here: https://www.youtube.com/watch?v=Q49RO2kd1u8
PBS Newshour, Solman, Rosenthal: US paying twice for COVID vaccines?
https://www.pbs.org/newshour/show/is-the-u-s-government-paying-twice-for-coronavirus-vaccine
Excerpt:
https://www.pbs.org/newshour/show/is-the-u-s-government-paying-twice-for-coronavirus-vaccine
Excerpt:
- Osaremen Okolo:
There is no reason that private pharmaceutical companies should be profiteering off of a pandemic. - Paul Solman:
Osaremen Okolo is the chief health policy aide for Illinois Democrat Jan Schakowsky. - Rep. Jan Schakowsky, D-Ill.:
Yes or no, will you sell your vaccine at cost, so that we can verify you aren't making a profit? - Paul Solman:
Merck's vaccine has received $38 million in government funding.
Julie Gerberding is executive vice president. - Julie Gerberding:
No, we will not be selling vaccine at cost, although it's very premature for us, since we're a long way from really understanding the cost basis of what will end up. - Rep. Jan Schakowsky:
So, Dr. Hoge, yes or no? - Paul Solman:
Stephen Hoge is president of Moderna, which, by some measures, has gotten nearly $1.5 billion in federal funding, all the money it's put into the vaccine, and will get another $1.5 if it succeeds. - Stephen Hoge:
We will not sell it at cost, no ma'am.
Tyson, Perdue, Escape Antitrust Suit Over Immigrant Wages
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September 17, 2020
Tyson Foods and other top poultry processors tentatively escaped a lawsuit alleging an industrywide scheme to depress the wages of their largely immigrant workforce, although the Maryland federal judge hearing the case signaled she might revive it if the workers can offer more specifics, reported Bloomberg Law.
Despite the suit’s “smoking gun” conspiracy allegations, including a statement by a Tyson executive “fretting about the propriety of wage discussions at the secret meetings” and “admitting to the inappropriateness of its conduct” it suffers from a fatal flaw, Judge Stephanie A. Gallagher wrote.
Full Content: Bloomberg https://news.bloomberglaw.com/mergers-and-antitrust/tyson-perdue-others-dodge-antitrust-suit-over-immigrant-wages
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September 17, 2020
Tyson Foods and other top poultry processors tentatively escaped a lawsuit alleging an industrywide scheme to depress the wages of their largely immigrant workforce, although the Maryland federal judge hearing the case signaled she might revive it if the workers can offer more specifics, reported Bloomberg Law.
Despite the suit’s “smoking gun” conspiracy allegations, including a statement by a Tyson executive “fretting about the propriety of wage discussions at the secret meetings” and “admitting to the inappropriateness of its conduct” it suffers from a fatal flaw, Judge Stephanie A. Gallagher wrote.
Full Content: Bloomberg https://news.bloomberglaw.com/mergers-and-antitrust/tyson-perdue-others-dodge-antitrust-suit-over-immigrant-wages
Cass Sunstein: More than at any time since the 1930s, the administrative state is under constitutional assault.
Some judges, lawyers and legal academics are calling into question the very structure of modern government.
Four members of the U.S. Supreme Court, and possibly five, have indicated that they would like to revive the “nondelegation doctrine,” which would forbid Congress from granting excessively broad or uncabined discretion to administrative agencies such as the Environmental Protection Agency, the Department of Labor and the Department of Transportation. Under their approach, important parts of the Clean Air Act and the Occupational Safety and Health Act might be invalidated.
So too, in eliminating the independence of the Consumer Financial Protection Bureau in June, a majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.
These developments are just two of a large number of emerging efforts within the federal courts to limit the power of administrative agencies or perhaps even to abolish them, at least in their current form. We are witnessing the flowering of a longstanding attempt to see the administrative state as fundamentally illegitimate. (The legal assault on the administrative state has political resonance, too; think of the former Trump adviser Steve Bannon’s call for the “deconstruction of the administrative state.”)
Excerpt from: https://www.nytimes.com/2020/09/15/opinion/us-government-constitution.html
Some judges, lawyers and legal academics are calling into question the very structure of modern government.
Four members of the U.S. Supreme Court, and possibly five, have indicated that they would like to revive the “nondelegation doctrine,” which would forbid Congress from granting excessively broad or uncabined discretion to administrative agencies such as the Environmental Protection Agency, the Department of Labor and the Department of Transportation. Under their approach, important parts of the Clean Air Act and the Occupational Safety and Health Act might be invalidated.
So too, in eliminating the independence of the Consumer Financial Protection Bureau in June, a majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.
These developments are just two of a large number of emerging efforts within the federal courts to limit the power of administrative agencies or perhaps even to abolish them, at least in their current form. We are witnessing the flowering of a longstanding attempt to see the administrative state as fundamentally illegitimate. (The legal assault on the administrative state has political resonance, too; think of the former Trump adviser Steve Bannon’s call for the “deconstruction of the administrative state.”)
Excerpt from: https://www.nytimes.com/2020/09/15/opinion/us-government-constitution.html
The US Justice Department has ordered Al Jazeera’s affiliate youth channel AJ+ to register as a foreign agent for engaging in “political activities” on behalf of the Qatari government
The move comes a few months after US Congress members demanded that Al Jazeera itself be registered and subject to the Foreign Agents Registration Act (FARA).
AJ+, a youth network only found on social media channels, produces short videos in English Arabic, French and Spanish.
The Justice Department stated in a letter dated Monday that Qatar provides the channel with funding and appoints its board of directors.
“Journalism designed to influence American perceptions of a domestic policy issue or a foreign nation’s activities or its leadership qualifies as ‘political activities’ under the statutory definition, even if it views itself as ‘balanced’,” stated the letter, which was signed by Jay I. Bratt, head of the department’s counterintelligence division, and first obtained by American magazine Mother Jones.
Al Jazeera has been called a useful tool for Qatar’s ruling elite, which sympathizes with the Muslim Brotherhood and other terrorist and extremist groups.
From: https://www.arabnews.com/node/1735401/media
The move comes a few months after US Congress members demanded that Al Jazeera itself be registered and subject to the Foreign Agents Registration Act (FARA).
AJ+, a youth network only found on social media channels, produces short videos in English Arabic, French and Spanish.
The Justice Department stated in a letter dated Monday that Qatar provides the channel with funding and appoints its board of directors.
“Journalism designed to influence American perceptions of a domestic policy issue or a foreign nation’s activities or its leadership qualifies as ‘political activities’ under the statutory definition, even if it views itself as ‘balanced’,” stated the letter, which was signed by Jay I. Bratt, head of the department’s counterintelligence division, and first obtained by American magazine Mother Jones.
Al Jazeera has been called a useful tool for Qatar’s ruling elite, which sympathizes with the Muslim Brotherhood and other terrorist and extremist groups.
From: https://www.arabnews.com/node/1735401/media
Ohio businesses get state protection from COVID related liability
Ohio has joined the list of states where legislation offering businesses protection from Covid-19-related liabilities has been approved. The bill signed by Ohio Gov. Mike DeWine gives individuals, schools, health-care providers, businesses and other entities civil immunity from lawsuits stemming from the exposure, transmission or contraction of Covid-19 as long as organizations are not blatantly disregarding health and safety guidelines. The legislation take effect later this year and runs through September 2021.
From https://connect.bizjournals.com/index.php/email/emailWebview
Comcast Wants SCOTUS to Shut Down A Monopolization Suit Over TV Ads
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September 14, 2020
Comcast claims that the US Supreme Court should step in and shut down a monopolization lawsuit over the TV ad placement market, arguing a federal appeals court improperly gave a green light to claims it illegally refused to do business with rival Viamedia, reported Bloomberg.
“Compelled cooperation between rivals contradicts antitrust law’s goal of encouraging competition, and courts are ill-suited to policing the rare exceptions to the general rule,” the company says. “The Seventh Circuit’s expansive approach to refusal-to-deal liability upends this court’s intentional limits on such claims.”
The suit accuses Comcast of leveraging its control over its “interconnect,” a regional clearinghouse for TV advertising availabilities, to force a boycott of Viamedia, its sole competitor in the market for ad placement services in Chicago, Detroit, and Hartford, Conn.
Comcast also refused to let Viamedia use the interconnect at all, the suit states. The “tying” tactic and outright refusal to deal allegedly combined to drive Viamedia out of the three regional markets.
After a federal judge in Chicago threw out the case in 2018, a divided US Court of Appeals for the Seventh Circuit revived it in February.
https://news.bloomberglaw.com/antitrust/comcast-tells-scotus-viamedia-ruling-would-upend-antitrust-law
-
September 14, 2020
Comcast claims that the US Supreme Court should step in and shut down a monopolization lawsuit over the TV ad placement market, arguing a federal appeals court improperly gave a green light to claims it illegally refused to do business with rival Viamedia, reported Bloomberg.
“Compelled cooperation between rivals contradicts antitrust law’s goal of encouraging competition, and courts are ill-suited to policing the rare exceptions to the general rule,” the company says. “The Seventh Circuit’s expansive approach to refusal-to-deal liability upends this court’s intentional limits on such claims.”
The suit accuses Comcast of leveraging its control over its “interconnect,” a regional clearinghouse for TV advertising availabilities, to force a boycott of Viamedia, its sole competitor in the market for ad placement services in Chicago, Detroit, and Hartford, Conn.
Comcast also refused to let Viamedia use the interconnect at all, the suit states. The “tying” tactic and outright refusal to deal allegedly combined to drive Viamedia out of the three regional markets.
After a federal judge in Chicago threw out the case in 2018, a divided US Court of Appeals for the Seventh Circuit revived it in February.
https://news.bloomberglaw.com/antitrust/comcast-tells-scotus-viamedia-ruling-would-upend-antitrust-law
The future of gambling is being shaped by a 2018 Supreme Court decision that struck down a 1992 federal limit on sports betting to four states.
In addition to the 40 plus states that allow daily fantasy sports, nine now have legal sports betting and three have iGaming, or online casino betting. A DraftKings customer can use a single online wallet for all three in a state such as New Jersey.
DraftKings estimates that the total addressable U.S. market for online betting and gaming could be $40 billion annually. Flutter says online represents just 12% of the gambling market globally and is growing at 10% a year.
https://www.osga.com/online_gaming_articles.php?Making-Sense-Of-DraftKings-Multi-Billion-Dollar-Valuation-26055
In addition to the 40 plus states that allow daily fantasy sports, nine now have legal sports betting and three have iGaming, or online casino betting. A DraftKings customer can use a single online wallet for all three in a state such as New Jersey.
DraftKings estimates that the total addressable U.S. market for online betting and gaming could be $40 billion annually. Flutter says online represents just 12% of the gambling market globally and is growing at 10% a year.
https://www.osga.com/online_gaming_articles.php?Making-Sense-Of-DraftKings-Multi-Billion-Dollar-Valuation-26055
President Trump signed an executive order that he says lowers prescription drug prices "by putting America first," but experts say the move is unlikely to have any immediate impact.
The move comes nearly two months after the president signed a different executive order with the exact same name, but held it back to see if he could negotiate a better deal with drug companies. "If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them," Trump said at the time.
The new executive order repeals the original and expands the drugs covered by Trump's proposed "most favored nations" pricing scheme to include both Medicare Part B and Medicare Part D. The idea is that Medicare would refuse to pay more for drugs than the lower prices paid by other developed nations.
excerpt from https://www.npr.org/2020/09/13/912545090/trump-signs-new-executive-order-on-prescription-drug-prices
A copy of the Order is here: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/e
The move comes nearly two months after the president signed a different executive order with the exact same name, but held it back to see if he could negotiate a better deal with drug companies. "If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them," Trump said at the time.
The new executive order repeals the original and expands the drugs covered by Trump's proposed "most favored nations" pricing scheme to include both Medicare Part B and Medicare Part D. The idea is that Medicare would refuse to pay more for drugs than the lower prices paid by other developed nations.
excerpt from https://www.npr.org/2020/09/13/912545090/trump-signs-new-executive-order-on-prescription-drug-prices
A copy of the Order is here: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/e
Why Apple’s antitracking strategy hurts everyone but Apple
https://apple.news/ANDTY_1e_St26rypFUHfJ4A
Steve Latham September 12, 2020
Excerpt:
Apple recently announced a new privacy feature that will ask iPhone and iPad users to opt in or opt out of tracking for in-app advertising. While most applaud Apple for its pro-privacy stance, there’s much more to the story. As I’ll explain below, Apple’s move will hurt publishers and consumers for its own financial gain. The truth is that Apple’s virtue-signaling is masking anti-competitive behavior that needs to be called out.
The first domino
Apple announced in June that iOS14 (due later this month) would prompt users to opt in out of tracking by advertisers in third-party apps on their iPhones and iPads. It’s not hard to see why most expect users to opt-out en masse. How ominous is this warning?
When a user selects “Ask App Not to Track,” it disables an anonymous identifier known as the ID for Advertisers (IDFA). Once the IDFA is disabled, app developers and publishers can no longer make that identifier available to advertisers seeking to deliver relevant ads to users. While it seems rather innocuous, it will set off a chain of events that will end badly for everyone but Apple and Google.
Harm to publishers and developers
Articles have covered how this will hurt advertisers. While few will take pity on advertisers, what about your favorite news, weather, music, fitness, gaming, or meditation app? Disabling the IDFA will devastate ad-supported apps because it’s the IDFA that makes their media valuable to advertisers. If you’re a luxury apparel brand for women, you’re targeting a very narrow set of users, and you’re willing to pay more to reach them. In this example, apps that serve ads to affluent females (anonymously identified by their IDFA) can charge a 2-3x premium for that ad. Without IDFAs to target ads to relevant audiences, prices will plummet by 50-70%, making ad-supported models untenable.
Of the 2.2 million apps in the Apple store, many will fail as ad revenue nosedives. Apps that are able to migrate to subscription models will pay a high price. Aside from the costly development work and the inevitable loss of users, publishers will have to pay Apple a 30% tax on new subscription revenue. This is where Apple crosses the line into monopolistic behavior – more on that below.
Harm to consumers
When ad supported content is no longer viable, consumers will have to pay for content. While very few say they like ads, most realize we need them. A recent NAI study found that 75% of consumers are aware that free content is enabled by advertising. Moreover, 64% of consumers believe online content should be free. So we expect free ad-supported content, but we don’t want to share data that makes ad models work? Actually the problem isn’t advertisers. The NAI study also found that the #1 privacy concern is data collection by hackers, not publishers. Guess who else knows this and stands to benefit from the death of the free content? Well … you know the answer.
So to recap: Apple knows that disabling IDFAs will kill ad models and force publishers to migrate to subscriptions for which Apple will collect 30%. Apple also knows this will require us to pay for content (such as Apple News+ at $9.99/month) that we fundamentally expect for free. Are you getting the picture yet?
Goldman in the Lancet: Exaggerated risk of transmission of COVID-19 by fomites [hard surfaces and objects]
"In my opinion, the chance of transmission through inanimate surfaces is very small, and only in instances where an infected person coughs or sneezes on the surface, and someone else touches that surface soon after the cough or sneeze (within 1–2 h). I do not disagree with erring on the side of caution, but this can go to extremes not justified by the data. Although periodically disinfecting surfaces and use of gloves are reasonable precautions especially in hospitals, I believe that fomites that have not been in contact with an infected carrier for many hours do not pose a measurable risk of transmission in non-hospital settings. A more balanced perspective is needed to curb excesses that become counterproductive."
https://www.thelancet.com/pdfs/journals/laninf/PIIS1473-3099(20)30561-2.pdf
DAR Comment: This article in the Lancet has drawn the attention of journalist Ed Yong in the Atlantic Magazine, and others. Their takeaway point is that the most important strategy for avoiding COVID exposure is avoiding airborne transmission. Social distancing and avoiding crowded places are part of that strategy. Hard surfaces and objects that have been exposed to virus are less likely to cause a problem, according to Goldman. He says that after a few hours the viruses that may have landed on hard surfaces pose a diminished threat. The suggestion of the journalists is that elaborate cleaning of surfaces at commercial establishments is a theatrical exercise intended to create comfort among patrons who should be discomfited by proximity of other people. The greater threat to a restaurant patron is the close presence of other people sending out airborne particles, not a table top that has not been disinfected. Which is not to say that table tops should not be disinfected.
"In my opinion, the chance of transmission through inanimate surfaces is very small, and only in instances where an infected person coughs or sneezes on the surface, and someone else touches that surface soon after the cough or sneeze (within 1–2 h). I do not disagree with erring on the side of caution, but this can go to extremes not justified by the data. Although periodically disinfecting surfaces and use of gloves are reasonable precautions especially in hospitals, I believe that fomites that have not been in contact with an infected carrier for many hours do not pose a measurable risk of transmission in non-hospital settings. A more balanced perspective is needed to curb excesses that become counterproductive."
https://www.thelancet.com/pdfs/journals/laninf/PIIS1473-3099(20)30561-2.pdf
DAR Comment: This article in the Lancet has drawn the attention of journalist Ed Yong in the Atlantic Magazine, and others. Their takeaway point is that the most important strategy for avoiding COVID exposure is avoiding airborne transmission. Social distancing and avoiding crowded places are part of that strategy. Hard surfaces and objects that have been exposed to virus are less likely to cause a problem, according to Goldman. He says that after a few hours the viruses that may have landed on hard surfaces pose a diminished threat. The suggestion of the journalists is that elaborate cleaning of surfaces at commercial establishments is a theatrical exercise intended to create comfort among patrons who should be discomfited by proximity of other people. The greater threat to a restaurant patron is the close presence of other people sending out airborne particles, not a table top that has not been disinfected. Which is not to say that table tops should not be disinfected.
Learning Pods and Inequality: Issues and Ideas to Combat Unfair Treatment
08/10/2020 Maria Airth
Learning pods are small groups of students learning together normally independent of a traditional school system. In times of forced school closures due to public health emergencies, learning pods can be a welcome alternative to individual remote learning at home.
Unfortunately, learning pods tend to create inequality and unfair educational experiences for students. Let's look at the characteristics required for families to create a learning pod:
Due to the need for geographic proximity to create a learning pod, especially during times of public health crises, learning pods can create unintentional segregation in education.
Knowing how inequalities in education can come about when learning pods are created in response to school closures is the first part of the battle. Addressing these inequalities is the most important part of winning the battle against unfair treatment in education.
One main issue with many learning pods is a lack of diversity in the pod. Minority students and children from low-income families may not have the resources to participate in learning pods.
A method to address this issue is school involvement in the creation of pods. If a teacher knows that some parents from the class are intending to create a learning pod, the teacher can approach those parents and ask that disadvantaged students be included in the group. The teacher can facilitate communication between parents intending to create pods and parents with children who would benefit from being included in such a learning environment.
Another option might be for teachers to divide their students into diverse learning pods and offer ideas and resources to assist the parents of these students to form and implement the pods. While parents can't be forced to create learning pods with specific children, they may be more willing to include disadvantaged students if it is suggested by their child's teacher.
Another area that separates disadvantaged students from other students is their access to resources. Students in learning pods formed by affluent families will likely have plenty of access to technology devices and learning tools to support their students.
When schools are forcibly closed, it might be plausible for the government to subsidize low-income and disadvantaged student access to resources in a number of ways:
Some learning pods include a paid private tutor to offer students excellent, high-quality instruction during their school day. Students from low-income families cannot often afford this luxury but should not be disadvantaged academically.
How can teachers help students in learning pods have access to a high level of education? Implementing online instruction in a flipped classroom model could be the most efficient use of teacher and student time. In a flipped classroom, students preview recorded instructional information prior to a live teacher facilitating discussion on the topic. In this way, students would be somewhat familiar with the concepts prior to their teacher's live instruction, through Zoom or a similar platform, to answer any questions and address any issues students have. The flipped classroom method would allow teachers to spread their time between multiple learning pods due to students being prepared with alternative instruction methods prior to the teacher making contact.
SummaryI
t is not possible to address every inequality or unfairness that stems from the creation of learning pods in a time when schools are closed due to a public health crisis. No single learning environment is going to be perfect for every student nor is it going to be implemented the same for every student.
Best efforts should be made to increase the equality of the educational experience for all students in a crisis. This may mean that the government should subsidize learning space, resources (such as devices and internet access) and instruction time. Schools can encourage diversity when parents are forming learning pods. Using alternative instructional methods such as the flipped classroom method, each teacher may be able to effectively offer instruction to multiple learning pods daily.
https://study.com/academy/popular/learning-pods-and-inequality-issues-and-ideas-to-combat-unfair-treatment.html
08/10/2020 Maria Airth
Learning pods are small groups of students learning together normally independent of a traditional school system. In times of forced school closures due to public health emergencies, learning pods can be a welcome alternative to individual remote learning at home.
Unfortunately, learning pods tend to create inequality and unfair educational experiences for students. Let's look at the characteristics required for families to create a learning pod:
- Affluent enough to afford resources for multiple students.
- Affluent enough to have space for multiple students to work.
- Access to a facilitator (either parents in the group or privately sourced) with educational credentials sufficient to assist students with their learning objectives.
- Ability for a parent/guardian to remain home to facilitate the learning pod.
- Geographic proximity to other members of a learning pod.
- Access to experts to facilitate students with special needs.
- It is clear from this list that many students who live in socio-economic hardship would not be able to participate in a typical learning pod.
Due to the need for geographic proximity to create a learning pod, especially during times of public health crises, learning pods can create unintentional segregation in education.
Knowing how inequalities in education can come about when learning pods are created in response to school closures is the first part of the battle. Addressing these inequalities is the most important part of winning the battle against unfair treatment in education.
One main issue with many learning pods is a lack of diversity in the pod. Minority students and children from low-income families may not have the resources to participate in learning pods.
A method to address this issue is school involvement in the creation of pods. If a teacher knows that some parents from the class are intending to create a learning pod, the teacher can approach those parents and ask that disadvantaged students be included in the group. The teacher can facilitate communication between parents intending to create pods and parents with children who would benefit from being included in such a learning environment.
Another option might be for teachers to divide their students into diverse learning pods and offer ideas and resources to assist the parents of these students to form and implement the pods. While parents can't be forced to create learning pods with specific children, they may be more willing to include disadvantaged students if it is suggested by their child's teacher.
Another area that separates disadvantaged students from other students is their access to resources. Students in learning pods formed by affluent families will likely have plenty of access to technology devices and learning tools to support their students.
When schools are forcibly closed, it might be plausible for the government to subsidize low-income and disadvantaged student access to resources in a number of ways:
- Allow libraries to loan out computers, laptops and other learning devices to learning pods with disadvantaged students.
- Pay teachers and/or substitute teachers to attend some learning pods (safely, using social distancing restrictions) to ensure that the students are progressing.
- Offer space in libraries or schools to learning pods that include disadvantaged students.
- Ensure that all students on an IEP, or special education plan, have internet access and devices with which to access the internet so that they can contact specialists to assist with their individual educational needs.
- Offer internet access to learning pods with disadvantaged students.
Some learning pods include a paid private tutor to offer students excellent, high-quality instruction during their school day. Students from low-income families cannot often afford this luxury but should not be disadvantaged academically.
How can teachers help students in learning pods have access to a high level of education? Implementing online instruction in a flipped classroom model could be the most efficient use of teacher and student time. In a flipped classroom, students preview recorded instructional information prior to a live teacher facilitating discussion on the topic. In this way, students would be somewhat familiar with the concepts prior to their teacher's live instruction, through Zoom or a similar platform, to answer any questions and address any issues students have. The flipped classroom method would allow teachers to spread their time between multiple learning pods due to students being prepared with alternative instruction methods prior to the teacher making contact.
SummaryI
t is not possible to address every inequality or unfairness that stems from the creation of learning pods in a time when schools are closed due to a public health crisis. No single learning environment is going to be perfect for every student nor is it going to be implemented the same for every student.
Best efforts should be made to increase the equality of the educational experience for all students in a crisis. This may mean that the government should subsidize learning space, resources (such as devices and internet access) and instruction time. Schools can encourage diversity when parents are forming learning pods. Using alternative instructional methods such as the flipped classroom method, each teacher may be able to effectively offer instruction to multiple learning pods daily.
https://study.com/academy/popular/learning-pods-and-inequality-issues-and-ideas-to-combat-unfair-treatment.html
Oversight group says SBA misled public on disaster loan fraud
Internal emails show the agency was scrambling to clamp down on fraudulent loans from the Economic Injury Disaster Loan program.
A government watchdog group said in a report published Wednesday that the Small Business Administration misled the public about its ability to prevent fraud in a disaster business loan program.
The Project on Government Oversight (POGO), citing internal emails said the SBA was scrambling through mid-August to clamp down on fraudulent loans from the Economic Injury Disaster Loan (EIDL) program. That counters assertions from SBA Administrator Jovita Carranza to the agency's inspector general in late July that solutions to reported problems were already in place, the group says.
https://www.pogo.org/investigation/2020/09/a-disaster-small-business-administration-scrambling-to-stop-pandemic-loan-fraud/
Internal emails show the agency was scrambling to clamp down on fraudulent loans from the Economic Injury Disaster Loan program.
A government watchdog group said in a report published Wednesday that the Small Business Administration misled the public about its ability to prevent fraud in a disaster business loan program.
The Project on Government Oversight (POGO), citing internal emails said the SBA was scrambling through mid-August to clamp down on fraudulent loans from the Economic Injury Disaster Loan (EIDL) program. That counters assertions from SBA Administrator Jovita Carranza to the agency's inspector general in late July that solutions to reported problems were already in place, the group says.
https://www.pogo.org/investigation/2020/09/a-disaster-small-business-administration-scrambling-to-stop-pandemic-loan-fraud/
A new report outlines the efforts of a team paid by the Centers for Medicare and Medicaid Services to enhance Administrator Verma’s personal image, obtain profiles and coverage from friendly reporters
https://drive.google.com/file/d/1nezMXLk6auFtFn4bzLy26k0P5CVI1Zow/view
https://drive.google.com/file/d/1nezMXLk6auFtFn4bzLy26k0P5CVI1Zow/view
Fishy Price Fixing Leads to 40-month Jail Stint
By Darley Maw on June 30, 2020POSTED IN PRICE-FIXING
On June 16, following a monthlong trial, Christopher Lischewski, former CEO and president of Bumble Bee Foods LLC, was sentenced by Judge Edward Chen of the Northern District of California to 40 months in prison plus a $100,000 fine for orchestrating a canned tuna price-fixing conspiracy. Lischewski’s sentence demonstrates the punishment individuals should be prepared to face if involved in price fixing and that such criminal behavior cannot be shielded by any corporate protections. Assistant Attorney General Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that “[t]he sentence imposed … will serve as a significant deterrent in the C-suite and the boardroom.”[1] Indeed, Chen himself stated that Lischewski’s sentence was intended to send a message of general deterrence, particularly where a basic food staple relied upon by many households is concerned.
After a lengthy government investigation, Lischewski, along with other senior executives in the packaged seafood industry, was charged in 2018 with one count of price fixing. During his trial, the government showed evidence of Lischewski’s involvement with competitors and colleagues in the conspiracy, such as sharing pricing information with other executives in the canned tuna industry, including at Chicken of the Sea and Starkist, and their efforts to keep such meetings and communications covert. Lischewski’s defense argued that the government failed to show that consumers were harmed by any such price fixing, an element required in this kind of criminal case. Ultimately, however, the jury found Lischewski guilty of one count of price fixing. His attorneys have indicated they plan on filing an appeal.
Lischewski’s trial and sentence serve as an example to show compliance officers and in-house counsel what could happen without an effective and robust compliance program in place. Here, Bumble Bee had pleaded guilty for its role in a price-fixing conspiracy and already had agreed to pay a $25 million fine. Though when this sort of anticompetitive action happens, typically no one gets a prison sentence. And for many corporations, while a multimillion-dollar fine definitely hurts, it may not be enough of a deterrent (though in Bumble Bee’s situation, it did hurt, as the company had to file for Chapter 11 bankruptcy protection at the end of last year). But seeing Lischewski face prison time for more than three years, the punishment of breaking the law seems much more palpable. And in addition to the criminal punishment, Lischewski also now faces susceptibility to civil lawsuits.
The pursuit of Lischewski – from investigation to sentencing – must put all executives and business leaders on high alert that individuals who are involved in price fixing or other anticompetitive conduct will be held accountable by the government. Corporate heads should refrain from sharing pricing information with competitors and, likewise, should not take the bait when such information is requested. Pun intended.
[1] https://www.justice.gov/opa/pr/former-bumble-bee-ceo-sentenced-prison-fixing-prices-canned-tuna.
https://www.antitrustadvocate.com/2020/06/30/fishy-price-fixing-leads-to-40-month-jail-stint/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=7aa08c09dc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-7aa08c09dc-70980973
By Darley Maw on June 30, 2020POSTED IN PRICE-FIXING
On June 16, following a monthlong trial, Christopher Lischewski, former CEO and president of Bumble Bee Foods LLC, was sentenced by Judge Edward Chen of the Northern District of California to 40 months in prison plus a $100,000 fine for orchestrating a canned tuna price-fixing conspiracy. Lischewski’s sentence demonstrates the punishment individuals should be prepared to face if involved in price fixing and that such criminal behavior cannot be shielded by any corporate protections. Assistant Attorney General Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that “[t]he sentence imposed … will serve as a significant deterrent in the C-suite and the boardroom.”[1] Indeed, Chen himself stated that Lischewski’s sentence was intended to send a message of general deterrence, particularly where a basic food staple relied upon by many households is concerned.
After a lengthy government investigation, Lischewski, along with other senior executives in the packaged seafood industry, was charged in 2018 with one count of price fixing. During his trial, the government showed evidence of Lischewski’s involvement with competitors and colleagues in the conspiracy, such as sharing pricing information with other executives in the canned tuna industry, including at Chicken of the Sea and Starkist, and their efforts to keep such meetings and communications covert. Lischewski’s defense argued that the government failed to show that consumers were harmed by any such price fixing, an element required in this kind of criminal case. Ultimately, however, the jury found Lischewski guilty of one count of price fixing. His attorneys have indicated they plan on filing an appeal.
Lischewski’s trial and sentence serve as an example to show compliance officers and in-house counsel what could happen without an effective and robust compliance program in place. Here, Bumble Bee had pleaded guilty for its role in a price-fixing conspiracy and already had agreed to pay a $25 million fine. Though when this sort of anticompetitive action happens, typically no one gets a prison sentence. And for many corporations, while a multimillion-dollar fine definitely hurts, it may not be enough of a deterrent (though in Bumble Bee’s situation, it did hurt, as the company had to file for Chapter 11 bankruptcy protection at the end of last year). But seeing Lischewski face prison time for more than three years, the punishment of breaking the law seems much more palpable. And in addition to the criminal punishment, Lischewski also now faces susceptibility to civil lawsuits.
The pursuit of Lischewski – from investigation to sentencing – must put all executives and business leaders on high alert that individuals who are involved in price fixing or other anticompetitive conduct will be held accountable by the government. Corporate heads should refrain from sharing pricing information with competitors and, likewise, should not take the bait when such information is requested. Pun intended.
[1] https://www.justice.gov/opa/pr/former-bumble-bee-ceo-sentenced-prison-fixing-prices-canned-tuna.
https://www.antitrustadvocate.com/2020/06/30/fishy-price-fixing-leads-to-40-month-jail-stint/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=7aa08c09dc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-7aa08c09dc-70980973
DOJ’s Antitrust Division Targets Commercial Flooring Industry for Criminal Cartel Activity
BY MICHAEL VOLKOV · SEPTEMBER 8, 2020
EXCERPT:
DOJ’s Antitrust Division is increasing criminal antitrust enforcement. After two relatively slow years of criminal enforcement, the Antitrust Division’s criminal enforcement program is steadily increasing. The next five years promises to be a time of aggressive criminal cartel enforcement.
DOJ’s Antitrust Division has been racking up indictments and guilty pleas in a long-time cartel operating in the commercial flooring and services industry in the Chicago area. Nine companies were involved in the long-running conspiracy involving bid-rigging for flooring contracts.
DOJ has identified at least 15 instances of bid-rigging for certain jobs valued from $11,000 to more than $3.3 million. The contracts involved not only public schools but also hospitals, an electronics company, a professional services firm and a broadband provider.
From https://blog.volkovlaw.com/2020/09/dojs-antitrust-division-targets-commercial-flooring-industry-for-criminal-cartel-activity/
BY MICHAEL VOLKOV · SEPTEMBER 8, 2020
EXCERPT:
DOJ’s Antitrust Division is increasing criminal antitrust enforcement. After two relatively slow years of criminal enforcement, the Antitrust Division’s criminal enforcement program is steadily increasing. The next five years promises to be a time of aggressive criminal cartel enforcement.
DOJ’s Antitrust Division has been racking up indictments and guilty pleas in a long-time cartel operating in the commercial flooring and services industry in the Chicago area. Nine companies were involved in the long-running conspiracy involving bid-rigging for flooring contracts.
DOJ has identified at least 15 instances of bid-rigging for certain jobs valued from $11,000 to more than $3.3 million. The contracts involved not only public schools but also hospitals, an electronics company, a professional services firm and a broadband provider.
From https://blog.volkovlaw.com/2020/09/dojs-antitrust-division-targets-commercial-flooring-industry-for-criminal-cartel-activity/
Protection of low wage workers declines during coronavirus recession
https://equitablegrowth.org/research-paper/maintaining-effective-u-s-labor-standards-enforcement-through-the-coronavirus-recession/
https://equitablegrowth.org/research-paper/maintaining-effective-u-s-labor-standards-enforcement-through-the-coronavirus-recession/
USDOJ filing taking over Trump's defamation defense in Carroll rape denial case
https://int.nyt.com/data/documenttools/trump-justice-department-e-jean-carroll/cc7606ac221ce832/full.pdf
https://int.nyt.com/data/documenttools/trump-justice-department-e-jean-carroll/cc7606ac221ce832/full.pdf
DAR Note: The following is by an apparent Biden partisan, but the topic is of broader interest, and is suggestive for Trump partisans as well
Fed Paper's Inadvertent Antitrust Policy Questions For Biden
By Christopher Kelly
Excerpt, footnotes omitted:
No one confuses the Federal Reserve Board with the American Antitrust Institute. The Fed's concern is financial stability, not competition. But a recent working paper from two Fed staff economists[1] points up a potentially major role for antitrust enforcement in a Joe Biden administration, one well beyond heightened merger scrutiny and tougher standards for platform industries.
By identifying increased market power as a cause of the income and wealth inequality that has become a subject of intense public debate and, not coincidentally, a key issue for Democratic presidential candidate Biden's campaign, the paper implicitly raises the possibility that antitrust enforcement could take on urgency and aggressiveness well beyond what the predictable campaign positions have suggested and be used to address a core societal issue.
The paper's focus is narrow: Consistent with the Fed's mission to "foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems and to promote optimal economic performance,"[2] it examines a collective increase in firms' market power over the past 40 years as a cause of an increased risk of financial crises like that of 2008 (defined as "events during which a country's banking sector experiences bank runs, sharp increases in default rates accompanied by large losses of capital that result in public intervention, bankruptcy, or forced merger of financial institutions").[3]
But the paper concludes that the market-power increase raised that risk by triggering a chain reaction of noncyclical (in economics terms, "secular") trends that themselves are major policy hot buttons. To simplify the paper's chain reaction:
From the Fed's standpoint, the critical policy concern is that the rise of market power has made financial crises like that of 2008 more likely. But the findings that, along the way, market power led to increased income and wealth inequality play directly into the broader discussions of economic equity that have become part of this year's presidential campaign.
The paper's implications for antitrust enforcement seem inadvertent. The word "antitrust" appears only once, in a sidelong mention in a footnote, so antitrust law does not appear as a potential solution to the problem.
To the contrary, the authors propose a back-end fix: They suggest redistributing the market-power-driven profits back to the working class through an income tax specifically because the tax (unlike antitrust enforcement) would not distort marketplace decisions. But no one interested in shaping antitrust policy in a potential Biden administration would miss the underlying questions of whether antitrust law's retreat at the outset of this 40-year period into "a mild constraint on a relatively small set of practices that pose a threat to allocative efficiency"[4] contributed to these secular trends and, if so, whether shifting antitrust law's goal from mere allocative efficiency to economic equity could be an important part of the solution.
Christopher J. Kelly is a partner at Mayer Brown LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Isabel Cairó & Jae Sim (2020). Market Power, Inequality, and Financial Instability, Finance and Economics Discussion Series 2020-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.057.
From https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/09/law360--fed-papers-inadvertent-antitrust-policy-questions-for-biden.pdf
Fed Paper's Inadvertent Antitrust Policy Questions For Biden
By Christopher Kelly
Excerpt, footnotes omitted:
No one confuses the Federal Reserve Board with the American Antitrust Institute. The Fed's concern is financial stability, not competition. But a recent working paper from two Fed staff economists[1] points up a potentially major role for antitrust enforcement in a Joe Biden administration, one well beyond heightened merger scrutiny and tougher standards for platform industries.
By identifying increased market power as a cause of the income and wealth inequality that has become a subject of intense public debate and, not coincidentally, a key issue for Democratic presidential candidate Biden's campaign, the paper implicitly raises the possibility that antitrust enforcement could take on urgency and aggressiveness well beyond what the predictable campaign positions have suggested and be used to address a core societal issue.
The paper's focus is narrow: Consistent with the Fed's mission to "foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems and to promote optimal economic performance,"[2] it examines a collective increase in firms' market power over the past 40 years as a cause of an increased risk of financial crises like that of 2008 (defined as "events during which a country's banking sector experiences bank runs, sharp increases in default rates accompanied by large losses of capital that result in public intervention, bankruptcy, or forced merger of financial institutions").[3]
But the paper concludes that the market-power increase raised that risk by triggering a chain reaction of noncyclical (in economics terms, "secular") trends that themselves are major policy hot buttons. To simplify the paper's chain reaction:
- The increased market power, in both product and labor markets, has reduced the labor income share and, to a much lesser degree, the capital share of total output.
- The reduced labor and capital shares necessarily increase the profit share of output.
- The increased profit share increases income inequality by raising the income of the most wealthy households, whose income is driven by stock ownership, relative to the less wealthy, whose income is based primarily on wages.
- Because the wealthy have a relatively high marginal propensity to save, the skewed income also increases wealth inequality between wealthy and less wealthy households.
- Less wealthy households respond to their decreasing relative income and wealth by increasing borrowing (from, in effect, the wealthy households).
- The resulting increased credit-to-GDP ratio leads in turn to a significantly increased probability of a financial crisis.
From the Fed's standpoint, the critical policy concern is that the rise of market power has made financial crises like that of 2008 more likely. But the findings that, along the way, market power led to increased income and wealth inequality play directly into the broader discussions of economic equity that have become part of this year's presidential campaign.
The paper's implications for antitrust enforcement seem inadvertent. The word "antitrust" appears only once, in a sidelong mention in a footnote, so antitrust law does not appear as a potential solution to the problem.
To the contrary, the authors propose a back-end fix: They suggest redistributing the market-power-driven profits back to the working class through an income tax specifically because the tax (unlike antitrust enforcement) would not distort marketplace decisions. But no one interested in shaping antitrust policy in a potential Biden administration would miss the underlying questions of whether antitrust law's retreat at the outset of this 40-year period into "a mild constraint on a relatively small set of practices that pose a threat to allocative efficiency"[4] contributed to these secular trends and, if so, whether shifting antitrust law's goal from mere allocative efficiency to economic equity could be an important part of the solution.
Christopher J. Kelly is a partner at Mayer Brown LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Isabel Cairó & Jae Sim (2020). Market Power, Inequality, and Financial Instability, Finance and Economics Discussion Series 2020-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.057.
From https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/09/law360--fed-papers-inadvertent-antitrust-policy-questions-for-biden.pdf
Biopharma leaders unite to stand with science
- Nine CEOs sign pledge to continue to make the safety and well-being of vaccinated individuals the top priority in development of the first COVID-19 vaccines
NEW YORK – September 8, 2020 – The CEOs of AstraZeneca (LSE/STO/NYSE: AZN), BioNTech (NASDAQ: BNTX), GlaxoSmithKline plc (LSE/NYSE: GSK), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK), known as MSD outside the United States and Canada, Moderna, Inc. (Nasdaq: MRNA), Novavax, Inc. (Nasdaq: NVAX), Pfizer Inc. (NYSE: PFE), and Sanofi (NASDAQ: SNY) today announced a historic pledge, outlining a united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines.
All nine CEOs signed the following pledge:
We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.
The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration (FDA). FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA’s guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations.
Following guidance from expert regulatory authorities such as FDA regarding the development of COVID-19 vaccines, consistent with existing standards and practices, and in the interest of public health, we pledge to:
From: http://www.news.sanofi.us/2020-09-08-Biopharma-leaders-unite-to-stand-with-science
- Nine CEOs sign pledge to continue to make the safety and well-being of vaccinated individuals the top priority in development of the first COVID-19 vaccines
NEW YORK – September 8, 2020 – The CEOs of AstraZeneca (LSE/STO/NYSE: AZN), BioNTech (NASDAQ: BNTX), GlaxoSmithKline plc (LSE/NYSE: GSK), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK), known as MSD outside the United States and Canada, Moderna, Inc. (Nasdaq: MRNA), Novavax, Inc. (Nasdaq: NVAX), Pfizer Inc. (NYSE: PFE), and Sanofi (NASDAQ: SNY) today announced a historic pledge, outlining a united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines.
All nine CEOs signed the following pledge:
We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.
The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration (FDA). FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA’s guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations.
Following guidance from expert regulatory authorities such as FDA regarding the development of COVID-19 vaccines, consistent with existing standards and practices, and in the interest of public health, we pledge to:
- Always make the safety and well-being of vaccinated individuals our top priority.
- Continue to adhere to high scientific and ethical standards regarding the conduct of clinical trials and the rigor of manufacturing processes.
- Only submit for approval or emergency use authorization after demonstrating safety and efficacy through a Phase 3 clinical study that is designed and conducted to meet requirements of expert regulatory authorities such as FDA.[emphasis added by DAR]
- Work to ensure a sufficient supply and range of vaccine options, including those suitable for global access.
From: http://www.news.sanofi.us/2020-09-08-Biopharma-leaders-unite-to-stand-with-science
A group of drug companies competing with one another to be among the first to develop coronavirus vaccines are planning to pledge early next week that they will not release any vaccines that do not follow rigorous efficacy and safety standards, according to representatives of three of the companies.
The statement, which has not yet been finalized, is meant to reassure the public that the companies will not seek a premature approval of vaccines under political pressure from the Trump administration. A New York Times headline calls the agreement a "Joint Pledge on Vaccine Safety."
President Trump has pushed for a vaccine to be available by October — just before the presidential election — and a growing number of scientists, regulators and public health experts have expressed concern over what they see as a pattern of political arm-twisting by the Trump administration in its efforts to combat the virus.
The companies’ joint statement was planned for early next week, but it may be released before then after its existence was made public on Friday by The Wall Street Journal. The manufacturers that are said to have signed the letter include Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline and Sanofi.
The pharmaceutical companies are not the only ones pushing back. Senior regulators at the Food and Drug Administration have been discussing making their own joint public statement about the need to rely on proven science, according to two senior administration officials, a move that would breach their usual reticence as civil servants.
From: https://www.nytimes.com/2020/09/04/science/covid-vaccine-pharma-pledge.html?action=click&module=Top%20Stories&pgtype=Homepage
DAR Comment: The expected collaboration announcement by Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline and Sanofi causes some consternation among antitrust experts. Even collaborations for ostensibly good public interest purposes cause worry that other and darker collaborative actions might be facilitated. Here the companies pledge that they will not ask government regulators to approve new vaccines as safe and effective unless the vaccines actually have proven to be safe and effective. The joint pledge seems to include agreeing that no one company will rush ahead to ask emergency approval, a risky but possibly profitable step depending on real world experience with the vaccine. The collaboration is a response to perceived government disfunction -- government arm twisting to release vaccines before election day even if they are not proven safe and effective.
Over time many collaborators have justified their collusive conduct by calling on public interest justifications. On the other hand, this may be a situation where one's broad view of the politics and the public interest trumps parsing the relevant antitrust law. Avoiding premature release of a vaccine that turns out after election day to be unsafe or ineffective may seem more important than resolving antitrust issues like rule of reason or procompetitive effects versus anticompetitive effects.
PS. I am grateful that someone suggested comparison to Georgia restaurants that agreed to stay closed despite the Governor's order allowing them to open. See https://thehill.com/changing-america/well-being/prevention-cures/495712-more-than-120-atlanta-restaurants-refuse-to-open
Russian government sponsored voting propaganda in plain sight
By Don Allen Resnikoff:
The media suggests that Russian operatives are spreading disinformation in order to influence the Presidential election. The disinformation effort is said to frequently be surreptitious, known to U.S. intelligence people, but largely hidden from the general public.
Recently an acquaintance sent me a YouTube link featuring a “comedian” in the John Oliver mold who was leading a discussion on the perils of mail in ballots for the Trump v. Biden Presidential vote. The main peril, briefly put, is that the mail-in ballots won’t be counted. The YouTube link is here. https://www.youtube.com/watch?v=qT8YUyNuirE
After a little searching I found that Wikopedia says of the interviewer-comedian Lee Camp that:
he is host and head writer of the weekly comedy news show Redacted Tonight with Lee Camp, which airs every Friday at 8pm EST on the Russian-financed RT America. Jason Zinoman wrote in The New York Times that his appearance on the channel: "raises questions about the comedian’s independence."[cites omitted] He told Rachel Manteuffel of The Washington Post Magazine that the Russian government funds his show, explaining "One of the reasons I'm at RT America is because there’s no advertising. If there were advertising, no channel really wants someone who goes after corporations as much as I do."[cite omitted]
So it may be that the video I was sent is an example of Russian Government sponsored propaganda in plain sight.
That doesn't necessarily mean that all the points about unreliability of mail-in ballots in the video are wrong, but knowing the possible Russian government propaganda link is concerning. It suggests that viewers need to take the information offered with the proverbial grain of salt, or perhaps many grains of salt. It is not unusual for propaganda to start from actual facts and real concerns and spin a further web that includes disinformation.
Following is a link to Bloomberg's coverage of the same topic, which there is reason to hope is relatively objective, fair, and balanced:
https://www.bloomberg.com/news/videos/2020-08-07/2020-year-in-crisis-vote-from-home-video
Posting is by Don Allen Resnikoff, who is responsible for its content.
By Don Allen Resnikoff:
The media suggests that Russian operatives are spreading disinformation in order to influence the Presidential election. The disinformation effort is said to frequently be surreptitious, known to U.S. intelligence people, but largely hidden from the general public.
Recently an acquaintance sent me a YouTube link featuring a “comedian” in the John Oliver mold who was leading a discussion on the perils of mail in ballots for the Trump v. Biden Presidential vote. The main peril, briefly put, is that the mail-in ballots won’t be counted. The YouTube link is here. https://www.youtube.com/watch?v=qT8YUyNuirE
After a little searching I found that Wikopedia says of the interviewer-comedian Lee Camp that:
he is host and head writer of the weekly comedy news show Redacted Tonight with Lee Camp, which airs every Friday at 8pm EST on the Russian-financed RT America. Jason Zinoman wrote in The New York Times that his appearance on the channel: "raises questions about the comedian’s independence."[cites omitted] He told Rachel Manteuffel of The Washington Post Magazine that the Russian government funds his show, explaining "One of the reasons I'm at RT America is because there’s no advertising. If there were advertising, no channel really wants someone who goes after corporations as much as I do."[cite omitted]
So it may be that the video I was sent is an example of Russian Government sponsored propaganda in plain sight.
That doesn't necessarily mean that all the points about unreliability of mail-in ballots in the video are wrong, but knowing the possible Russian government propaganda link is concerning. It suggests that viewers need to take the information offered with the proverbial grain of salt, or perhaps many grains of salt. It is not unusual for propaganda to start from actual facts and real concerns and spin a further web that includes disinformation.
Following is a link to Bloomberg's coverage of the same topic, which there is reason to hope is relatively objective, fair, and balanced:
https://www.bloomberg.com/news/videos/2020-08-07/2020-year-in-crisis-vote-from-home-video
Posting is by Don Allen Resnikoff, who is responsible for its content.
Amazon Is Spying on Its Workers in Closed Facebook Groups, Internal Reports Show
The company is surveilling dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet.
By Lauren Kaori Gurley
By Joseph Cox
September 1, 2020, 7:53pm
Amazon is monitoring the conversations of Amazon Flex drivers in dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet and viewed by Motherboard. According to the files left online, Amazon corporate employees are getting regular reports about the social media posts of its Flex drivers on nominally private pages, and are using these reports to diagnose problems as well as monitor, for example, drivers "planning for any strike or protest against Amazon."
Among the files left online is a document called “social media monitoring” that lists closed Amazon Flex Driver Facebook groups and websites across the world, as well as open Flex driver Subreddits, and the Twitter keyword "Amazon Flex." Forty three of the Facebook groups are run by drivers in different cities in the United States.
“The following social forums mentioned in the table are to be monitored during the Social media process,” the document reads. Facebook groups being monitored include “Amazon Flex Drivers of Los Angeles,” “Amazon Flex Drivers,” “deactivated Amazon Drivers,” and dozens of others.
Amazon seemingly asked employees to keep this monitoring secret.
https://www.vice.com/en_ca/article/3azegw/amazon-is-spying-on-its-workers-in-closed-facebook-groups-internal-reports-show
The company is surveilling dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet.
By Lauren Kaori Gurley
By Joseph Cox
September 1, 2020, 7:53pm
Amazon is monitoring the conversations of Amazon Flex drivers in dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet and viewed by Motherboard. According to the files left online, Amazon corporate employees are getting regular reports about the social media posts of its Flex drivers on nominally private pages, and are using these reports to diagnose problems as well as monitor, for example, drivers "planning for any strike or protest against Amazon."
Among the files left online is a document called “social media monitoring” that lists closed Amazon Flex Driver Facebook groups and websites across the world, as well as open Flex driver Subreddits, and the Twitter keyword "Amazon Flex." Forty three of the Facebook groups are run by drivers in different cities in the United States.
“The following social forums mentioned in the table are to be monitored during the Social media process,” the document reads. Facebook groups being monitored include “Amazon Flex Drivers of Los Angeles,” “Amazon Flex Drivers,” “deactivated Amazon Drivers,” and dozens of others.
Amazon seemingly asked employees to keep this monitoring secret.
https://www.vice.com/en_ca/article/3azegw/amazon-is-spying-on-its-workers-in-closed-facebook-groups-internal-reports-show
10th Circuit nixes Oklahoma City panhandling restrictions
The US Court of Appeals for the 10th Circuit has held that an anti-panhandling law in Oklahoma City runs afoul of constitutional free speech protections. The ordinance prohibited pedestrians in roadway medians, which the court said "share fundamental characteristics with public streets, sidewalks and parks, which are quintessential public fora."
Full Story: https://apnews.com/dd2c9484747abf5e2347d6bb182c03ec
The US Court of Appeals for the 10th Circuit has held that an anti-panhandling law in Oklahoma City runs afoul of constitutional free speech protections. The ordinance prohibited pedestrians in roadway medians, which the court said "share fundamental characteristics with public streets, sidewalks and parks, which are quintessential public fora."
Full Story: https://apnews.com/dd2c9484747abf5e2347d6bb182c03ec
California's proposal for its own CFPB is back on track
...https://www.housingwire.com/articles/californias...Aug 18, 2020 ·
The proposal to create a “mini-CFPB” in the state was added to a pending budget bill after being dropped in June.
...https://www.housingwire.com/articles/californias...Aug 18, 2020 ·
The proposal to create a “mini-CFPB” in the state was added to a pending budget bill after being dropped in June.
Michael Kades on antitrust enforcement:
The curious case of the federal prosecutor who sided with defendants
Excerpt:
Let’s look at three cases that are emblematic of this antitrust tilt toward defendants in antitrust cases brought by other antitrust agencies. As Equitable Growth recently reiterated, the United States has a monopoly power problem. During this critical moment, however, the Trump administration’s antitrust legacy at the Department Justice may be to limit the ability of the antitrust laws to combat that problem. Rather than criticizing other agencies for bringing cases, the leadership at the Department of Justice and its Antitrust Division would better serve the country by enforcing the law.
Peabody-Arch Coal: The most recent intervention
Let’s start with the most recent action. Back in February 2020, in a 4-1 vote, the Federal Trade Commission sought to block a joint venture (a form of coordination that is less than a full merger but still subject to the antitrust laws) between Peabody Energy Corporation and Arch Coal, Inc. According to the complaint, the two companies are combining their coal mines located in the Southern Powder River Basin in Wyoming. They are the two largest coal mines in the Southern Powder River Basin and fierce, direct competitors.
According to the Commission’s complaint, coal from this region is different than other coal. It is cheaper to mine, being close to the surface. It is cleaner to burn. And it boasts a higher heat content. This is why the Federal Trade Commission argues that the proposed post-merger joint venture would be able to increase the price of its coal—it won’t be profitable for utilities to shift to other types of coal or other types of energy. Currently, the agency is seeking a preliminary judgement in federal court to prevent the joint venture.
If granted, that injunction would block the deal until the FTC’s litigation on the full merits is concluded, which is an administrative trial. The federal court held a 9-day hearing on the request for a preliminary injunction, with the parties now awaiting the court’s judgment. The administrative trial is scheduled to start on December 1, 2020, before the FTC’s administrative law judge.
So far, this is a pretty standard antitrust complaint. It includes high market shares, direct competitors, and limited alternatives. Could the Federal Trade Commission be wrong? Maybe, which is why the agency has to go to court and convince a judge that the evidence supports its case.
Here is what is not so standard. After meeting with Wyoming Gov. Mark Gordon (R), who supports the merger, Attorney General Barr announced he was going to review the FTC’s case: “If I reach a conclusion in which I feel like the merger would benefit competition,” he explained, “then I will try to use whatever authority I have to rectify the situation.”
A judge will decide the merits of the Peabody-Arch Coal case, so let’s focus on Government 101. The Federal Trade Commission is an independent agency. It was created to be separate from the U.S. Department of Justice. Neither the Department of Justice nor Attorney General Barr have any formal authority over the FTC’s decision to bring an antitrust case. But the Department of Justice can interfere. It can file statements of interest in the case or intervene in an ongoing litigation.
The parties will almost certainly quote as often as possible Attorney General Barr’s statement: “It sounds to me like the whole picture wasn’t looked at here.” Why interfere in this case? It is not as though the agency has a reputation for being overly aggressive. It currently has three Republican commissioners, two of whom—Chairman Joe Simmons and Commissioner Noah Phillips—supported the action. Both a majority of the Commission and a majority of the majority party at the agency supported blocking the joint venture.
Qualcomm: Opposing monopolization cases
Next up is the semiconductor monopoly case involving Qualcomm Inc. In 2017, the Federal Trade Commission alleged that Qualcomm used licensing and supply terms to maintain its monopoly on semiconductors necessary for cell phones to work. After the trial and before the judge issued her decision, the Antitrust Division of the Department of Justice filed a statement of interest, requesting that the judge hold additional hearings on remedy if she were to rule for the FTC.
When the judge did rule in the FTC’s favor and rejected the need for more hearings, the Division sided with Qualcomm in seeking a stay of the order and asking the federal Ninth Circuit Court of Appeals to vacate the lower court’s decision. The Ninth Circuit granted the stay and recently ruled in favor of Qualcomm.
The current administration’s Antitrust Division has not brought a single monopolization case (to be fair, the Division has brought only one monopolization case this century). But it opposes this monopolization case against Qualcomm brought by the Federal Trade Commission.
Although the Justice Department (along with the Departments of Defense and Energy) raised legal issues with the district court’s decision, it also mentioned national security 17 times in one brief, an argument the Justice Department itself had to refute when it sought to break up AT&T almost 40 years ago.
T-Mobile Sprint: Defending consolidation
Then, there is the case challenging T-Mobile US Inc.’s acquisition of Sprint Corporation. In November of last year, a group of state attorneys general sued to block the deal that would reduce the number of mobile phone carriers in the United States from four to three. The Antitrust Division had entered a settlement with the two companies, agreeing not to challenge the transaction in exchange for a remedy that the Division believed would resolve any competitive concerns.
The Antitrust Division filed a Statement of Interest in the states’ case defending the merger. In its view, “The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.” The Assistant Attorney General Makan Delrahim even went so far as to encourage Dish Network Corporation, which would benefit from the settlement as a buyer of some of the merging parties’ assets, to lobby lawmakers to the settlement.
In short, the Antitrust Division was asking for the very deference it had failed to show the Federal Trade Commission in the first two cases detailed above. The district court ruled against the states.
Excerpt from https://equitablegrowth.org/the-curious-case-of-the-federal-prosecutor-who-sided-with-defendants/
The curious case of the federal prosecutor who sided with defendants
Excerpt:
Let’s look at three cases that are emblematic of this antitrust tilt toward defendants in antitrust cases brought by other antitrust agencies. As Equitable Growth recently reiterated, the United States has a monopoly power problem. During this critical moment, however, the Trump administration’s antitrust legacy at the Department Justice may be to limit the ability of the antitrust laws to combat that problem. Rather than criticizing other agencies for bringing cases, the leadership at the Department of Justice and its Antitrust Division would better serve the country by enforcing the law.
Peabody-Arch Coal: The most recent intervention
Let’s start with the most recent action. Back in February 2020, in a 4-1 vote, the Federal Trade Commission sought to block a joint venture (a form of coordination that is less than a full merger but still subject to the antitrust laws) between Peabody Energy Corporation and Arch Coal, Inc. According to the complaint, the two companies are combining their coal mines located in the Southern Powder River Basin in Wyoming. They are the two largest coal mines in the Southern Powder River Basin and fierce, direct competitors.
According to the Commission’s complaint, coal from this region is different than other coal. It is cheaper to mine, being close to the surface. It is cleaner to burn. And it boasts a higher heat content. This is why the Federal Trade Commission argues that the proposed post-merger joint venture would be able to increase the price of its coal—it won’t be profitable for utilities to shift to other types of coal or other types of energy. Currently, the agency is seeking a preliminary judgement in federal court to prevent the joint venture.
If granted, that injunction would block the deal until the FTC’s litigation on the full merits is concluded, which is an administrative trial. The federal court held a 9-day hearing on the request for a preliminary injunction, with the parties now awaiting the court’s judgment. The administrative trial is scheduled to start on December 1, 2020, before the FTC’s administrative law judge.
So far, this is a pretty standard antitrust complaint. It includes high market shares, direct competitors, and limited alternatives. Could the Federal Trade Commission be wrong? Maybe, which is why the agency has to go to court and convince a judge that the evidence supports its case.
Here is what is not so standard. After meeting with Wyoming Gov. Mark Gordon (R), who supports the merger, Attorney General Barr announced he was going to review the FTC’s case: “If I reach a conclusion in which I feel like the merger would benefit competition,” he explained, “then I will try to use whatever authority I have to rectify the situation.”
A judge will decide the merits of the Peabody-Arch Coal case, so let’s focus on Government 101. The Federal Trade Commission is an independent agency. It was created to be separate from the U.S. Department of Justice. Neither the Department of Justice nor Attorney General Barr have any formal authority over the FTC’s decision to bring an antitrust case. But the Department of Justice can interfere. It can file statements of interest in the case or intervene in an ongoing litigation.
The parties will almost certainly quote as often as possible Attorney General Barr’s statement: “It sounds to me like the whole picture wasn’t looked at here.” Why interfere in this case? It is not as though the agency has a reputation for being overly aggressive. It currently has three Republican commissioners, two of whom—Chairman Joe Simmons and Commissioner Noah Phillips—supported the action. Both a majority of the Commission and a majority of the majority party at the agency supported blocking the joint venture.
Qualcomm: Opposing monopolization cases
Next up is the semiconductor monopoly case involving Qualcomm Inc. In 2017, the Federal Trade Commission alleged that Qualcomm used licensing and supply terms to maintain its monopoly on semiconductors necessary for cell phones to work. After the trial and before the judge issued her decision, the Antitrust Division of the Department of Justice filed a statement of interest, requesting that the judge hold additional hearings on remedy if she were to rule for the FTC.
When the judge did rule in the FTC’s favor and rejected the need for more hearings, the Division sided with Qualcomm in seeking a stay of the order and asking the federal Ninth Circuit Court of Appeals to vacate the lower court’s decision. The Ninth Circuit granted the stay and recently ruled in favor of Qualcomm.
The current administration’s Antitrust Division has not brought a single monopolization case (to be fair, the Division has brought only one monopolization case this century). But it opposes this monopolization case against Qualcomm brought by the Federal Trade Commission.
Although the Justice Department (along with the Departments of Defense and Energy) raised legal issues with the district court’s decision, it also mentioned national security 17 times in one brief, an argument the Justice Department itself had to refute when it sought to break up AT&T almost 40 years ago.
T-Mobile Sprint: Defending consolidation
Then, there is the case challenging T-Mobile US Inc.’s acquisition of Sprint Corporation. In November of last year, a group of state attorneys general sued to block the deal that would reduce the number of mobile phone carriers in the United States from four to three. The Antitrust Division had entered a settlement with the two companies, agreeing not to challenge the transaction in exchange for a remedy that the Division believed would resolve any competitive concerns.
The Antitrust Division filed a Statement of Interest in the states’ case defending the merger. In its view, “The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.” The Assistant Attorney General Makan Delrahim even went so far as to encourage Dish Network Corporation, which would benefit from the settlement as a buyer of some of the merging parties’ assets, to lobby lawmakers to the settlement.
In short, the Antitrust Division was asking for the very deference it had failed to show the Federal Trade Commission in the first two cases detailed above. The district court ruled against the states.
Excerpt from https://equitablegrowth.org/the-curious-case-of-the-federal-prosecutor-who-sided-with-defendants/
Artist Rights Alliance Calls Out ‘Secretive Agreements’ Between Streaming Services and Major Music Publishers
Dylan Smith
August 31, 2020
1
In comments forwarded to the U.S. Copyright Office, the Artist Rights Alliance (ARA) has called out “secretive agreements” between streaming services and music publishers.
Artist Rights Alliance officials voiced their criticism of the “secretive agreements” this morning, and the corresponding statement was shared with Digital Music News. Delivered in response to the Copyright Office’s Unpaid Royalties Study (and “Notice of Inquiry” requesting expert opinions and feedback), the ARA’s statement arrives exactly four weeks after questions surfaced over whether the overarching “Black Box” initiative is doomed to fail.
While the latter comments centered on the pitfalls associated with a disproportionate degree of music industry influence upon the Mechanical Licensing Collective’s royalty-matching procedures, the ARA’s latest message takes aim at “secret, private agreements” between streaming services and publishers.
Specifically, these behind-closed-doors arrangements enable the involved parties to forego identifying and paying rightsholders based upon their number of plays, per the ARA. Instead, they serve to divvy up the mechanical royalties to major publishers by market share.
“Using market share to distribute royalties is a terrible substitute for actual matching — since market share leaders are least likely to have any unclaimed royalties of their own in the pool because they have the greatest ability and incentives to find and claim their work,” the Artist Rights Alliance’s formal inquiry to the Copyright Office continues.
From there, the ARA calls on the Copyright Office and the MLC “to aggressively investigate” agreements that circumvent the MLC and utilize market share as a benchmark for the distribution of royalties. The system should be used “as a very last resort,” according to the Washington, D.C.-based non-profit organization.
The ARA then touches on a few points aside from agreements between streaming services and major publishers. Concurring with a suggestion from the Recording Academy, ARA higher-ups recommend that the MLC delay royalty payments in order to improve their match rate – even if the process “takes more time than initially hoped.” Similarly, the entity lends support to the idea that the Music Modernization Act’s Digital Licensee Coordinator should join the MLC in identifying unmatched royalties.
“Digital services… must be required to be part of the solution, not a cause of further problems in this area,” the document indicates.
Lastly, the entity emphasizes that the purpose of eliminating Black Box royalties isn’t to simply pay out the funds to any party that will accept them, but rather, is to afford publishers and songwriters their due compensation.
Dylan Smith
August 31, 2020
1
In comments forwarded to the U.S. Copyright Office, the Artist Rights Alliance (ARA) has called out “secretive agreements” between streaming services and music publishers.
Artist Rights Alliance officials voiced their criticism of the “secretive agreements” this morning, and the corresponding statement was shared with Digital Music News. Delivered in response to the Copyright Office’s Unpaid Royalties Study (and “Notice of Inquiry” requesting expert opinions and feedback), the ARA’s statement arrives exactly four weeks after questions surfaced over whether the overarching “Black Box” initiative is doomed to fail.
While the latter comments centered on the pitfalls associated with a disproportionate degree of music industry influence upon the Mechanical Licensing Collective’s royalty-matching procedures, the ARA’s latest message takes aim at “secret, private agreements” between streaming services and publishers.
Specifically, these behind-closed-doors arrangements enable the involved parties to forego identifying and paying rightsholders based upon their number of plays, per the ARA. Instead, they serve to divvy up the mechanical royalties to major publishers by market share.
“Using market share to distribute royalties is a terrible substitute for actual matching — since market share leaders are least likely to have any unclaimed royalties of their own in the pool because they have the greatest ability and incentives to find and claim their work,” the Artist Rights Alliance’s formal inquiry to the Copyright Office continues.
From there, the ARA calls on the Copyright Office and the MLC “to aggressively investigate” agreements that circumvent the MLC and utilize market share as a benchmark for the distribution of royalties. The system should be used “as a very last resort,” according to the Washington, D.C.-based non-profit organization.
The ARA then touches on a few points aside from agreements between streaming services and major publishers. Concurring with a suggestion from the Recording Academy, ARA higher-ups recommend that the MLC delay royalty payments in order to improve their match rate – even if the process “takes more time than initially hoped.” Similarly, the entity lends support to the idea that the Music Modernization Act’s Digital Licensee Coordinator should join the MLC in identifying unmatched royalties.
“Digital services… must be required to be part of the solution, not a cause of further problems in this area,” the document indicates.
Lastly, the entity emphasizes that the purpose of eliminating Black Box royalties isn’t to simply pay out the funds to any party that will accept them, but rather, is to afford publishers and songwriters their due compensation.
NIJ: The Use-of-Force Continuum
https://nij.ojp.gov/topics/articles/use-force-continuum (USDOJ)
Date Published
August 3, 2009
Most law enforcement agencies have policies that guide their use of force. These policies describe a escalating series of actions an officer may take to resolve a situation. This continuum generally has many levels, and officers are instructed to respond with a level of force appropriate to the situation at hand, acknowledging that the officer may move from one part of the continuum to another in a matter of seconds.
An example of a use-of-force continuum follows:
https://nij.ojp.gov/topics/articles/use-force-continuum (USDOJ)
Date Published
August 3, 2009
Most law enforcement agencies have policies that guide their use of force. These policies describe a escalating series of actions an officer may take to resolve a situation. This continuum generally has many levels, and officers are instructed to respond with a level of force appropriate to the situation at hand, acknowledging that the officer may move from one part of the continuum to another in a matter of seconds.
An example of a use-of-force continuum follows:
- Officer Presence — No force is used. Considered the best way to resolve a situation.
- The mere presence of a law enforcement officer works to deter crime or diffuse a situation.
- Officers' attitudes are professional and nonthreatening.
- Verbalization — Force is not-physical.
- Officers issue calm, nonthreatening commands, such as "Let me see your identification and registration."
- Officers may increase their volume and shorten commands in an attempt to gain compliance. Short commands might include "Stop," or "Don't move."
- Empty-Hand Control — Officers use bodily force to gain control of a situation.
- Soft technique. Officers use grabs, holds and joint locks to restrain an individual.
- Hard technique. Officers use punches and kicks to restrain an individual.
- Less-Lethal Methods — Officers use less-lethal technologies to gain control of a situation.
- Blunt impact. Officers may use a baton or projectile to immobilize a combative person.
- Chemical. Officers may use chemical sprays or projectiles embedded with chemicals to restrain an individual (e.g., pepper spray).
- Conducted Energy Devices (CEDs). Officers may use CEDs to immobilize an individual. CEDs discharge a high-voltage, low-amperage jolt of electricity at a distance.
- Lethal Force — Officers use lethal weapons to gain control of a situation. Should only be used if a suspect poses a serious threat to the officer or another individual.
- Officers use deadly weapons such as firearms to stop an individual's actions.
Product Liability's Amazon Problem
Posted: 9 Jul 2020
Sean Bender
University of Pennsylvania Law School
Date Written: June 16, 2020
From the Abstract:
As Amazon has reinvented retail, tort law has struggled to keep up. Modern product liability doctrines were developed at a time when supply chains were linear and actors could be neatly cabined into roles like “seller” or “manufacturer.” By design, Amazon’s marketplace disrupts that model, removing the middlemen between manufacturers and consumers while reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market. And while courts have readily held its third-party merchants strictly liable when they sell defective products through Amazon’s website, Amazon’s own role in these transactions is far less clear.
This Article proceeds in three parts. Part I begins with an overview of contemporary product liability law, discussing the origins of the strict liability rule and the rise of the Restatement (Second)’s approach to no fault recovery. Part II focuses on the doctrine’s application to Amazon, tracking the outcome of every product liability lawsuit filed against the company between 2015 and 2020. Finally, Part III is prescriptive, discussing both why and how courts should respond to Amazon’s disruption of product liability law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3628921
Posted: 9 Jul 2020
Sean Bender
University of Pennsylvania Law School
Date Written: June 16, 2020
From the Abstract:
As Amazon has reinvented retail, tort law has struggled to keep up. Modern product liability doctrines were developed at a time when supply chains were linear and actors could be neatly cabined into roles like “seller” or “manufacturer.” By design, Amazon’s marketplace disrupts that model, removing the middlemen between manufacturers and consumers while reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market. And while courts have readily held its third-party merchants strictly liable when they sell defective products through Amazon’s website, Amazon’s own role in these transactions is far less clear.
This Article proceeds in three parts. Part I begins with an overview of contemporary product liability law, discussing the origins of the strict liability rule and the rise of the Restatement (Second)’s approach to no fault recovery. Part II focuses on the doctrine’s application to Amazon, tracking the outcome of every product liability lawsuit filed against the company between 2015 and 2020. Finally, Part III is prescriptive, discussing both why and how courts should respond to Amazon’s disruption of product liability law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3628921
Should the US border wall contract comply with competitive procurement practices that reward efficiency?
DAR comment: The Bannon border wall indictment story is related to another story where the issue is more mundane: whether government contracts for the Mexico/US border wall went to the most qualified company based on routine competitive procurement practices. Forbes and the Washington Post are among the media sources for the point that Tommy Fisher and his Fisher Industries are politically-connected and helping the Bannon We Build The Wall project. Reportedly Fisher also won US Government wall building work after repeatedly being "touted" by Trump. That touting does not mean that usual government procurement procedures were not followed, but it would be interesting to know whether Fisher's company was subjected to routine government contract vetting, as opposed to being helped into the contract by political favoritism.
Following are excerpts from Forbes:
Trump also “personally and repeatedly” lobbied for the U.S. Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, a politically-connected firm that was also helping We Build The Wall build a private portion of the wall, according to the Washington Post.
The company, which is not mentioned in the indictment, is run by GOP donor and frequent Fox News guest Tommy Fisher and won the contract after it “captured Trump's attention” and was “repeatedly touted” by him, according to CNN.
The White House declined to comment on whether Trump knew of the connection between Fisher and We Build The Wall.
The White House insisted at the time that Trump’s interest in Fisher was due to their cost efficiency. “The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals,” White House press secretary Sarah Sanders told the Washington Post. “He wants to make sure we get the job done under budget and ahead of schedule.”
https://www.forbes.com/sites/andrewsolender/2020/08/20/trump-reportedly-gave-we-build-the-wall-his-blessing-and-tried-to-steer-1b-contract-to-its-builder/#592043263904
DAR comment: The Bannon border wall indictment story is related to another story where the issue is more mundane: whether government contracts for the Mexico/US border wall went to the most qualified company based on routine competitive procurement practices. Forbes and the Washington Post are among the media sources for the point that Tommy Fisher and his Fisher Industries are politically-connected and helping the Bannon We Build The Wall project. Reportedly Fisher also won US Government wall building work after repeatedly being "touted" by Trump. That touting does not mean that usual government procurement procedures were not followed, but it would be interesting to know whether Fisher's company was subjected to routine government contract vetting, as opposed to being helped into the contract by political favoritism.
Following are excerpts from Forbes:
Trump also “personally and repeatedly” lobbied for the U.S. Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, a politically-connected firm that was also helping We Build The Wall build a private portion of the wall, according to the Washington Post.
The company, which is not mentioned in the indictment, is run by GOP donor and frequent Fox News guest Tommy Fisher and won the contract after it “captured Trump's attention” and was “repeatedly touted” by him, according to CNN.
The White House declined to comment on whether Trump knew of the connection between Fisher and We Build The Wall.
The White House insisted at the time that Trump’s interest in Fisher was due to their cost efficiency. “The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals,” White House press secretary Sarah Sanders told the Washington Post. “He wants to make sure we get the job done under budget and ahead of schedule.”
https://www.forbes.com/sites/andrewsolender/2020/08/20/trump-reportedly-gave-we-build-the-wall-his-blessing-and-tried-to-steer-1b-contract-to-its-builder/#592043263904
Steve Bannon and Three Defendants Indicted for $25 Million “We Build The Wall” Fraud Scheme
BY MICHAEL VOLKOV · AUGUST 24, 2020
In a surprise indictment, the US Attorney’s Office for the Southern District of New York announced that Steve Bannon, Brian Kolfage, Andrew Badolato and Timothy Shea were indicted for defrauding hundreds of thousands of donors in response to the “We Build The Wall” online fundraising campaign. The indictment charges the defendants in defrauding donors from more than $25 million.
As charged, the defendants defrauded hundreds of thousands of donors under the false pretense that all the money would be spent on the construction of the border wall between Mexico and the United States.
All four defendants were charged with conspiracy to commit wire fraud, and conspiracy to engage in money laundering. In an ironic twist (you cannot make this up), the case was investigated by the United States Postal Inspection Services, and the defendants were arrested by USPIS agents.
Kolfage, a disabled war veteran, was the founder and public face of We Build The Wall, and repeatedly assured donors would not be paid a penny. Notwithstanding this reassurance, the defendants secretly schemed to funnel hundreds of thousands of dollars to Kolfage, which he used to pay for his lavish lifestyle. To hide the scheme, the defendants not only lied to donors, they created sham invoices and accounts to launder donations and cover up the financial transaction trail.
The scheme was launched in December 2018 when the defendants launched a website for an online crowdfunding campaign, We Build The Wall. According to statements on the crowdfunding webpage, the campaign was raising funds to donate to the federal government for construction of a wall on the southern border of the United States. The website included an assurance that “100 % of your donations” would be given to the government for the construction of a wall, and if the campaign could not attain its goal, it would “refund every single penny.”
Kolfage is quoted as repeatedly and falsely stating to the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.” Bannon was quoted on numerous occasions as stating “we’re a volunteer organization.”
The “We Build The Wall” online campaign was an instant success. Within the first week, the site raised $17 million. Based on this success, the campaign drew scrutiny, including questions concerning Kolfage’s background and the plan to give the money to the federal government.
Later in December 2018, the crowdfunding website suspended the campaign, which by that time had raised $20 million. The website operator warned Kolfage that unless he identified a legitimate non-profit organization into which those funds could be transferred, the website would return the funds to the donors.
Kolfage enlisted Bannon and Badolato to lead the campaign. Bannon and Badolato already maintained and operated a non-profit organization to promote economic nationalism and American sovereignty. Bannon and Badolato took control of the fundraising organization and day-to-day activities, including its finances, messaging, donor outreach and operations. They created a new non-profit organization, We Build the Wall Inc., to which they proposed to transfer the money raised on the crowdfunding website., and resume operation of the fundraising activities with a modified purpose – to fund the private construction of a wall along the southern border. They also announced that donors would need to “opt in” to transfer their previous donations to the new We Build the Wall, and in effect “re-raise” the $20 million previously donated.
Starting in 2019, the defendants mislead donors and the crowdfunding website. promising them that “100 percent” of the funds would be used for construction of a wall and that Kolfage would not take a salary or compensation from the new organization.
These false representations were made in solicitations, public statements, social media posts and press appearances by Kolfage and Bannon, and others acting at their direction. In fact, Kolfage issued statements that were false and misleading and reviewed and approved by Bannon and Botolato.
To reinforce these false representations, the defendants adopted bylaws for the non-profit organization that contained false representations that none of the defendants could or would receive any compensation from the funds raised. The defendants also promoted communications that none of the Advisory Board members, which was chaired by Bannon, would receive any compensation for their services. Bannon publicly stated that he and other principals were volunteers.
Bannon and Botalato text each other that the false public statements were important to drive donations and since it “removes all taint of self-interest.”
The false representations were important to many donors and repeated to reassure donors.
All four of the defendants worked together to misappropriate hundreds of thousands of dollars for their personal use. Kolfage took more than $350,000 for personal use, including home renovations, payments for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt. Bannon received over $1 million from We Build The Wall through a non-profit organization under his control, which he used for personal purposes.
The four defendants employed a scheme to route payments from We Build The Wall to Kolfage through Bannon’s non-profit organization and a shell company under Shea’s control. The defendants prepared fake invoices and sham “vendor” arrangements to ensure that the pay arrangement as Kolfage noted in a text message to Badolato remained “confidential” and kept on a “need to know” basis.
Kolfage specifically requested that a specific payment be routed to his spouse. Subsequently a false 1099 was issued to his spouse and listed the services provided as “media.”
In October 2019, the defendants learned they may be under criminal investigation. They switched to encrypted text messaging, revised the website to remove the representation that Kolfage would not be compensated and added a statement that Kolfage would receive a salary beginning in January 2020.
https://blog.volkovlaw.com/
BY MICHAEL VOLKOV · AUGUST 24, 2020
In a surprise indictment, the US Attorney’s Office for the Southern District of New York announced that Steve Bannon, Brian Kolfage, Andrew Badolato and Timothy Shea were indicted for defrauding hundreds of thousands of donors in response to the “We Build The Wall” online fundraising campaign. The indictment charges the defendants in defrauding donors from more than $25 million.
As charged, the defendants defrauded hundreds of thousands of donors under the false pretense that all the money would be spent on the construction of the border wall between Mexico and the United States.
All four defendants were charged with conspiracy to commit wire fraud, and conspiracy to engage in money laundering. In an ironic twist (you cannot make this up), the case was investigated by the United States Postal Inspection Services, and the defendants were arrested by USPIS agents.
Kolfage, a disabled war veteran, was the founder and public face of We Build The Wall, and repeatedly assured donors would not be paid a penny. Notwithstanding this reassurance, the defendants secretly schemed to funnel hundreds of thousands of dollars to Kolfage, which he used to pay for his lavish lifestyle. To hide the scheme, the defendants not only lied to donors, they created sham invoices and accounts to launder donations and cover up the financial transaction trail.
The scheme was launched in December 2018 when the defendants launched a website for an online crowdfunding campaign, We Build The Wall. According to statements on the crowdfunding webpage, the campaign was raising funds to donate to the federal government for construction of a wall on the southern border of the United States. The website included an assurance that “100 % of your donations” would be given to the government for the construction of a wall, and if the campaign could not attain its goal, it would “refund every single penny.”
Kolfage is quoted as repeatedly and falsely stating to the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.” Bannon was quoted on numerous occasions as stating “we’re a volunteer organization.”
The “We Build The Wall” online campaign was an instant success. Within the first week, the site raised $17 million. Based on this success, the campaign drew scrutiny, including questions concerning Kolfage’s background and the plan to give the money to the federal government.
Later in December 2018, the crowdfunding website suspended the campaign, which by that time had raised $20 million. The website operator warned Kolfage that unless he identified a legitimate non-profit organization into which those funds could be transferred, the website would return the funds to the donors.
Kolfage enlisted Bannon and Badolato to lead the campaign. Bannon and Badolato already maintained and operated a non-profit organization to promote economic nationalism and American sovereignty. Bannon and Badolato took control of the fundraising organization and day-to-day activities, including its finances, messaging, donor outreach and operations. They created a new non-profit organization, We Build the Wall Inc., to which they proposed to transfer the money raised on the crowdfunding website., and resume operation of the fundraising activities with a modified purpose – to fund the private construction of a wall along the southern border. They also announced that donors would need to “opt in” to transfer their previous donations to the new We Build the Wall, and in effect “re-raise” the $20 million previously donated.
Starting in 2019, the defendants mislead donors and the crowdfunding website. promising them that “100 percent” of the funds would be used for construction of a wall and that Kolfage would not take a salary or compensation from the new organization.
These false representations were made in solicitations, public statements, social media posts and press appearances by Kolfage and Bannon, and others acting at their direction. In fact, Kolfage issued statements that were false and misleading and reviewed and approved by Bannon and Botolato.
To reinforce these false representations, the defendants adopted bylaws for the non-profit organization that contained false representations that none of the defendants could or would receive any compensation from the funds raised. The defendants also promoted communications that none of the Advisory Board members, which was chaired by Bannon, would receive any compensation for their services. Bannon publicly stated that he and other principals were volunteers.
Bannon and Botalato text each other that the false public statements were important to drive donations and since it “removes all taint of self-interest.”
The false representations were important to many donors and repeated to reassure donors.
All four of the defendants worked together to misappropriate hundreds of thousands of dollars for their personal use. Kolfage took more than $350,000 for personal use, including home renovations, payments for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt. Bannon received over $1 million from We Build The Wall through a non-profit organization under his control, which he used for personal purposes.
The four defendants employed a scheme to route payments from We Build The Wall to Kolfage through Bannon’s non-profit organization and a shell company under Shea’s control. The defendants prepared fake invoices and sham “vendor” arrangements to ensure that the pay arrangement as Kolfage noted in a text message to Badolato remained “confidential” and kept on a “need to know” basis.
Kolfage specifically requested that a specific payment be routed to his spouse. Subsequently a false 1099 was issued to his spouse and listed the services provided as “media.”
In October 2019, the defendants learned they may be under criminal investigation. They switched to encrypted text messaging, revised the website to remove the representation that Kolfage would not be compensated and added a statement that Kolfage would receive a salary beginning in January 2020.
https://blog.volkovlaw.com/
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
Here is the AAI's statement about the brief:
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
Read the brief here: https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-for-proper-predominance-and-evidentiary-standards-in-antitrust-class-actions-in-re-packaged-seafood-antitrust-litig
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
Here is the AAI's statement about the brief:
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
Read the brief here: https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-for-proper-predominance-and-evidentiary-standards-in-antitrust-class-actions-in-re-packaged-seafood-antitrust-litig
The Tik-Tok Complaint against the US
You can read the Complaint here:
https://www.scribd.com/document/473516538/Tiktok-Trump-Complaint#from_embed?
A useful and skeptical analysis of the Tik-Tok Complaint is here:
Will TikTok Win Its Lawsuit Against Trump?
By Robert Chesney https://www.lawfareblog.com/will-tiktok-win-its-lawsuit-against-trump
DAR Comment: Chesney finds that some Tik-Tok arguments are stronger than others, but doubts that any will prevail. CFIUS is about national security, and the arguments that can prevail in the CFIUS context are narrow.
CFIUS proceedings tend to be quick and carried out without great transparency. The CFIUS process does not typically involve court review. There is a difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters.
A point of the TikTok Complaint is that CFUIS rules and procedures and the government's use of them are unfair and unreasonable. It is a policy point worth pondering, but there is reason to doubt the effectiveness of that point in a court proceeding where the context involves allegations about national security.
Tik-Tok's public statement about its Complaint is here:
https://newsroom.tiktok.com/en-us/tiktok-files-lawsuit
Excerpts:
In our complaint we make clear that we believe the Administration ignored our extensive efforts to address its concerns, which we conducted fully and in good faith even as we disagreed with the concerns themselves:
"The executive order seeks to ban TikTok purportedly because of the speculative possibility that the application could be manipulated by the Chinese government. But, as the U.S. government is well aware, Plaintiffs have taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data, including by having TikTok store such data outside of China (in the United States and Singapore) and by erecting software barriers that help ensure that TikTok stores its U.S. user data separately from the user data of other ByteDance products. These actions were made known to the U.S. government during a recent U.S. national security review of ByteDance’s 2017 acquisition of a China-based company, Musical.ly. As part of that review, Plaintiffs provided voluminous documentation to the U.S. government documenting TikTok's security practices and made commitments that were more than sufficient to address any conceivable U.S. government privacy or national security concerns..."
* * *
Further, as we note in our complaint, not only does the Executive Order ignore due process, it also authorizes the prohibition of activities that have not been found to be "an unusual and extraordinary threat," as required by the International Emergency Economic Powers Act (IEEPA), under which the Administration is purportedly acting:
"By banning TikTok with no notice or opportunity to be heard (whether before or after the fact), the executive order violates the due process protections of the Fifth Amendment.
"The order is ultra vires because it is not based on a bona fide national emergency and authorizes the prohibition of activities that have not been found to pose 'an unusual and extraordinary threat.'"
In the complaint we also point to the fact that the August 6 Executive Order is a misuse of IEEPA:
"...the actions directed in the August 6 executive order are not supported by the emergency declared a year earlier in Executive Order 13873.
"That previous executive order was designed to address asserted U.S. national security concerns about certain telecommunications companies’ ability to abuse access to 'information and communications technology and services' that 'store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people.'
"TikTok Inc. is not a telecommunications provider and it does not provide the types of technology and services contemplated by the 2019 executive order. Specifically, TikTok Inc. does not provide the hardware backbone to 'facilitate the digital economy,' and TikTok Inc. has no role in providing 'critical infrastructure and vital emergency services.'"
In the complaint we also go into significant detail about the nearly year-long effort we made in good faith to provide the Committee on Foreign Investment in the United States (“CFIUS”) the voluminous information requested – was disregarded – and the numerous steps we offered to take in our commitment to transparency and cooperation:
"In 2019, CFIUS contacted ByteDance to consider whether to review its acquisition of Musical.ly, a China-based video-sharing platform—even though Musical.ly was based in China and had very limited assets in the United States. This review was highly unusual in that ByteDance had acquired Musical.ly two years earlier in 2017, Musical.ly was previously Chinese-owned and based in China, and ByteDance had predominantly abandoned Musical.ly’s limited U.S. assets by the time of CFIUS’s outreach in 2019.
"During this period, and through the course of the CFIUS review, ByteDance provided voluminous documentation and information in response to CFIUS’s questions. Among other evidence, ByteDance submitted detailed documentation to CFIUS demonstrating TikTok’s security measures to help ensure U.S. user data is safeguarded in storage and in transit and cannot be accessed by unauthorized persons—including any government—outside the United States.
"CFIUS never articulated any reason why TikTok’s security measures were inadequate to address any national security concerns, and effectively terminated formal communications with Plaintiffs well before the conclusion of the initial statutory review period. Notwithstanding the U.S. government's failure to identify any security risk, in an effort to address any conceivable concerns that the U.S. government may have and to assure continuity for the U.S. users who had come to value and cherish the platform that TikTok provides, Plaintiffs took the extraordinary step of offering to restructure their U.S. business...
"Despite these repeated efforts and concrete proposals to alleviate any national security concerns, the agency record reflects that CFIUS repeatedly refused to engage with ByteDance and its counsel about CFIUS’s concerns."
* * *
Likewise, in the August 6 Executive Order issued under IEEPA, the Administration failed to follow due process and act in good faith, neither providing evidence that TikTok was an actual threat, nor justification for its punitive actions. We believe the Administration's decisions were heavily politicized, and industry experts have said the same. As the complaint explains:
"The executive order is not rooted in bona fide national security concerns. Independent national security and information security experts have criticized the political nature of this executive order, and expressed doubt as to whether its stated national security objective is genuine...
"The President’s demands for payments have no relationship to any conceivable national security concern and serve only to underscore that Defendants failed to provide Plaintiffs with the due process required by law."
A three-judge Ninth Circuit panel upheld a lower court’s June 2018 ruling refusing to dismiss Oakland’s claims for lost property tax revenue under the Fair Housing Act.
However, the panel also upheld the dismissal of claims over increased city spending to tackle blight and unsafe conditions at abandoned homes.
Additionally, the panel ordered the lower court to reevaluate if Wells Fargo is inflicting an ongoing injury on Oakland that would justify the city’s request for an injunction to change the bank’s lending practices in the city going forward.
Oakland sued Wells Fargo in September 2015 claiming the bank steered minority homebuyers into predatory loans that caused hundreds of foreclosures, lost tax revenue, and increased costs of addressing problems with abandoned properties.
In June 2018, U.S. District Judge Edward Chen advanced Oakland’s claims for injunctive relief and lost tax revenue, finding Oakland’s proposed statistical analysis offered a “clear quantifiable link between [Wells Fargo’s] challenged practice and foreclosure rates and consequent harm to the city.”
The Ninth Circuit opinion is here:
https://www.courthousenews.com/wp-content/uploads/2020/08/OaklandWellsFargo-9CA.pdf
Case: 19-15169, 08/26/2020, ID: 11802959, DktEntry: 73-1
Excerpt:
The panel held that the allegations in Oakland’s amended complaint were sufficient to plead that its reduced property-tax revenues, but not its increased municipal expenses, were proximately caused by Wells Fargo’s discriminatory lending practices. Construing the amended complaint’s allegations in the light most favorable to the City, including the City’s proposed statistical regression analyses, the panel held that Oakland had plausibly alleged that its decrease in property-tax revenues had some direct and continuous relation to Wells Fargo’s discriminatory lending practices throughout much of the City.
However, the panel also upheld the dismissal of claims over increased city spending to tackle blight and unsafe conditions at abandoned homes.
Additionally, the panel ordered the lower court to reevaluate if Wells Fargo is inflicting an ongoing injury on Oakland that would justify the city’s request for an injunction to change the bank’s lending practices in the city going forward.
Oakland sued Wells Fargo in September 2015 claiming the bank steered minority homebuyers into predatory loans that caused hundreds of foreclosures, lost tax revenue, and increased costs of addressing problems with abandoned properties.
In June 2018, U.S. District Judge Edward Chen advanced Oakland’s claims for injunctive relief and lost tax revenue, finding Oakland’s proposed statistical analysis offered a “clear quantifiable link between [Wells Fargo’s] challenged practice and foreclosure rates and consequent harm to the city.”
The Ninth Circuit opinion is here:
https://www.courthousenews.com/wp-content/uploads/2020/08/OaklandWellsFargo-9CA.pdf
Case: 19-15169, 08/26/2020, ID: 11802959, DktEntry: 73-1
Excerpt:
The panel held that the allegations in Oakland’s amended complaint were sufficient to plead that its reduced property-tax revenues, but not its increased municipal expenses, were proximately caused by Wells Fargo’s discriminatory lending practices. Construing the amended complaint’s allegations in the light most favorable to the City, including the City’s proposed statistical regression analyses, the panel held that Oakland had plausibly alleged that its decrease in property-tax revenues had some direct and continuous relation to Wells Fargo’s discriminatory lending practices throughout much of the City.
NYPD's Terrorism Official Says Anarchist Groups Planned George Floyd Protest Violence in Advance
By Tom Winter, Andrew Blankstein and Jonathan Dienst • Published May 31, 2020 • Updated on June 1, 2020 at 9:05 am
Excerpts:
New York's top terrorism official says there's evidence that members of anarchist groups from outside the city intentionally planned to incite violence at protests calling for justice in the death of George Floyd.
Deputy Commissioner for Intelligence and Counterterrorism John Miller said there is a high level of confidence within the NYPD that these unnamed groups had organized scouts, medics, and supply routes of rocks, bottles and accelerants for breakaway groups to commit vandalism and violence. There are strong indicators they planned for violence in advance using at times encrypted communications, he said.
One out of every seven arrests, of 686 so far since May 28, has been people from out of state, according to Miller. He said those arrested came from Massachusettes, Connecticut, Pennsylvania, New Jersey, Iowa, Nevada, Virginia, Maryland, Texas and St. Paul, Minnesota.
"Before the protests began, organizers of certain anarchists groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police," Miller said.
He added, "They prepared to commit property damage and directed people who were following them that this should be done selectively and only in wealthier areas or at high-end stores run by corporate entities."
Without specifying who "they" are, Miller said the agitators "developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be."
Mayor Bill de Blasio said Sunday morning that the members of the anarchist movement plan together online and that "they have explicit rules, and we're going to make all this information available today and in the days ahead."
Among the out-of-area instigators were two sisters from upstate New York. They were detained after one threw a Molotov cocktail at a police van. The woman who threw the Molotov cocktail will face federal charges from prosecutors in Brooklyn, law enforcement source said.
https://www.nbcnewyork.com/news/local/nypds-terrorism-chief-says-unnamed-groups-planned-protest-violence-in-advance/2440722/
By Tom Winter, Andrew Blankstein and Jonathan Dienst • Published May 31, 2020 • Updated on June 1, 2020 at 9:05 am
Excerpts:
New York's top terrorism official says there's evidence that members of anarchist groups from outside the city intentionally planned to incite violence at protests calling for justice in the death of George Floyd.
Deputy Commissioner for Intelligence and Counterterrorism John Miller said there is a high level of confidence within the NYPD that these unnamed groups had organized scouts, medics, and supply routes of rocks, bottles and accelerants for breakaway groups to commit vandalism and violence. There are strong indicators they planned for violence in advance using at times encrypted communications, he said.
One out of every seven arrests, of 686 so far since May 28, has been people from out of state, according to Miller. He said those arrested came from Massachusettes, Connecticut, Pennsylvania, New Jersey, Iowa, Nevada, Virginia, Maryland, Texas and St. Paul, Minnesota.
"Before the protests began, organizers of certain anarchists groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police," Miller said.
He added, "They prepared to commit property damage and directed people who were following them that this should be done selectively and only in wealthier areas or at high-end stores run by corporate entities."
Without specifying who "they" are, Miller said the agitators "developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be."
Mayor Bill de Blasio said Sunday morning that the members of the anarchist movement plan together online and that "they have explicit rules, and we're going to make all this information available today and in the days ahead."
Among the out-of-area instigators were two sisters from upstate New York. They were detained after one threw a Molotov cocktail at a police van. The woman who threw the Molotov cocktail will face federal charges from prosecutors in Brooklyn, law enforcement source said.
https://www.nbcnewyork.com/news/local/nypds-terrorism-chief-says-unnamed-groups-planned-protest-violence-in-advance/2440722/
DC AG on home improvement abuse
DAR Comment: When I've helped as a volunteer attorney with the DC Bar pro bono clinic, I've been impressed by the many instances when property owners failed to take basic steps to protect themselves from home improvement abuse. The consumer guide on the DC AG's website talks about those steps, some of which are copied below:
HOME IMPROVEMENT ABUSE
Remodeling or performing construction on your home may require a contractor. There are a few things you can do to ensure that you find someone reputable:
Research contractors before hiring them. Find out whether a contractor’s license is valid and up to date. To verify a D.C. contractor’s license, call the Department of Consumer and Regulatory Affairs at (202) 442-4311. You can also call Office of the Attorney General’s Office of Consumer Protection or check online to see if there are complaints against a particular contractor. Request written estimates from several contractors.
Request a copy of the contractor’s personal liability, worker’s compensation, and property damage coverage insurance.
Obtain a written contract describing the work to be performed and make sure the contract states that it is the contractor’s obligation to get all necessary permits.
Keep a record of all meetings, phone conversations, and payments.
Do not obtain a home equity loan from your contractor unless you have shopped around for a loan first and compared rates and terms. For a list of approved lenders in your area, visit http://www.hud.gov/ll/code/ llslcrit.cfm or call (800) 225-5342. CONSUMER HOTLINE — (202) 442-9828 15
Be wary of a contractor who claims to have “leftover” material from another job or who “just happens to be in the neighborhood.”
Do not hire a contractor who only accepts cash.
Avoid paying the full price up front. You can ask to pay only a deposit at the beginning of a job and withhold the final payment until the work is completed and passes any required inspection.
See https://oag.dc.gov/sites/default/files/2019-04/2016-06-30%20Consumer%20Protection%20Guide%20FINAL_06_15_17_SinglePage.pdf
DAR Comment: When I've helped as a volunteer attorney with the DC Bar pro bono clinic, I've been impressed by the many instances when property owners failed to take basic steps to protect themselves from home improvement abuse. The consumer guide on the DC AG's website talks about those steps, some of which are copied below:
HOME IMPROVEMENT ABUSE
Remodeling or performing construction on your home may require a contractor. There are a few things you can do to ensure that you find someone reputable:
Research contractors before hiring them. Find out whether a contractor’s license is valid and up to date. To verify a D.C. contractor’s license, call the Department of Consumer and Regulatory Affairs at (202) 442-4311. You can also call Office of the Attorney General’s Office of Consumer Protection or check online to see if there are complaints against a particular contractor. Request written estimates from several contractors.
Request a copy of the contractor’s personal liability, worker’s compensation, and property damage coverage insurance.
Obtain a written contract describing the work to be performed and make sure the contract states that it is the contractor’s obligation to get all necessary permits.
Keep a record of all meetings, phone conversations, and payments.
Do not obtain a home equity loan from your contractor unless you have shopped around for a loan first and compared rates and terms. For a list of approved lenders in your area, visit http://www.hud.gov/ll/code/ llslcrit.cfm or call (800) 225-5342. CONSUMER HOTLINE — (202) 442-9828 15
Be wary of a contractor who claims to have “leftover” material from another job or who “just happens to be in the neighborhood.”
Do not hire a contractor who only accepts cash.
Avoid paying the full price up front. You can ask to pay only a deposit at the beginning of a job and withhold the final payment until the work is completed and passes any required inspection.
See https://oag.dc.gov/sites/default/files/2019-04/2016-06-30%20Consumer%20Protection%20Guide%20FINAL_06_15_17_SinglePage.pdf
NYT: Concierge care, which offers personalized medical services for people who can afford it, has grown fast in the pandemic as patients seek direct access to physicians.
Basic telemedicine can bring with it cumbersome insurance protocols and hard-to-navigate health care portals. Concierge care, which is typically not covered by insurance, gets around restrictions placed on doctors and other health care providers. But it comes at a steep cost: Prices for services can be two to three times higher, and that comes on top of annual fees.
When more than 173,000 people in the United States have died from the coronavirus and millions of Americans remain out of work, the growing interest in concierge medical services may seem out of touch with the devastation the pandemic has inflicted.
But the concept is expanding in other areas. The affluent are able to pay a premium for a luxury pursuit that was relatively affordable before the coronavirus crisis, like pampering themselves with a private manicure or hiring a personal trainer for a home workout.
Doctors say they have had to expand their services or create new ones to meet the expectations of their wealthy patients.
From: https://www.nytimes.com/2020/08/24/business/doctors-are-offering-direct-access-in-the-pandemic-for-those-who-can-afford-it.html
Basic telemedicine can bring with it cumbersome insurance protocols and hard-to-navigate health care portals. Concierge care, which is typically not covered by insurance, gets around restrictions placed on doctors and other health care providers. But it comes at a steep cost: Prices for services can be two to three times higher, and that comes on top of annual fees.
When more than 173,000 people in the United States have died from the coronavirus and millions of Americans remain out of work, the growing interest in concierge medical services may seem out of touch with the devastation the pandemic has inflicted.
But the concept is expanding in other areas. The affluent are able to pay a premium for a luxury pursuit that was relatively affordable before the coronavirus crisis, like pampering themselves with a private manicure or hiring a personal trainer for a home workout.
Doctors say they have had to expand their services or create new ones to meet the expectations of their wealthy patients.
From: https://www.nytimes.com/2020/08/24/business/doctors-are-offering-direct-access-in-the-pandemic-for-those-who-can-afford-it.html
AG Barr says he’ll review stalled Wyoming coal merger
DAR Comment: The local Wyoming press report below indicates that AG Barr will review the proposed joint venture between Arch Coal and Peabody Energy that has been challenged by the FTC. A number of antitrust lawyers and economists who support strong enforcement have complained about Barr’s role, for several reasons. For one, some antitrust experts think it is inappropriate for the head of the USDOJ to comment on the work of the FTC (although in the past Barr’s USDOJ has actually filed in court against the FTC’s challenge to Qualcomm). Also, Barr’s support of an Arch/Peabody joint venture for the purpose of stabilizing production in response to changing demand is contrary to established case law. The Arch/Peabody position in some ways resembles the argument of book publishers that they should be allowed to coordinate on price in order to provide a counter to Amazon as the dominant force in electronic book distribution. Some critics see Barr’s position as influenced by political considerations in support of the President, rather than antitrust law principles. The President has promised support for the coal industry.
https://trib.com/news/state-and-regional/attorney-general-says-he-will-look-into-stalled-wyoming-coal-venture/article_3b20f273-5d9c-5908-92da-ab2d89619f4a.html
by Nick Reynolds
Aug 13, 2020 Updated Aug 14, 2020
– U.S. Attorney General William Barr said he would look into stalled joint venture between two of Wyoming’s largest coal operators after meeting with Gov. Mark Gordon on Thursday morning.
The joint venture between Arch Coal and Peabody Energy was pitched by the two companies last year as a way to improve price stability and keep two of the state’s largest coal mines viable as the industry continues to suffer from bankruptcies spurred by massive declines coal demand following a decade of coal plant closures in favor of new natural gas plants.
The Federal Trade Commission, however, rejected the deal, saying it would reduce competition in coal markets. That left both companies in a precarious financial position at a time when the Trump administration has pushed for a resurgence in coal within the United States’ efforts for energy independence.
DAR Comment: Following is the FTC press release explaining the agencies challenge to the joint venture:
FTC Files Suit to Block Joint Venture between Coal Mining Companies Peabody Energy Corporation and Arch Coal
February 26, 2020
For Release
The Federal Trade Commission has filed an administrative complaint challenging a proposed joint venture between Peabody Energy Corporation and Arch Coal. The transaction would combine their coal mining operations in the Southern Powder River Basin, located in northeastern Wyoming.
The complaint [ https://www.ftc.gov/system/files/documents/cases/d09391_peabody_energy-arch_coal_administrative_complaint_0.pdf ] alleges that the transaction will eliminate competition between Peabody and Arch Coal, which are the two major competitors in the market for thermal coal in the Southern Powder River Basin, or SPRB, and the two largest coal-mining companies in the United States.
The FTC has also authorized staff to file a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri, to maintain the status quo pending an administrative trial on the merits.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices. This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition.
The complaint alleges that, in 2018, Peabody and Arch Coal produced more than 60 percent of all SPRB coal mined. The complaint also states that these firms collectively control more than 60 percent of SPRB coal reserves. SPRB coal is attractive to electric power producers in the central United States and upper Midwest because the deposits are relatively inexpensive to extract compared to deposits elsewhere, according to the complaint. The deposits’ sulfur and sodium content allow electric power plants to burn significant quantities without violating environmental regulations. The complaint alleges that owners of power generation units designed to burn SPRB coal have high fixed costs, and these units cannot readily replace SPRB coal with natural gas, wind, sun, or nuclear fuels.
DAR Comment: The following news report concerns the position of the State of Wyoming concerning the Arch/Peabody joint venture:
Wyoming sides with Peabody-Arch over proposed coal venture
The state of Wyoming once again threw its support behind a proposed joint venture involving two of its leading coal operators this week.
In an amicus curiae brief filed Tuesday in the U.S. District Court for the Eastern District of Missouri, state attorneys opposed the Federal Trade Commission’s recent move to block the joint venture proposed by coal firms Peabody Energy Corp. and Arch Resources Inc.
In February, the FTC filed a preliminary injunction to stop Peabody and Arch’s attempt to combine their coal operations under one roof. The two companies operate five coal mines in Wyoming and hoped to join ventures and reduce costs. But the FTC, charged with protecting consumers, is concerned the move could stifle competition and hurt the public by hiking up prices for coal.
The two coal firms control about two-thirds of the southern Powder River Basin’s coal reserves, making them the biggest players in the basin.
In response to the federal agency’s decision to halt the venture and take the coal operators to court, Gov. Mark Gordon and the Wyoming Attorney General’s Office reaffirmed their support of the coal companies’ plan.
“In Wyoming’s view, the benefits of the proposed joint venture to the public plainly outweigh the unlikely anti-competitive effects,” Deputy Attorney General James Kaste wrote in court documents. “It just does not make sense to Wyoming that the merged entity can or will raise prices; effectively cutting off its nose to spite its face. Nor does it makes sense to Wyoming to conclude that a reduction in production is anti-competitive rather than a reasonable and necessary response to reduced demand. A healthy, albeit consolidated, coal production industry benefits the mines, the miners, the State, its citizens, and the public at large.”
The coal operators have said the joint venture would increase their cost competitiveness and help them survive. Coal’s ranking in the power generation market has been under siege in recent years with the expansion of affordable natural gas and renewable energy.
In response to these rapidly changing conditions, coal operators, including Peabody and Arch, have been hunting for ways to cut costs and keep their foothold in the electricity markets. The joint venture would save the companies roughly $120 million each year for the next decade during a time when the firms must operate amidst thermal coal’s brutal market conditions, the firms argue.
Peabody owns the North Antelope Rochelle mine, the largest coal mine in the country. Arch Resources owns neighboring Black Thunder. In addition to these two mammoth mines, the joint venture would include the Rawhide, Caballo and Coal Creek mines in the Powder River Basin, as well as a pair of mines in Colorado.
Gov. Mark Gordon immediately opposed the FTC’s decision back in February too, calling the decision “a nail into an industry which is struggling to adapt to a rapidly changing marketplace.” He also cited the potential job losses at coal mines in the basin if controlled consolidation does not occur.
Production losses in coal country have significant consequences for the state — heightening unemployment and exacerbating revenue shortfalls. One in 10 jobs in the Powder River Basin depends on coal, according to research conducted by University of Wyoming economist Rob Godby in 2015. Last quarter, the coal industry supported some 4,500 jobs.
A combined Peabody and Arch venture would likely translate into more stability and certainty for the coal-dependent state, the Attorney General’s Office outlined in court documents. Overcapacity in the basin (or too many coal operators vying for too few customers) has sent five firms operating in the Powder River Basin into bankruptcy since 2015.
Posting on Arch/Peabody by Don Allen Resnikoff
DAR Comment: The local Wyoming press report below indicates that AG Barr will review the proposed joint venture between Arch Coal and Peabody Energy that has been challenged by the FTC. A number of antitrust lawyers and economists who support strong enforcement have complained about Barr’s role, for several reasons. For one, some antitrust experts think it is inappropriate for the head of the USDOJ to comment on the work of the FTC (although in the past Barr’s USDOJ has actually filed in court against the FTC’s challenge to Qualcomm). Also, Barr’s support of an Arch/Peabody joint venture for the purpose of stabilizing production in response to changing demand is contrary to established case law. The Arch/Peabody position in some ways resembles the argument of book publishers that they should be allowed to coordinate on price in order to provide a counter to Amazon as the dominant force in electronic book distribution. Some critics see Barr’s position as influenced by political considerations in support of the President, rather than antitrust law principles. The President has promised support for the coal industry.
https://trib.com/news/state-and-regional/attorney-general-says-he-will-look-into-stalled-wyoming-coal-venture/article_3b20f273-5d9c-5908-92da-ab2d89619f4a.html
by Nick Reynolds
Aug 13, 2020 Updated Aug 14, 2020
– U.S. Attorney General William Barr said he would look into stalled joint venture between two of Wyoming’s largest coal operators after meeting with Gov. Mark Gordon on Thursday morning.
The joint venture between Arch Coal and Peabody Energy was pitched by the two companies last year as a way to improve price stability and keep two of the state’s largest coal mines viable as the industry continues to suffer from bankruptcies spurred by massive declines coal demand following a decade of coal plant closures in favor of new natural gas plants.
The Federal Trade Commission, however, rejected the deal, saying it would reduce competition in coal markets. That left both companies in a precarious financial position at a time when the Trump administration has pushed for a resurgence in coal within the United States’ efforts for energy independence.
DAR Comment: Following is the FTC press release explaining the agencies challenge to the joint venture:
FTC Files Suit to Block Joint Venture between Coal Mining Companies Peabody Energy Corporation and Arch Coal
February 26, 2020
For Release
The Federal Trade Commission has filed an administrative complaint challenging a proposed joint venture between Peabody Energy Corporation and Arch Coal. The transaction would combine their coal mining operations in the Southern Powder River Basin, located in northeastern Wyoming.
The complaint [ https://www.ftc.gov/system/files/documents/cases/d09391_peabody_energy-arch_coal_administrative_complaint_0.pdf ] alleges that the transaction will eliminate competition between Peabody and Arch Coal, which are the two major competitors in the market for thermal coal in the Southern Powder River Basin, or SPRB, and the two largest coal-mining companies in the United States.
The FTC has also authorized staff to file a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri, to maintain the status quo pending an administrative trial on the merits.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices. This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition.
The complaint alleges that, in 2018, Peabody and Arch Coal produced more than 60 percent of all SPRB coal mined. The complaint also states that these firms collectively control more than 60 percent of SPRB coal reserves. SPRB coal is attractive to electric power producers in the central United States and upper Midwest because the deposits are relatively inexpensive to extract compared to deposits elsewhere, according to the complaint. The deposits’ sulfur and sodium content allow electric power plants to burn significant quantities without violating environmental regulations. The complaint alleges that owners of power generation units designed to burn SPRB coal have high fixed costs, and these units cannot readily replace SPRB coal with natural gas, wind, sun, or nuclear fuels.
DAR Comment: The following news report concerns the position of the State of Wyoming concerning the Arch/Peabody joint venture:
Wyoming sides with Peabody-Arch over proposed coal venture
- Camille Erickson
- Jul 10, 2020 Updated Aug 14, 2020
The state of Wyoming once again threw its support behind a proposed joint venture involving two of its leading coal operators this week.
In an amicus curiae brief filed Tuesday in the U.S. District Court for the Eastern District of Missouri, state attorneys opposed the Federal Trade Commission’s recent move to block the joint venture proposed by coal firms Peabody Energy Corp. and Arch Resources Inc.
In February, the FTC filed a preliminary injunction to stop Peabody and Arch’s attempt to combine their coal operations under one roof. The two companies operate five coal mines in Wyoming and hoped to join ventures and reduce costs. But the FTC, charged with protecting consumers, is concerned the move could stifle competition and hurt the public by hiking up prices for coal.
The two coal firms control about two-thirds of the southern Powder River Basin’s coal reserves, making them the biggest players in the basin.
In response to the federal agency’s decision to halt the venture and take the coal operators to court, Gov. Mark Gordon and the Wyoming Attorney General’s Office reaffirmed their support of the coal companies’ plan.
“In Wyoming’s view, the benefits of the proposed joint venture to the public plainly outweigh the unlikely anti-competitive effects,” Deputy Attorney General James Kaste wrote in court documents. “It just does not make sense to Wyoming that the merged entity can or will raise prices; effectively cutting off its nose to spite its face. Nor does it makes sense to Wyoming to conclude that a reduction in production is anti-competitive rather than a reasonable and necessary response to reduced demand. A healthy, albeit consolidated, coal production industry benefits the mines, the miners, the State, its citizens, and the public at large.”
The coal operators have said the joint venture would increase their cost competitiveness and help them survive. Coal’s ranking in the power generation market has been under siege in recent years with the expansion of affordable natural gas and renewable energy.
In response to these rapidly changing conditions, coal operators, including Peabody and Arch, have been hunting for ways to cut costs and keep their foothold in the electricity markets. The joint venture would save the companies roughly $120 million each year for the next decade during a time when the firms must operate amidst thermal coal’s brutal market conditions, the firms argue.
Peabody owns the North Antelope Rochelle mine, the largest coal mine in the country. Arch Resources owns neighboring Black Thunder. In addition to these two mammoth mines, the joint venture would include the Rawhide, Caballo and Coal Creek mines in the Powder River Basin, as well as a pair of mines in Colorado.
Gov. Mark Gordon immediately opposed the FTC’s decision back in February too, calling the decision “a nail into an industry which is struggling to adapt to a rapidly changing marketplace.” He also cited the potential job losses at coal mines in the basin if controlled consolidation does not occur.
Production losses in coal country have significant consequences for the state — heightening unemployment and exacerbating revenue shortfalls. One in 10 jobs in the Powder River Basin depends on coal, according to research conducted by University of Wyoming economist Rob Godby in 2015. Last quarter, the coal industry supported some 4,500 jobs.
A combined Peabody and Arch venture would likely translate into more stability and certainty for the coal-dependent state, the Attorney General’s Office outlined in court documents. Overcapacity in the basin (or too many coal operators vying for too few customers) has sent five firms operating in the Powder River Basin into bankruptcy since 2015.
Posting on Arch/Peabody by Don Allen Resnikoff
The Decline of College Free Speech Zones
Jul 2, 2020
Nicole Divers
The term “free speech zone” can be misleading. While the name implies a policy that promotes free expression, free speech zones do the opposite. They confine political demonstrations to a small, often secluded, area on campus and typically require students to get advance permission to demonstrate.
In Oregon, a pro-life group, Students for Life, filed a lawsuit [http://www.adfmedia.org/files/ChemeketaComplaint.pdf] against Chemeketa Community College in May to challenge the college’s free speech zone policy.
The college restricts outdoor speech to two small “free speech areas” and requires a two-week notice to use them. Students for Life claims that the policy violates their right to free speech and that the required notice prevents them from engaging in spontaneous political expression.
Even at schools that claim to have eliminated their free speech zone policies, though, colleges still restrict speech. In 2003, Western Illinois University said that it would eliminate its free speech area policy. However, when students protested to legalize marijuana in 2019, campus police told them to stop because they were outside the school’s free speech zone.
Thankfully, colleges have been cleaning up their act in recent years: free speech zones are on the decline. According to FIRE’s 2020 Spotlight on Speech Codes, only 8.3 percent of surveyed schools enforced free speech zone policies, down from 10.5 percent in 2019.
State legislatures have also acted against free speech zones. Seventeen states have passed legislation preventing free speech zone policies: Virginia, Missouri, Arizona, Kentucky, Colorado, Utah, North Carolina, Tennessee, Florida, Georgia, Louisiana, Arkansas, South Dakota, Iowa, Alabama, Oklahoma, and Texas.
Those annoying limitations on students exercising their Constitutional rights on campus may soon be a relic of the past.
Nicole Divers is a Martin Center intern and a senior at the University of North Carolina at Chapel Hill.
Source: https://www.jamesgmartin.center/2020/07/did-you-know-the-decline-of-free-speeech-zones/
Jul 2, 2020
Nicole Divers
The term “free speech zone” can be misleading. While the name implies a policy that promotes free expression, free speech zones do the opposite. They confine political demonstrations to a small, often secluded, area on campus and typically require students to get advance permission to demonstrate.
In Oregon, a pro-life group, Students for Life, filed a lawsuit [http://www.adfmedia.org/files/ChemeketaComplaint.pdf] against Chemeketa Community College in May to challenge the college’s free speech zone policy.
The college restricts outdoor speech to two small “free speech areas” and requires a two-week notice to use them. Students for Life claims that the policy violates their right to free speech and that the required notice prevents them from engaging in spontaneous political expression.
Even at schools that claim to have eliminated their free speech zone policies, though, colleges still restrict speech. In 2003, Western Illinois University said that it would eliminate its free speech area policy. However, when students protested to legalize marijuana in 2019, campus police told them to stop because they were outside the school’s free speech zone.
Thankfully, colleges have been cleaning up their act in recent years: free speech zones are on the decline. According to FIRE’s 2020 Spotlight on Speech Codes, only 8.3 percent of surveyed schools enforced free speech zone policies, down from 10.5 percent in 2019.
State legislatures have also acted against free speech zones. Seventeen states have passed legislation preventing free speech zone policies: Virginia, Missouri, Arizona, Kentucky, Colorado, Utah, North Carolina, Tennessee, Florida, Georgia, Louisiana, Arkansas, South Dakota, Iowa, Alabama, Oklahoma, and Texas.
Those annoying limitations on students exercising their Constitutional rights on campus may soon be a relic of the past.
Nicole Divers is a Martin Center intern and a senior at the University of North Carolina at Chapel Hill.
Source: https://www.jamesgmartin.center/2020/07/did-you-know-the-decline-of-free-speeech-zones/
Consumer advocates call for investigation of Paypal on student loans
https://protectborrowers.org/wp-content/uploads/2020/08/PayPal-Credit-letter-Regulators.pdf
Excerpt:
[T]he results of an investigation by the Student Borrower Protection Center (SBPC) indicate that PayPal Credit is currently providing its products as high cost education financing options that can leave borrowers in significant distress with few protections. Further, PayPal Credit is being used to prop up a wide range of for-profit educational institutions, many of them bearing the hallmarks of schools that have cheated or failed borrowers in the past. We write today to warn of the significant consumer harm that PayPal Credit may be driving and to call for an immediate investigation into PayPal, Synchrony Bank, and their business practices related to PayPal Credit.
https://protectborrowers.org/wp-content/uploads/2020/08/PayPal-Credit-letter-Regulators.pdf
Excerpt:
[T]he results of an investigation by the Student Borrower Protection Center (SBPC) indicate that PayPal Credit is currently providing its products as high cost education financing options that can leave borrowers in significant distress with few protections. Further, PayPal Credit is being used to prop up a wide range of for-profit educational institutions, many of them bearing the hallmarks of schools that have cheated or failed borrowers in the past. We write today to warn of the significant consumer harm that PayPal Credit may be driving and to call for an immediate investigation into PayPal, Synchrony Bank, and their business practices related to PayPal Credit.
WSJ: Community development financial institutions, or CDFIs, are community-based banks, credit unions and investment funds that lend to home buyers, small businesses and others in rural, impoverished and minority communities.
Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. GS -0.87% and Bank of America Corp., BAC -1.43% and new corporate supporters such as Netflix Inc. NFLX 1.97% and Google Inc.
Google joined with the Opportunity Finance Network, a membership group for CDFIs, to launch a $125 million fund for the industry. Goldman, Bank of America, Morgan Stanley, Citigroup Inc. and Wells Fargo & Co., all of which had existing relationships with CDFIs, have in recent months announced investments—in the form of grants or capital to fund PPP and other loans—ranging from $5 million to $750 million.
There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.
CDFIs are meant to redress racial and economic disparities. For example, the Opportunity Finance Network, based on a 2018 survey, estimates 58% of the clients served by its roughly 300 members are people of color, 85% are low-income and 48% are women.
From: https://www.wsj.com/articles/renewed-focus-on-race-triggers-surge-of-interest-in-community-based-lenders-11597743000?mod=business_major_pos4
Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. GS -0.87% and Bank of America Corp., BAC -1.43% and new corporate supporters such as Netflix Inc. NFLX 1.97% and Google Inc.
Google joined with the Opportunity Finance Network, a membership group for CDFIs, to launch a $125 million fund for the industry. Goldman, Bank of America, Morgan Stanley, Citigroup Inc. and Wells Fargo & Co., all of which had existing relationships with CDFIs, have in recent months announced investments—in the form of grants or capital to fund PPP and other loans—ranging from $5 million to $750 million.
There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.
CDFIs are meant to redress racial and economic disparities. For example, the Opportunity Finance Network, based on a 2018 survey, estimates 58% of the clients served by its roughly 300 members are people of color, 85% are low-income and 48% are women.
From: https://www.wsj.com/articles/renewed-focus-on-race-triggers-surge-of-interest-in-community-based-lenders-11597743000?mod=business_major_pos4
When antitrust prosecutors act on political motives: judicial review of antitrust consent decrees under the Tunney Act
There is a growing perception that U.S. Government antitrust prosecutors are acting improperly and pursuing political rather than impartial goals. A question that follows is whether the courts can step in and restrain such behavior. As discussed in this brief note, an important judicial role in response to abuse of prosecutorial discretion is for the courts to more aggressively review antitrust settlements, using sometimes neglected settlement review provisions of the decades-old Tunney Act
Law professor Chris Sagers recently opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
Among other things, Sagers talks about USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers now finds the allegations “hard to doubt.”
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s own guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
Waller supports the thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
Requiring antitrust prosecutors to be clear in explaining prosecutorial decisions reduces the opportunity for furtive pursuit of narrow and partisan political goals. A further and more difficult question is whether courts should have any role to play in reviewing USDOJ exercise of prosecutorial discretion.
An important opportunity for the courts to play a reviewing role occurs when the USDOJ elects to settle an antitrust matter and enter a consent decree. The Tunney Act, passed in 1974, and amended in 2004, requires a public interest showing before a consent decree can be accepted by the court.
Darren Bush explains in his article The Death of the Tunney Act at the Hands of an Activist D.C. Circuit (April 11, 2018). Antitrust Bulletin, Vol. 63, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3161181 that some courts, particularly D.C. courts, have limited the Tunney Act because of Constitutional concerns about separation of powers – the courts don’t want to overrule prosecutor’s judgments and decide what cases should or should not be prosecuted. Bush calls that view “disingenuous,” pointing out that separation of powers is really not in issue in the context of a consent decree. The court’s acceptance or rejection of a consent decree does not supplant exercise of prosecutorial discretion about whether and how to move forward with a matter. Bush also points out that concerns about separation of powers do not block the courts’ traditional role in reviewing sufficiency of remedies proposed by government prosecutors.
A thought provoking and relevant story about judicial review of questionable prosecutorial action recently arose in a context removed from antitrust. That is the extraordinary story of USDOJ’s request to United States District Judge Emmet G. Sullivan to dismiss the felony charge against President Trump’s former National Security Advisor, Michael T. Flynn. The unusual circumstance that Flynn had pled guilty and was awaiting sentencing gave the trial court a strong reason to be interested in the government’s motives. Despite the circumstances, the Government urged that Judge Sullivan had little choice but to grant the motion to dismiss, notwithstanding that the relevant Court rule requires “leave of court.” (Rule 48(a))
Commenters have pointed out that the Rule 48(a) “leave of court” requirement for government dismissal of a criminal action was purposefully added by the U.S. Supreme Court in 1944 with the goal of arming district judges with a powerful tool to halt corrupt or politically motivated dismissals of cases. See https://www.stanfordlawreview.org/online/why-do-rule-48a-dismissals-require-leave-of-court/
Judge Griffith at the August 11, 2020 en banc federal circuit court hearing concerning the Flynn case posed questions suggesting that the district court’s role in reviewing the government dismissal motion is more than ministerial. (See the video of the hearing at https://www.c-span.org/video/?474473-1/michael-flynn-perjury-dismissal-case-rehearing , beginning at approximately minute 18.) Judge Griffith says at one point about the court’s Rule 48(a) decision: “It’s not ministerial, you know that. … The judge has to do some thinking about it. He’s not simply a rubber stamp.”
Judge Robert Wilkins asked Flynn’s defense attorney Sidney Powell a hypothetical: If a group of nuns approached the court to say they had video footage of a prosecutor taking a bribe from a defendant to dismiss a case, should that judge be allowed to investigate a motion to dismiss? Powell said that no, even in such a case the trial judge “cannot go behind the prosecutors’ decision to dismiss a case.”
Returning to Chris Sagers’ comments about political misuse by prosecutors in antitrust cases, are there ways to apply to antitrust cases the very serious concern expressed in the Flynn matter: that the courts not be a rubber stamp for bad prosecutorial behavior? One way is vigorous application of Tunney Act review procedures for settlement consent decrees as advocated in Darren Bush’s article. Heightened concerns about political misuse of antitrust provide a rationale for reviving and strengthening the original Tunney Act idea that in appropriate situations the courts should have more than a ministerial role in reviewing case settlements. It is worth remembering that Tunney Act judicial review of USDOJ antitrust settlements came about because of what Senator Tunney decried as “a massive behind-closed-doors campaign [that] resulted in halting of the prosecution of the ITT case and its hasty settlement favorable to the Company.”
By Don Allen Resnikoff, who takes full responsibility for the content
There is a growing perception that U.S. Government antitrust prosecutors are acting improperly and pursuing political rather than impartial goals. A question that follows is whether the courts can step in and restrain such behavior. As discussed in this brief note, an important judicial role in response to abuse of prosecutorial discretion is for the courts to more aggressively review antitrust settlements, using sometimes neglected settlement review provisions of the decades-old Tunney Act
Law professor Chris Sagers recently opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
Among other things, Sagers talks about USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers now finds the allegations “hard to doubt.”
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s own guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
Waller supports the thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
Requiring antitrust prosecutors to be clear in explaining prosecutorial decisions reduces the opportunity for furtive pursuit of narrow and partisan political goals. A further and more difficult question is whether courts should have any role to play in reviewing USDOJ exercise of prosecutorial discretion.
An important opportunity for the courts to play a reviewing role occurs when the USDOJ elects to settle an antitrust matter and enter a consent decree. The Tunney Act, passed in 1974, and amended in 2004, requires a public interest showing before a consent decree can be accepted by the court.
Darren Bush explains in his article The Death of the Tunney Act at the Hands of an Activist D.C. Circuit (April 11, 2018). Antitrust Bulletin, Vol. 63, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3161181 that some courts, particularly D.C. courts, have limited the Tunney Act because of Constitutional concerns about separation of powers – the courts don’t want to overrule prosecutor’s judgments and decide what cases should or should not be prosecuted. Bush calls that view “disingenuous,” pointing out that separation of powers is really not in issue in the context of a consent decree. The court’s acceptance or rejection of a consent decree does not supplant exercise of prosecutorial discretion about whether and how to move forward with a matter. Bush also points out that concerns about separation of powers do not block the courts’ traditional role in reviewing sufficiency of remedies proposed by government prosecutors.
A thought provoking and relevant story about judicial review of questionable prosecutorial action recently arose in a context removed from antitrust. That is the extraordinary story of USDOJ’s request to United States District Judge Emmet G. Sullivan to dismiss the felony charge against President Trump’s former National Security Advisor, Michael T. Flynn. The unusual circumstance that Flynn had pled guilty and was awaiting sentencing gave the trial court a strong reason to be interested in the government’s motives. Despite the circumstances, the Government urged that Judge Sullivan had little choice but to grant the motion to dismiss, notwithstanding that the relevant Court rule requires “leave of court.” (Rule 48(a))
Commenters have pointed out that the Rule 48(a) “leave of court” requirement for government dismissal of a criminal action was purposefully added by the U.S. Supreme Court in 1944 with the goal of arming district judges with a powerful tool to halt corrupt or politically motivated dismissals of cases. See https://www.stanfordlawreview.org/online/why-do-rule-48a-dismissals-require-leave-of-court/
Judge Griffith at the August 11, 2020 en banc federal circuit court hearing concerning the Flynn case posed questions suggesting that the district court’s role in reviewing the government dismissal motion is more than ministerial. (See the video of the hearing at https://www.c-span.org/video/?474473-1/michael-flynn-perjury-dismissal-case-rehearing , beginning at approximately minute 18.) Judge Griffith says at one point about the court’s Rule 48(a) decision: “It’s not ministerial, you know that. … The judge has to do some thinking about it. He’s not simply a rubber stamp.”
Judge Robert Wilkins asked Flynn’s defense attorney Sidney Powell a hypothetical: If a group of nuns approached the court to say they had video footage of a prosecutor taking a bribe from a defendant to dismiss a case, should that judge be allowed to investigate a motion to dismiss? Powell said that no, even in such a case the trial judge “cannot go behind the prosecutors’ decision to dismiss a case.”
Returning to Chris Sagers’ comments about political misuse by prosecutors in antitrust cases, are there ways to apply to antitrust cases the very serious concern expressed in the Flynn matter: that the courts not be a rubber stamp for bad prosecutorial behavior? One way is vigorous application of Tunney Act review procedures for settlement consent decrees as advocated in Darren Bush’s article. Heightened concerns about political misuse of antitrust provide a rationale for reviving and strengthening the original Tunney Act idea that in appropriate situations the courts should have more than a ministerial role in reviewing case settlements. It is worth remembering that Tunney Act judicial review of USDOJ antitrust settlements came about because of what Senator Tunney decried as “a massive behind-closed-doors campaign [that] resulted in halting of the prosecution of the ITT case and its hasty settlement favorable to the Company.”
By Don Allen Resnikoff, who takes full responsibility for the content
Statement by Secretary Steven T. Mnuchin on the President’s Decision Regarding the Acquisition by ByteDance Ltd. of the U.S. Business of musical.ly
https://home.treasury.gov/news/press-releases/sm1094
August 14, 2020WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), U.S. Treasury Secretary Steven T. Mnuchin today issued the following statement:
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance. The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
View a copy of the President’s order.https://home.treasury.gov/system/files/136/EO-on-TikTok-8-14-20.pdf
https://home.treasury.gov/news/press-releases/sm1094
August 14, 2020WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), U.S. Treasury Secretary Steven T. Mnuchin today issued the following statement:
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance. The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
View a copy of the President’s order.https://home.treasury.gov/system/files/136/EO-on-TikTok-8-14-20.pdf
From Law.com: The developer of popular video game Fortnite is suing Apple and Google for allegedly monopolizing their app distribution stores and in-app payment processing markets after the tech giants booted the online game.
Attorneys from Faegre Drinker Biddle & Reath in San Francisco and Cravath, Swaine & Moore in New York filed the complaints against Apple and Google on behalf of Epic Games Inc. on Thursday in the U.S. District Court for the Northern District of California.
In the lawsuits, Epic claims the companies removed Fortnite from their iOS and Google Play app stores after the gaming company added an alternative payment option for in-app purchases. As part of license agreements with both companies, developers agree to only use their in-store payment processing tool and not even mention that users can buy the same content outside the apps.
The Complaint in Epic Games v Apple is here:
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf?ref=hvper.com
Excerpt:
NATURE OF THE ACTION
1. In 1984, the fledgling Apple computer company released the Macintosh—the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money . . . . Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”
2. Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.
3. This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for (i) the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”). Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30% tax.
4. In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases.
5. The anti-competitive consequences of Apple’s conduct are pervasive. Mobile computing devices (like smartphones and tablets)—and the apps that run on those devices—have become an integral part of people’s daily lives; as a primary source for news, a place for entertainment, a tool for business, a means to connect with friends and family, and more. For many consumers, mobile devices are their primary computers to stay connected to the digital world, as they may not even own a personal computer. When these devices are unfairly restricted and extortionately “taxed” by Apple, the consumers who rely on these mobile devices to stay connected in the digital age are directly harmed.
6. Epic brings this suit to end Apple’s unfair and anti-competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market (each as defined below). Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.
7. Apple imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS App Distribution Market. To live up to its promise to users that “there’s an app for that”, Apple, after a short initial attempt to go it alone, opened up and invited third-party app developers to develop a wide array of apps for the iOS ecosystem. Those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
8. The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so (some of which are discussed further below). For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself. iOS developers are thus forced to increase the prices they charge consumers in order to pay Apple’s app tax. There is no method app developers can use to avoid this tax, as Apple has foreclosed any alternative ways to reach the over one billion users of iOS devices. As Representative Hank Johnson aptly summed up at a recent Congressional hearing on technology monopolies: “developers have no choice but to go along with [Apple’s policies] or they must leave the App Store. That’s an enormous amount of power.”
9. Apple’s anti-competitive conduct with respect to iOS app distribution results in sweeping harms to (i) app distributors, who are foreclosed from competing with Apple and innovating new methods of distributing iOS apps to users outside the App Store (such as, for example, curated app stores targeting particular categories of apps, like gaming or travel); (ii) app developers, who are denied choice on how to distribute their apps, are forced to fork over more of their revenue on paid apps than they would if Apple faced competition, and on occasion have to abandon their apps altogether if they cannot earn a profit given Apple’s 30% tax; and (iii) consumers, who are likewise denied choice and innovation in app distribution channels and are forced to pay higher prices and suffer inferior customer service from Apple, the unwelcome middleman.
0. Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content. Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes as far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app—for example, by purchasing content directly from the app developer, or using a web browser. Because Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie; it is Apple’s way or the highway.
11. In this market too, Apple thus stands as the monopolist middleman, positioning itself between developers and consumers. As the sole payment processor, Apple is able to take an exorbitant 30% fee on all in-app purchases of in-app content.
12. Apple’s anti-competitive conduct with respect to iOS in-app payment processing harms: (i) other payment processors, who are foreclosed from competing with Apple on price and innovating new methods of in-app payment processing (such as, for example, rewards points or payment through carrier billing); (ii) app developers, who are denied choice on how to process payments and the benefits of innovation in payment processing, and are forced to pay Apple’s tax—set by fiat—rather than by competitive market forces; and (iii) consumers, who are also denied choice and innovation in payment processing and suffer higher prices and inferior service. (Part II.)
13. Apple’s anti-competitive conduct in these markets is unchecked; Apple faces little, if any, constraint on its monopoly power in both the iOS App Distribution and iOS In-App Payment Processing Markets, as Apple has foreclosed all 5 Complaint for Injunctive Relief 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 direct competition in these markets. And Apple stands as the sole middleman between a vast and dispersed group of iOS users, and a vast and dispersed group of app developers, each with little power individually to constrain Apple.
14. Further, competition in the sale of mobile devices does not limit Apple’s market power. The threat of users switching to non-iOS devices does not constrain Apple’s anti-competitive conduct because Apple’s mobile device customers face significant switching costs and lock-in to the Apple iOS ecosystem, which serves to perpetuate Apple’s substantial market power. This power manifests itself in the data, as Apple is able to gobble up over two thirds of the total global smartphone operating profits. Furthermore, when making mobile device purchases, consumers are either unaware of, or cannot adequately account for, Apple’s anti-competitive conduct in the downstream app distribution and payment processing markets. The cost of app downloads and in-app purchases will play an insignificant (if any) role in swaying a consumer’s smartphone purchase decision.
15. Epic is one of the many app developers affected by Apple’s anticompetitive conduct. Epic is a developer of entertainment software for personal computers, smart mobile devices and gaming consoles. The most popular game Epic currently makes is Fortnite, which has connected hundreds of millions of people in a colorful, virtual world where they meet, play, talk, compete, dance, and even attend concerts and other cultural events. Fortnite is beloved by its millions of users. In the first year after Fortnite’s release in 2017, the game attracted over 125 million players; in the years since, Fortnite has topped 350 million players and has become a global cultural phenomenon.
16. Epic—and Fortnite’s users—are directly harmed by Apple’s anticompetitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool. Apple’s anti-competitive conduct has also injured Epic in its capacity as an app developer by forcing Epic to distribute its app exclusively through the App Store and exclusively use Apple’s payment processing services. As a result, Epic is forced, like so many other developers, to charge higher prices on its users’ in-app purchases on Fortnite in order to pay Apple’s 30% tax.
17. Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this.
18. Epic has approached Apple and asked to negotiate relief that would stop Apple’s unlawful and unreasonable restrictions. Epic also has publicly advocated that Apple cease the anti-competitive conduct addressed in this Complaint. Apple has refused to let go of its stranglehold on the iOS ecosystem.
19. On the morning of August 13, 2020, for the first time, Apple mobile device users were offered competitive choice. Epic added a direct payment option to Fortnite, giving players the option to continue making purchases using Apple’s payment processor or to use Epic’s direct payment system. Fortnite users on iOS, for the first time, had a competitive alternative to Apple’s payment solution, which in turn enabled Epic to pass along its cost savings by offering its users a 20% reduction in in-app prices as shown below:
20. Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store, which means that new users cannot download the app, and users who have already downloaded prior versions of the app from the App Store cannot update it to the latest version. This also means that Fortnite players who downloaded their app from the App Store will not receive updates to Fortnite through the App Store, either automatically or by searching the App Store for the update. Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.
21. Accordingly, Epic seeks injunctive relief in court to end Apple’s unreasonable and unlawful practices. Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. Instead, Epic seeks to end Apple’s dominance over key technology markets, open up the space for progress and ingenuity, and ensure that Apple mobile devices are open to the same competition as Apple’s personal computers. As such, Epic respectfully requests this Court to enjoin Apple from continuing to impose its anti-competitive restrictions on the iOS ecosystem and ensure 2020 is not like “1984”
Attorneys from Faegre Drinker Biddle & Reath in San Francisco and Cravath, Swaine & Moore in New York filed the complaints against Apple and Google on behalf of Epic Games Inc. on Thursday in the U.S. District Court for the Northern District of California.
In the lawsuits, Epic claims the companies removed Fortnite from their iOS and Google Play app stores after the gaming company added an alternative payment option for in-app purchases. As part of license agreements with both companies, developers agree to only use their in-store payment processing tool and not even mention that users can buy the same content outside the apps.
The Complaint in Epic Games v Apple is here:
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf?ref=hvper.com
Excerpt:
NATURE OF THE ACTION
1. In 1984, the fledgling Apple computer company released the Macintosh—the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money . . . . Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”
2. Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.
3. This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for (i) the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”). Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30% tax.
4. In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases.
5. The anti-competitive consequences of Apple’s conduct are pervasive. Mobile computing devices (like smartphones and tablets)—and the apps that run on those devices—have become an integral part of people’s daily lives; as a primary source for news, a place for entertainment, a tool for business, a means to connect with friends and family, and more. For many consumers, mobile devices are their primary computers to stay connected to the digital world, as they may not even own a personal computer. When these devices are unfairly restricted and extortionately “taxed” by Apple, the consumers who rely on these mobile devices to stay connected in the digital age are directly harmed.
6. Epic brings this suit to end Apple’s unfair and anti-competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market (each as defined below). Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.
7. Apple imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS App Distribution Market. To live up to its promise to users that “there’s an app for that”, Apple, after a short initial attempt to go it alone, opened up and invited third-party app developers to develop a wide array of apps for the iOS ecosystem. Those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
8. The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so (some of which are discussed further below). For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself. iOS developers are thus forced to increase the prices they charge consumers in order to pay Apple’s app tax. There is no method app developers can use to avoid this tax, as Apple has foreclosed any alternative ways to reach the over one billion users of iOS devices. As Representative Hank Johnson aptly summed up at a recent Congressional hearing on technology monopolies: “developers have no choice but to go along with [Apple’s policies] or they must leave the App Store. That’s an enormous amount of power.”
9. Apple’s anti-competitive conduct with respect to iOS app distribution results in sweeping harms to (i) app distributors, who are foreclosed from competing with Apple and innovating new methods of distributing iOS apps to users outside the App Store (such as, for example, curated app stores targeting particular categories of apps, like gaming or travel); (ii) app developers, who are denied choice on how to distribute their apps, are forced to fork over more of their revenue on paid apps than they would if Apple faced competition, and on occasion have to abandon their apps altogether if they cannot earn a profit given Apple’s 30% tax; and (iii) consumers, who are likewise denied choice and innovation in app distribution channels and are forced to pay higher prices and suffer inferior customer service from Apple, the unwelcome middleman.
0. Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content. Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes as far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app—for example, by purchasing content directly from the app developer, or using a web browser. Because Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie; it is Apple’s way or the highway.
11. In this market too, Apple thus stands as the monopolist middleman, positioning itself between developers and consumers. As the sole payment processor, Apple is able to take an exorbitant 30% fee on all in-app purchases of in-app content.
12. Apple’s anti-competitive conduct with respect to iOS in-app payment processing harms: (i) other payment processors, who are foreclosed from competing with Apple on price and innovating new methods of in-app payment processing (such as, for example, rewards points or payment through carrier billing); (ii) app developers, who are denied choice on how to process payments and the benefits of innovation in payment processing, and are forced to pay Apple’s tax—set by fiat—rather than by competitive market forces; and (iii) consumers, who are also denied choice and innovation in payment processing and suffer higher prices and inferior service. (Part II.)
13. Apple’s anti-competitive conduct in these markets is unchecked; Apple faces little, if any, constraint on its monopoly power in both the iOS App Distribution and iOS In-App Payment Processing Markets, as Apple has foreclosed all 5 Complaint for Injunctive Relief 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 direct competition in these markets. And Apple stands as the sole middleman between a vast and dispersed group of iOS users, and a vast and dispersed group of app developers, each with little power individually to constrain Apple.
14. Further, competition in the sale of mobile devices does not limit Apple’s market power. The threat of users switching to non-iOS devices does not constrain Apple’s anti-competitive conduct because Apple’s mobile device customers face significant switching costs and lock-in to the Apple iOS ecosystem, which serves to perpetuate Apple’s substantial market power. This power manifests itself in the data, as Apple is able to gobble up over two thirds of the total global smartphone operating profits. Furthermore, when making mobile device purchases, consumers are either unaware of, or cannot adequately account for, Apple’s anti-competitive conduct in the downstream app distribution and payment processing markets. The cost of app downloads and in-app purchases will play an insignificant (if any) role in swaying a consumer’s smartphone purchase decision.
15. Epic is one of the many app developers affected by Apple’s anticompetitive conduct. Epic is a developer of entertainment software for personal computers, smart mobile devices and gaming consoles. The most popular game Epic currently makes is Fortnite, which has connected hundreds of millions of people in a colorful, virtual world where they meet, play, talk, compete, dance, and even attend concerts and other cultural events. Fortnite is beloved by its millions of users. In the first year after Fortnite’s release in 2017, the game attracted over 125 million players; in the years since, Fortnite has topped 350 million players and has become a global cultural phenomenon.
16. Epic—and Fortnite’s users—are directly harmed by Apple’s anticompetitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool. Apple’s anti-competitive conduct has also injured Epic in its capacity as an app developer by forcing Epic to distribute its app exclusively through the App Store and exclusively use Apple’s payment processing services. As a result, Epic is forced, like so many other developers, to charge higher prices on its users’ in-app purchases on Fortnite in order to pay Apple’s 30% tax.
17. Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this.
18. Epic has approached Apple and asked to negotiate relief that would stop Apple’s unlawful and unreasonable restrictions. Epic also has publicly advocated that Apple cease the anti-competitive conduct addressed in this Complaint. Apple has refused to let go of its stranglehold on the iOS ecosystem.
19. On the morning of August 13, 2020, for the first time, Apple mobile device users were offered competitive choice. Epic added a direct payment option to Fortnite, giving players the option to continue making purchases using Apple’s payment processor or to use Epic’s direct payment system. Fortnite users on iOS, for the first time, had a competitive alternative to Apple’s payment solution, which in turn enabled Epic to pass along its cost savings by offering its users a 20% reduction in in-app prices as shown below:
20. Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store, which means that new users cannot download the app, and users who have already downloaded prior versions of the app from the App Store cannot update it to the latest version. This also means that Fortnite players who downloaded their app from the App Store will not receive updates to Fortnite through the App Store, either automatically or by searching the App Store for the update. Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.
21. Accordingly, Epic seeks injunctive relief in court to end Apple’s unreasonable and unlawful practices. Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. Instead, Epic seeks to end Apple’s dominance over key technology markets, open up the space for progress and ingenuity, and ensure that Apple mobile devices are open to the same competition as Apple’s personal computers. As such, Epic respectfully requests this Court to enjoin Apple from continuing to impose its anti-competitive restrictions on the iOS ecosystem and ensure 2020 is not like “1984”
The EU on control issues and Apple and Google
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”
iPhone and iPad users can only download native (non web-based) apps via the App Store.
The Commission will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices:
(i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.
(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
From https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1073
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”
iPhone and iPad users can only download native (non web-based) apps via the App Store.
The Commission will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices:
(i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.
(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
From https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1073
Market Power, Inequality, and Financial Instability
Isabel Cair
Jae Sim
July 2020
Abstract
Over the last four decades, the U.S. economy has experienced a few secular trends, each of which may be considered undesirable in some aspects: declining labor share; rising profit share; rising income and wealth inequalities; and rising household sector leverage, and associated financial instability. We develop a real business cycle model and show that the rise of market power of the firms in both product and labor markets over the last four decades can generate all of these secular trends. We derive macroprudential policy implications for financial stability.
https://www.federalreserve.gov/econres/feds/files/2020057pap.pdf
Isabel Cair
Jae Sim
July 2020
Abstract
Over the last four decades, the U.S. economy has experienced a few secular trends, each of which may be considered undesirable in some aspects: declining labor share; rising profit share; rising income and wealth inequalities; and rising household sector leverage, and associated financial instability. We develop a real business cycle model and show that the rise of market power of the firms in both product and labor markets over the last four decades can generate all of these secular trends. We derive macroprudential policy implications for financial stability.
https://www.federalreserve.gov/econres/feds/files/2020057pap.pdf
Linda Greenhouse writes about the status of abortion rights law:
Excerpt:
When I wrapped up the Supreme Court term in a column last month, I observed that in his separate opinion providing a crucial fifth vote to overturn a Louisiana abortion law, Chief Justice John Roberts had been “careful to leave the door open to continued attacks on the right to abortion.”
What I intended as a cleareyed warning to my fellow abortion-rights supporters to hold the cheers for the outcome in June Medical Services v. Russo turns out to have been quite an understatement. It turns out that the door, with the chief justice holding it, opened wide enough to drive an entire federal appeals court through.
Last week, the famously anti-abortion United States Court of Appeals for the Eighth Circuit invoked the chief justice’s separate opinion to justify reinstating four Arkansas anti-abortion laws that a federal district judge had invalidated more than three years ago.
https://www.nytimes.com/2020/08/13/opinion/arkansas-abortion-laws.html
Excerpt:
When I wrapped up the Supreme Court term in a column last month, I observed that in his separate opinion providing a crucial fifth vote to overturn a Louisiana abortion law, Chief Justice John Roberts had been “careful to leave the door open to continued attacks on the right to abortion.”
What I intended as a cleareyed warning to my fellow abortion-rights supporters to hold the cheers for the outcome in June Medical Services v. Russo turns out to have been quite an understatement. It turns out that the door, with the chief justice holding it, opened wide enough to drive an entire federal appeals court through.
Last week, the famously anti-abortion United States Court of Appeals for the Eighth Circuit invoked the chief justice’s separate opinion to justify reinstating four Arkansas anti-abortion laws that a federal district judge had invalidated more than three years ago.
https://www.nytimes.com/2020/08/13/opinion/arkansas-abortion-laws.html
Bloomberg on Russian COVID vaccine: there are questions around other vaccine candidates, too.
Moderna Inc., which reached a $1.5 billion deal with the Trump administration this week to supply 100 million doses, is one of several companies pushing a novel technology called mRNA. Its shot produced side effects among participants in clinical trials.Other early vaccines, possibly including one from the University of Oxford and AstraZeneca Plc, may not stop you from catching or spreading the virus though might prevent severe illness or death. [See https://www.bloomberg.com/news/articles/2020-06-15/the-first-covid-vaccines-may-not-prevent-you-from-getting-covid?] That’s a huge step, but still imperfect in the world of vaccines.
Moderna Inc., which reached a $1.5 billion deal with the Trump administration this week to supply 100 million doses, is one of several companies pushing a novel technology called mRNA. Its shot produced side effects among participants in clinical trials.Other early vaccines, possibly including one from the University of Oxford and AstraZeneca Plc, may not stop you from catching or spreading the virus though might prevent severe illness or death. [See https://www.bloomberg.com/news/articles/2020-06-15/the-first-covid-vaccines-may-not-prevent-you-from-getting-covid?] That’s a huge step, but still imperfect in the world of vaccines.
THE EVICTION CRISIS AND STEVEN MNUCHIN
There is a current housing eviction crisis connected to COVID-19 and widespread unemployment. See https://nlihc.org/sites/default/files/The_Eviction_Crisis_080720.pdf
We can hope that the U.S. Government will not repeat errors that occurred after the 2008 financial crisis. According to many observers, at that time large investors were subsidized by the Government as they foreclosed on many home mortgages that should have been modified so that homeowners could pay the modified mortgages and stay in their homes.
The flawed U.S. Government’s response to the 2008 housing crisis is discussed in the recent book The Homewreckers, by Aaron Glantz. One topic of the book is how big investors worked with the US Government in a manner that, in Glantz’s view, unfairly enriched big investors and harmed struggling homeowners. A summary version is presented in Glantz’s Congressional testimony, which can be found at https://www.revealnews.org/article/reveal-submits-testimony-to-congress/
Here is part of the story: In 2007 Steven Mnuchin formed a consortium of five investors, including Michael Dell, John Paulson, and George Soros, and acquired the struggling IndyMac Bank. The Bank was struggling because of the many shaky loans it had made.
According to Glantz, the F.D.I.C. imposed some weak conditions on IndyMac’s new owners—a particularly important one wass that they had to modify, rather than foreclose on, as many mortgages as possible. But Mnuchin and his colleagues were free to keep any profits they made, and the F.D.I.C. agreed to cover most losses on deteriorating mortgage loans that they had inherited.
IndyMac, renamed OneWest, soon had big profits, while the FDIC paid billions of dollars to the bank. In the course of five years, the F.D.I.C. paid out more than a billion dollars, during which time OneWest foreclosed on thirty-six thousand homes in California, many of them in low-income neighborhoods. Approximately seventy per cent of OneWest’s foreclosures were in neighborhoods where most of the residents were people of color, according to some sources. Such trends were playing out nationwide, but, according to Aaron Glantz, OneWest was one of the worst offenders.
When a New Yorker magazine reporter recently asked Mnuchin about the controversy surrounding IndyMac and OneWest, he said, “I think this whole thing about me and mortgage foreclosures isn’t fair.” Many of the souring home loans that IndyMac was servicing couldn’t be modified, he said, leaving the bank with no choice but to foreclose on owners who stopped paying. “I never wanted to foreclose on those people,” Mnuchin said. “Having someone’s home foreclosed upon is a terrible experience.” See https://www.newyorker.com/magazine/2020/07/20/the-high-finance-mogul-in-charge-of-our-economic-recovery?
There is a point about the 2008 housing crisis that may be more important than the politically charged questions of whether or not an elite group of investors including current US Secretary of the Treasury Mnuchin gained unfairly from widespread mortgage foreclosures, or whether or not the Obama Administration and California State government provided sufficient protection for homeowners. It is that the government should do better for financially struggling homeowners in the current financial crisis.
What that means is a system for struggling homeowners where mortgage modification rather than mortgage foreclosure is really the preferred solution for as many mortgages as possible. That means lowering monthly payments to reflect the real underlying values of the homes or adding years to the mortgages to make the monthly payments more manageable. If a home owner misses mortgage payments, there should be an effort to avoid immediate foreclosure. Wholesale mortgage foreclosures without individual modification negotiations should be avoided. Many foreclosures by OneWest on particular homes reportedly yielded less for the Bank than the return that would have been received from modified mortgages.
Posted by Don Allen Resnikoff, who is responsible for the content
There is a current housing eviction crisis connected to COVID-19 and widespread unemployment. See https://nlihc.org/sites/default/files/The_Eviction_Crisis_080720.pdf
We can hope that the U.S. Government will not repeat errors that occurred after the 2008 financial crisis. According to many observers, at that time large investors were subsidized by the Government as they foreclosed on many home mortgages that should have been modified so that homeowners could pay the modified mortgages and stay in their homes.
The flawed U.S. Government’s response to the 2008 housing crisis is discussed in the recent book The Homewreckers, by Aaron Glantz. One topic of the book is how big investors worked with the US Government in a manner that, in Glantz’s view, unfairly enriched big investors and harmed struggling homeowners. A summary version is presented in Glantz’s Congressional testimony, which can be found at https://www.revealnews.org/article/reveal-submits-testimony-to-congress/
Here is part of the story: In 2007 Steven Mnuchin formed a consortium of five investors, including Michael Dell, John Paulson, and George Soros, and acquired the struggling IndyMac Bank. The Bank was struggling because of the many shaky loans it had made.
According to Glantz, the F.D.I.C. imposed some weak conditions on IndyMac’s new owners—a particularly important one wass that they had to modify, rather than foreclose on, as many mortgages as possible. But Mnuchin and his colleagues were free to keep any profits they made, and the F.D.I.C. agreed to cover most losses on deteriorating mortgage loans that they had inherited.
IndyMac, renamed OneWest, soon had big profits, while the FDIC paid billions of dollars to the bank. In the course of five years, the F.D.I.C. paid out more than a billion dollars, during which time OneWest foreclosed on thirty-six thousand homes in California, many of them in low-income neighborhoods. Approximately seventy per cent of OneWest’s foreclosures were in neighborhoods where most of the residents were people of color, according to some sources. Such trends were playing out nationwide, but, according to Aaron Glantz, OneWest was one of the worst offenders.
When a New Yorker magazine reporter recently asked Mnuchin about the controversy surrounding IndyMac and OneWest, he said, “I think this whole thing about me and mortgage foreclosures isn’t fair.” Many of the souring home loans that IndyMac was servicing couldn’t be modified, he said, leaving the bank with no choice but to foreclose on owners who stopped paying. “I never wanted to foreclose on those people,” Mnuchin said. “Having someone’s home foreclosed upon is a terrible experience.” See https://www.newyorker.com/magazine/2020/07/20/the-high-finance-mogul-in-charge-of-our-economic-recovery?
There is a point about the 2008 housing crisis that may be more important than the politically charged questions of whether or not an elite group of investors including current US Secretary of the Treasury Mnuchin gained unfairly from widespread mortgage foreclosures, or whether or not the Obama Administration and California State government provided sufficient protection for homeowners. It is that the government should do better for financially struggling homeowners in the current financial crisis.
What that means is a system for struggling homeowners where mortgage modification rather than mortgage foreclosure is really the preferred solution for as many mortgages as possible. That means lowering monthly payments to reflect the real underlying values of the homes or adding years to the mortgages to make the monthly payments more manageable. If a home owner misses mortgage payments, there should be an effort to avoid immediate foreclosure. Wholesale mortgage foreclosures without individual modification negotiations should be avoided. Many foreclosures by OneWest on particular homes reportedly yielded less for the Bank than the return that would have been received from modified mortgages.
Posted by Don Allen Resnikoff, who is responsible for the content
Chris Sagers: Trump and Delrahim have left the Antitrust Division a corrupted and misbegotten shambles.
"Makan Delrahim briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks."
https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
"Makan Delrahim briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks."
https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
The Ninth Circuit on Tuesday reversed the Federal Trade Commission's win in the agency's case accusing Qualcomm of violating antitrust law through its licensing practices for standard-essential patents covering cellular technology.
The Ninth Circuit on Tuesday reversed the FTC's win in its case alleging Qualcomm's licensing practices violate antitrust law. (AP Photo/Richard Drew)
The panel found that if Qualcomm did breach its obligations to license its SEPs on fair, reasonable and non-discriminatory terms, it would be a breach of contract issue, not an antitrust problem. It also found that the company's "no license, no chips" policy did not impose a surcharge on the sales of chips by rivals, as the lower court had found.
Writing for the panel, U.S. Circuit Judge Consuelo M. Callahan said that the district court had issued a worldwide injunction barring several of Qualcomm's core business practices and that the appellate court had stayed the order at Qualcomm's request, which was backed by the U.S. Department of Justice and other federal agencies.
"At that time, we characterized the district court's order and injunction as either 'a trailblazing application of the antitrust laws' or 'an improper excursion beyond the outer limits of the Sherman Act,'" the opinion said. "We now hold that the district court went beyond the scope of the Sherman Act, and we reverse."
Read more at: https://www.law360.com/competition/articles/1300307?copied=1
The court opinion is here: https://www.scribd.com/document/472126232/20-08-11-9th-Cir-Opinion-Reversing-FTC-v-Qualcomm-Ruling
The Ninth Circuit on Tuesday reversed the FTC's win in its case alleging Qualcomm's licensing practices violate antitrust law. (AP Photo/Richard Drew)
The panel found that if Qualcomm did breach its obligations to license its SEPs on fair, reasonable and non-discriminatory terms, it would be a breach of contract issue, not an antitrust problem. It also found that the company's "no license, no chips" policy did not impose a surcharge on the sales of chips by rivals, as the lower court had found.
Writing for the panel, U.S. Circuit Judge Consuelo M. Callahan said that the district court had issued a worldwide injunction barring several of Qualcomm's core business practices and that the appellate court had stayed the order at Qualcomm's request, which was backed by the U.S. Department of Justice and other federal agencies.
"At that time, we characterized the district court's order and injunction as either 'a trailblazing application of the antitrust laws' or 'an improper excursion beyond the outer limits of the Sherman Act,'" the opinion said. "We now hold that the district court went beyond the scope of the Sherman Act, and we reverse."
Read more at: https://www.law360.com/competition/articles/1300307?copied=1
The court opinion is here: https://www.scribd.com/document/472126232/20-08-11-9th-Cir-Opinion-Reversing-FTC-v-Qualcomm-Ruling
The D.C. Circuit overrules the Copyright Royalty Board's ruling hiking the rates that streaming services must pay songwriters and publishers.
Exactly how much it disagrees isn't clear — the panel sealed its Friday opinion vacating part of the ruling.
All that was public of the three-judge panel's decision as of Friday afternoon was a brief summary noting that the appeals court affirmed in part, vacated in part and remanded the case to the copyright board for a consistent decision.
When the panel was hearing arguments in the case in March — before the court system switched to largely virtual and telephone proceedings — at least two judges on the panel seemed concerned that record labels might pull their content from streaming services should they be pushed to accept a smaller slice of the royalty pie.
At dispute in the case is the Copyright Royalty Board's decision in February 2019 to usher in a new era of royalty rates after several years of contentious proceedings over the matter, and essentially everyone with a finger in the pie is unhappy with some part of its decision.
Copyrightowners and songwriters are displeased — particularly one George D. Johnson, who represented himself pro se and was praised by the court for his performance — because they believe the royalty hike was too little, too late.
Source: https://www.law360.com/articles/1299549/dc-circ-breathes-new-life-into-copyright-royalty-hike-fight?copied=1 [pay wall]
Exactly how much it disagrees isn't clear — the panel sealed its Friday opinion vacating part of the ruling.
All that was public of the three-judge panel's decision as of Friday afternoon was a brief summary noting that the appeals court affirmed in part, vacated in part and remanded the case to the copyright board for a consistent decision.
When the panel was hearing arguments in the case in March — before the court system switched to largely virtual and telephone proceedings — at least two judges on the panel seemed concerned that record labels might pull their content from streaming services should they be pushed to accept a smaller slice of the royalty pie.
At dispute in the case is the Copyright Royalty Board's decision in February 2019 to usher in a new era of royalty rates after several years of contentious proceedings over the matter, and essentially everyone with a finger in the pie is unhappy with some part of its decision.
Copyrightowners and songwriters are displeased — particularly one George D. Johnson, who represented himself pro se and was praised by the court for his performance — because they believe the royalty hike was too little, too late.
Source: https://www.law360.com/articles/1299549/dc-circ-breathes-new-life-into-copyright-royalty-hike-fight?copied=1 [pay wall]
Federal Court Terminates Paramount Consent Decrees
A federal court in the Southern District of New York terminated the Paramount Consent Decrees, which for over seventy years have regulated how certain movie studios distribute films to movie theatres. The review and termination of these Decrees were part of the Department of Justice’s review of legacy antitrust judgments that dated back to the 1890’s and has resulted in the termination of nearly 800 perpetual decrees.
“We appreciate the Court’s thoughtful opinion and ruling today granting our motion to terminate these outdated Paramount Decrees,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “As the Court points out, Gone with the Wind, The Wizard of Oz, and It’s a Wonderful Life were the blockbusters when these Decrees were litigated; the movie industry and how Americans enjoy their movies have changed leaps and bounds in these intervening years. Without these restraints on the market, American ingenuity is again free to experiment with different business models that can benefit consumers.”
In summary, the Court concluded that the government had offered a persuasive explanation for why termination of the Paramount Decrees serves the public interest in free and unfettered competition. The conspiracy and practices that existed decades ago no longer exist. New technology has created many different movie platforms that did not exist when the Decrees were entered into, including cable and broadcast television, DVDs, and streaming and download services.
https://www.justice.gov/opa/pr/federal-court-terminates-paramount-consent-decrees
A federal court in the Southern District of New York terminated the Paramount Consent Decrees, which for over seventy years have regulated how certain movie studios distribute films to movie theatres. The review and termination of these Decrees were part of the Department of Justice’s review of legacy antitrust judgments that dated back to the 1890’s and has resulted in the termination of nearly 800 perpetual decrees.
“We appreciate the Court’s thoughtful opinion and ruling today granting our motion to terminate these outdated Paramount Decrees,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “As the Court points out, Gone with the Wind, The Wizard of Oz, and It’s a Wonderful Life were the blockbusters when these Decrees were litigated; the movie industry and how Americans enjoy their movies have changed leaps and bounds in these intervening years. Without these restraints on the market, American ingenuity is again free to experiment with different business models that can benefit consumers.”
In summary, the Court concluded that the government had offered a persuasive explanation for why termination of the Paramount Decrees serves the public interest in free and unfettered competition. The conspiracy and practices that existed decades ago no longer exist. New technology has created many different movie platforms that did not exist when the Decrees were entered into, including cable and broadcast television, DVDs, and streaming and download services.
https://www.justice.gov/opa/pr/federal-court-terminates-paramount-consent-decrees
Antitrust & Corruption: Overruling Noerr
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August 3, 2020By Tim Wu, (Columbia University)
We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.
Since the 1960s, however, antitrust law’s scrutiny of corrupt and deceptive political practices has been sharply limited by the Noerr-Pennington doctrine, which provides immunity to antitrust liability for conduct that can be described as political or legal advocacy. The doctrine was created through apparent First Amendment avoidance, based on the premise that the Sherman Act could not have been intended to interfere with a right to petition government.
The Noerr decision, dating from 1961, was strained when it was decided and has not aged well. As an interpretation of the antitrust laws, it ignored Congressional concern with political mischief undertaken by conspiracy or monopoly. Its legitimacy has always rested on avoidance of the First Amendment, and while Noerr itself may have legitimately reflected such avoidance, the subsequent growth of a Noerr immunity has blown past any First Amendment-driven defense of its existence. For that reason, others have suggested a reformulation of the doctrine. The better answer is that, lacking constitutional or statutory foundation, Noerr should be overruled.
The First Amendment guarantees freedom of speech, assembly, and “to petition the government for a redress of grievances.” It therefore protects efforts to influence political debate as well as legitimate petitioning in the legislative, judicial or administrative processes. The First Amendment does not, however create a right to bribe government officials, deceive agencies, file false statements, or abuse government process through repeated filings designed only to injure a competitor. Nonetheless, each of these activities has, in some courts at least, been granted immunity under the overgrown Noerr immunity. It is an extra-constitutional outlier ripe for reexamination.
Overruling Noerr would not make political petitioning illegal. It would, instead, require defendants to rely on the First Amendment when seeking to defend what would otherwise be conduct that is illegal under the antitrust laws. Doctrinally, this is to force courts to address whether conduct in question is actually an antitrust violation, and if, so whether it is protected by the First Amendment or not, drawing on an established jurisprudence for some of the problems presented in the Noerr context.
Continue Reading https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630610
-
August 3, 2020By Tim Wu, (Columbia University)
We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.
Since the 1960s, however, antitrust law’s scrutiny of corrupt and deceptive political practices has been sharply limited by the Noerr-Pennington doctrine, which provides immunity to antitrust liability for conduct that can be described as political or legal advocacy. The doctrine was created through apparent First Amendment avoidance, based on the premise that the Sherman Act could not have been intended to interfere with a right to petition government.
The Noerr decision, dating from 1961, was strained when it was decided and has not aged well. As an interpretation of the antitrust laws, it ignored Congressional concern with political mischief undertaken by conspiracy or monopoly. Its legitimacy has always rested on avoidance of the First Amendment, and while Noerr itself may have legitimately reflected such avoidance, the subsequent growth of a Noerr immunity has blown past any First Amendment-driven defense of its existence. For that reason, others have suggested a reformulation of the doctrine. The better answer is that, lacking constitutional or statutory foundation, Noerr should be overruled.
The First Amendment guarantees freedom of speech, assembly, and “to petition the government for a redress of grievances.” It therefore protects efforts to influence political debate as well as legitimate petitioning in the legislative, judicial or administrative processes. The First Amendment does not, however create a right to bribe government officials, deceive agencies, file false statements, or abuse government process through repeated filings designed only to injure a competitor. Nonetheless, each of these activities has, in some courts at least, been granted immunity under the overgrown Noerr immunity. It is an extra-constitutional outlier ripe for reexamination.
Overruling Noerr would not make political petitioning illegal. It would, instead, require defendants to rely on the First Amendment when seeking to defend what would otherwise be conduct that is illegal under the antitrust laws. Doctrinally, this is to force courts to address whether conduct in question is actually an antitrust violation, and if, so whether it is protected by the First Amendment or not, drawing on an established jurisprudence for some of the problems presented in the Noerr context.
Continue Reading https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630610
From: https://www.whitehouse.gov/presidential-actions/executive-order-addressing-threat-posed-tiktok/
Executive Order on Addressing the Threat Posed by TikTok
Infrastructure & Technology
Issued on: August 6, 2020
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Accordingly, I hereby order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
(b) The prohibition in subsection (a) of this section applies except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(c) 45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section.
Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization; and
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
Sec. 4. The Secretary is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary may, consistent with applicable law, redelegate any of these functions within the Department of Commerce. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
August 6, 2020.
Executive Order on Addressing the Threat Posed by TikTok
Infrastructure & Technology
Issued on: August 6, 2020
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Accordingly, I hereby order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
(b) The prohibition in subsection (a) of this section applies except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(c) 45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section.
Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization; and
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
Sec. 4. The Secretary is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary may, consistent with applicable law, redelegate any of these functions within the Department of Commerce. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
August 6, 2020.
NYT: The nation’s leading health insurers are experiencing an embarrassment of profits.
Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago. And while insurance profits are capped under the Affordable Care Act, with the requirement that consumers should benefit from such excesses in the form of rebates, no one should expect an immediate windfall.
But the amounts that insurers are retaining have caught the attention of the Trump administration. The Health and Human Services Department advised companies to consider speeding up rebates, and on Tuesday suggested that they reduce premiums to help consumers through the economic downturn caused by the pandemic.
The US Government advisory is here: https://www.cms.gov/newsroom/press-releases/cms-announces-temporary-policy-premium-reductions
NYT credit: https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html?action=click&module=Latest&pgtype=Homepage
Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago. And while insurance profits are capped under the Affordable Care Act, with the requirement that consumers should benefit from such excesses in the form of rebates, no one should expect an immediate windfall.
But the amounts that insurers are retaining have caught the attention of the Trump administration. The Health and Human Services Department advised companies to consider speeding up rebates, and on Tuesday suggested that they reduce premiums to help consumers through the economic downturn caused by the pandemic.
The US Government advisory is here: https://www.cms.gov/newsroom/press-releases/cms-announces-temporary-policy-premium-reductions
NYT credit: https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html?action=click&module=Latest&pgtype=Homepage
AGs letter to Facebook
[Not all AG signatures are shown]
[Not all AG signatures are shown]
Multistate AGs' letter to HHS seeking remedy against Gilead for Remdesivir shortage
https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf
Excerpts:
Remdesivir has benefited from millions of dollars of public funding, including a $30- million NIH-funded clinical trial estimated for this fiscal year alone.11 But despite the large infusion of taxpayer monies, Gilead is unable to guarantee a supply of remdesivir sufficient to alleviate the health and safety needs of the country amid the pandemic.
***
Aside from production issues, the large infusion of taxpayer dollars into remdesivir has not resulted in the product being made available at a reasonable price. A study from four institutions, including the University of Liverpool and Howard University, found that remdesivir can be manufactured at $0.93 per day or $12.50 per patient.16 Yet, in June, Gilead announced that the company will charge government programs, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, $2,340 for a six-vial, five-day treatment course ($390 per vial).17 For patients with private insurance, as well as Medicare and Medicaid, Gilead will charge 33% more or $3,120 (the equivalent of $520 per vial) for the exact same treatment.18 Gilead did not announce the pricing structure for the uninsured.19
It is unfortunate that Gilead has chosen to place its profit margins over the interests of Americans suffering in this pandemic. Record unemployment and ongoing financial troubles will prevent many Americans from paying for remdesivir. Even for the insured, Gilead’s excessive pricing makes copayments and out-of-pocket expenses cost-prohibitive. Moreover, Gilead’s pricing will challenge the growing numbers of Americans that lack health coverage as a result of the pandemic.20 If Americans who need remdesivir find themselves unable to afford a treatment course, then federal agencies have sufficient reason to require Gilead to “license both the background patents and the patents stemming from the contract work” under the Bayh-Dole Act.21
In light of the unprecedented COVID-19 crisis, we request the NIH and FDA exercise their march-in rights under the Bayh-Dole Act. Failing that, we ask that the NIH and FDA assign to the states these rights to ensure that drug manufacturers are licensed to meet the market demand during this health crisis. Alongside either exercise, we urge you to make full and immediate use of your legal authority under the Defense Production Act to put the weight of the federal government behind a rapid scaling up of remdesivir production and distribution. Under the authority already delegated to Secretary Azar of HHS under the Executive Order of March 18th, 2020, the Secretary has the power to invoke the Defense Production Act to identify specific health and medical resources needed to respond to the COVID-19 crisis, and to require performance of contracts or orders to meet the needs of the country over other priorities.22
Critically, this delegation of power to the HHS Secretary already extends to drugs—not just to PPE and ventilators—and can help states.23 Now more than ever, the American public needs the support of the federal government in helping them afford COVID-19-related treatment. This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people. Gilead should not profit from the pandemic and it should be pushed to do more to help more people.
We look forward to a prompt response in bringing relief to millions of COVID-19 patients and working with our federal partners to rapidly scale up remdesivir production and distribution.
Sincerely,
Xavier Becerra California Attorney General
Jeff Landry Louisiana Attorney General
[and 28 other AGs, including Karl Racine DC AG]
https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf
Excerpts:
Remdesivir has benefited from millions of dollars of public funding, including a $30- million NIH-funded clinical trial estimated for this fiscal year alone.11 But despite the large infusion of taxpayer monies, Gilead is unable to guarantee a supply of remdesivir sufficient to alleviate the health and safety needs of the country amid the pandemic.
***
Aside from production issues, the large infusion of taxpayer dollars into remdesivir has not resulted in the product being made available at a reasonable price. A study from four institutions, including the University of Liverpool and Howard University, found that remdesivir can be manufactured at $0.93 per day or $12.50 per patient.16 Yet, in June, Gilead announced that the company will charge government programs, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, $2,340 for a six-vial, five-day treatment course ($390 per vial).17 For patients with private insurance, as well as Medicare and Medicaid, Gilead will charge 33% more or $3,120 (the equivalent of $520 per vial) for the exact same treatment.18 Gilead did not announce the pricing structure for the uninsured.19
It is unfortunate that Gilead has chosen to place its profit margins over the interests of Americans suffering in this pandemic. Record unemployment and ongoing financial troubles will prevent many Americans from paying for remdesivir. Even for the insured, Gilead’s excessive pricing makes copayments and out-of-pocket expenses cost-prohibitive. Moreover, Gilead’s pricing will challenge the growing numbers of Americans that lack health coverage as a result of the pandemic.20 If Americans who need remdesivir find themselves unable to afford a treatment course, then federal agencies have sufficient reason to require Gilead to “license both the background patents and the patents stemming from the contract work” under the Bayh-Dole Act.21
In light of the unprecedented COVID-19 crisis, we request the NIH and FDA exercise their march-in rights under the Bayh-Dole Act. Failing that, we ask that the NIH and FDA assign to the states these rights to ensure that drug manufacturers are licensed to meet the market demand during this health crisis. Alongside either exercise, we urge you to make full and immediate use of your legal authority under the Defense Production Act to put the weight of the federal government behind a rapid scaling up of remdesivir production and distribution. Under the authority already delegated to Secretary Azar of HHS under the Executive Order of March 18th, 2020, the Secretary has the power to invoke the Defense Production Act to identify specific health and medical resources needed to respond to the COVID-19 crisis, and to require performance of contracts or orders to meet the needs of the country over other priorities.22
Critically, this delegation of power to the HHS Secretary already extends to drugs—not just to PPE and ventilators—and can help states.23 Now more than ever, the American public needs the support of the federal government in helping them afford COVID-19-related treatment. This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people. Gilead should not profit from the pandemic and it should be pushed to do more to help more people.
We look forward to a prompt response in bringing relief to millions of COVID-19 patients and working with our federal partners to rapidly scale up remdesivir production and distribution.
Sincerely,
Xavier Becerra California Attorney General
Jeff Landry Louisiana Attorney General
[and 28 other AGs, including Karl Racine DC AG]
Maryland is working with six other states to negotiate the purchase of so-called antigen tests for the coronavirus that will return results more quickly, Gov. Larry Hogan said Tuesday.
Maryland formed an alliance with the states of Louisiana, Massachusetts, Michigan, Ohio and Virginia as well as the Rockefeller Foundation to negotiate to buy 500,000 tests for each state, Hogan said Tuesday morning. By the end of the day, North Carolina joined the pact, bringing the potential joint purchase to 3.5 million tests.
From https://www.baltimoresun.com/coronavirus/bs-md-hogan-antigen-20200804-n564sfbyjrbpplkdmhg6d6cwbe-story.html
Maryland formed an alliance with the states of Louisiana, Massachusetts, Michigan, Ohio and Virginia as well as the Rockefeller Foundation to negotiate to buy 500,000 tests for each state, Hogan said Tuesday morning. By the end of the day, North Carolina joined the pact, bringing the potential joint purchase to 3.5 million tests.
From https://www.baltimoresun.com/coronavirus/bs-md-hogan-antigen-20200804-n564sfbyjrbpplkdmhg6d6cwbe-story.html
WSJ on China reaction after Trump intervention in Microsoft/Tik-Tok Acwuisition talks
In China, talk of a TikTok sale has gone down badly. The Global Times, a Communist Party tabloid, derided the situation as “the hunting and looting of TikTok by the U.S. government in conjunction with U.S. high-tech companies.” One risk for Microsoft is that the Chinese government retaliates over the company’s role in a TikTok deal, political analysts have suggested, such as by targeting the Chinese versions of its Bing search engine or LinkedIn, the business-focused social-media platform that Microsoft bought in 2016.
From https://www.wsj.com/articles/microsoft-ceo-nadella-wades-into-u-s-china-tensions-in-tiktok-pursuit-11596569063?mod=hp_lead_pos4 [pay wall]
In China, talk of a TikTok sale has gone down badly. The Global Times, a Communist Party tabloid, derided the situation as “the hunting and looting of TikTok by the U.S. government in conjunction with U.S. high-tech companies.” One risk for Microsoft is that the Chinese government retaliates over the company’s role in a TikTok deal, political analysts have suggested, such as by targeting the Chinese versions of its Bing search engine or LinkedIn, the business-focused social-media platform that Microsoft bought in 2016.
From https://www.wsj.com/articles/microsoft-ceo-nadella-wades-into-u-s-china-tensions-in-tiktok-pursuit-11596569063?mod=hp_lead_pos4 [pay wall]
See the filed Trump Campaign Complaint against Nevada mail voting bill, and a copy of the bill
The complaint:
https://thenevadaindependent.com/article/trump-campaign-sues-nevada-over-bill-expanding-mail-in-voting-for-general-election
The bill:
https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7150/Overview
Excerpts from the Complaint:
“The RNC has a vital interest in protecting the ability of Republican voters to cast, and Republican candidates to receive, effective votes in Nevada elections and elsewhere . . . . “Major or hasty changes confuse voters, undermine confidence in the electoral process, and create incentive to remain away from the polls.”
The bill, AB4 “upends Nevada’s election laws and requires massive changes in election procedures and processes, makes voter fraud and other ineligible voting inevitable.”
The complaint:
https://thenevadaindependent.com/article/trump-campaign-sues-nevada-over-bill-expanding-mail-in-voting-for-general-election
The bill:
https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7150/Overview
Excerpts from the Complaint:
“The RNC has a vital interest in protecting the ability of Republican voters to cast, and Republican candidates to receive, effective votes in Nevada elections and elsewhere . . . . “Major or hasty changes confuse voters, undermine confidence in the electoral process, and create incentive to remain away from the polls.”
The bill, AB4 “upends Nevada’s election laws and requires massive changes in election procedures and processes, makes voter fraud and other ineligible voting inevitable.”
From Maryland Consumer Rights Coalition
The Trump Administration has taken bold action to….
Extend protections and expand support for debt collectors and payday lenders.
CFPB. First, the Consumer Financial Protection Bureau (CFPB) is proposing disclosures on time barred debt that will confuse consumers and may lead them to pay debts that they do not owe. Time-barred debt (otherwise known as “zombie” debt) is a debt that is so old that it is no longer legally collectible. However, if a person pays something on the debt, even though it is no longer collectible, this can restart the clock and the debt rises from the dead and is a ‘live' debt again. Confused? So are many many consumers.
Rather than bar these kinds of debts across the country, the CFPB is creating greater confusion requiring that debt collectors tell consumers: (1) they must pay a debt, and (2) nothing will happen to them if they do not, and in fact making a payment could harm them by giving the collector renewed permission to sue them.
While Maryland bans filing a debt collection action, if this proposal is implemented, there will likely be attempts to weaken laws in Maryland.
Consumer advocates believe that the CFPB should, instead, ban these kinds of debts completely. The National Consumer Law Center is circulating a sign-on letter for nonprofit organizations. The letter will close on August 3.
True Lender. The Office of the Comptroller of the Currency (OCC) has proposed a new rule to determine who is the ‘true lender’ in the relationship between a bank and a third party. While this may sound innocuous, in fact, this would undermine state rate caps-like the 33% rate cap MCRC and partners fought to maintain two years ago-to keep predatory payday lenders out of Maryland. This proposal creates a massive loophole that would allow payday lenders to ignore state rate caps if the high-cost lender partnered with a bank on the loans. This is similar to the rent-a-bank scheme that Maryland rejected years ago but under this new proposal, it would be much harder to reject this model. MCRC will be sharing a sign-on letter for organizations and a separate one for individuals in the next few weeks. I
The Trump Administration has taken bold action to….
Extend protections and expand support for debt collectors and payday lenders.
CFPB. First, the Consumer Financial Protection Bureau (CFPB) is proposing disclosures on time barred debt that will confuse consumers and may lead them to pay debts that they do not owe. Time-barred debt (otherwise known as “zombie” debt) is a debt that is so old that it is no longer legally collectible. However, if a person pays something on the debt, even though it is no longer collectible, this can restart the clock and the debt rises from the dead and is a ‘live' debt again. Confused? So are many many consumers.
Rather than bar these kinds of debts across the country, the CFPB is creating greater confusion requiring that debt collectors tell consumers: (1) they must pay a debt, and (2) nothing will happen to them if they do not, and in fact making a payment could harm them by giving the collector renewed permission to sue them.
While Maryland bans filing a debt collection action, if this proposal is implemented, there will likely be attempts to weaken laws in Maryland.
Consumer advocates believe that the CFPB should, instead, ban these kinds of debts completely. The National Consumer Law Center is circulating a sign-on letter for nonprofit organizations. The letter will close on August 3.
True Lender. The Office of the Comptroller of the Currency (OCC) has proposed a new rule to determine who is the ‘true lender’ in the relationship between a bank and a third party. While this may sound innocuous, in fact, this would undermine state rate caps-like the 33% rate cap MCRC and partners fought to maintain two years ago-to keep predatory payday lenders out of Maryland. This proposal creates a massive loophole that would allow payday lenders to ignore state rate caps if the high-cost lender partnered with a bank on the loans. This is similar to the rent-a-bank scheme that Maryland rejected years ago but under this new proposal, it would be much harder to reject this model. MCRC will be sharing a sign-on letter for organizations and a separate one for individuals in the next few weeks. I
Trump says TikTok sale can go through but only if the US gets a cut
By Rishi Iyengar, Oliver Effron and Nikki Carvajal, CNN Business
Updated 5:22 PM ET, Mon August 3, 2020
(CNN Business)After days of whiplash over the future of TikTok, President Donald Trump said he would allow an American company to acquire the short-form video app — with a catch.
Trump on Monday set September 15 as the deadline for TikTok to find a US buyer, failing which he said he will shut down the app in the country. In an unusual declaration, Trump also said any deal would have to include a "substantial amount of money" coming to the US Treasury.
"Right now they don't have any rights unless we give it to them. So if we're going to give them the rights, then ... it has to come into this country," Trump said. "It's a great asset, but it's not a great asset in the United States unless they have approval in the United States."
The President's requirement that some of the money from the deal go to the US Treasury doesn't have a basis in antitrust law, according to Gene Kimmelman, a former chief counsel for the US Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge.
"This is quite unusual, this is out of the norm," Kimmelman said. "It's actually quite hard to understand what the president is actually talking about here. ... It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
continue reading the article at CNN https://www.msn.com/en-us/news/politics/trump-says-tiktok-sale-can-go-through-but-only-if-the-us-gets-a-cut/ar-BB17woF9?ocid=msedgdhp
By Rishi Iyengar, Oliver Effron and Nikki Carvajal, CNN Business
Updated 5:22 PM ET, Mon August 3, 2020
(CNN Business)After days of whiplash over the future of TikTok, President Donald Trump said he would allow an American company to acquire the short-form video app — with a catch.
Trump on Monday set September 15 as the deadline for TikTok to find a US buyer, failing which he said he will shut down the app in the country. In an unusual declaration, Trump also said any deal would have to include a "substantial amount of money" coming to the US Treasury.
"Right now they don't have any rights unless we give it to them. So if we're going to give them the rights, then ... it has to come into this country," Trump said. "It's a great asset, but it's not a great asset in the United States unless they have approval in the United States."
The President's requirement that some of the money from the deal go to the US Treasury doesn't have a basis in antitrust law, according to Gene Kimmelman, a former chief counsel for the US Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge.
"This is quite unusual, this is out of the norm," Kimmelman said. "It's actually quite hard to understand what the president is actually talking about here. ... It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
continue reading the article at CNN https://www.msn.com/en-us/news/politics/trump-says-tiktok-sale-can-go-through-but-only-if-the-us-gets-a-cut/ar-BB17woF9?ocid=msedgdhp
The Political Misuse of Antitrust
By Spencer Waller
https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/
Review and Comment by Don Allen Resnikoff
Some believe that the Trump administration has politically misused antitrust actions. For example, there were rumors of a politically motivated White House direction to challenge the AT&T-Time Warner merger. Some see political hostility as the reason for Administration encouragement of antitrust action against Google and other social media and tech giants. Some have found politics at play with regard to the outcomes of the Sprint-T Mobile merger investigation. And, there has been whistleblower testimony to Congress from USDOJ staffers alleging politically motivated interference in antitrust investigations.
Such allegations raise disturbing questions for the general public. For the non-lawyer, it may suffice to say that antitrust agencies should rise above partisan politics in the pursuit of justice, and that those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
But Spencer Waller and his writing partner Jacob Morse are lawyers and antitrust scholars, so they have written an article focusing on the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Their analysis will be useful to lawyers for future litigants who may feel their clients are targets of political misuse.
Waller starts with the USDOJ’s nonbinding guidance on the impropriety of government prosecutions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
The Antitrust Division has worked on international agreements about due process principles, including some about conflict of interest principles that may relate to political bias.
Turning to case law, Waller reports that the closest the question of political bias or animus has come to being part of an antitrust case law decision was in the ATT-Time Warner litigation. There the defendants sought discovery of potential communications between the White House and the Justice Department about political influence in the decision to challenge the merger. District Court Judge Richard Leon denied the requested discovery, holding that defendants did not make a credible showing that they were singled out by the DOJ]. Waller wonders: “Even it turned out that there were no such communications, how would one ever know whether officials eager to please their bosses brought a plausible antitrust (or other kind of case) because they believed it would make the White House happy? And what should one do (or conclude) if such information became available? “
Turning to analogies from various more remote areas of the law, Waller observes that the law often deals with questions of purpose versus effect, objectively baseless claims versus claims with evidentiary and factual merit but improper purpose, and cases where these issues of mixed motives and biases are intertwined.
Examples include issues of selective prosecution. Waller suggests that the selective prosecution analogy does not offer a fruitful path for antitrust defendants: “ The defendants would have to establish most of the facts necessary for the claim before obtaining disclosure or discovery on this topic from the government in litigation, a burden even well-heeled defendants like AT&T and Time Warner could not meet. Finally, even the most egregious of political favoritism would do nothing to attack a biased decision not to enforce the antitrust laws to benefit an ally.”
Another analogy is offered by Federal Rule of Civil Procedure (FRCP) 11, which requires attorneys to sign pleadings, motions, and most other writings, attesting that they have made an investigation reasonable under the circumstances and certifying that the pleadings and other matters have a reasonable basis in both law and fact and are not being brought for an improper purpose. But the limitations of the Rule are great, Waller explains, such as that the Rule only states that the court “may” impose “appropriate” sanctions for violations of the rule. Moreover, “sanctions are limited to what is sufficient to deter repeated violations by the party or those in similar circumstances. The court also has wide discretion as to the type of sanctions that can be imposed.”
Model Rules of Professional Responsibility, variants of which are followed in many states, say that “In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.” But the rules only allow for the subsequent initiation of disciplinary proceedings with the relevant state bar authorities and those courts where the attorney in question is admitted to practice. Waller says that provides “little comfort to the litigants in the moment of responding to improperly motivated proceedings.”
Turning to administrative law for analogies, Waller observes that the cases generally preclude judicial inquiry into the mental processes of administrative decision makers. The cases do allow an inquiry and extra-record discovery in the exceptional circumstance where there is a strong showing of bad faith or improper behavior.
Employment discrimination law cases deal with allegations of surreptitious discriminatory motives analogous to surreptitious political motives in antitrust cases, generally requiring that the plaintiff must first establish a prima facie case of discrimination. The defendant (employer) must then produce evidence of a legitimate non-discriminatory reason for its actions. If this occurs, then there is no presumption of discrimination. The plaintiff must then be afforded a fair opportunity to present additional facts to show discrimination. Those cases suggest difficult procedural hurdles for the target of surreptitious conduct.
Tort law with regard to malicious prosecution and abuse of process is yet another area of law that offers analogies to misuse of antitrust for political purposes that Waller finds relevant.
I recommend reading the Waller piece to get a fuller sense of his observations and conclusions. An important part of his conclusion tracks what a non-lawyer observer might say about politics and antitrust: antitrust agencies should rise above partisan politics in the pursuit of justice, and those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
Waller observes that the decision of USDOJ to settle an antitrust matter already has some procedural protections from political influence. The Tunney Act,(which dates from 1974, requires a public interest showing before a settlement can be accepted by the court. However, the courts have made Tunney Act requirements a mere formality, limiting the inquiry to matching the nature of the relief to the civil complaint actually filed, rather than the scope of the case that should have been filed or the reasons why the agency acted or refrained from acting. Plainly, protections from improper political action would be enhanced if those limits were removed.
The issue of a decision not filed because of political considerations is one where US law is silent, but EU law provides a partial answer. There is no mechanism in current US law for judicial review of a decision not to proceed with a civil or criminal matter, but plainly there could be. Waller supports a commenter’s thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
In other words, requiring antitrust prosecutors to be articulate about public policy goals and purposes for either prosecuting or not prosecuting cases reduces the opportunity for furtive prosecutorial pursuit of narrow and partisan political goals.
Spencer Waller deserves great credit for moving forward the discussion of political misuse of antitrust. It is, of course, a topic of great interest for the general public as well as antitrust specialists with the ability to parse the array of available legal precedents and guides.
DR
By Spencer Waller
https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/
Review and Comment by Don Allen Resnikoff
Some believe that the Trump administration has politically misused antitrust actions. For example, there were rumors of a politically motivated White House direction to challenge the AT&T-Time Warner merger. Some see political hostility as the reason for Administration encouragement of antitrust action against Google and other social media and tech giants. Some have found politics at play with regard to the outcomes of the Sprint-T Mobile merger investigation. And, there has been whistleblower testimony to Congress from USDOJ staffers alleging politically motivated interference in antitrust investigations.
Such allegations raise disturbing questions for the general public. For the non-lawyer, it may suffice to say that antitrust agencies should rise above partisan politics in the pursuit of justice, and that those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
But Spencer Waller and his writing partner Jacob Morse are lawyers and antitrust scholars, so they have written an article focusing on the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Their analysis will be useful to lawyers for future litigants who may feel their clients are targets of political misuse.
Waller starts with the USDOJ’s nonbinding guidance on the impropriety of government prosecutions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
The Antitrust Division has worked on international agreements about due process principles, including some about conflict of interest principles that may relate to political bias.
Turning to case law, Waller reports that the closest the question of political bias or animus has come to being part of an antitrust case law decision was in the ATT-Time Warner litigation. There the defendants sought discovery of potential communications between the White House and the Justice Department about political influence in the decision to challenge the merger. District Court Judge Richard Leon denied the requested discovery, holding that defendants did not make a credible showing that they were singled out by the DOJ]. Waller wonders: “Even it turned out that there were no such communications, how would one ever know whether officials eager to please their bosses brought a plausible antitrust (or other kind of case) because they believed it would make the White House happy? And what should one do (or conclude) if such information became available? “
Turning to analogies from various more remote areas of the law, Waller observes that the law often deals with questions of purpose versus effect, objectively baseless claims versus claims with evidentiary and factual merit but improper purpose, and cases where these issues of mixed motives and biases are intertwined.
Examples include issues of selective prosecution. Waller suggests that the selective prosecution analogy does not offer a fruitful path for antitrust defendants: “ The defendants would have to establish most of the facts necessary for the claim before obtaining disclosure or discovery on this topic from the government in litigation, a burden even well-heeled defendants like AT&T and Time Warner could not meet. Finally, even the most egregious of political favoritism would do nothing to attack a biased decision not to enforce the antitrust laws to benefit an ally.”
Another analogy is offered by Federal Rule of Civil Procedure (FRCP) 11, which requires attorneys to sign pleadings, motions, and most other writings, attesting that they have made an investigation reasonable under the circumstances and certifying that the pleadings and other matters have a reasonable basis in both law and fact and are not being brought for an improper purpose. But the limitations of the Rule are great, Waller explains, such as that the Rule only states that the court “may” impose “appropriate” sanctions for violations of the rule. Moreover, “sanctions are limited to what is sufficient to deter repeated violations by the party or those in similar circumstances. The court also has wide discretion as to the type of sanctions that can be imposed.”
Model Rules of Professional Responsibility, variants of which are followed in many states, say that “In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.” But the rules only allow for the subsequent initiation of disciplinary proceedings with the relevant state bar authorities and those courts where the attorney in question is admitted to practice. Waller says that provides “little comfort to the litigants in the moment of responding to improperly motivated proceedings.”
Turning to administrative law for analogies, Waller observes that the cases generally preclude judicial inquiry into the mental processes of administrative decision makers. The cases do allow an inquiry and extra-record discovery in the exceptional circumstance where there is a strong showing of bad faith or improper behavior.
Employment discrimination law cases deal with allegations of surreptitious discriminatory motives analogous to surreptitious political motives in antitrust cases, generally requiring that the plaintiff must first establish a prima facie case of discrimination. The defendant (employer) must then produce evidence of a legitimate non-discriminatory reason for its actions. If this occurs, then there is no presumption of discrimination. The plaintiff must then be afforded a fair opportunity to present additional facts to show discrimination. Those cases suggest difficult procedural hurdles for the target of surreptitious conduct.
Tort law with regard to malicious prosecution and abuse of process is yet another area of law that offers analogies to misuse of antitrust for political purposes that Waller finds relevant.
I recommend reading the Waller piece to get a fuller sense of his observations and conclusions. An important part of his conclusion tracks what a non-lawyer observer might say about politics and antitrust: antitrust agencies should rise above partisan politics in the pursuit of justice, and those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
Waller observes that the decision of USDOJ to settle an antitrust matter already has some procedural protections from political influence. The Tunney Act,(which dates from 1974, requires a public interest showing before a settlement can be accepted by the court. However, the courts have made Tunney Act requirements a mere formality, limiting the inquiry to matching the nature of the relief to the civil complaint actually filed, rather than the scope of the case that should have been filed or the reasons why the agency acted or refrained from acting. Plainly, protections from improper political action would be enhanced if those limits were removed.
The issue of a decision not filed because of political considerations is one where US law is silent, but EU law provides a partial answer. There is no mechanism in current US law for judicial review of a decision not to proceed with a civil or criminal matter, but plainly there could be. Waller supports a commenter’s thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
In other words, requiring antitrust prosecutors to be articulate about public policy goals and purposes for either prosecuting or not prosecuting cases reduces the opportunity for furtive prosecutorial pursuit of narrow and partisan political goals.
Spencer Waller deserves great credit for moving forward the discussion of political misuse of antitrust. It is, of course, a topic of great interest for the general public as well as antitrust specialists with the ability to parse the array of available legal precedents and guides.
DR
Why does Medicare pay $100 per COVID test to Quest for too-slow 7 day test turnaround?
Excerpt from https://www.usatoday.com/story/news/health/2020/07/18/covid-testing-delays-worsen-labs-struggle-keep-pace-demand/5415468002/
In mid-April, when labs completed about 150,000 COVID-19 tests a day, the federal government dangled a major incentive to increase testing output. Medicare would pay labs $100 for each “high-throughput” test, nearly double the $51 per test paid in the early days of the pandemic, as a way to get labs with machines that process lots of tests to increase capacity and deliver faster results to combat the spread of the virus.
The labs reached an all-time high of more than 831,900 COVID tests Thursday, according to the COVID Tracking Project, but the prolific expansion has led to a bottleneck, slowing results for families such as the Julians.
Quest Diagnostics said this week the average turnaround time for nonpriority patients was seven days or more. Patients in hospitals, those preparing for acute surgery and health care workers with symptoms get results within a day.
Posting by Don Allen Resnikoff
Excerpt from https://www.usatoday.com/story/news/health/2020/07/18/covid-testing-delays-worsen-labs-struggle-keep-pace-demand/5415468002/
In mid-April, when labs completed about 150,000 COVID-19 tests a day, the federal government dangled a major incentive to increase testing output. Medicare would pay labs $100 for each “high-throughput” test, nearly double the $51 per test paid in the early days of the pandemic, as a way to get labs with machines that process lots of tests to increase capacity and deliver faster results to combat the spread of the virus.
The labs reached an all-time high of more than 831,900 COVID tests Thursday, according to the COVID Tracking Project, but the prolific expansion has led to a bottleneck, slowing results for families such as the Julians.
Quest Diagnostics said this week the average turnaround time for nonpriority patients was seven days or more. Patients in hospitals, those preparing for acute surgery and health care workers with symptoms get results within a day.
Posting by Don Allen Resnikoff
'I'm fighting a war against COVID-19 and a war against stupidity,' says CMO of Houston hospital
Molly Gamble (Twitter) -
After two hours of sleep a night for four months and seeing a member of his team contract the virus, Joseph Varon, MD, is growing exasperated.
"I'm pretty much fighting two wars: A war against COVID and a war against stupidity," Dr. Varon, MD, CMO and chief of critical care at United Memorial Medical Center in Houston, told NBC News. "And the problem is the first one, I have some hope about winning. But the second one is becoming more and more difficult."
Dr. Varon noted that whether it's information backed by science or common sense, people throughout the U.S. are not listening. "The thing that annoys me the most is that we keep on doing our best to save all these people, and then you get another batch of people that are doing exactly the opposite of what you're telling them to do."
From:
https://www.beckershospitalreview.com/hospital-physician-relationships/i-m-fighting-a-war-against-covid-19-and-a-war-against-stupidity-says-cmo-of-houston-hospital.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_source=BHRE&utm_medium=email&oly_enc_id=8431J4722801B7S'I'm fighting a war against COVID-19 and a war against stupidity,' says CMO of Houston hospital Molly Gamble (Twitter) - 2 hours ago Print | Email
Antitrust and Platform Monopoly -
By Herbert Hovenkamp (University of Pennsylvania)
This article first considers an often-discussed question about large internet platforms that deal directly with consumers: Are they “winner take all,” or natural monopoly, firms? That question is complex and does not produce the same answer for every platform. The closer one looks at digital platforms they less they seem to be winner-take-all. As a result, we can assume that competition can be made to work in most of them.
Second, assuming that an antitrust violation is found, what should be the appropriate remedy? Breaking up large firms subject to extensive scale economies or positive network effects is generally thought to be unwise. The resulting entities will be unable to behave competitively. Inevitably, they will either merge or collude, or else one will drive the others out of business. Even if a platform is not a natural monopoly but does experience significant economies of scale in production or consumption, a breakup can be socially costly. In the past, structural relief of this type has led to higher prices or business firm failure. If breakup is not the answer, then what are the best antitrust remedies? One possibility is to break up ownership and management rather than assets. The history of antitrust law is replete with firms that are organized as single entities under corporate law, but that function as competitors and treated that way by antitrust law. This permits productive assets to remain intact, but forces decision makers to behave competitively.
Finally, this paper takes a look at the problem of platform acquisition of nascent firms, where the biggest threat is not from horizontal mergers but rather from acquisitions of complements or differentiated technologies. For these, the tools we currently use in merger law are poorly suited. Here I offer some suggestions.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639142
By Herbert Hovenkamp (University of Pennsylvania)
This article first considers an often-discussed question about large internet platforms that deal directly with consumers: Are they “winner take all,” or natural monopoly, firms? That question is complex and does not produce the same answer for every platform. The closer one looks at digital platforms they less they seem to be winner-take-all. As a result, we can assume that competition can be made to work in most of them.
Second, assuming that an antitrust violation is found, what should be the appropriate remedy? Breaking up large firms subject to extensive scale economies or positive network effects is generally thought to be unwise. The resulting entities will be unable to behave competitively. Inevitably, they will either merge or collude, or else one will drive the others out of business. Even if a platform is not a natural monopoly but does experience significant economies of scale in production or consumption, a breakup can be socially costly. In the past, structural relief of this type has led to higher prices or business firm failure. If breakup is not the answer, then what are the best antitrust remedies? One possibility is to break up ownership and management rather than assets. The history of antitrust law is replete with firms that are organized as single entities under corporate law, but that function as competitors and treated that way by antitrust law. This permits productive assets to remain intact, but forces decision makers to behave competitively.
Finally, this paper takes a look at the problem of platform acquisition of nascent firms, where the biggest threat is not from horizontal mergers but rather from acquisitions of complements or differentiated technologies. For these, the tools we currently use in merger law are poorly suited. Here I offer some suggestions.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639142
Warren letter to Fed's Quarles objecting to reduced bank capital requirements
https://www.warren.senate.gov/imo/media/doc/2020.07.30%20Letter%20to%20Quarles.pdf
Excerpt:
Dear Vice Chair Quarles,
Your requests for Congress to weaken the rules put in place after the 2008 financial crisis to protect our financial system are outrageous and irresponsible, and we are writing to seek an explanation for why – during a historic economic crisis – you are seeking to hand out regulatory favors to big banks that would harm the economy and increase systemic risks. Your efforts to weaken key safeguards of our nation's financial system at a time when millions of families' livelihoods are at risk is an abdication of your agency's mission of "foster[ing] the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems." 1 Congress is right now in the process of crafting legislation that will determine, among other things, whether millions of Americans are able to keep their homes, whether critical financial support for people out of work will continue, and whether families across the nation will be able to pay their bills on time and keep food on the table.
With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress appropriated half a trillion dollars for the Federal Reserve System to stabilize our economy by providing support to struggling businesses and state and local governments; you have proven unable or unwilling to fully utilize these tools. Instead of using your authority to assist our most vulnerable communities, you have apparently chosen to press for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – signed into law by President Obama ten years ago this month – that Wall Street's army of lawyers and bank lobbyists have long sought and that would put our financial system in jeopardy. According to recent reports, the stimulus bill now being drafted is "expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, . . .
https://www.warren.senate.gov/imo/media/doc/2020.07.30%20Letter%20to%20Quarles.pdf
Excerpt:
Dear Vice Chair Quarles,
Your requests for Congress to weaken the rules put in place after the 2008 financial crisis to protect our financial system are outrageous and irresponsible, and we are writing to seek an explanation for why – during a historic economic crisis – you are seeking to hand out regulatory favors to big banks that would harm the economy and increase systemic risks. Your efforts to weaken key safeguards of our nation's financial system at a time when millions of families' livelihoods are at risk is an abdication of your agency's mission of "foster[ing] the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems." 1 Congress is right now in the process of crafting legislation that will determine, among other things, whether millions of Americans are able to keep their homes, whether critical financial support for people out of work will continue, and whether families across the nation will be able to pay their bills on time and keep food on the table.
With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress appropriated half a trillion dollars for the Federal Reserve System to stabilize our economy by providing support to struggling businesses and state and local governments; you have proven unable or unwilling to fully utilize these tools. Instead of using your authority to assist our most vulnerable communities, you have apparently chosen to press for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – signed into law by President Obama ten years ago this month – that Wall Street's army of lawyers and bank lobbyists have long sought and that would put our financial system in jeopardy. According to recent reports, the stimulus bill now being drafted is "expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, . . .
DMN: Congress Asks Jeff Bezos — ‘Shouldn’t Twitch License Music?’
Congress asked Jeff Bezos during historic antitrust hearings why Twitch doesn’t pay music royalties. Bezos replied, “I don’t know.”
The story continues here. https://www.digitalmusicnews.com/2020/07/30/jeff-bezos-congress-twitch-music-licensing/
Congress asked Jeff Bezos during historic antitrust hearings why Twitch doesn’t pay music royalties. Bezos replied, “I don’t know.”
The story continues here. https://www.digitalmusicnews.com/2020/07/30/jeff-bezos-congress-twitch-music-licensing/
Qualcomm Signs Patent Licensing Deal With Huawei
-
July 30, 2020Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Thursday, July 30.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective January 1, 2020, according to Qualcomm.
Qualcomm expects about US$1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
The agreement was unexpected given the backdrop of an increasingly acrimonious political battle between Washington and Beijing over technologies broadly and Huawei in particular. The Trump administration has accused China of stealing trade secrets and using technology, including Huawei’s, as a vehicle to potentially conduct espionage. China and Huawei have denied those charges.
As part of that tussle, the administration and China have imposed tariffs on each other, including on electronics. In 2018, President Trump blocked the US$117 billion takeover bid of Qualcomm by rival chip maker Broadcom, which was previously based in Singapore. The administration saw the deal as a threat to US leadership over China in technological arenas such as the emerging field of superfast 5G communications.
Full Content: Wall Street Journal
-
July 30, 2020Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Thursday, July 30.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective January 1, 2020, according to Qualcomm.
Qualcomm expects about US$1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
The agreement was unexpected given the backdrop of an increasingly acrimonious political battle between Washington and Beijing over technologies broadly and Huawei in particular. The Trump administration has accused China of stealing trade secrets and using technology, including Huawei’s, as a vehicle to potentially conduct espionage. China and Huawei have denied those charges.
As part of that tussle, the administration and China have imposed tariffs on each other, including on electronics. In 2018, President Trump blocked the US$117 billion takeover bid of Qualcomm by rival chip maker Broadcom, which was previously based in Singapore. The administration saw the deal as a threat to US leadership over China in technological arenas such as the emerging field of superfast 5G communications.
Full Content: Wall Street Journal
Big banks may get a big gift in the stimulus bill being drafted by Senate Republicans -- lower capital requirements.
Lawmakers are expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, according to three people familiar with the effort.
The push is the culmination of a monthslong effort by industry lobbyists and a top Federal Reserve official to change a restriction put in place in the wake of the 2008 financial crisis to prevent banks from engaging in risky behavior.
From https://www.nytimes.com/2020/07/27/business/bank-regulations-rollback-stimulus-bill.html
Comment: On the need for capital requirements to discourage risky bank behavior (among many other sourcess) : “Ending Too Big to Fail," produced by the Federal Reserve Bank of Minneapolis (2016). The report proposes a substantial increase in the capital requirements
of the U.S. banking system, and it argues that this increase would improve the resiliency of financial institutions in the face of a severe financial shock, such as the 2008 crisis. Improving the resiliency of these institutions in turn makes the need for another public bailout of the financial system less likely.
Lawmakers are expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, according to three people familiar with the effort.
The push is the culmination of a monthslong effort by industry lobbyists and a top Federal Reserve official to change a restriction put in place in the wake of the 2008 financial crisis to prevent banks from engaging in risky behavior.
From https://www.nytimes.com/2020/07/27/business/bank-regulations-rollback-stimulus-bill.html
Comment: On the need for capital requirements to discourage risky bank behavior (among many other sourcess) : “Ending Too Big to Fail," produced by the Federal Reserve Bank of Minneapolis (2016). The report proposes a substantial increase in the capital requirements
of the U.S. banking system, and it argues that this increase would improve the resiliency of financial institutions in the face of a severe financial shock, such as the 2008 crisis. Improving the resiliency of these institutions in turn makes the need for another public bailout of the financial system less likely.
Moderna is talking to governments about pricing its COVID-19 vaccine between $50 and $60 per course in the U.S. and other high-income countries, the Financial Times reported, citing anonymous sources.
If the report proves true, that would put the cost of Moderna’s vaccine, mRNA-1273, at $25 to $30 per shot, well above the price of the vaccine being developed by Pfizer and BioNTech. They struck a deal with the U.S. government for a dose price of $19.50 last week.
A spokesperson for Moderna declined to comment on the company’s pricing plans, citing in an email to Fierce Pharma the confidentiality of “discussions with a number of governments and governmental entities about potential supply of mRNA-1273.”
Source: https://www.fiercepharma.com/pharma/moderna-s-rumored-50-plus-price-covid-19-vaccine-draws-ire-as-company-touts-new-animal-data?
If the report proves true, that would put the cost of Moderna’s vaccine, mRNA-1273, at $25 to $30 per shot, well above the price of the vaccine being developed by Pfizer and BioNTech. They struck a deal with the U.S. government for a dose price of $19.50 last week.
A spokesperson for Moderna declined to comment on the company’s pricing plans, citing in an email to Fierce Pharma the confidentiality of “discussions with a number of governments and governmental entities about potential supply of mRNA-1273.”
Source: https://www.fiercepharma.com/pharma/moderna-s-rumored-50-plus-price-covid-19-vaccine-draws-ire-as-company-touts-new-animal-data?
Generic Drugmakers Lose Bid To Block New California Antitrust Law
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July 26, 2020 A California law that punishes drugmakers who pay to keep generic competitors off the market will stand after the Ninth Circuit ruled the generic companies challenging the law failed to show it would harm them.
The Association for Accessible Medicines, a lobbying group for the generic drug industry, sought to overturn a lower court decision denying an injunction to block the law. But the US Court of Appeals for the Ninth Circuit ruled Friday, July 24, that the district court must dismiss the case without prejudice, July 24, reported Bloomberg.
The California law AB 824, combats illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug. These collusive agreements, known as “pay-for-delay” agreements, stifle competition and hike the price patients and employers pay for prescription medicines. AB 824 is the first state law in the nation to tackle pay-for-delay agreements.
Full Content: Bloomberg
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July 26, 2020 A California law that punishes drugmakers who pay to keep generic competitors off the market will stand after the Ninth Circuit ruled the generic companies challenging the law failed to show it would harm them.
The Association for Accessible Medicines, a lobbying group for the generic drug industry, sought to overturn a lower court decision denying an injunction to block the law. But the US Court of Appeals for the Ninth Circuit ruled Friday, July 24, that the district court must dismiss the case without prejudice, July 24, reported Bloomberg.
The California law AB 824, combats illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug. These collusive agreements, known as “pay-for-delay” agreements, stifle competition and hike the price patients and employers pay for prescription medicines. AB 824 is the first state law in the nation to tackle pay-for-delay agreements.
Full Content: Bloomberg
NYT op-ed: Fix the Remdesivir Supply problem:
By Amy Kapczynski, Paul Biddinger and Rochelle Walensky
Ms. Kapczynski is a professor at Yale Law School. Dr. Biddinger and Dr. Walensky practice at Massachusetts General Hospital.
Excerpt:
The Department of Health and Human Services can build a transparent system that ensures remdesivir quickly gets to where it does the greatest good — and can be redistributed, making sure that hospitals that share now won’t be harmed down the line for doing so. Having more available doses would also help with logistics, because hospitals’ needs are not fully predictable.
Beyond the distribution problem, we are facing a supply problems as well. Gilead Sciences, which holds the key patents on remdesivir, announced last month that it had only about 500,000 treatment courses through September — for the entire world. The company has sold almost all of it to the United States, and other countries are already experiencing serious shortages.
Gilead attributes its supply problems to the complexities of manufacturing the drug. But small-molecule drugs like remdesivir are usually pretty simple to reverse-engineer. In fact, companies in India, Bangladesh and China are already making it.
Some of those companies are licensed by Gilead, and history suggests that those deals include provisions meant to lock up all available supply. But some companies are producing remdesivir independently, and if the United States were willing to put out a competitive tender, there could be a greater supply.
Indeed, isn’t that what we usually would expect any government or any business to do if its main supplier falls short? The barrier is Gilead’s patents, which allow it to prevent others from selling the drug.
Fortunately, there is a remedy for this. Health and Human Services can offer to buy the drug from any company that can supply it (or give hospitals the right to do the same) and then pay Gilead a royalty in return. The solution, called “government patent use,” was legally codified in the two world wars to prevent price gouging and shortages, and has been used for medicines before.
Government patent use is especially appropriate now, given the risk of shortages and the government’s substantial contributions to its development (so substantial in fact that it may be entitled to co-ownership credit, though it has not asserted these rights).
Remdesivir is also, arguably, overpriced. Gilead sells it for $2,340 to $3,120 per five-day treatment, even though an independent group estimated that a fair price could be substantially lower, and generic versions are selling for about $320 per treatment.
Fixing the remdesivir supply lines would do right by hundreds of thousands of patients and help us flex the kind of muscle we will need for the next Covid-19 treatment or the next vaccine. If we can create a thousand-bed Covid hospital in a matter of days, if we can ramp up telemedicine programs overnight, if we can swiftly transform the way we live, learn and work, then surely we can tackle a remdesivir shortage too.
https://www.nytimes.com/2020/07/28/opinion/remdesivir-shortage-coronavirus.html?action=click&module=Opinion&pgtype=Homepage#after-story-ad-2
Read the testimony being submitted to Congress on behalf of:
Amazon https://www.washingtonpost.com/context/jeff-bezos-statement-to-the-u-s-house-committee-on-the-judiciary/ec8c99a0-e2cc-4a35-bff5-e796e2a6fd0d/?itid=lb_big-tech-battles-congress_9
Facebook https://www.washingtonpost.com/context/mark-zuckerberg-s-statement-to-a-house-judiciary-panel/9edb5481-5825-477d-bba0-f510055b0c4e/?itid=lb_big-tech-battles-congress_10
Google https://www.washingtonpost.com/context/sundar-pichai-s-statement-to-a-house-judiciary-panel/f45ffdda-49c0-4ffe-9bfc-9095f7eddea2/?itid=lb_big-tech-battles-congress_11
Apple https://www.washingtonpost.com/context/tim-cook-s-statement-to-a-house-judiciary-panel/89c15175-1055-4d72-aa10-86619b2525c9/?itid=lb_big-tech-battles-congress_12
Amazon https://www.washingtonpost.com/context/jeff-bezos-statement-to-the-u-s-house-committee-on-the-judiciary/ec8c99a0-e2cc-4a35-bff5-e796e2a6fd0d/?itid=lb_big-tech-battles-congress_9
Facebook https://www.washingtonpost.com/context/mark-zuckerberg-s-statement-to-a-house-judiciary-panel/9edb5481-5825-477d-bba0-f510055b0c4e/?itid=lb_big-tech-battles-congress_10
Google https://www.washingtonpost.com/context/sundar-pichai-s-statement-to-a-house-judiciary-panel/f45ffdda-49c0-4ffe-9bfc-9095f7eddea2/?itid=lb_big-tech-battles-congress_11
Apple https://www.washingtonpost.com/context/tim-cook-s-statement-to-a-house-judiciary-panel/89c15175-1055-4d72-aa10-86619b2525c9/?itid=lb_big-tech-battles-congress_12
9th Circuit: State Unfair Competition claims against pet food company may go forward; class action claims not
https://cdn.ca9.uscourts.gov/datastore/memoranda/2020/07/28/18-15026.pdf
https://cdn.ca9.uscourts.gov/datastore/memoranda/2020/07/28/18-15026.pdf
From DMN
Major Labels Face Legal Action for Issuing ‘False, Deceptive, and Misleading’ Copyright Claims
Charter Communications-owned internet service provider (ISP) Bright House has fired back against leading record labels’ far-reaching copyright infringement lawsuit, alleging in a counterclaim that the plaintiffs issued “false, deceptive, and misleading” DMCA takedown notices.
The story continues here. https://www.digitalmusicnews.com/2020/07/28/major-labels-legal-action/
Neil Young Threatens Legal Action Against Donald Trump — Again
Neil Young has asked Trump to stop using his music at his rallies and campaign events. Now the singer may be looking to take legal action.
The story continues here.https://www.digitalmusicnews.com/2020/07/28/neil-young-threatens-to-sue-trump/
Major Labels Face Legal Action for Issuing ‘False, Deceptive, and Misleading’ Copyright Claims
Charter Communications-owned internet service provider (ISP) Bright House has fired back against leading record labels’ far-reaching copyright infringement lawsuit, alleging in a counterclaim that the plaintiffs issued “false, deceptive, and misleading” DMCA takedown notices.
The story continues here. https://www.digitalmusicnews.com/2020/07/28/major-labels-legal-action/
Neil Young Threatens Legal Action Against Donald Trump — Again
Neil Young has asked Trump to stop using his music at his rallies and campaign events. Now the singer may be looking to take legal action.
The story continues here.https://www.digitalmusicnews.com/2020/07/28/neil-young-threatens-to-sue-trump/
Antitrust lobbying: The Global Antitrust Institute
A New York Times article about The Global Antitrust Institute explains that the Institute is bankrolled in large part by tech companies — corporate donors like Google, Amazon and Qualcomm — that are facing antitrust scrutiny from some of the regulators who attended its programs.
The Times reports that the Institute’s leaders, including Joshua Wright, who has longstanding ties to Google, have worked closely with tech companies to fend off antitrust criticism. The institute has reportedly cultivated relationships with top competition officials and sitting judges.
“This [financial support for the Global Antitrust Institute] is not a significant expenditure for these companies. And the potential benefits, even making it moderately less likely to be on the losing end of an ambitious antitrust case, is worth that price many times over,” said Michael Carrier, a professor at Rutgers University’s law school.
There are entities that provide a counter to the Global Antitrust Institute, particularly the American Antitrust Institute. The AAI website says “The American Antitrust Institute (AAI) is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. We serve the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Posted by Don Allen Resnikoff
Source: https://www.nytimes.com/2020/07/24/technology/global-antitrust-institute-google-amazon-qualcomm.html
A New York Times article about The Global Antitrust Institute explains that the Institute is bankrolled in large part by tech companies — corporate donors like Google, Amazon and Qualcomm — that are facing antitrust scrutiny from some of the regulators who attended its programs.
The Times reports that the Institute’s leaders, including Joshua Wright, who has longstanding ties to Google, have worked closely with tech companies to fend off antitrust criticism. The institute has reportedly cultivated relationships with top competition officials and sitting judges.
“This [financial support for the Global Antitrust Institute] is not a significant expenditure for these companies. And the potential benefits, even making it moderately less likely to be on the losing end of an ambitious antitrust case, is worth that price many times over,” said Michael Carrier, a professor at Rutgers University’s law school.
There are entities that provide a counter to the Global Antitrust Institute, particularly the American Antitrust Institute. The AAI website says “The American Antitrust Institute (AAI) is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. We serve the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Posted by Don Allen Resnikoff
Source: https://www.nytimes.com/2020/07/24/technology/global-antitrust-institute-google-amazon-qualcomm.html
SDOJ Press release: USDOJ OKs proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 23, 2020
Department Of Justice Issues Business Review Letter To Monoclonal Antibody Manufacturers To Expedite And Increase The Production Of Covid-19 Mab Treatments
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at atrdocs.grp@usdoj.gov.
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 23, 2020
Department Of Justice Issues Business Review Letter To Monoclonal Antibody Manufacturers To Expedite And Increase The Production Of Covid-19 Mab Treatments
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at atrdocs.grp@usdoj.gov.
The problem of litigants without lawyers
The DC Access to Justice Commission’s 2019 Report contains some remarkable information on the number of litigants in the D.C. Courts without lawyer representation.
The Report says that in 2017, the D.C. Court of Appeals saw unrepresented pro se participation at the time of case filing ranging from 50% to 90% depending on case type.
In D.C. Superior Court, pro se participation rates of cases disposed of in 2017 included: 97% of plaintiffs in small estate matters in the Probate Division, 88% of petitioners and 95% of respondents in the Domestic Violence Division, 83% of plaintiffs and 93% of respondents in divorce/ custody/miscellaneous cases in Family Court, 97% of respondents in paternity and child support cases in Family Court, 88% of designated respondents in the Landlord and Tenant Branch of the Civil Division ( in contrast to the 95% of plaintiffs who were represented), 75% of plaintiffs in Housing Conditions cases in the Civil Division.
The D.C. Office of Administrative Proceedings saw a comparably high percentage of cases where no party is represented in student discipline appeals (88%), appeals related to public benefits determinations (86%), and disputes concerning unemployment compensation benefits (91%)
The numbers are unlikely to have changed in recent years.
The Commission Report lauds the considerable efforts to help litigants made by D.C. government, the Courts, not-for-profit entities, law schools, the organized bar, and law firms and lawyers. But the problem of unrepresented litigants is a big one.
The Commission Report data suggests a need for additional support for helping organizations.
The Commission report is at https://www.dcaccesstojustice.org/assets/pdf/Delivering_Justice_2019.pdf
The DC Access to Justice Commission’s 2019 Report contains some remarkable information on the number of litigants in the D.C. Courts without lawyer representation.
The Report says that in 2017, the D.C. Court of Appeals saw unrepresented pro se participation at the time of case filing ranging from 50% to 90% depending on case type.
In D.C. Superior Court, pro se participation rates of cases disposed of in 2017 included: 97% of plaintiffs in small estate matters in the Probate Division, 88% of petitioners and 95% of respondents in the Domestic Violence Division, 83% of plaintiffs and 93% of respondents in divorce/ custody/miscellaneous cases in Family Court, 97% of respondents in paternity and child support cases in Family Court, 88% of designated respondents in the Landlord and Tenant Branch of the Civil Division ( in contrast to the 95% of plaintiffs who were represented), 75% of plaintiffs in Housing Conditions cases in the Civil Division.
The D.C. Office of Administrative Proceedings saw a comparably high percentage of cases where no party is represented in student discipline appeals (88%), appeals related to public benefits determinations (86%), and disputes concerning unemployment compensation benefits (91%)
The numbers are unlikely to have changed in recent years.
The Commission Report lauds the considerable efforts to help litigants made by D.C. government, the Courts, not-for-profit entities, law schools, the organized bar, and law firms and lawyers. But the problem of unrepresented litigants is a big one.
The Commission Report data suggests a need for additional support for helping organizations.
The Commission report is at https://www.dcaccesstojustice.org/assets/pdf/Delivering_Justice_2019.pdf
Whistleblower Law Collaborative: States Join Lawsuit Against Mallinckrodt
26 states plus Puerto Rico have intervened in The Whistleblower Law Collaborative’s False Claims Act suit against Mallinckrodt, in which the federal government intervened in March. The complaint alleges that Mallinckrodt violated federal and state False Claims Acts by failing to pay hundreds of millions of dollars in Medicaid rebates for its high-priced drug Acthar.
https://www.whistleblowerllc.com/states-join-clients-lawsuit-against-mallinckrodt/?
So, how are you and your kids coping with school shutdowns?
Probably not as well as the Maryland Mom who gave her teenage sons the homework assignment of developing recipes for mambo sauce. The result was a commercial product that has had a substantial measure of financial success.
Posted by Don Allen Resnikoff
Source: https://www.nbcwashington.com/?s=mambo+sauce
Probably not as well as the Maryland Mom who gave her teenage sons the homework assignment of developing recipes for mambo sauce. The result was a commercial product that has had a substantial measure of financial success.
Posted by Don Allen Resnikoff
Source: https://www.nbcwashington.com/?s=mambo+sauce
Knowledge Ecology International finds the US Government has bargained away public rights concerning COVID therapeutics funded by the US
KEI received a series of heavily redacted US Government contracts with pharmaceutical companies relevant to COVID therapeutics in response to a Freedom of Information Act request.
Brief excerpts from a much longer report follow:
While heavily redacted, the contracts shed considerable light on the extent to which the federal government has limited or eliminated altogether its rights in intellectual and data arising from the COVID-19 research and development that it is funding.
Five of the contracts we received are designated as “Other Transaction Agreements” (OTAs). . . .[F]ederal agencies, including the DOD, BARDA and the NIH, are using Other Transactions Authority to limit or eliminate the government’s rights in inventions and data that were funded by taxpayers.
Under the OTAs, several provisions of the Bayh-Dole Act and the Federal Acquisition Regulation on rights in data are being disregarded. The contracts generally involve a renegotiation of such basic public interest provisions as the federal royalty-free right, the grounds for march-ins, the ownership of patent rights, and the definition of “practical application,” typically in order to eliminate the Bayh-Dole obligation to make products available “to the public on reasonable terms” — language that authorizes the federal government to intervene if pharmaceutical companies charge unreasonable prices for federally-funded drugs, biologics, vaccines, and other medical products.
See
https://www.keionline.org/covid19-ota-contracts
The KEI report is discussed at https://www.axios.com/federal-government-barda-contracts-moderna-regeneron-aaf9fde2-2ee1-46fb-8465-0d573e6af1ed.html
FROM NPR: Bowser Says Proposed Cuts To Her Police Spending Plan Are 'Not Sound Budgeting'
July 20, 2020 Jenny Gathright
D.C. Mayor Muriel Bowser claims the council's proposed police budget will reduce the number of MPD officers by more than 250 and incur additional overtime costs.
D.C. Mayor Muriel Bowser is criticizing the D.C. Council's proposed budget reductions to the Metropolitan Police Department, saying that they could lead to an increase in costs and should be examined by the city's chief financial officer.
Bowser wrote in a letter over the weekend that the D.C. Council's proposed budget, which it approved unanimously last week, is expected to result in a reduction of more than 250 police officers. That reduction, she claimed, would cause "a significant pressure on overtime." The council is scheduled to take additional votes on the budget and accompanying laws on Tuesday, July 21 and Tuesday, July 28.
D.C. Chief Financial Officer Jeffrey DeWitt must certify the city's budget as part of its approval process. Bowser wrote in her letter that she believed the overtime costs were an issue that could prevent DeWitt from signing off on the spending plan.
"It's one thing to say that you're going to reduce something," Bowser said in a press conference on Monday. "But if we discover eight months from now that it just caused an increase somewhere else — i.e. overtime — it's not sound budgeting."
In her budget proposal, Bowser increased MPD's budget by $18 million, or 3% over the previous year. The council's budget cut $9.6 million of the mayor's proposed increase. As it stands in the council's proposal, MPD will get $568 million dollars, or a 1.6% increase from last year's proposed budget. Ward 6 Council member Charles Allen, who chairs the committee that oversees MPD, has said this actually represents a decrease in police department funding because the mayor revised police spending upwards in the middle of this fiscal year.
The council's changes to the police budget followed an outpouring of testimony from residents and activists who wanted to see significant cuts to MPD's budget and reinvestment in other programs, including violence interruption programs and social services. The council's proposed budget takes the cuts from MPD and funnels them toward violence interruption programs, restorative justice initiatives and victims services work.
Activists who are pushing for greater cuts to policing and echoing calls from Black Lives Matter demonstrators across the country to "defund the police," said the council's proposal was an improvement from the mayor's original budget. But they say it does not go far enough to meet their goals.
"We saw the restoration of funding for violence interruption," Dominique Hazzard, an organizer with Black Youth Project 100, told DCist/WAMU last week. "We saw some funding put in for health support in our schools. But at the same time, you know, that's half of what we were asking for."
Activists with Black Lives Matter's D.C. chapter and other groups have repeatedly said that they want to see the city address violence by tackling its root causes, not through policing.
Allen told DCist/WAMU recently that he believed investments in violence interruption programs led by the Office of Neighborhood Safety and Engagement (ONSE) and the Office of the Attorney General could help alleviate gun violence.
"We know most violent crime is committed by a small percentage of vulnerable residents," Allen said. "If we can reach these folks and offer them a way out, we will prevent more senseless gun violence."
On the other hand, Bowser on Sunday raised concerns she has already brought up about the public safety consequences of reversing her proposed increases to police funding.
"I understand the Council's goal of responding to recent incidents involving excessive force by police officers in other jurisdictions and the national public sentiment regarding the need to reform police operations," Bowser wrote. "But changes to the MPD budget should be made in a more thoughtful and coordinated manner, and I am concerned that the Council's proposed cuts will make District residents less safe."
As part of its cuts, the council eliminated a $1.7 million increase to the police department's cadet program, a reduction Bowser's letter called "inexplicable." Bowser said the cadet program was an important tool for recruiting officers "of diverse racial backgrounds," who are "precisely the officers that we want in MPD to continue our focus on community policing."
In her letter, Bowser said she also had "significant concerns" with several other proposals from the D.C. Council, including tax changes that the Council agreed upon last week.
Bowser wrote that a proposed advertising tax was "ill-advised" because of its potential impact on local newspapers and Black-owned newspapers in particular — a concern that several councilmembers also raised during debate last week. She added that a proposed gas tax could disproportionately impact D.C. residents who have taken on rideshare and delivery gigs as new sources of income during the pandemic and resulting economic crisis. And Bowser opposed the council's decision to further cut a controversial tax credit for tech companies, saying that it would "negatively impact the District's ability to attract future businesses."
Councilmembers have argued for increasing revenues to bring more equity into the budget and to allocate additional resources for programs that target economically vulnerable residents hit hardest by the pandemic. (A majority of the council voted down last week a proposal to increase taxes modestly on wealthy residents.) The council used funds freed up from the tax changes to add money for a fund for undocumented workers, school-based mental health, affordable housing and rental assistance.
Bowser also questioned whether several spending increases proposed by the council, including some money set aside for the Cherry Blossom Festival and an arts project on New York Avenue, were advisable.
"Our fiscal outlook has not changed and the impacts of COVID-19 are still unfolding," Bowser wrote. "Many of the Council's proposed increases are offering District residents a false hope that the additional spending can be maintained."
Source: https://www.npr.org/local/305/2020/07/20/893117369/bowser-says-proposed-cuts-to-her-police-spending-plan-are-not-sound-budgeting
July 20, 2020 Jenny Gathright
D.C. Mayor Muriel Bowser claims the council's proposed police budget will reduce the number of MPD officers by more than 250 and incur additional overtime costs.
D.C. Mayor Muriel Bowser is criticizing the D.C. Council's proposed budget reductions to the Metropolitan Police Department, saying that they could lead to an increase in costs and should be examined by the city's chief financial officer.
Bowser wrote in a letter over the weekend that the D.C. Council's proposed budget, which it approved unanimously last week, is expected to result in a reduction of more than 250 police officers. That reduction, she claimed, would cause "a significant pressure on overtime." The council is scheduled to take additional votes on the budget and accompanying laws on Tuesday, July 21 and Tuesday, July 28.
D.C. Chief Financial Officer Jeffrey DeWitt must certify the city's budget as part of its approval process. Bowser wrote in her letter that she believed the overtime costs were an issue that could prevent DeWitt from signing off on the spending plan.
"It's one thing to say that you're going to reduce something," Bowser said in a press conference on Monday. "But if we discover eight months from now that it just caused an increase somewhere else — i.e. overtime — it's not sound budgeting."
In her budget proposal, Bowser increased MPD's budget by $18 million, or 3% over the previous year. The council's budget cut $9.6 million of the mayor's proposed increase. As it stands in the council's proposal, MPD will get $568 million dollars, or a 1.6% increase from last year's proposed budget. Ward 6 Council member Charles Allen, who chairs the committee that oversees MPD, has said this actually represents a decrease in police department funding because the mayor revised police spending upwards in the middle of this fiscal year.
The council's changes to the police budget followed an outpouring of testimony from residents and activists who wanted to see significant cuts to MPD's budget and reinvestment in other programs, including violence interruption programs and social services. The council's proposed budget takes the cuts from MPD and funnels them toward violence interruption programs, restorative justice initiatives and victims services work.
Activists who are pushing for greater cuts to policing and echoing calls from Black Lives Matter demonstrators across the country to "defund the police," said the council's proposal was an improvement from the mayor's original budget. But they say it does not go far enough to meet their goals.
"We saw the restoration of funding for violence interruption," Dominique Hazzard, an organizer with Black Youth Project 100, told DCist/WAMU last week. "We saw some funding put in for health support in our schools. But at the same time, you know, that's half of what we were asking for."
Activists with Black Lives Matter's D.C. chapter and other groups have repeatedly said that they want to see the city address violence by tackling its root causes, not through policing.
Allen told DCist/WAMU recently that he believed investments in violence interruption programs led by the Office of Neighborhood Safety and Engagement (ONSE) and the Office of the Attorney General could help alleviate gun violence.
"We know most violent crime is committed by a small percentage of vulnerable residents," Allen said. "If we can reach these folks and offer them a way out, we will prevent more senseless gun violence."
On the other hand, Bowser on Sunday raised concerns she has already brought up about the public safety consequences of reversing her proposed increases to police funding.
"I understand the Council's goal of responding to recent incidents involving excessive force by police officers in other jurisdictions and the national public sentiment regarding the need to reform police operations," Bowser wrote. "But changes to the MPD budget should be made in a more thoughtful and coordinated manner, and I am concerned that the Council's proposed cuts will make District residents less safe."
As part of its cuts, the council eliminated a $1.7 million increase to the police department's cadet program, a reduction Bowser's letter called "inexplicable." Bowser said the cadet program was an important tool for recruiting officers "of diverse racial backgrounds," who are "precisely the officers that we want in MPD to continue our focus on community policing."
In her letter, Bowser said she also had "significant concerns" with several other proposals from the D.C. Council, including tax changes that the Council agreed upon last week.
Bowser wrote that a proposed advertising tax was "ill-advised" because of its potential impact on local newspapers and Black-owned newspapers in particular — a concern that several councilmembers also raised during debate last week. She added that a proposed gas tax could disproportionately impact D.C. residents who have taken on rideshare and delivery gigs as new sources of income during the pandemic and resulting economic crisis. And Bowser opposed the council's decision to further cut a controversial tax credit for tech companies, saying that it would "negatively impact the District's ability to attract future businesses."
Councilmembers have argued for increasing revenues to bring more equity into the budget and to allocate additional resources for programs that target economically vulnerable residents hit hardest by the pandemic. (A majority of the council voted down last week a proposal to increase taxes modestly on wealthy residents.) The council used funds freed up from the tax changes to add money for a fund for undocumented workers, school-based mental health, affordable housing and rental assistance.
Bowser also questioned whether several spending increases proposed by the council, including some money set aside for the Cherry Blossom Festival and an arts project on New York Avenue, were advisable.
"Our fiscal outlook has not changed and the impacts of COVID-19 are still unfolding," Bowser wrote. "Many of the Council's proposed increases are offering District residents a false hope that the additional spending can be maintained."
Source: https://www.npr.org/local/305/2020/07/20/893117369/bowser-says-proposed-cuts-to-her-police-spending-plan-are-not-sound-budgeting
Ala. voter ID requirement upheld by 11th Circuit
The US Court of Appeals for the 11th Circuit has ruled in favor of an Alabama law requiring photo identification to vote in person or absentee, saying that the law "was driven by the need to address well-documented and public cases of voter fraud that occurred in Alabama." Opponents argued that the measure was racially discriminatory and unconstitutional, but the court held that the law is not overly burdensome.
Full Story: Courthouse News Service (7/21) https://www.courthousenews.com/naacp-loses-11th-circuit-fight-against-alabama-voter-id-law/
The US Court of Appeals for the 11th Circuit has ruled in favor of an Alabama law requiring photo identification to vote in person or absentee, saying that the law "was driven by the need to address well-documented and public cases of voter fraud that occurred in Alabama." Opponents argued that the measure was racially discriminatory and unconstitutional, but the court held that the law is not overly burdensome.
Full Story: Courthouse News Service (7/21) https://www.courthousenews.com/naacp-loses-11th-circuit-fight-against-alabama-voter-id-law/
Ore. DOJ files lawsuit over feds' response to protests
The Oregon Justice Department has filed a lawsuit alleging that the civil rights of protesters in Portland have been violated by the US Department of Homeland Security, US Customs and Border Protection, the US Marshals Service and the Federal Protective Service. The Oregon DOJ said the federal agencies are detaining protesters without probable cause, and it is seeking a temporary restraining order. It seems likely that the key issue in the litigation is simply whether or not probable cause standards are met, not whether federal officers are exempt from probable cause standards. DR
A copy of the Complaint is here:
http://opb-imgserve-production.s3-website-us-west-2.amazonaws.com/original/ag_rosenblum_xxxx_updated_complaint_1595086491349.pdf
Excerpt:
On information and belief, federal law enforcement officers including John Does 1-10 have been using unmarked vehicles to drive around downtown Portland, detain protesters, and place them into the officers’ unmarked vehicles, removing them from public without either arresting them or stating the basis for an arrest, since at least Tuesday, July 14. The identity of the officers is not known, nor is their agency affiliation, according to videos and reports that the officers in question wear military fatigues with patches simply reading “POLICE,” with no other identifying information.
In one widely reported incident, in the early hours of Wednesday, July 15, Mark Pettibone alleges that he was confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, and drove him through downtown until unloading him into a building, which is believed to have been the Mark O. Hatfield United States Courthouse. Pettibone alleges that he was put into a cell and read his Miranda rights, but was not told why he was arrested, nor was he provided with a lawyer. He alleges that he was released without any paperwork, citation, or record of his arrest. U.S. Customs and Border Protection has been reported by the Washington Post to have taken responsibility for pulling Mr. Pettibone off the streets of Portland and detaining him.
On information and belief, unidentified federal officers including John Does 1-10 have likewise detained other citizens off the Portland streets, without warning or explanation, without a warrant, and without providing any way to determine who is directing this action. There is no way of knowing, in the absence of those officers identifying themselves, whether only U.S. Customs and Border Protection is engaging in these actions. The Marshals Service and other Homeland Security agencies reportedly have been sent to Portland to respond to the protests against racial inequality.
Oregonians have the right to walk through downtown Portland at night, and in the early hours of the morning. Ordinarily, a person exercising his right to walk through the streets of Portland who is confronted by anonymous men in military-type fatigues and ordered into an unmarked van can reasonably assume that he is being kidnapped and is the victim of a crime.
Defendants are injuring the occupants of Portland by taking away citizens’ ability to determine whether they are being kidnapped by militia or other malfeasants dressed in paramilitary gear (such that they may engage in self-defense to the fullest extent permitted by law) or are being arrested (such that resisting might amount to a crime).
State law enforcement officers are not being consulted or coordinated with on these federal detentions, and could expend unnecessary resources responding to reports of an abduction, when federal agents snatch people walking through downtown Portland without explanation or identification.
Defendants’ tactics violate the rights of all people detained without a warrant or a basis for arrest, and violate the state’s sovereign interests in enforcing its laws and in protecting people within its borders from kidnap and false arrest, without serving any legitimate federal law enforcement purpose.
The Oregon Justice Department has filed a lawsuit alleging that the civil rights of protesters in Portland have been violated by the US Department of Homeland Security, US Customs and Border Protection, the US Marshals Service and the Federal Protective Service. The Oregon DOJ said the federal agencies are detaining protesters without probable cause, and it is seeking a temporary restraining order. It seems likely that the key issue in the litigation is simply whether or not probable cause standards are met, not whether federal officers are exempt from probable cause standards. DR
A copy of the Complaint is here:
http://opb-imgserve-production.s3-website-us-west-2.amazonaws.com/original/ag_rosenblum_xxxx_updated_complaint_1595086491349.pdf
Excerpt:
On information and belief, federal law enforcement officers including John Does 1-10 have been using unmarked vehicles to drive around downtown Portland, detain protesters, and place them into the officers’ unmarked vehicles, removing them from public without either arresting them or stating the basis for an arrest, since at least Tuesday, July 14. The identity of the officers is not known, nor is their agency affiliation, according to videos and reports that the officers in question wear military fatigues with patches simply reading “POLICE,” with no other identifying information.
In one widely reported incident, in the early hours of Wednesday, July 15, Mark Pettibone alleges that he was confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, and drove him through downtown until unloading him into a building, which is believed to have been the Mark O. Hatfield United States Courthouse. Pettibone alleges that he was put into a cell and read his Miranda rights, but was not told why he was arrested, nor was he provided with a lawyer. He alleges that he was released without any paperwork, citation, or record of his arrest. U.S. Customs and Border Protection has been reported by the Washington Post to have taken responsibility for pulling Mr. Pettibone off the streets of Portland and detaining him.
On information and belief, unidentified federal officers including John Does 1-10 have likewise detained other citizens off the Portland streets, without warning or explanation, without a warrant, and without providing any way to determine who is directing this action. There is no way of knowing, in the absence of those officers identifying themselves, whether only U.S. Customs and Border Protection is engaging in these actions. The Marshals Service and other Homeland Security agencies reportedly have been sent to Portland to respond to the protests against racial inequality.
Oregonians have the right to walk through downtown Portland at night, and in the early hours of the morning. Ordinarily, a person exercising his right to walk through the streets of Portland who is confronted by anonymous men in military-type fatigues and ordered into an unmarked van can reasonably assume that he is being kidnapped and is the victim of a crime.
Defendants are injuring the occupants of Portland by taking away citizens’ ability to determine whether they are being kidnapped by militia or other malfeasants dressed in paramilitary gear (such that they may engage in self-defense to the fullest extent permitted by law) or are being arrested (such that resisting might amount to a crime).
State law enforcement officers are not being consulted or coordinated with on these federal detentions, and could expend unnecessary resources responding to reports of an abduction, when federal agents snatch people walking through downtown Portland without explanation or identification.
Defendants’ tactics violate the rights of all people detained without a warrant or a basis for arrest, and violate the state’s sovereign interests in enforcing its laws and in protecting people within its borders from kidnap and false arrest, without serving any legitimate federal law enforcement purpose.
Administration on Portland: From Press Briefing by Press Secretary Kayleigh McEnany
Issued on: July 21, 2020
"And 40 U.S. Code 1315 gives DHS the ability to deputize officers in any department or agency, like ICE, Customs and Border Patrol, and Secret Service. Quote, “As officers and agents,” they can be deputized for the duty of — “in connection with the protection of property owned or occupied by the federal government and persons on that property.” And when a federal courthouse is being lit on fire, commercial fireworks being shot at it, being shot at the officers, I think that that falls pretty well within the limits of 40 U.S. Code 1315."
https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-kayleigh-mcenany-072120/
Administration on Portland: From Statement by Homeland Security Chief Wolf
Wolf pointed out that there have been “over 50 nights of violent activity targeting federal facilities and federal law enforcement officers,” and added that “it needs to stop.”
“DHS is not going to back down from our responsibilities,” he continued. “We are not escalating, we are protecting … federal facilities.”
He noted that “it's our job” to protect federal property.
“It’s what Congress told us to do time and time again and so we're going to do that,” Wolf said. “We're going to investigate and we're going to hold those accountable. We’re going to arrest them and hold those accountable that are doing this destruction.”
Source: https://www.foxnews.com/media/dhs-chad-wolf-portland-mayor-feds-unrest
Issued on: July 21, 2020
"And 40 U.S. Code 1315 gives DHS the ability to deputize officers in any department or agency, like ICE, Customs and Border Patrol, and Secret Service. Quote, “As officers and agents,” they can be deputized for the duty of — “in connection with the protection of property owned or occupied by the federal government and persons on that property.” And when a federal courthouse is being lit on fire, commercial fireworks being shot at it, being shot at the officers, I think that that falls pretty well within the limits of 40 U.S. Code 1315."
https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-kayleigh-mcenany-072120/
Administration on Portland: From Statement by Homeland Security Chief Wolf
Wolf pointed out that there have been “over 50 nights of violent activity targeting federal facilities and federal law enforcement officers,” and added that “it needs to stop.”
“DHS is not going to back down from our responsibilities,” he continued. “We are not escalating, we are protecting … federal facilities.”
He noted that “it's our job” to protect federal property.
“It’s what Congress told us to do time and time again and so we're going to do that,” Wolf said. “We're going to investigate and we're going to hold those accountable. We’re going to arrest them and hold those accountable that are doing this destruction.”
Source: https://www.foxnews.com/media/dhs-chad-wolf-portland-mayor-feds-unrest
From the DC AG:
Major Environmental Protection Win:
Last week, our office announced its largest environmental recovery to date: Monsanto, an agrochemical company, will pay $52 million to clean up toxic pollution in the District.
We sued Monsanto in May to hold the company accountable for toxic polychlorinated biphenyls (PCBs) that damaged our natural resources—including the Anacostia and Potomac Rivers—and put the health of residents at risk. Monsanto manufactured over 99 percent of the PCBs ever used in the U.S. before the chemical was banned in 1979. We alleged the company knowingly produced, promoted, and sold toxic and harmful products and misled consumers and regulators to maximize profits.
Over the last two years and with support from the D.C. Council, OAG has deployed additional resources to protect our environment and the health of District residents. OAG is deeply involved in the District’s ongoing cleanup of the Anacostia River and recovered $2.5 million from a fossil fuel energy company that illegally polluted the river.
Every District resident deserves clean air to breathe, clean water to drink, and a healthy environment to live in. If you are aware of violations of the District’s environmental laws, please report it to the District’s Department of Energy and Environment by calling 311 or using the 311 mobile app.
Karl A. Racine
Attorney General
Holding Neglectful Landlords Accountable
Forest Ridge/The Vista Apartments in Ward 8.
Last week, OAG secured several settlements against neglectful D.C. landlords in Wards 8 and 4 for unsafe and unhealthy housing conditions. Castle Management will pay $3.5 million to D.C. and Ward 8 tenants who were forced to live with vermin infestations, water damage and mold, and security defects that led to persistent gun violence. Ward 8’s Good Hope Laundromat is also required to implement more security measures and pay up to $24k in fines to address rampant drug-related activity on the property. The owners and property managers of Ward 4’s 220 Hamilton St. apartment complex are required to make property repairs and pay a combined total of $50k as a penalty for violating D.C. housing code.
Cure the Streets Spotlight:
OAG is launching a new series called “Cure the Streets Spotlight” where we will highlight Cure the Streets staff who are interrupting violence to make their communities safer. Cotey Wynn is a lifelong Trinidad resident and a Program Supervisor in Ward 5. Read about the challenges that Cotey has overcome and his commitment to being a respected professional, a loving father, a devoted friend, and a pillar to the community. Read about Cotey.
WIN: Stopping Deportation of International Students
AG Racine and a coalition of Attorneys General sued the Trump administration last week to stop a new rule that would have forced thousands of students to leave the U.S. if their all of their classes were online. One day after the lawsuit was filed, the Administration rescinded its policy. This reckless and unlawful rule would have upended months of planning by colleges and universities in D.C. and across the country to limit in-person classes during COVID-19 and put the health and safety of students and educators at risk.
Major Environmental Protection Win:
Last week, our office announced its largest environmental recovery to date: Monsanto, an agrochemical company, will pay $52 million to clean up toxic pollution in the District.
We sued Monsanto in May to hold the company accountable for toxic polychlorinated biphenyls (PCBs) that damaged our natural resources—including the Anacostia and Potomac Rivers—and put the health of residents at risk. Monsanto manufactured over 99 percent of the PCBs ever used in the U.S. before the chemical was banned in 1979. We alleged the company knowingly produced, promoted, and sold toxic and harmful products and misled consumers and regulators to maximize profits.
Over the last two years and with support from the D.C. Council, OAG has deployed additional resources to protect our environment and the health of District residents. OAG is deeply involved in the District’s ongoing cleanup of the Anacostia River and recovered $2.5 million from a fossil fuel energy company that illegally polluted the river.
Every District resident deserves clean air to breathe, clean water to drink, and a healthy environment to live in. If you are aware of violations of the District’s environmental laws, please report it to the District’s Department of Energy and Environment by calling 311 or using the 311 mobile app.
Karl A. Racine
Attorney General
Holding Neglectful Landlords Accountable
Forest Ridge/The Vista Apartments in Ward 8.
Last week, OAG secured several settlements against neglectful D.C. landlords in Wards 8 and 4 for unsafe and unhealthy housing conditions. Castle Management will pay $3.5 million to D.C. and Ward 8 tenants who were forced to live with vermin infestations, water damage and mold, and security defects that led to persistent gun violence. Ward 8’s Good Hope Laundromat is also required to implement more security measures and pay up to $24k in fines to address rampant drug-related activity on the property. The owners and property managers of Ward 4’s 220 Hamilton St. apartment complex are required to make property repairs and pay a combined total of $50k as a penalty for violating D.C. housing code.
Cure the Streets Spotlight:
OAG is launching a new series called “Cure the Streets Spotlight” where we will highlight Cure the Streets staff who are interrupting violence to make their communities safer. Cotey Wynn is a lifelong Trinidad resident and a Program Supervisor in Ward 5. Read about the challenges that Cotey has overcome and his commitment to being a respected professional, a loving father, a devoted friend, and a pillar to the community. Read about Cotey.
WIN: Stopping Deportation of International Students
AG Racine and a coalition of Attorneys General sued the Trump administration last week to stop a new rule that would have forced thousands of students to leave the U.S. if their all of their classes were online. One day after the lawsuit was filed, the Administration rescinded its policy. This reckless and unlawful rule would have upended months of planning by colleges and universities in D.C. and across the country to limit in-person classes during COVID-19 and put the health and safety of students and educators at risk.
TikTok Plans to Hire 10,000 Employees In America
Ashley King
July 22, 2020
TikTok’s meteoric growth around the globe has brought concerns over censorship and moderation. TikTok has been caught red-handed censoring things China deems inappropriate – like fat, ugly, poor, and gay people. Since then, ByteDance has continued its mission to separate TikTok.
Kevin Mayer, who Peter Navarro called an “American puppet,” recently joined the company as CEO. Mayer previously managed Disney’s streaming division and the launch of Disney+. As part of its stateside takeover, the company has launched splashy offices in Los Angeles and Times Square in New York City. Now, a TikTok spokesperson says the company plans to hire 10,000 employees in the U.S. over the next three years.
“In 2020, TikTok tripled the number of employees working in the U.S., and we plan to add another 10,000 jobs here over the next three years,” the TikTok spokesperson confirmed. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy.”
Back in March, ByteDance said it hopes to have 100,000 global employees on its payroll by the end of 2020. By comparison, Facebook employs 44,942 people, and Google employs 118,899, according to 2019 data.
ByteDance likely hopes the jobs announcement will deter the Trump admin from following through with a TikTok ban.
The United States is clamping down on Chinese technology companies like ByteDance and Huawei. The Trump administration says it is “looking at” a TikTok ban and whether that’s feasible in the U.S. The administration has also taken drastic steps against Huawei, banning it from selling equipment to the U.S. telecoms. Huawei is also subject to strict sanctions due to allegations of spying.
The U.S. government is also conducting a national security review of the acquisition of Musical.ly. ByteDance acquired Musical.ly back in 2017 and merged it with TikTok. Government officials are concerned that ByteDance may be censoring politically-sensitive content. Officials have also announced concerns about China’s access to user data.
Several branches of the U.S. military, including the Army, Navy, and Marines, have a TikTok ban in place already. There’s even a bill pitched in Congress to extend that ban to all government-owned devices.
ByteDance’s plan to create more American jobs may throw a wrench in the Trump admin’s plans for a TikTok ban. The president is eager to be seen as a job creator in the U.S., and banning TikTok, of course, will do the opposite of that.
Source: https://www.digitalmusicnews.com/2020/07/22/tiktok-hiring-despite-ban/
Ashley King
July 22, 2020
TikTok’s meteoric growth around the globe has brought concerns over censorship and moderation. TikTok has been caught red-handed censoring things China deems inappropriate – like fat, ugly, poor, and gay people. Since then, ByteDance has continued its mission to separate TikTok.
Kevin Mayer, who Peter Navarro called an “American puppet,” recently joined the company as CEO. Mayer previously managed Disney’s streaming division and the launch of Disney+. As part of its stateside takeover, the company has launched splashy offices in Los Angeles and Times Square in New York City. Now, a TikTok spokesperson says the company plans to hire 10,000 employees in the U.S. over the next three years.
“In 2020, TikTok tripled the number of employees working in the U.S., and we plan to add another 10,000 jobs here over the next three years,” the TikTok spokesperson confirmed. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy.”
Back in March, ByteDance said it hopes to have 100,000 global employees on its payroll by the end of 2020. By comparison, Facebook employs 44,942 people, and Google employs 118,899, according to 2019 data.
ByteDance likely hopes the jobs announcement will deter the Trump admin from following through with a TikTok ban.
The United States is clamping down on Chinese technology companies like ByteDance and Huawei. The Trump administration says it is “looking at” a TikTok ban and whether that’s feasible in the U.S. The administration has also taken drastic steps against Huawei, banning it from selling equipment to the U.S. telecoms. Huawei is also subject to strict sanctions due to allegations of spying.
The U.S. government is also conducting a national security review of the acquisition of Musical.ly. ByteDance acquired Musical.ly back in 2017 and merged it with TikTok. Government officials are concerned that ByteDance may be censoring politically-sensitive content. Officials have also announced concerns about China’s access to user data.
Several branches of the U.S. military, including the Army, Navy, and Marines, have a TikTok ban in place already. There’s even a bill pitched in Congress to extend that ban to all government-owned devices.
ByteDance’s plan to create more American jobs may throw a wrench in the Trump admin’s plans for a TikTok ban. The president is eager to be seen as a job creator in the U.S., and banning TikTok, of course, will do the opposite of that.
Source: https://www.digitalmusicnews.com/2020/07/22/tiktok-hiring-despite-ban/
The DC Council’s Coronavirus Support Emergency Amendment Act of 2020 and landlord- tenant rights
Rent Payment Program. Effective as of May 19th, for the remaining period of the Emergency and one year thereafter (program period), all landlords (no matter the number of units leased) are required to (i) notify their residential and commercial retail tenants of the availability, terms and application process for a rent payment program and (ii) make the program available to eligible tenants.
Evictions. Effective as of March 11th until 60 days after the end of the Emergency, no landlord may file complaints for evictions of residential or commercial tenants.
Credit: https://www.arnoldporter.com/en/perspectives/publications/2020/06/dc-council-provisions-for-the-real-estate
Rent Payment Program. Effective as of May 19th, for the remaining period of the Emergency and one year thereafter (program period), all landlords (no matter the number of units leased) are required to (i) notify their residential and commercial retail tenants of the availability, terms and application process for a rent payment program and (ii) make the program available to eligible tenants.
- Eligible tenants include residential and commercial retail tenants (excluding franchisees of non-District residents).
- To qualify, eligible tenants must demonstrate that they are suffering a financial hardship resulting directly or indirectly from the Emergency and that such hardship would make the tenant unable to qualify to rent the space based on the same criteria that were applied at the time the tenant was approved to rent the space.
- The program must grant a deferral of "gross rent" due until the earlier of the end of the program period or the end of the lease term. In other words, this seems to grant tenants the right to defer rent for at least 13 months.
- The payback period must be for at least one year unless the tenant requests a shorter period, with payments in equal monthly installments unless a different schedule is requested by the tenant. The legislation leaves unclear what happens if a tenant's lease term expires between May 19, 2020 and the end of the payback period.
- During the program period, unless the landlord has offered and approved a rent payment plan pursuant to the Consolidated Bill (and the tenant defaults on such plan), the landlord is prohibited from filing any collection lawsuit or eviction for non-payment of rent against a tenant in default.
Evictions. Effective as of March 11th until 60 days after the end of the Emergency, no landlord may file complaints for evictions of residential or commercial tenants.
Credit: https://www.arnoldporter.com/en/perspectives/publications/2020/06/dc-council-provisions-for-the-real-estate
How has China grown to dominate the market for rare earth metals even though it only possesses one-third of known global deposits?
https://www.nbr.org/publication/chinas-control-of-rare-earth-metals/
Excerpt:
China has dominated the production of rare earth metals since the 1990s, driven largely by two factors: low prices and state-backed investment in infrastructure and technology. In prior decades, the United States had dominated this market, largely through production at the Mountain Pass mine in California. However, as Chinese output began to reach levels that could fulfill global demand at a much lower price point, the United States was unable to compete. By the 2000s, China had near complete domination of rare earths production.
This dominance was not achieved by prices alone. The Chinese party-state also used industrial policy starting in the 1980s to develop expertise in the extraction, separation, and refinement of rare earths. Chinese industrial policy in fact mirrored the U.S. approach in the 1950s and 1960s, when the Ames Laboratory and Rare-earth Information Center (RIC) used state investment to bolster the efforts of the private sector.
https://www.nbr.org/publication/chinas-control-of-rare-earth-metals/
Excerpt:
China has dominated the production of rare earth metals since the 1990s, driven largely by two factors: low prices and state-backed investment in infrastructure and technology. In prior decades, the United States had dominated this market, largely through production at the Mountain Pass mine in California. However, as Chinese output began to reach levels that could fulfill global demand at a much lower price point, the United States was unable to compete. By the 2000s, China had near complete domination of rare earths production.
This dominance was not achieved by prices alone. The Chinese party-state also used industrial policy starting in the 1980s to develop expertise in the extraction, separation, and refinement of rare earths. Chinese industrial policy in fact mirrored the U.S. approach in the 1950s and 1960s, when the Ames Laboratory and Rare-earth Information Center (RIC) used state investment to bolster the efforts of the private sector.
In honor of John Lewis: John Lewis’ speech at the March on Washington - "complete the revolution of 1776." https://www.youtube.com/watch?v=tFs1eTsokJg&feature=youtu.be
The March on Washington was held in Washington, D.C. on August 28, 1963 to advocate for the civil and economic rights of African Americans. At the march, Martin Luther King Jr. delivered his historic “I Have a Dream” speech in which he called for an end to racism. John Lewis of SNCC also spoke at the event. His speech pointed out the injustices visited on African Americans and focused on the need of government to expand the civil and economic rights and opportunities of all Americans.
The March on Washington was held in Washington, D.C. on August 28, 1963 to advocate for the civil and economic rights of African Americans. At the march, Martin Luther King Jr. delivered his historic “I Have a Dream” speech in which he called for an end to racism. John Lewis of SNCC also spoke at the event. His speech pointed out the injustices visited on African Americans and focused on the need of government to expand the civil and economic rights and opportunities of all Americans.
U.S. to pay Pfizer, BioNTech $1.95 billion for 100 million COVID-19 vaccine doses
Michael Erman and Ankur Banerjee
ReutersJuly 22, 2020
(Reuters) - The U.S. government will pay $1.95 billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc <PFE.N> and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.
The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.
Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.
Under the agreement, the government would also have an option to procure an additional 500 million doses. Pfizer said the price for the additional doses if ordered would be negotiated separately if the U.S. orders them.
The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.
The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.
The deal suggests a U.S. price of $39 for a two-dose regimen.
The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.
The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA)vaccine.
The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drugmakers to secure supplies of various candidates. Whether any will succeed remains far from clear.
The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.
Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc , AstraZeneca Plc .L> and Novavax Inc .
Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.
The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.
Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.
On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.
Pfizer shares were up 4%, while BioNTech's U.S.-listed shares were up 13%.
Source: https://finance.yahoo.com/news/u-government-engages-pfizer-produce-111948798.html
Michael Erman and Ankur Banerjee
ReutersJuly 22, 2020
(Reuters) - The U.S. government will pay $1.95 billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc <PFE.N> and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.
The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.
Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.
Under the agreement, the government would also have an option to procure an additional 500 million doses. Pfizer said the price for the additional doses if ordered would be negotiated separately if the U.S. orders them.
The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.
The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.
The deal suggests a U.S. price of $39 for a two-dose regimen.
The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.
The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA)vaccine.
The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drugmakers to secure supplies of various candidates. Whether any will succeed remains far from clear.
The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.
Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc , AstraZeneca Plc .L> and Novavax Inc .
Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.
The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.
Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.
On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.
Pfizer shares were up 4%, while BioNTech's U.S.-listed shares were up 13%.
Source: https://finance.yahoo.com/news/u-government-engages-pfizer-produce-111948798.html
Elisabeth Rosenthal on why COVID-19 vaccines are likely to yield high profit to pharmaceutical companies, and be expensive
Health care industry expert Elisabeth Rosenthal warns that a future COVID-19 vaccine is likely to be a high profit and high priced product for pharmaceutical companies. The consequences are likely to be high prices charged to individuals, health insurers, and government, with distribution that will be inefficient from a public health perspective. See www.nytimes.com/2020/07/06/opinion/...
Rosenthal points out that a COVID-19 vaccine will be high priced because it will be covered by patent protection, and very likely pharmaceutical companies will follow the strategy of high prices that has become the industry standard for vaccines. Examples are meningitis B vaccine and shingles vaccine, which have a retail cost of $300 to $400 for a full course.
The potential for commercial profiteering from a COVID-19 vaccine is in contrast to what happened with the crucial polio vaccine of an earlier era. In the mid-1950s the developer of the successful polio vaccine, Jonas Salk, did not take a patent on the vaccine. The March of Dimes Foundation covered the drug cost for a free national vaccination program.
Rosenthal discusses several ways in which high COVID-19 vaccine prices could be moderated. She mentions recent legislative proposals to limit prices. They are the Make Medications Affordable by Preventing Pandemic Price Gouging Act (MMAPPP) Act of 2020, sponsored by Rep. Jan Schakowsky (D-Ill.), and Taxpayer Research and Coronavirus Knowledge (TRACK) Act, sponsored by Rep. Lloyd Doggett (D-Texas). According to a press release, these proposals establish "comprehensive protections against drug price gouging" of COVID-19 treatments. The bills would prohibit monopolies by pharmaceutical companies for taxpayer-funded COVID-19 drugs, require the federal government to mandate affordable pricing for treatments and vaccines, and require drug makers to reveal their total expenditures on a COVID-19 drug, including what percentage were derived from federal funds.
These recent legislative proposals mix two approaches to controlling pricing. One approach focuses on regulation of price gouging. Another approach focuses on the role of the federal government as the source of crucial research and funding. The thought is that since the federal government and taxpayers have provided funding for the development of pharmaceuticals, they should be repaid by the pharmaceutical companies that market the final commercial product.
This issue is not new, and the statutory law already provides some authority for the federal government to assert pricing authority where the government has provided funding or intellectual property. A relevant controversy from the past involved Zidovudine (AZT, Retrovir) an anti-HIV drug. These drugs were developed with substantial federal government participation but initially were sold by pharmaceutical companies at high prices that were unaffordable for many. Advocates argued that anti- HIV drugs should not be too scarce or too expensive. They were concerned that private commercialization of government supported drug development was unfair.
As Elisabeth Rosenthal points out, the federal government has some existing authority to protect its rights as an investor by asserting "march-in" authority under the Bayh-Dole Act of 2000. That statutory authority permits the government to insist that federally developed vaccine technology be more freely and inexpensively available to others, including the federal government. See the article on march-in authority by Linlin Tian at www.jdsupra.com/legalnews/...
As Rosenthal says, the federal government's "march in'' authority is seldom used, and may have already been waived with regard to some pharmaceutical companies developing COVID-19 vaccines. That would be unfortunate; it would be better if the statutory authority to protect the public interest were wisely used.
By Don Allen Resnikoff, who takes responsibility for opinions expressed
Health care industry expert Elisabeth Rosenthal warns that a future COVID-19 vaccine is likely to be a high profit and high priced product for pharmaceutical companies. The consequences are likely to be high prices charged to individuals, health insurers, and government, with distribution that will be inefficient from a public health perspective. See www.nytimes.com/2020/07/06/opinion/...
Rosenthal points out that a COVID-19 vaccine will be high priced because it will be covered by patent protection, and very likely pharmaceutical companies will follow the strategy of high prices that has become the industry standard for vaccines. Examples are meningitis B vaccine and shingles vaccine, which have a retail cost of $300 to $400 for a full course.
The potential for commercial profiteering from a COVID-19 vaccine is in contrast to what happened with the crucial polio vaccine of an earlier era. In the mid-1950s the developer of the successful polio vaccine, Jonas Salk, did not take a patent on the vaccine. The March of Dimes Foundation covered the drug cost for a free national vaccination program.
Rosenthal discusses several ways in which high COVID-19 vaccine prices could be moderated. She mentions recent legislative proposals to limit prices. They are the Make Medications Affordable by Preventing Pandemic Price Gouging Act (MMAPPP) Act of 2020, sponsored by Rep. Jan Schakowsky (D-Ill.), and Taxpayer Research and Coronavirus Knowledge (TRACK) Act, sponsored by Rep. Lloyd Doggett (D-Texas). According to a press release, these proposals establish "comprehensive protections against drug price gouging" of COVID-19 treatments. The bills would prohibit monopolies by pharmaceutical companies for taxpayer-funded COVID-19 drugs, require the federal government to mandate affordable pricing for treatments and vaccines, and require drug makers to reveal their total expenditures on a COVID-19 drug, including what percentage were derived from federal funds.
These recent legislative proposals mix two approaches to controlling pricing. One approach focuses on regulation of price gouging. Another approach focuses on the role of the federal government as the source of crucial research and funding. The thought is that since the federal government and taxpayers have provided funding for the development of pharmaceuticals, they should be repaid by the pharmaceutical companies that market the final commercial product.
This issue is not new, and the statutory law already provides some authority for the federal government to assert pricing authority where the government has provided funding or intellectual property. A relevant controversy from the past involved Zidovudine (AZT, Retrovir) an anti-HIV drug. These drugs were developed with substantial federal government participation but initially were sold by pharmaceutical companies at high prices that were unaffordable for many. Advocates argued that anti- HIV drugs should not be too scarce or too expensive. They were concerned that private commercialization of government supported drug development was unfair.
As Elisabeth Rosenthal points out, the federal government has some existing authority to protect its rights as an investor by asserting "march-in" authority under the Bayh-Dole Act of 2000. That statutory authority permits the government to insist that federally developed vaccine technology be more freely and inexpensively available to others, including the federal government. See the article on march-in authority by Linlin Tian at www.jdsupra.com/legalnews/...
As Rosenthal says, the federal government's "march in'' authority is seldom used, and may have already been waived with regard to some pharmaceutical companies developing COVID-19 vaccines. That would be unfortunate; it would be better if the statutory authority to protect the public interest were wisely used.
By Don Allen Resnikoff, who takes responsibility for opinions expressed
Does Chief US Supreme Court Justice Roberts want to get the government out of the business of counting by race?
That's what respected US Supreme Court journalist Linda Greenhouse suggests in a recent column at https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage Her brief comments about racial equity issues are part of an article focused largely on cases about religion. Her comments about racial equity issues are based on some earlier cases, but they resonate at our current moment of broadened attention to racial justice issues:
She writes that one of Roberts' goals as Chief Justice concerning racial issues is:
getting the government out of the business of counting by race by rejecting both affirmative action that increases opportunity for racial minorities and federally policed guardrails to prevent the suppression of minority votes. His early years on the job reflected this deep commitment, first with the Parents Involved case in 2006, overturning efforts by two school districts to maintain integration through race-conscious school assignment measures [see https://www.oyez.org/cases/2006/05-908] , and, six years later, with Shelby County v. Holder, which cut the heart out of the Voting Rights Act of 1965. [see https://www.oyez.org/cases/2012/12-96]
https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage
That's what respected US Supreme Court journalist Linda Greenhouse suggests in a recent column at https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage Her brief comments about racial equity issues are part of an article focused largely on cases about religion. Her comments about racial equity issues are based on some earlier cases, but they resonate at our current moment of broadened attention to racial justice issues:
She writes that one of Roberts' goals as Chief Justice concerning racial issues is:
getting the government out of the business of counting by race by rejecting both affirmative action that increases opportunity for racial minorities and federally policed guardrails to prevent the suppression of minority votes. His early years on the job reflected this deep commitment, first with the Parents Involved case in 2006, overturning efforts by two school districts to maintain integration through race-conscious school assignment measures [see https://www.oyez.org/cases/2006/05-908] , and, six years later, with Shelby County v. Holder, which cut the heart out of the Voting Rights Act of 1965. [see https://www.oyez.org/cases/2012/12-96]
https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage
Complaint in states' lawsuit against education department over borrower defense
https://int.nyt.com/data/documenttools/states-lawsuit-against-education-department-over-borrower-defense/59a7f80eac022971/full.pdf
Excerpt from the Complaint (lightly edited for convenient display):
In 2019, ED issued new regulations (the “2019 Rule”) governing the defenses borrowers may assert to the repayment of their federal student loans. The 2019 Rule for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans.
In fact, ED eliminated all available defenses, except just one: “a misrepresentation . . . of material fact upon which the borrower reasonably relied in deciding to obtain” a federal student loan. 84 Fed. Reg. 49,803.
Even after drastically limiting available defenses, ED [the Department of Education] imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully.
Amongst other arbitrary impediments, the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth. A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake.
Moreover, the 2019 Rule requires each and every borrower to meet this insurmountable burden on their own. Notwithstanding the fact that borrower defense claims frequently involve common issues of fact, the 2019 Rule arbitrarily eliminates any group discharge process.
In reality, the 2019 Rule eliminates all viable defenses to repayment, contrary to Congress’s mandate to ED. ED does not even fully deny this fact, and states that one of the primary purposes of the 2019 Rule is to diminish successful borrower defense claims even where, as ED concedes, the school has engaged in actionable misconduct.
https://int.nyt.com/data/documenttools/states-lawsuit-against-education-department-over-borrower-defense/59a7f80eac022971/full.pdf
Excerpt from the Complaint (lightly edited for convenient display):
In 2019, ED issued new regulations (the “2019 Rule”) governing the defenses borrowers may assert to the repayment of their federal student loans. The 2019 Rule for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans.
In fact, ED eliminated all available defenses, except just one: “a misrepresentation . . . of material fact upon which the borrower reasonably relied in deciding to obtain” a federal student loan. 84 Fed. Reg. 49,803.
Even after drastically limiting available defenses, ED [the Department of Education] imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully.
Amongst other arbitrary impediments, the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth. A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake.
Moreover, the 2019 Rule requires each and every borrower to meet this insurmountable burden on their own. Notwithstanding the fact that borrower defense claims frequently involve common issues of fact, the 2019 Rule arbitrarily eliminates any group discharge process.
In reality, the 2019 Rule eliminates all viable defenses to repayment, contrary to Congress’s mandate to ED. ED does not even fully deny this fact, and states that one of the primary purposes of the 2019 Rule is to diminish successful borrower defense claims even where, as ED concedes, the school has engaged in actionable misconduct.
Texas AG Sends Another Round Of Questions To Google -
July 13, 2020Texas Attorney General Ken Paxton sent another round of questions to Google seeking detailed answers about the company’s advertising technology.
The 53-page civil investigative demand, dated June 22 and obtained by POLITICO through a public records request, zeroes in on changes the search giant has made in recent years to how online ads are sold. Google must respond by July 22.
Among the Google product changes targeted by investigators is the company’s decision in 2016 to require advertisers to buy YouTube ads through Google’s products; the adoption of accelerated mobile pages, known as AMP, a technology that stores mobile websites on Google servers; and the January announcement that the tech giant will eliminate third-party cookies from the Chrome web browser.
All three changes have drawn complaints from advertisers. Subscription news service MLex first reported on the query. Google said it will “continue to engage” with the investigation.
Full Content: Politico
July 13, 2020Texas Attorney General Ken Paxton sent another round of questions to Google seeking detailed answers about the company’s advertising technology.
The 53-page civil investigative demand, dated June 22 and obtained by POLITICO through a public records request, zeroes in on changes the search giant has made in recent years to how online ads are sold. Google must respond by July 22.
Among the Google product changes targeted by investigators is the company’s decision in 2016 to require advertisers to buy YouTube ads through Google’s products; the adoption of accelerated mobile pages, known as AMP, a technology that stores mobile websites on Google servers; and the January announcement that the tech giant will eliminate third-party cookies from the Chrome web browser.
All three changes have drawn complaints from advertisers. Subscription news service MLex first reported on the query. Google said it will “continue to engage” with the investigation.
Full Content: Politico
Should the government force prudence on novice stock investors?
Market observers worry that a new group of largely inexperienced stock investors is at risk for great financial harm.
Commenters like Jim Cramer have remarked that many novice investors use recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel stocks. These stocks have been pummeled by COVID concerns, but rebounded from very low prices to somewhat higher prices. The rebound was partly in response to infusions of federal cash and credit. Jim Cramer and others fretted that novice traders who relied on the recent upward trajectory of COVID vulnerable stocks risked disaster because of market ignorance.
Casey Primozic, whose company Robintrack follows behavior of novice investors, suggested in a CNBC interview that novice investors will often join what they sense is a growth trend in a stock, without worrying about business fundamentals like profitability.
Novice investors are subject to manipulation by sophisticated investors, according to Jim Cramer. He says that professionals on Wall Street have taken advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Many observers saw a ploy to snare gullible novice stock traders when Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares destined to be wiped out when Hertz’ bankruptcy case is finished. Investors promptly bid up Hertz by 68%. Hertz halted stock sales when staff members at the U.S. Securities and Exchange Commission raised legal issues.
A New York Times article explains that millions of individuals without stock trading experience have recently begun investing through a company called Robinhood, which has an “app” that makes trading particularly easy and cheap. The article says that “More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace . . . .”
A Bankrate review of Robinhood says that “While investors can find free stock and ETF trades at most brokerages, the real differentiator for Robinhood is its free options trading. . . . Robinhood charges no per-contract fee.” Also, “Robinhood allows you to trade some cryptocurrencies commission-free, too.”
The New York Times article explains that Robinhood software coaches its investors on how to avoid government regulatory strictures that block the inexperienced from trading in options. The Robinhood app is organized so that customers who want to trade options answer just a few multiple-choice questions. The Times explains that “Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to ‘not much’ experience. Then people can immediately begin trading.”
Such egging on of inexperienced investors by Robinhood and others seems undesirable, particularly since there are many unfortunate stories of novice investors who have been brought to financial ruin. It is hard not to agree with Jim Cramer’s conclusion that novice investors are subject to exploitation by unscrupulous people. Sometimes such exploitation will attract the attention of regulators, as happened with the Hertz offering. But it seems likely that much exploitative behavior will escape government scrutiny. And, of course, not all examples of aggressive selling to novice investors deserve government action: Novice investors have at least some obligation to exercise common sense.
Possible government action against exploitation of novice investors may be supplemented by industry self-regulation. In addition to being subject to SEC regulation, most brokerage firms voluntarily participate in self-regulatory organizations (SROs) like the Financial Industry Regulatory Authority (FINRA). Brokerages that are FINRA members submit to the organization's rules and regulations, which includes a transparent disclosure framework that protects investors. In an article which asks whether Robinhood is safe for investors, Investopedia points out that Robinhood maintains membership in FINRA.
By Don Allen Resnikoff
Citations:
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html?searchResultPosition=1
https://www.cnbc.com/video/2020/07/08/robintrack-founder-casey-primozic-parses-through-latest-trading-trends.html
https://www.bankrate.com/investing/brokerage-reviews/robinhood/
https://www.investopedia.com/investing/is-robinhood-safe/
Bloomberg:
Amateur investors who loaded up on J.C. Penney Co. shares as the retailer went bankrupt are now pleading with a judge to spare them from a complete wipeout.
“I hope and pray for you to consider the shareholders,” wrote 50-year-old individual investor John Hardt in a letter dated May 25, one of dozens sent to the Corpus Christi, Texas-based court overseeing the case in recent months.
Hardt is part of a growing number of retail traders -- many driven by lockdown boredom and free online trading -- who have piled into the stock market. Speculation by amateurs is nothing new, but for the first time experts can recall, investors are buying shares of even bankrupt companies. Hertz Global Holdings Inc., oil driller Whiting Petroleum Corp. and J.C. Penney have all seen their stock price surge in recent sessions, despite being in Chapter 11.
Those gains almost always prove fleeting, leaving retail traders with little to show for their stakes other than an expensive lesson in the U.S. corporate bankruptcy process -- where shareholder value disappears almost as a rule. That’s because all creditors have to be made whole before equity owners get anything. For J.C. Penney investors, there’s little to suggest this time will prove any different.
A representative for the company declined to comment on the shareholder letters. An unrelated hearing scheduled for Monday may yield an update about extending the deadline for lenders to approve its turnaround plan.
“If there is any possible way -- any way -- to give a meaningful recovery to shareholders, we will fight for it,” Joshua Sussberg of Kirkland & Ellis, J.C. Penney’s bankruptcy lawyer, said at a June 9 hearing.
Mom-and-pop investors who insist on betting on struggling companies would be well advised to stay away from those in or near bankruptcy, said Fred Ringel, a partner and co-chair of the bankruptcy department at law firm Robinson Brog Leinwand Greene Genovese & Gluck.
“People who buy equity hoping that they’re not going to get wiped out in a bankruptcy just don’t understand the process,” Ringel said.
He added he’s been baffled to see retail investors putting cash into bankrupt stocks given the complexity of the restructuring process. “I don’t understand this phenomenon at all,” he said.
J.C. Penney filed for Chapter 11 in mid-May. After climbing as high as 67.9 cents last month, the company’s stock is trading at around 30 cents. Some of the retailer’s most junior debt -- which still ranks ahead of shares in the repayment line -- is quoted at less than 2 cents on the dollar. This implies extremely thin odds that bondholders will get repaid, and in turn that nothing will be left over for stockholders.
Hardt, when contacted by Bloomberg last week, said he had “zero knowledge of the bankruptcy process” before buying about 10,000 J.C. Penney shares. The Plano, Texas native said he’s already sold the position.
Several of the letters from J.C. Penney shareholders criticize the company’s failure so far to announce a buyer, after media reports cited several potential bidders, including Amazon.com Inc. Bloomberg reported in May on talks between Authentic Brands Group LLC and mall landlords Simon Property Group Inc. and Brookfield Property Partners LP to acquire the chain.
Retail investors hoping for a sale may have thought a buyer would pay cash for outstanding shares. Yet that’s practically unheard of in bankruptcy, where any asset value that remains after court costs belongs to lenders with senior collateral claims. Once they’re made whole, other creditors, including unsecured lenders and vendors are next in line. J.C. Penney entered bankruptcy with more than $2 billion in secured debt and $8 billion in total debt.
Some recent J.C. Penney investors said in interviews that that they bought shares on the expectation that the company would be able to rebound once stores shuttered by the Covid-19 outbreak were able to reopen, and therefore the retailer would be able to secure better terms in its restructuring negotiations than the typical Chapter 11 debtor.
The company has struggled for years, but analysts generally expected before the pandemic that it could hold out until at least 2021.
Some of the letters also criticize the decisions of corporate management and claim that Chief Executive Officer Jill Soltau offered false hope to investors. The company maintained in public statements through the end of March that it remained “optimistic about J.C. Penney’s ability to weather this pandemic.”
“I saw no bankruptcy coming only the promise of turnaround and great news,” wrote shareholder David Dean of Baltimore, who submitted a letter to the court on June 3. “Now this bankruptcy filing. Who could have known.”
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)
— With assistance by Jeremy Hill
https://www.bloomberg.com/markets/fixed-income
Market observers worry that a new group of largely inexperienced stock investors is at risk for great financial harm.
Commenters like Jim Cramer have remarked that many novice investors use recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel stocks. These stocks have been pummeled by COVID concerns, but rebounded from very low prices to somewhat higher prices. The rebound was partly in response to infusions of federal cash and credit. Jim Cramer and others fretted that novice traders who relied on the recent upward trajectory of COVID vulnerable stocks risked disaster because of market ignorance.
Casey Primozic, whose company Robintrack follows behavior of novice investors, suggested in a CNBC interview that novice investors will often join what they sense is a growth trend in a stock, without worrying about business fundamentals like profitability.
Novice investors are subject to manipulation by sophisticated investors, according to Jim Cramer. He says that professionals on Wall Street have taken advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Many observers saw a ploy to snare gullible novice stock traders when Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares destined to be wiped out when Hertz’ bankruptcy case is finished. Investors promptly bid up Hertz by 68%. Hertz halted stock sales when staff members at the U.S. Securities and Exchange Commission raised legal issues.
A New York Times article explains that millions of individuals without stock trading experience have recently begun investing through a company called Robinhood, which has an “app” that makes trading particularly easy and cheap. The article says that “More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace . . . .”
A Bankrate review of Robinhood says that “While investors can find free stock and ETF trades at most brokerages, the real differentiator for Robinhood is its free options trading. . . . Robinhood charges no per-contract fee.” Also, “Robinhood allows you to trade some cryptocurrencies commission-free, too.”
The New York Times article explains that Robinhood software coaches its investors on how to avoid government regulatory strictures that block the inexperienced from trading in options. The Robinhood app is organized so that customers who want to trade options answer just a few multiple-choice questions. The Times explains that “Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to ‘not much’ experience. Then people can immediately begin trading.”
Such egging on of inexperienced investors by Robinhood and others seems undesirable, particularly since there are many unfortunate stories of novice investors who have been brought to financial ruin. It is hard not to agree with Jim Cramer’s conclusion that novice investors are subject to exploitation by unscrupulous people. Sometimes such exploitation will attract the attention of regulators, as happened with the Hertz offering. But it seems likely that much exploitative behavior will escape government scrutiny. And, of course, not all examples of aggressive selling to novice investors deserve government action: Novice investors have at least some obligation to exercise common sense.
Possible government action against exploitation of novice investors may be supplemented by industry self-regulation. In addition to being subject to SEC regulation, most brokerage firms voluntarily participate in self-regulatory organizations (SROs) like the Financial Industry Regulatory Authority (FINRA). Brokerages that are FINRA members submit to the organization's rules and regulations, which includes a transparent disclosure framework that protects investors. In an article which asks whether Robinhood is safe for investors, Investopedia points out that Robinhood maintains membership in FINRA.
By Don Allen Resnikoff
Citations:
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html?searchResultPosition=1
https://www.cnbc.com/video/2020/07/08/robintrack-founder-casey-primozic-parses-through-latest-trading-trends.html
https://www.bankrate.com/investing/brokerage-reviews/robinhood/
https://www.investopedia.com/investing/is-robinhood-safe/
Bloomberg:
Amateur investors who loaded up on J.C. Penney Co. shares as the retailer went bankrupt are now pleading with a judge to spare them from a complete wipeout.
“I hope and pray for you to consider the shareholders,” wrote 50-year-old individual investor John Hardt in a letter dated May 25, one of dozens sent to the Corpus Christi, Texas-based court overseeing the case in recent months.
Hardt is part of a growing number of retail traders -- many driven by lockdown boredom and free online trading -- who have piled into the stock market. Speculation by amateurs is nothing new, but for the first time experts can recall, investors are buying shares of even bankrupt companies. Hertz Global Holdings Inc., oil driller Whiting Petroleum Corp. and J.C. Penney have all seen their stock price surge in recent sessions, despite being in Chapter 11.
Those gains almost always prove fleeting, leaving retail traders with little to show for their stakes other than an expensive lesson in the U.S. corporate bankruptcy process -- where shareholder value disappears almost as a rule. That’s because all creditors have to be made whole before equity owners get anything. For J.C. Penney investors, there’s little to suggest this time will prove any different.
A representative for the company declined to comment on the shareholder letters. An unrelated hearing scheduled for Monday may yield an update about extending the deadline for lenders to approve its turnaround plan.
“If there is any possible way -- any way -- to give a meaningful recovery to shareholders, we will fight for it,” Joshua Sussberg of Kirkland & Ellis, J.C. Penney’s bankruptcy lawyer, said at a June 9 hearing.
Mom-and-pop investors who insist on betting on struggling companies would be well advised to stay away from those in or near bankruptcy, said Fred Ringel, a partner and co-chair of the bankruptcy department at law firm Robinson Brog Leinwand Greene Genovese & Gluck.
“People who buy equity hoping that they’re not going to get wiped out in a bankruptcy just don’t understand the process,” Ringel said.
He added he’s been baffled to see retail investors putting cash into bankrupt stocks given the complexity of the restructuring process. “I don’t understand this phenomenon at all,” he said.
J.C. Penney filed for Chapter 11 in mid-May. After climbing as high as 67.9 cents last month, the company’s stock is trading at around 30 cents. Some of the retailer’s most junior debt -- which still ranks ahead of shares in the repayment line -- is quoted at less than 2 cents on the dollar. This implies extremely thin odds that bondholders will get repaid, and in turn that nothing will be left over for stockholders.
Hardt, when contacted by Bloomberg last week, said he had “zero knowledge of the bankruptcy process” before buying about 10,000 J.C. Penney shares. The Plano, Texas native said he’s already sold the position.
Several of the letters from J.C. Penney shareholders criticize the company’s failure so far to announce a buyer, after media reports cited several potential bidders, including Amazon.com Inc. Bloomberg reported in May on talks between Authentic Brands Group LLC and mall landlords Simon Property Group Inc. and Brookfield Property Partners LP to acquire the chain.
Retail investors hoping for a sale may have thought a buyer would pay cash for outstanding shares. Yet that’s practically unheard of in bankruptcy, where any asset value that remains after court costs belongs to lenders with senior collateral claims. Once they’re made whole, other creditors, including unsecured lenders and vendors are next in line. J.C. Penney entered bankruptcy with more than $2 billion in secured debt and $8 billion in total debt.
Some recent J.C. Penney investors said in interviews that that they bought shares on the expectation that the company would be able to rebound once stores shuttered by the Covid-19 outbreak were able to reopen, and therefore the retailer would be able to secure better terms in its restructuring negotiations than the typical Chapter 11 debtor.
The company has struggled for years, but analysts generally expected before the pandemic that it could hold out until at least 2021.
Some of the letters also criticize the decisions of corporate management and claim that Chief Executive Officer Jill Soltau offered false hope to investors. The company maintained in public statements through the end of March that it remained “optimistic about J.C. Penney’s ability to weather this pandemic.”
“I saw no bankruptcy coming only the promise of turnaround and great news,” wrote shareholder David Dean of Baltimore, who submitted a letter to the court on June 3. “Now this bankruptcy filing. Who could have known.”
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)
— With assistance by Jeremy Hill
https://www.bloomberg.com/markets/fixed-income
WSJ article on business fat cats who received PPP money
Excerpt:
By Cezary Podkul
, Juliet Chung
and Will Parker
July 7, 2020 7:33 am ET
The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan’s most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic.
The entities all received loans under the federal government’s Paycheck Protection Program. Since March, the program has extended about $521 billion out of more than $650 billion in authorized loans, but until now, the public hasn’t gotten a detailed look at who was benefitting from the cash.
That changed on Monday, when the Small Business Administration published the names of businesses that accounted for about three-fourths of the loan dollars distributed. While small family-owned businesses and nonprofits benefited from the aid, so did many Wall Street firms that potentially have other sources of cash and didn’t suffer like restaurants and retailers.
The Extell development Central Park Tower of luxury condos and a department store while it was being constructed last year; Extell said the recent federal Paycheck Protection Program allowed the firm to continue paying its employees.PHOTO: RICHARD B. LEVINE/ZUMA PRESS
“The PPP program was designed for small businesses that had to shut down and lose revenues because of the crisis,” said Marcus Stanley, policy director for Americans for Financial Reform, which advocates for tighter financial regulations. “The markets never shut down at any point.”
Loan recipients say they were justified to seek the aid and did so within the spirit and guidelines of the program. Xtellus Capital Partners, the former U.S. operations of Russian bank VTB Capital, said the pandemic hurt trading volumes, which made its effort to diversify after its 2018 spinoff riskier. VTB has been under U.S. sanctions for several years. Xtellus got a loan between $150,000 to $350,000, according to the SBA, which only disclosed loan amount ranges.
“It’s been a big help. We haven’t had to let anyone go,” Xtellus Chief Executive Paul Swigart said in an interview.
More than a dozen floor brokerages at the New York Stock Exchange got loans of at least $150,000, Monday’s disclosures showed. NYSE floor brokers, who often work for smaller firms of a few dozen employees, were unable to work for about two months starting in March when the exchange shut down floor trading to prevent the spread of the virus.
Excerpt:
By Cezary Podkul
, Juliet Chung
and Will Parker
July 7, 2020 7:33 am ET
The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan’s most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic.
The entities all received loans under the federal government’s Paycheck Protection Program. Since March, the program has extended about $521 billion out of more than $650 billion in authorized loans, but until now, the public hasn’t gotten a detailed look at who was benefitting from the cash.
That changed on Monday, when the Small Business Administration published the names of businesses that accounted for about three-fourths of the loan dollars distributed. While small family-owned businesses and nonprofits benefited from the aid, so did many Wall Street firms that potentially have other sources of cash and didn’t suffer like restaurants and retailers.
The Extell development Central Park Tower of luxury condos and a department store while it was being constructed last year; Extell said the recent federal Paycheck Protection Program allowed the firm to continue paying its employees.PHOTO: RICHARD B. LEVINE/ZUMA PRESS
“The PPP program was designed for small businesses that had to shut down and lose revenues because of the crisis,” said Marcus Stanley, policy director for Americans for Financial Reform, which advocates for tighter financial regulations. “The markets never shut down at any point.”
Loan recipients say they were justified to seek the aid and did so within the spirit and guidelines of the program. Xtellus Capital Partners, the former U.S. operations of Russian bank VTB Capital, said the pandemic hurt trading volumes, which made its effort to diversify after its 2018 spinoff riskier. VTB has been under U.S. sanctions for several years. Xtellus got a loan between $150,000 to $350,000, according to the SBA, which only disclosed loan amount ranges.
“It’s been a big help. We haven’t had to let anyone go,” Xtellus Chief Executive Paul Swigart said in an interview.
More than a dozen floor brokerages at the New York Stock Exchange got loans of at least $150,000, Monday’s disclosures showed. NYSE floor brokers, who often work for smaller firms of a few dozen employees, were unable to work for about two months starting in March when the exchange shut down floor trading to prevent the spread of the virus.
About Joseph Corcoran, developer of mixed use housing in Boston
Mr. Corcoran is the subject of a recent obituary in the Wall Street Journal that talks of Mr. Corcoran's role in developing mixed use housing in Boston.
The article explains that the mixed use project Harbor Point was completed in 1990 at a cost of more than $250 million. Harbor Point created a neighborhood where lawyers and graduate students lived alongside people qualifying for subsidized rent. They shared swimming pools, a gym and views of Boston’s harbor and skyline.
Mr. Corcoran died June 3 of congestive heart failure at his home in Milton, Mass. He was 84. Over nearly five decades, his firm built and managed more than 20,000 housing units in 15 states, his family said.
His mixed-income projects relied on government rental subsidies and tax credits, as well as his patience in negotiating with local, state and federal officials. Perhaps most crucial was his ability to persuade poor residents of neighborhoods he was proposing to redevelop that they wouldn’t be pushed out. At Harbor Point, they were at the table as redevelopment plans were worked out.
“The political establishment can ignore us as money-hungry developers, but they can’t ignore the plight of these people who want something better,” he told Jane Roessner, author of “A Decent Place to Live,” a history of the Columbia Point makeover.
The Wall Street Journal article [paywalled] is at https://www.wsj.com/articles/joseph-corcoran-rescued-a-squalid-boston-housing-project-11592485201?mod=lead_feature_below_a_pos1 Author Roessner was a speaker on a panel that put the Columbia Point project in a broader context. A video of the panel presentation is at https://www.youtube.com/watch?reload=9&time_continue=8&v=QYiVxfSlPFU&feature=emb_logo
Mr. Corcoran is the subject of a recent obituary in the Wall Street Journal that talks of Mr. Corcoran's role in developing mixed use housing in Boston.
The article explains that the mixed use project Harbor Point was completed in 1990 at a cost of more than $250 million. Harbor Point created a neighborhood where lawyers and graduate students lived alongside people qualifying for subsidized rent. They shared swimming pools, a gym and views of Boston’s harbor and skyline.
Mr. Corcoran died June 3 of congestive heart failure at his home in Milton, Mass. He was 84. Over nearly five decades, his firm built and managed more than 20,000 housing units in 15 states, his family said.
His mixed-income projects relied on government rental subsidies and tax credits, as well as his patience in negotiating with local, state and federal officials. Perhaps most crucial was his ability to persuade poor residents of neighborhoods he was proposing to redevelop that they wouldn’t be pushed out. At Harbor Point, they were at the table as redevelopment plans were worked out.
“The political establishment can ignore us as money-hungry developers, but they can’t ignore the plight of these people who want something better,” he told Jane Roessner, author of “A Decent Place to Live,” a history of the Columbia Point makeover.
The Wall Street Journal article [paywalled] is at https://www.wsj.com/articles/joseph-corcoran-rescued-a-squalid-boston-housing-project-11592485201?mod=lead_feature_below_a_pos1 Author Roessner was a speaker on a panel that put the Columbia Point project in a broader context. A video of the panel presentation is at https://www.youtube.com/watch?reload=9&time_continue=8&v=QYiVxfSlPFU&feature=emb_logo
SBA changes course, will reveal some PPP loan data
The U.S. Small Business Administration and Treasury Department announced Friday that they would release a data set showing which businesses received many taxpayer-funded Paycheck Protection Program loans, walking back an earlier stance that all of the business names would remain hidden because the Trump administration considered them proprietary.
The disclosures will include the names of recipients who received loans of more than $150,000 and it will also reveal a dollar range for each loan, such as whether it was between $1 million and $2 million. Precise dollar amounts will not be disclosed, the Trump administration said. Borrowers who obtained loans of less than $150,000 will not have their identities disclosed. The administration said nearly 75 percent of all loans were for $150,000 or more, so most borrowers would be revealed.
https://www.washingtonpost.com/business/2020/06/19/treasury-sba-ppp-disclosure/
The U.S. Small Business Administration and Treasury Department announced Friday that they would release a data set showing which businesses received many taxpayer-funded Paycheck Protection Program loans, walking back an earlier stance that all of the business names would remain hidden because the Trump administration considered them proprietary.
The disclosures will include the names of recipients who received loans of more than $150,000 and it will also reveal a dollar range for each loan, such as whether it was between $1 million and $2 million. Precise dollar amounts will not be disclosed, the Trump administration said. Borrowers who obtained loans of less than $150,000 will not have their identities disclosed. The administration said nearly 75 percent of all loans were for $150,000 or more, so most borrowers would be revealed.
https://www.washingtonpost.com/business/2020/06/19/treasury-sba-ppp-disclosure/
News Media Cartels are Bad News for Consumers
By John M. Yun (George Mason University)
The Journalism Competition and Preservation Act was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring “quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates. In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.
Drawn from https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-5-Full.pdf
By John M. Yun (George Mason University)
The Journalism Competition and Preservation Act was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring “quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates. In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.
Drawn from https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-5-Full.pdf
Hertz Global Holdings Inc. suspended plans to raise cash by selling new shares that the bankrupt car renter described as potentially “worthless,” after its proposal failed to pass muster with regulators.
The company halted sales while it deals with issues brought up by staff members at the U.S. Securities and Exchange Commission, according to a filing. The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.
From: https://www.msn.com/en-us/money/topstocks/hertz-suspends-sale-of-worthless-stock-amid-sec-scrutiny/ar-BB15CODb
The company halted sales while it deals with issues brought up by staff members at the U.S. Securities and Exchange Commission, according to a filing. The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.
From: https://www.msn.com/en-us/money/topstocks/hertz-suspends-sale-of-worthless-stock-amid-sec-scrutiny/ar-BB15CODb
Is Hertz using bankruptcy Court to exploit gullible investors?
Commenters like Jim Cramer have remarked that many novice investors are taking advantage of recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel sector stocks. These stocks have been pummeled by COVID concerns; but rebounded from very low prices to somewhat higher prices. The rebound is partly in response to infusions of federal cash and credit. Jim Cramer and others have fretted that novice traders who rely on the recent upward trajectory of COVID vulnerable stocks risk disaster because of market ignorance.
Also, novice investors are subject to manipulation by sophisticated investors, according to Cramer. He says that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Now, in what Cramer and some others see as yet another ploy to snare gullible novice stock traders, Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares. Hertz readily concedes those might wind up worthless, too. The stock appears destined to be wiped out when its bankruptcy case is finished. Investors promptly bid up Hertz by 68%.
The car rental company wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. The proceeds would provide some much-needed working capital while Hertz tries to dig out from massive debts that forced it into court protection.
The filing explains that “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
On Friday, June 12, the bankruptcy court approved Hertz’s request to sell up to $1 billion in stock.
But the risk to novice investors plainly is great. Investors who own stock in bankrupt firms are last in line as the company pays back creditors like banks and bondholders. Shares of a bankrupt company are typically wiped out, and if new stock is issued there is no guarantee the prior shareholders will receive new shares.
Commenters have not been sympathetic. One said: “Failing rental car company Hertz‘s latest Hail Mary might be its most dastardly yet: Exploit newly-found popularity among Robinhood traders to sell $1 billion worth of potentially worthless stock.” [i]
According to Marketwatch, Amy Lynch, a former U.S. Securities and Exchange Commission staffer, said that the proposed stock sale needs to spell out that “any money put into this company could be a total loss.” She explained that “The disclosures would have to be air tight in order to avoid lawsuits in the future.”
CNBC’s Jim Cramer was even more apoplectic than usual, comparing Hertz promoters to P.T. Barnum.
Cramer warns new investors about the serious risk of buying the stock of companies that filed for bankruptcy such as Hertz.
“You may think a stock like Hertz . . .looks like a steal at these levels, but the only people being robbed here are you the buyers,” he said.
Cramer said it is “highly unlikely” that Hertz, as a business, goes away in its bankruptcy. But the company’s bondholders will be the first in line to get a piece of the post-bankruptcy Hertz. Owners of the common stock, on the other hand, “are at the bottom of the bankruptcy pecking order,” Cramer said.
“[Y]ou’re buying the old Hertz with $19 billion in debt that it can’t repay,” Cramer explained. “Since the creditors can’t collect, they’re going to seize the collateral, which is the business. So this $4 stock will most likely just be cancelled.”
That is a reality well-known by people like legendary activist investor Carl Icahn, Cramer said. Icahn held a nearly 39% stake in Hertz but dumped it last month after the company filed for bankruptcy.
“Believe me, if there was a real chance the common stock would be worth anything, Icahn would’ve stuck around. He didn’t,” Cramer said.
Cramer also said if he were running the bankruptcy court, he would prevent shares of Hertz from being traded, helping “keep inexperienced investors from losing money on it.”
-by Don Allen Resnikoff
A copy of the Hertz filing is here:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDE4NzYy&id2=0
[i] https://usa-newsposts.com/technology/bankrupt-hertz-targets-robinhood-traders-in-plot-to-dump-1-billion-in-stock/
Commenters like Jim Cramer have remarked that many novice investors are taking advantage of recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel sector stocks. These stocks have been pummeled by COVID concerns; but rebounded from very low prices to somewhat higher prices. The rebound is partly in response to infusions of federal cash and credit. Jim Cramer and others have fretted that novice traders who rely on the recent upward trajectory of COVID vulnerable stocks risk disaster because of market ignorance.
Also, novice investors are subject to manipulation by sophisticated investors, according to Cramer. He says that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Now, in what Cramer and some others see as yet another ploy to snare gullible novice stock traders, Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares. Hertz readily concedes those might wind up worthless, too. The stock appears destined to be wiped out when its bankruptcy case is finished. Investors promptly bid up Hertz by 68%.
The car rental company wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. The proceeds would provide some much-needed working capital while Hertz tries to dig out from massive debts that forced it into court protection.
The filing explains that “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
On Friday, June 12, the bankruptcy court approved Hertz’s request to sell up to $1 billion in stock.
But the risk to novice investors plainly is great. Investors who own stock in bankrupt firms are last in line as the company pays back creditors like banks and bondholders. Shares of a bankrupt company are typically wiped out, and if new stock is issued there is no guarantee the prior shareholders will receive new shares.
Commenters have not been sympathetic. One said: “Failing rental car company Hertz‘s latest Hail Mary might be its most dastardly yet: Exploit newly-found popularity among Robinhood traders to sell $1 billion worth of potentially worthless stock.” [i]
According to Marketwatch, Amy Lynch, a former U.S. Securities and Exchange Commission staffer, said that the proposed stock sale needs to spell out that “any money put into this company could be a total loss.” She explained that “The disclosures would have to be air tight in order to avoid lawsuits in the future.”
CNBC’s Jim Cramer was even more apoplectic than usual, comparing Hertz promoters to P.T. Barnum.
Cramer warns new investors about the serious risk of buying the stock of companies that filed for bankruptcy such as Hertz.
“You may think a stock like Hertz . . .looks like a steal at these levels, but the only people being robbed here are you the buyers,” he said.
Cramer said it is “highly unlikely” that Hertz, as a business, goes away in its bankruptcy. But the company’s bondholders will be the first in line to get a piece of the post-bankruptcy Hertz. Owners of the common stock, on the other hand, “are at the bottom of the bankruptcy pecking order,” Cramer said.
“[Y]ou’re buying the old Hertz with $19 billion in debt that it can’t repay,” Cramer explained. “Since the creditors can’t collect, they’re going to seize the collateral, which is the business. So this $4 stock will most likely just be cancelled.”
That is a reality well-known by people like legendary activist investor Carl Icahn, Cramer said. Icahn held a nearly 39% stake in Hertz but dumped it last month after the company filed for bankruptcy.
“Believe me, if there was a real chance the common stock would be worth anything, Icahn would’ve stuck around. He didn’t,” Cramer said.
Cramer also said if he were running the bankruptcy court, he would prevent shares of Hertz from being traded, helping “keep inexperienced investors from losing money on it.”
-by Don Allen Resnikoff
A copy of the Hertz filing is here:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDE4NzYy&id2=0
[i] https://usa-newsposts.com/technology/bankrupt-hertz-targets-robinhood-traders-in-plot-to-dump-1-billion-in-stock/
California & Washington Are Scrutinizing Amazon For Abuse Of Power
June 14, 2020
State investigators in California and Washington have been looking into whether Amazon abuses its power over sellers on the tech giant’s site, according to people involved with the inquiry.
In the last several months, California has asked about the company’s private label products and whether it uses data from sellers to determine which products it sells, according to two people, who spoke on condition of anonymity out of fear of retribution by the company.
The Washington attorney general’s office has also been interested in whether Amazon makes it harder for sellers to list their products on other websites, according to correspondence viewed by The New York Times.
See https://www.nytimes.com/2020/06/12/technology/state-inquiry-antitrust-amazon.html
June 14, 2020
State investigators in California and Washington have been looking into whether Amazon abuses its power over sellers on the tech giant’s site, according to people involved with the inquiry.
In the last several months, California has asked about the company’s private label products and whether it uses data from sellers to determine which products it sells, according to two people, who spoke on condition of anonymity out of fear of retribution by the company.
The Washington attorney general’s office has also been interested in whether Amazon makes it harder for sellers to list their products on other websites, according to correspondence viewed by The New York Times.
See https://www.nytimes.com/2020/06/12/technology/state-inquiry-antitrust-amazon.html
Bumblebee tuna Chris Lischewski sentenced to 40 months in prison, USD 100,000 fine
By
Chris Chase
June 16, 2020
Former Bumble Bee President and CEO Chris Lischewski was sentenced to 40 months in prison and given a USD 100,000 fine (EUR 88,000) as part of his role in a conspiracy to fix the prices of canned tuna sold in the United States from 2011 to 2013.
The sentence comes after a three-week-long trial in December ended with a jury finding Lischewski guilty of being involved in a scheme between Bumble Bee, StarKist, and Chicken of the Sea to fix the price of tuna. Lischewski was facing a maximum penalty of 10 years in prison and a fine of USD 1 million (EUR 887,500).
The sentence, according to U.S. District Court Judge Edward M. Chen, is in accordance to the severity of the conspiracy, which was “widespread, pervasive, and affecting the entire industry.”
“The conduct was deliberate, it was planned, it was sustained, over a three-year period,” Chen said. “This was not a rash act of having to commit a crime under distress, under episodic circumstances as we see sometimes, this was a contemplated and deliberate plan.”
The sentencing came after an over two-hour hearing, in which part of the sentencing hinged on the qualitative affect that the price-fixing conspiracy had on the economy. California’s penal code includes stipulations on how sentencing should be calculated based on its financial impact.
Excerpt from https://www.seafoodsource.com/news/business-finance/chris-lischewski-sentenced-to-40-months-in-prison-usd-100-000-fine
By
Chris Chase
June 16, 2020
Former Bumble Bee President and CEO Chris Lischewski was sentenced to 40 months in prison and given a USD 100,000 fine (EUR 88,000) as part of his role in a conspiracy to fix the prices of canned tuna sold in the United States from 2011 to 2013.
The sentence comes after a three-week-long trial in December ended with a jury finding Lischewski guilty of being involved in a scheme between Bumble Bee, StarKist, and Chicken of the Sea to fix the price of tuna. Lischewski was facing a maximum penalty of 10 years in prison and a fine of USD 1 million (EUR 887,500).
The sentence, according to U.S. District Court Judge Edward M. Chen, is in accordance to the severity of the conspiracy, which was “widespread, pervasive, and affecting the entire industry.”
“The conduct was deliberate, it was planned, it was sustained, over a three-year period,” Chen said. “This was not a rash act of having to commit a crime under distress, under episodic circumstances as we see sometimes, this was a contemplated and deliberate plan.”
The sentencing came after an over two-hour hearing, in which part of the sentencing hinged on the qualitative affect that the price-fixing conspiracy had on the economy. California’s penal code includes stipulations on how sentencing should be calculated based on its financial impact.
Excerpt from https://www.seafoodsource.com/news/business-finance/chris-lischewski-sentenced-to-40-months-in-prison-usd-100-000-fine
From DCAG Racine's budget request memo:
This week, I testified before the Council in support of OAG’s fiscal year 2021 budget proposal. I made clear that OAG—an agency that not only saves revenue but also generates revenue—is committed to helping the District weather a significant budget deficit. In fiscal year 2019, for example, OAG recovered over $10.8 million in settlements and contributed an additional $184.1 million in tax revenue preserved and collections for District children. To cut back on budget expenses, I ordered $1.5 million of OAG’s 2020 budget to be returned to the District’s General Fund and voluntarily imposed a spending freeze on our agency. These measures reflect OAG’s commitment to the District’s financial well-being.
OAG has also been working around the clock to educate residents about their rights, respond to a surge of nearly 800 COVID-related consumer complaints, enforce protections against price gouging, stand up for tenants and vulnerable residents, fight wage theft, enforce the District’s environmental laws, and protect public safety. Our Cure the Streets team continues to mitigate violence in their neighborhoods, while also partnering with community organizations to deliver food and educational materials to underserved residents. As the nation cries out for new approaches to public safety, funding these community-based violence interruption efforts is more important than ever.
I hope you'll support OAG’s budget that promotes the public interest by submitting comments to the Council’s Committee on the Judiciary and Public Safety by June 16, 2020.
This week, I testified before the Council in support of OAG’s fiscal year 2021 budget proposal. I made clear that OAG—an agency that not only saves revenue but also generates revenue—is committed to helping the District weather a significant budget deficit. In fiscal year 2019, for example, OAG recovered over $10.8 million in settlements and contributed an additional $184.1 million in tax revenue preserved and collections for District children. To cut back on budget expenses, I ordered $1.5 million of OAG’s 2020 budget to be returned to the District’s General Fund and voluntarily imposed a spending freeze on our agency. These measures reflect OAG’s commitment to the District’s financial well-being.
OAG has also been working around the clock to educate residents about their rights, respond to a surge of nearly 800 COVID-related consumer complaints, enforce protections against price gouging, stand up for tenants and vulnerable residents, fight wage theft, enforce the District’s environmental laws, and protect public safety. Our Cure the Streets team continues to mitigate violence in their neighborhoods, while also partnering with community organizations to deliver food and educational materials to underserved residents. As the nation cries out for new approaches to public safety, funding these community-based violence interruption efforts is more important than ever.
I hope you'll support OAG’s budget that promotes the public interest by submitting comments to the Council’s Committee on the Judiciary and Public Safety by June 16, 2020.
AGs v.Generics; 3rd Price-Fixing Complaint
State enforcers added to their price-fixing case against generic drugmakers with a third complaint n Connecticut federal court accusing 26 companies and 10 individuals of "rampant" collusion on topically applied treatments.
View Complaint: https://www.nj.gov/oag/newsreleases20/Public-Derm_Complaint.pdf
State enforcers added to their price-fixing case against generic drugmakers with a third complaint n Connecticut federal court accusing 26 companies and 10 individuals of "rampant" collusion on topically applied treatments.
View Complaint: https://www.nj.gov/oag/newsreleases20/Public-Derm_Complaint.pdf
Utah AG Joins Calls For Meatpacking Probe
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June 9, 2020
Utah’s state Attorney General Sean Reyes wants the Department of Justice to join Utah and other states to investigate suspected price fixing in the beleaguered meatpacking industry.
In a letter to US Attorney General Willam Barr, Reyes wrote that the state has become aware of complaints from beef growers and feeders regarding apparent manipulation of cattle pricing by processing and packing plants.
“Especially now, we need to encourage fair competition in the meatpacking industry and protect consumers,” Reyes wrote.
The Utah AG's letter is here: https://attorneygeneral.utah.gov/wp-content/uploads/2020/06/2020-05-21-Beef-Packing-Industry-Ltr-to-Attorney-General-William-Barr.pdf
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June 9, 2020
Utah’s state Attorney General Sean Reyes wants the Department of Justice to join Utah and other states to investigate suspected price fixing in the beleaguered meatpacking industry.
In a letter to US Attorney General Willam Barr, Reyes wrote that the state has become aware of complaints from beef growers and feeders regarding apparent manipulation of cattle pricing by processing and packing plants.
“Especially now, we need to encourage fair competition in the meatpacking industry and protect consumers,” Reyes wrote.
The Utah AG's letter is here: https://attorneygeneral.utah.gov/wp-content/uploads/2020/06/2020-05-21-Beef-Packing-Industry-Ltr-to-Attorney-General-William-Barr.pdf
Food accessibility challenges are growing.
In Georgia, the number of residents now living in "food insecure" areas has jumped 69% since the beginning of the pandemic, according to data firm Urban Footprint. The firm uses an index, including jobless claims, pre-existing health conditions, and access to grocery stores and healthy food, to measure food security — or "reliable access to a sufficient quantity of affordable, nutritionally adequate food."
In Louisiana, Mississippi and Kentucky the number of residents living in food insecure areas has spiked 43%, 36% and 118% respectively, driven by the rise in unemployment, according to the analysis.
From https://www.cnn.com/2020/06/09/business/food-deserts-coronavirus-grocery-stores/index.html
In Georgia, the number of residents now living in "food insecure" areas has jumped 69% since the beginning of the pandemic, according to data firm Urban Footprint. The firm uses an index, including jobless claims, pre-existing health conditions, and access to grocery stores and healthy food, to measure food security — or "reliable access to a sufficient quantity of affordable, nutritionally adequate food."
In Louisiana, Mississippi and Kentucky the number of residents living in food insecure areas has spiked 43%, 36% and 118% respectively, driven by the rise in unemployment, according to the analysis.
From https://www.cnn.com/2020/06/09/business/food-deserts-coronavirus-grocery-stores/index.html
COVID-19 pandemic hazard pay has started to disappear for workers.
New research by the New York-based not-for-profit Just Capital found that 12% of companies gave their workers this extra bit of cash, because the employees were working on the frontlines during the height of spread of COVID-19. Since then, four of the biggest employers—Walmart, Kroger, Lowe’s, and Costco—have stopped doing so.
From https://www.fastcompany.com/90514509/what-happened-to-covid-19-hazard-pay-walmart-kroger-and-others-called-out-in-new-report
New research by the New York-based not-for-profit Just Capital found that 12% of companies gave their workers this extra bit of cash, because the employees were working on the frontlines during the height of spread of COVID-19. Since then, four of the biggest employers—Walmart, Kroger, Lowe’s, and Costco—have stopped doing so.
From https://www.fastcompany.com/90514509/what-happened-to-covid-19-hazard-pay-walmart-kroger-and-others-called-out-in-new-report
Oil and gas materials manufacturer NRI ATM accused a rival company of poaching two of its essential employees and using them to steal intellectual property in a complaint filed Friday in a Texas federal court.
Read more at: https://www.law360.com/articles/1280408/energy-tools-co-says-rival-poached-employees-stole-ip?copied=
Read more at: https://www.law360.com/articles/1280408/energy-tools-co-says-rival-poached-employees-stole-ip?copied=
AG Racine Sues Predatory Online Lender For Illegal High-Interest Loans To District Consumers
June 5, 2020
Elevate Misleadingly Marketed High-Cost Loans, Ensnared 2,500+ Residents with Interest Rates Well in Excess of District’s Cap
WASHINGTON, D.C. — Attorney General Karl A. Racine today filed a lawsuit against Elevate, an online lender, for deceptively marketing high-cost loans carrying interest rates far above the District’s cap on interest rates. Elevate is not a licensed moneylender in the District, but offered two kinds of short-term loan products carrying interest rates of between 99 and 251 percent, or up to 42 times the legal limit. District law sets the maximum interest rates that lenders can charge at 6 percent or 24 percent per year, depending on the type of loan contract. Although the company touted its product as less expensive than payday loans, payday loans are illegal in the District. Over roughly two years, Elevate made 2,551 loans to District consumers and collected millions of dollars in interest. Following a cease and desist letter sent to the company in April 2020, OAG has filed suit to permanently stop Elevate from engaging in misleading business practices, require Elevate to void the loans made to District residents, return interest paid by consumers as restitution, and pay civil penalties.
“District law sets maximum interest rates that lenders can charge to protect residents from falling prey to unscrupulous, exploitative lenders,” said AG Racine. “Elevate misrepresented the nature of their loans—which had interest rates that ran up to 42 times over the District’s interest caps. By actively encouraging and participating in making loans at illegally high interest rates, Elevate unlawfully burdened over 2,500 financially vulnerable District residents with millions of dollars of debt. We’re suing to protect DC residents from being on the hook for these illegal loans and to ensure that Elevate permanently ceases its business activities in the District.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-06/Elevate-Complaint.pdf
From https://oag.dc.gov/release/ag-racine-sues-predatory-online-lender-illegal
June 5, 2020
Elevate Misleadingly Marketed High-Cost Loans, Ensnared 2,500+ Residents with Interest Rates Well in Excess of District’s Cap
WASHINGTON, D.C. — Attorney General Karl A. Racine today filed a lawsuit against Elevate, an online lender, for deceptively marketing high-cost loans carrying interest rates far above the District’s cap on interest rates. Elevate is not a licensed moneylender in the District, but offered two kinds of short-term loan products carrying interest rates of between 99 and 251 percent, or up to 42 times the legal limit. District law sets the maximum interest rates that lenders can charge at 6 percent or 24 percent per year, depending on the type of loan contract. Although the company touted its product as less expensive than payday loans, payday loans are illegal in the District. Over roughly two years, Elevate made 2,551 loans to District consumers and collected millions of dollars in interest. Following a cease and desist letter sent to the company in April 2020, OAG has filed suit to permanently stop Elevate from engaging in misleading business practices, require Elevate to void the loans made to District residents, return interest paid by consumers as restitution, and pay civil penalties.
“District law sets maximum interest rates that lenders can charge to protect residents from falling prey to unscrupulous, exploitative lenders,” said AG Racine. “Elevate misrepresented the nature of their loans—which had interest rates that ran up to 42 times over the District’s interest caps. By actively encouraging and participating in making loans at illegally high interest rates, Elevate unlawfully burdened over 2,500 financially vulnerable District residents with millions of dollars of debt. We’re suing to protect DC residents from being on the hook for these illegal loans and to ensure that Elevate permanently ceases its business activities in the District.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-06/Elevate-Complaint.pdf
From https://oag.dc.gov/release/ag-racine-sues-predatory-online-lender-illegal
Read COVID tracing employee lawsuit against Amazon
https://www.publicjustice.net/wp-content/uploads/2020/06/Palmer-v.-Amazon-filed-complaint.pdf
"This case is about Amazon’s failures to comply with New York law and state and federal public health guidance during the COVID-19 pandemic at the JFK8 facility. "
https://www.publicjustice.net/wp-content/uploads/2020/06/Palmer-v.-Amazon-filed-complaint.pdf
"This case is about Amazon’s failures to comply with New York law and state and federal public health guidance during the COVID-19 pandemic at the JFK8 facility. "
CNBC's Jim Cramer explains that the rising stock market is about the strength of large dominant companies, and does not reflect the poorly performing main street economy of struggling small businesses
https://www.youtube.com/watch?v=PKGDdvRBezQ
Martha White makes a similar point:
The divide between Wall Street and Main Street has grown sharply in recent weeks, amid the coronavirus pandemic and widespread civil unrest. To many, the market’s rise appeared as both cause and symptom of the widening gap between the country's haves and have-nots.
The Dow Jones Industrial Average rose by more than 400 points on Wednesday, with the S&P 500 now recovering a full 40 percent from its March lows. Yet millions of workers and small business owners are struggling to cope with the one-two punch of an economically devastating pandemic and unrest following the death of George Floyd at the hands of Minneapolis police that have filled America’s TV screens and news feeds with images of burned police cars, smashed store windows and looting in cities across the country.
“The stock market represents the fortunes of the fortunate… consolidating their power over the economy,” said Mark Zandi, chief economist at Moody’s Analytics. “As long as they feel like the economy isn't going to be disrupted significantly by the riots, they’re not going to price that in the stock market,” he said.
From https://www.nbcnews.com/business/markets/why-wall-street-soaring-while-main-street-burning-n1223506
Linda Greenhouse on a politically partisan US Supreme Court
Excerpt from Greenhouse opinion oiece at https://www.nytimes.com/2020/06/04/opinion/supreme-court-religion-coronavirus.html?action=click&module=Opinion&pgtype=Homepage:
The Supreme Court made the indisputably right call last week when it refused to block California from limiting attendance at religious services in an effort to control the spread of Covid-19.
A Southern California church, represented by a Chicago-based organization, the Thomas More Society, which most often defends anti-abortion activists, had sought the justices’ intervention with the argument that by limiting worshipers to the lesser of 25 percent of building capacity or 100 people, while setting a 50 percent occupancy cap on retail stores, California was discriminating against religion in violation of the Constitution’s Free Exercise Clause.
Given the obvious difference between walking through a store and sitting among fellow worshipers for an hour or more, as well as the documented spread of the virus through church attendance in such places as Sacramento (71 cases), Seattle (32 cases) and South Korea (over 5,000 cases traced to one person at a religious service), California’s limits are both sensitive and sensible, hardly the basis for constitutional outrage or judicial second-guessing.
So why did the court’s order, issued as midnight approached on Friday night, fill me with dread rather than relief?
It was because in a ruling that should have been unanimous, the vote was 5 to 4. And it was because of who the four dissenters were: the four most conservative justices, . . .
* * *
The U.S. Supreme Court Order Greenhouse discusses is here: https://www.supremecourt.gov/opinions/19pdf/19a1044_pok0.pdf
Excerpt from Greenhouse opinion oiece at https://www.nytimes.com/2020/06/04/opinion/supreme-court-religion-coronavirus.html?action=click&module=Opinion&pgtype=Homepage:
The Supreme Court made the indisputably right call last week when it refused to block California from limiting attendance at religious services in an effort to control the spread of Covid-19.
A Southern California church, represented by a Chicago-based organization, the Thomas More Society, which most often defends anti-abortion activists, had sought the justices’ intervention with the argument that by limiting worshipers to the lesser of 25 percent of building capacity or 100 people, while setting a 50 percent occupancy cap on retail stores, California was discriminating against religion in violation of the Constitution’s Free Exercise Clause.
Given the obvious difference between walking through a store and sitting among fellow worshipers for an hour or more, as well as the documented spread of the virus through church attendance in such places as Sacramento (71 cases), Seattle (32 cases) and South Korea (over 5,000 cases traced to one person at a religious service), California’s limits are both sensitive and sensible, hardly the basis for constitutional outrage or judicial second-guessing.
So why did the court’s order, issued as midnight approached on Friday night, fill me with dread rather than relief?
It was because in a ruling that should have been unanimous, the vote was 5 to 4. And it was because of who the four dissenters were: the four most conservative justices, . . .
* * *
The U.S. Supreme Court Order Greenhouse discusses is here: https://www.supremecourt.gov/opinions/19pdf/19a1044_pok0.pdf
Workers Fearful of the Coronavirus Are Getting Fired and Losing Their Benefits
Thousands who refuse to return to work are being reported to the state to have their unemployment benefits potentially revoked
https://www.nytimes.com/2020/06/04/us/virus-unemployment-fired.html?action=click&module=Top%20Stories&pgtype=Homepage
Thousands who refuse to return to work are being reported to the state to have their unemployment benefits potentially revoked
https://www.nytimes.com/2020/06/04/us/virus-unemployment-fired.html?action=click&module=Top%20Stories&pgtype=Homepage
The Senate approved a broad set of changes to the Small Business Administration's Paycheck Protection Program Wednesday evening, making the program's lending terms more favorable to restaurants, retailers and other businesses.
Among the changes, the legislation extends the “covered period” under which small businesses can spend PPP loan proceeds from eight weeks to 24 weeks. The bipartisan bill, titled the Paycheck Protection Program Flexibility Act of 2020, was passed by the House of Representatives on May 28. It now heads to President Trump for his signature.
Details are here: https://www.bizjournals.com/bizjournals/news/2020/06/03/congress-ppp-loan-change-bill-passes.html?
The US is No Longer the Authority Figure for Multinational Mergers
Excerpt from https://moginrubin.com/end-of-an-era-the-u-s-is-no-longer-the-authority-figure-for-multinational-mergers/:
Unlike other forms of international cooperation grounded in notions of comity and geopolitical realities, leadership in international merger clearance defaults to the jurisdiction with the most restrictive policy. For decades, the U.S. served in this role; merger clearance by the FTC or DOJ would practically ensure worldwide approval. But the E.C.’s decision to block the GE-Honeywell acquisition marked something of an inflection point in the path of global enforcement.
The actions by the DOJ and CMA regarding the Cengage/McGraw-Hill merger exemplify the simultaneous weakening in the U.S. and strengthening in Europe of substantive merger clearance standards and demands. The CMA applied the more restrictive standard and therefore led the clearance process. The CMA not only required the parties to propose remedies to the competition problems it identified, but then rejected those remedies as insufficient. Cengage and McGraw-Hill called off the merger roughly one month later, strongly implying the CMA’s rejection played a key role in stopping the deal. The DOJ, on the other hand, was reportedly poised to approve the merger with relatively minor divestitures, largely ignoring competition concerns raised by lawmakers and advocacy groups.
The CMA again took the lead in the Illumina/PacBio merger review. The CMA was first to conclude Illumina and PacBio operated in a single dynamic market and that the merger was an attempt by Illumina to eliminate a nascent competitor. The CMA also indicated it would attempt to block the merger, as it did not see an alternative that would protect competition from a patent-protected monopolist in a market for an extremely important technology. Although the DOJ eventually reached similar conclusions and challenged the merger, it was not until months after the CMA.
But global divergence in substantive standards and expedience is only half the story, as the Sabre/Farelogix debacle demonstrates that jurisdictions have differing procedural requirements as well. In that case the U.S. government challenged a significant consolidation in a complex, high-tech sub-market in the airline industry only to be confronted with seemingly insurmountable procedural hurdles. Judge Stark’s mechanical and misguided interpretation of the Supreme Court’s holding in Amex—that the competitive effects in any antitrust case involving a transaction platform must be analyzed within a two-sided market definition—created an impossible legal hurdle for the government since only two-sided transaction platforms could compete against Sabre, a qualification Farelogix did not meet.
Putting aside the wrong-headedness of the court’s interpretation of Amex (examples abound of anticompetitive conduct by a two-sided transaction platform that does not require defining a two-sided market), the greater sin may have been to elevate formalism over substance. It is well known that substantive rights can be rolled back through purely procedural maneuvers. In the Sabre-Farelogix case, the court created an excessively inflexible market definition requirement and reached a conclusion seemingly at odds with the evidence largely because the government failed to offer a prima facie case. In other words, the merging parties needn’t have bothered presenting their unreliable and misleading evidence. The court ruled the DOJ failed to make out its case in chief, so all the merging parties had to do was show up.
By contrast, the CMA satisfied its market definition and elemental requirements through overwhelming evidence that demonstrated Farelogix represented the most likely source of industry innovation and, as such, the most significant competitive constraint on Sabre’s market leadership. The U.S. court was aware of this, having noted that Farelogix represents the only real threat to Sabre and the testimony of one airline executive who said it would cost $40 million for an airline to develop its own platform and more than $20 million a year to maintain. An innovator like Farelogix could be easily and/or intentionally stymied if controlled by Sabre, a proposition that seemed self-evident to the CMA but was swallowed whole by the procedural obstacles erected by the U.S. court.
Indeed, the U.S.-European procedural divergence in merger control is institutional. U.S. authorities must prove a case in court to obtain an injunction whereas agencies like the E.C. can impose injunctions without judicial intervention, placing the onus on the merging parties to challenge the injunction in court. One can have no quarrel with the U.S. system and a deep suspicion of the European approach, but the U.S. institutional structure should not be used as an instrument to roll back substantive antitrust law, as the court did in the Sabre-Farelogix case.
In terms of both substantive competition law standards and the procedural requirements for merger control, the U.S and Europe appear headed in opposite directions. And, based on the three deals discussed above, the adjustment necessary to realign the world’s competition merger policies should be made in Washington – not in London or Brussels.
Excerpt from https://moginrubin.com/end-of-an-era-the-u-s-is-no-longer-the-authority-figure-for-multinational-mergers/:
Unlike other forms of international cooperation grounded in notions of comity and geopolitical realities, leadership in international merger clearance defaults to the jurisdiction with the most restrictive policy. For decades, the U.S. served in this role; merger clearance by the FTC or DOJ would practically ensure worldwide approval. But the E.C.’s decision to block the GE-Honeywell acquisition marked something of an inflection point in the path of global enforcement.
The actions by the DOJ and CMA regarding the Cengage/McGraw-Hill merger exemplify the simultaneous weakening in the U.S. and strengthening in Europe of substantive merger clearance standards and demands. The CMA applied the more restrictive standard and therefore led the clearance process. The CMA not only required the parties to propose remedies to the competition problems it identified, but then rejected those remedies as insufficient. Cengage and McGraw-Hill called off the merger roughly one month later, strongly implying the CMA’s rejection played a key role in stopping the deal. The DOJ, on the other hand, was reportedly poised to approve the merger with relatively minor divestitures, largely ignoring competition concerns raised by lawmakers and advocacy groups.
The CMA again took the lead in the Illumina/PacBio merger review. The CMA was first to conclude Illumina and PacBio operated in a single dynamic market and that the merger was an attempt by Illumina to eliminate a nascent competitor. The CMA also indicated it would attempt to block the merger, as it did not see an alternative that would protect competition from a patent-protected monopolist in a market for an extremely important technology. Although the DOJ eventually reached similar conclusions and challenged the merger, it was not until months after the CMA.
But global divergence in substantive standards and expedience is only half the story, as the Sabre/Farelogix debacle demonstrates that jurisdictions have differing procedural requirements as well. In that case the U.S. government challenged a significant consolidation in a complex, high-tech sub-market in the airline industry only to be confronted with seemingly insurmountable procedural hurdles. Judge Stark’s mechanical and misguided interpretation of the Supreme Court’s holding in Amex—that the competitive effects in any antitrust case involving a transaction platform must be analyzed within a two-sided market definition—created an impossible legal hurdle for the government since only two-sided transaction platforms could compete against Sabre, a qualification Farelogix did not meet.
Putting aside the wrong-headedness of the court’s interpretation of Amex (examples abound of anticompetitive conduct by a two-sided transaction platform that does not require defining a two-sided market), the greater sin may have been to elevate formalism over substance. It is well known that substantive rights can be rolled back through purely procedural maneuvers. In the Sabre-Farelogix case, the court created an excessively inflexible market definition requirement and reached a conclusion seemingly at odds with the evidence largely because the government failed to offer a prima facie case. In other words, the merging parties needn’t have bothered presenting their unreliable and misleading evidence. The court ruled the DOJ failed to make out its case in chief, so all the merging parties had to do was show up.
By contrast, the CMA satisfied its market definition and elemental requirements through overwhelming evidence that demonstrated Farelogix represented the most likely source of industry innovation and, as such, the most significant competitive constraint on Sabre’s market leadership. The U.S. court was aware of this, having noted that Farelogix represents the only real threat to Sabre and the testimony of one airline executive who said it would cost $40 million for an airline to develop its own platform and more than $20 million a year to maintain. An innovator like Farelogix could be easily and/or intentionally stymied if controlled by Sabre, a proposition that seemed self-evident to the CMA but was swallowed whole by the procedural obstacles erected by the U.S. court.
Indeed, the U.S.-European procedural divergence in merger control is institutional. U.S. authorities must prove a case in court to obtain an injunction whereas agencies like the E.C. can impose injunctions without judicial intervention, placing the onus on the merging parties to challenge the injunction in court. One can have no quarrel with the U.S. system and a deep suspicion of the European approach, but the U.S. institutional structure should not be used as an instrument to roll back substantive antitrust law, as the court did in the Sabre-Farelogix case.
In terms of both substantive competition law standards and the procedural requirements for merger control, the U.S and Europe appear headed in opposite directions. And, based on the three deals discussed above, the adjustment necessary to realign the world’s competition merger policies should be made in Washington – not in London or Brussels.
- Michael Carrier's primer:
Georgetown Journal of International Affairs (Jan. 2020)
4 Pages Posted: 27 May 2020
AbstractBig Tech is in the news. At the center of our political and economic dialogue is the effect that Amazon, Apple, Facebook, and Google have on our lives and what, if anything, governments should do about it.
In this short piece, I explain how Big Tech has come under scrutiny, the antitrust implications of the industry’s behavior, and the potential remedy of breaking up the companies.
Keywords: antitrust, Big Tech, Amazon, Apple, Facebook, Google
JEL Classification: K21, L40, L41, L63, O34
Suggested Citation:
Carrier, Michael A., Big Tech, Antitrust, and Breakup (January 14, 2020). Georgetown Journal of International Affairs (Jan. 2020). Available at SSRN: https://ssrn.com/abstract=3593863
In at least a dozen states, health departments have inflated testing numbers or deflated death tallies by changing criteria for who counts as a coronavirus victim and what counts as a coronavirus test
Some states have shifted the metrics for a “safe” reopening; Arizona sought to clamp down on bad news at one point by simply shuttering its pandemic modeling. About a third of the states aren’t even reporting hospital admission data — a big red flag for the resurgence of the virus.
Excerpt from https://www.msn.com/en-us/news/us/bad-state-data-hides-coronavirus-threat-as-trump-pushes-reopening/ar-BB14GGZj?ocid=msedgdhp
Some states have shifted the metrics for a “safe” reopening; Arizona sought to clamp down on bad news at one point by simply shuttering its pandemic modeling. About a third of the states aren’t even reporting hospital admission data — a big red flag for the resurgence of the virus.
Excerpt from https://www.msn.com/en-us/news/us/bad-state-data-hides-coronavirus-threat-as-trump-pushes-reopening/ar-BB14GGZj?ocid=msedgdhp
Goldman Sachs Forecloses on 10,000 Homes for ‘Consumer Relief’
A federal settlement over the 2008 financial crisis required the bank to offer homeowners $1.8 billion in relief. In the process, it became a big buyer of distressed mortgages.
To make amends for its part in the collapse of the housing market during the 2008 financial crisis, Goldman Sachs promised $1.8 billion in consumer relief to struggling homeowners.
That penance was also a business opportunity.
Four years after agreeing to help homeowners in a civil settlement with federal prosecutors, the Wall Street firm has become one of the biggest buyers of distressed mortgages, an area of investing that deals in loan modifications and foreclosures for borrowers who can’t make their payments.
And while Goldman has reworked loans to make it possible for thousands of homeowners to avoid foreclosure, it has also taken back more than 10,000 homes — properties it has started to sell to help offset the cost of the assistance it provides, a review of data shows.
“They are profiting off of this,” said George Daly, who almost lost his home in Millville, N.J., to Goldman after it bought his mortgage as part of the consumer relief program.
Excerpt from https://www.nytimes.com/2020/05/22/business/goldman-sachs-mortgage-foreclosure.html?action=click&algo=bandit-story&block=more_in_recirc&fellback=false&imp_id=301303615&impression_id=130080462&index=3&pgtype=Article®ion=footer
A federal settlement over the 2008 financial crisis required the bank to offer homeowners $1.8 billion in relief. In the process, it became a big buyer of distressed mortgages.
To make amends for its part in the collapse of the housing market during the 2008 financial crisis, Goldman Sachs promised $1.8 billion in consumer relief to struggling homeowners.
That penance was also a business opportunity.
Four years after agreeing to help homeowners in a civil settlement with federal prosecutors, the Wall Street firm has become one of the biggest buyers of distressed mortgages, an area of investing that deals in loan modifications and foreclosures for borrowers who can’t make their payments.
And while Goldman has reworked loans to make it possible for thousands of homeowners to avoid foreclosure, it has also taken back more than 10,000 homes — properties it has started to sell to help offset the cost of the assistance it provides, a review of data shows.
“They are profiting off of this,” said George Daly, who almost lost his home in Millville, N.J., to Goldman after it bought his mortgage as part of the consumer relief program.
Excerpt from https://www.nytimes.com/2020/05/22/business/goldman-sachs-mortgage-foreclosure.html?action=click&algo=bandit-story&block=more_in_recirc&fellback=false&imp_id=301303615&impression_id=130080462&index=3&pgtype=Article®ion=footer
Read the Court Ruling Against NCAA Restrictions on Athlete Pay
By Greta Anderson
May 19, 2020
A California federal appeals court has concluded that rules set by the National Collegiate Athletic Association to limit education-related compensation for athletes violate antitrust law.
The opinion issued May 18 by a three-judge panel [https://cdn.ca9.uscourts.gov/datastore/opinions/2020/05/18/19-15566.pdf click to read] in the United States Court of Appeals for the Ninth Circuit upheld a district court’s decision that the NCAA cannot restrict colleges from granting “non-cash education-related benefits” to athletes in Division I of the Football Bowl Subdivision, which encompass the nation’s most successful football, men’s basketball and women’s basketball programs.
Institutions are permitted to give money to athletes to pay for computers, musical instruments and other products and services used for academic pursuits, beyond the cost of attendance, or COA, which includes tuition, room and board, meals, and textbooks, the panel said. The NCAA also may not bar scholarships to athletes for study abroad programs or financial aid given after athletes have exhausted their eligibility to compete, according to the ruling.
The case, Alston v. NCAA, was originally ruled on by the U.S. District Court for the Northern District of California in March 2019 and was partly favorable to the NCAA, which argued that allowing certain types of athlete pay would eliminate distinctions between professional and college athletics. The panel agreed that the NCAA’s restrictions on athlete pay unrelated to education, and a requirement that athletic scholarships not exceed COA, were essential for “preserving amateurism and thus improving consumer choice by maintaining a distinction between college and professional sports,” according to the Ninth Circuit ruling.
The panel also addressed the enactment of the Fair Pay for Play Act in California last October. The law goes into effect in January 2023 and will allow college athletes in the state to be paid for use of their name, image and likeness, or NIL. Athletes who brought the Alston case to court argued that the NCAA’s creation of a working group to explore allowing NIL benefits nullifies the association’s argument that such benefits would diminish the amateurism model. But the Ninth Circuit panel said this argument is “premature” and “the NCAA has not endorsed cash compensation untethered to education.”
Judge Milan Smith concurred with the panel’s decision to focus on education-related expenses rather than payments unrelated to academics because of precedent set during a previous case in the Ninth Circuit, O’Bannon v. NCAA, but Smith also expressed concern that the court’s interpretation of antitrust law is damaging to athletes. He said the court relies on the NCAA’s argument that the compensation differences between college and professional sports are what “drive consumer demand” and strengthen the sports entertainment market, however, the same considerations aren’t made for the higher education market, where athletes could benefit from having greater choice over where they compete and the compensation they receive for their athletic success.
“The treatment of Student-Athletes is not the result of free market competition,” Smith wrote. “To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.”
Credit: https://www.insidehighered.com/quicktakes/2020/05/19/court-panel-rules-against-ncaa-restrictions-athlete-pay
By Greta Anderson
May 19, 2020
A California federal appeals court has concluded that rules set by the National Collegiate Athletic Association to limit education-related compensation for athletes violate antitrust law.
The opinion issued May 18 by a three-judge panel [https://cdn.ca9.uscourts.gov/datastore/opinions/2020/05/18/19-15566.pdf click to read] in the United States Court of Appeals for the Ninth Circuit upheld a district court’s decision that the NCAA cannot restrict colleges from granting “non-cash education-related benefits” to athletes in Division I of the Football Bowl Subdivision, which encompass the nation’s most successful football, men’s basketball and women’s basketball programs.
Institutions are permitted to give money to athletes to pay for computers, musical instruments and other products and services used for academic pursuits, beyond the cost of attendance, or COA, which includes tuition, room and board, meals, and textbooks, the panel said. The NCAA also may not bar scholarships to athletes for study abroad programs or financial aid given after athletes have exhausted their eligibility to compete, according to the ruling.
The case, Alston v. NCAA, was originally ruled on by the U.S. District Court for the Northern District of California in March 2019 and was partly favorable to the NCAA, which argued that allowing certain types of athlete pay would eliminate distinctions between professional and college athletics. The panel agreed that the NCAA’s restrictions on athlete pay unrelated to education, and a requirement that athletic scholarships not exceed COA, were essential for “preserving amateurism and thus improving consumer choice by maintaining a distinction between college and professional sports,” according to the Ninth Circuit ruling.
The panel also addressed the enactment of the Fair Pay for Play Act in California last October. The law goes into effect in January 2023 and will allow college athletes in the state to be paid for use of their name, image and likeness, or NIL. Athletes who brought the Alston case to court argued that the NCAA’s creation of a working group to explore allowing NIL benefits nullifies the association’s argument that such benefits would diminish the amateurism model. But the Ninth Circuit panel said this argument is “premature” and “the NCAA has not endorsed cash compensation untethered to education.”
Judge Milan Smith concurred with the panel’s decision to focus on education-related expenses rather than payments unrelated to academics because of precedent set during a previous case in the Ninth Circuit, O’Bannon v. NCAA, but Smith also expressed concern that the court’s interpretation of antitrust law is damaging to athletes. He said the court relies on the NCAA’s argument that the compensation differences between college and professional sports are what “drive consumer demand” and strengthen the sports entertainment market, however, the same considerations aren’t made for the higher education market, where athletes could benefit from having greater choice over where they compete and the compensation they receive for their athletic success.
“The treatment of Student-Athletes is not the result of free market competition,” Smith wrote. “To the contrary, it is the result of a cartel of buyers acting in concert to artificially depress the price that sellers could otherwise receive for their services. Our antitrust laws were originally meant to prohibit exactly this sort of distortion.”
Credit: https://www.insidehighered.com/quicktakes/2020/05/19/court-panel-rules-against-ncaa-restrictions-athlete-pay
Bloomberg TV Interview: Economist Stiglitz on Covid-19 Impact on Jobs, Government Stimulus, Supply and Demand
May 18th, 2020
Joseph Stiglitz says the U.S. will likely have double-digit unemployment for an extended period. He worries that large and dominant companies will become even more dominant. He worries that government support for small U.S. businesses and workers has been inefficient. He wishes for government support of essential industries like health care. DAR
https://www.bloomberg.com/news/videos/2020-05-18/economist-stiglitz-on-covid-19-impact-on-jobs-government-stimulus-supply-and-demand-video
May 18th, 2020
Joseph Stiglitz says the U.S. will likely have double-digit unemployment for an extended period. He worries that large and dominant companies will become even more dominant. He worries that government support for small U.S. businesses and workers has been inefficient. He wishes for government support of essential industries like health care. DAR
https://www.bloomberg.com/news/videos/2020-05-18/economist-stiglitz-on-covid-19-impact-on-jobs-government-stimulus-supply-and-demand-video
NY Post: Health Department hits NYC nursing home with violations after Post report
By Melissa Klein
May 23, 2020 |
Investigators slapped the Hebrew Home in Riverdale with several violations after a Post report revealed scores of coronavirus deaths there went uncounted by state officials.
The state Department of Health said it issued a “statement of deficiencies” to the nursing home with violations that included “infection control concerns, failure to report accurately upon request by the department, and failure to communicate with families and residents in a timely fashion regarding COVID-19 deaths.”
The 751-bed nursing home has to submit a correction plan to be reviewed by the DOH. It could face fines ranging up to $10,000 if any violation directly resulted in patient harm, the DOH said.
The agency’s probe came after The Post reported that 119 people had died at the home from March 1 through early May, although the home said it had just 14 COVID-19 related deaths at the facility and another 11 residents who died in the hospital.
After the DOH launched its probe, the Hebrew Home was forced to go through the records of everyone who died and substantially revised its count. It said as of Monday 28 deaths were reclassified as possibly COVID-19 related bringing the total to 63 since March 1.
A Hebrew Home spokesman said the DOH found only “minor deficiencies” after its inspection, including problems related to signs on residents’ doors and the types of questions asked of staff about exposure to COVID-19.
The communication lapses were tied to the reclassification of the COVID-19 deaths, spokeswoman Wendy Steinberg said.
“Since these were not classified as COVID-related cases, we did not communicate about them at the time. All reclassified residents have been reported,” she said.
She said the home had been adhering to federal regulations to notify families of COVID-19 deaths at the facility, which took effect on May 8.
https://nypost.com/2020/05/23/nyc-nursing-home-hit-with-health-department-violations/?
By Melissa Klein
May 23, 2020 |
Investigators slapped the Hebrew Home in Riverdale with several violations after a Post report revealed scores of coronavirus deaths there went uncounted by state officials.
The state Department of Health said it issued a “statement of deficiencies” to the nursing home with violations that included “infection control concerns, failure to report accurately upon request by the department, and failure to communicate with families and residents in a timely fashion regarding COVID-19 deaths.”
The 751-bed nursing home has to submit a correction plan to be reviewed by the DOH. It could face fines ranging up to $10,000 if any violation directly resulted in patient harm, the DOH said.
The agency’s probe came after The Post reported that 119 people had died at the home from March 1 through early May, although the home said it had just 14 COVID-19 related deaths at the facility and another 11 residents who died in the hospital.
After the DOH launched its probe, the Hebrew Home was forced to go through the records of everyone who died and substantially revised its count. It said as of Monday 28 deaths were reclassified as possibly COVID-19 related bringing the total to 63 since March 1.
A Hebrew Home spokesman said the DOH found only “minor deficiencies” after its inspection, including problems related to signs on residents’ doors and the types of questions asked of staff about exposure to COVID-19.
The communication lapses were tied to the reclassification of the COVID-19 deaths, spokeswoman Wendy Steinberg said.
“Since these were not classified as COVID-related cases, we did not communicate about them at the time. All reclassified residents have been reported,” she said.
She said the home had been adhering to federal regulations to notify families of COVID-19 deaths at the facility, which took effect on May 8.
https://nypost.com/2020/05/23/nyc-nursing-home-hit-with-health-department-violations/?
Judge dismisses OAN’s $10M defamation lawsuit against Rachel Maddow, MSNBC
: City News Service
Posted: May 22, 2020 / 01:01 PM PDT / Updated: May 22, 2020 / 01:04 PM PDT
SAN DIEGO (CNS) – A federal judge Friday dismissed a $10 million defamation lawsuit filed by the owners and operators of the San Diego-based One America News Network against MSNBC and political commentator Rachel Maddow for telling her viewers last summer that the conservative network “really literally is paid Russian propaganda.”
U.S. District Judge Cynthia Bashant dismissed Herring Networks’ suit with prejudice, ruling “there is no set of facts that could support a claim for defamation based on Maddow’s statement,” which was made during a July 22, 2019, segment of her show.
In that segment, Maddow cited a Daily Beast article stating that an OAN on-air reporter was “on the payroll for the Kremlin.”
Herring Networks’ court papers say the reporter, Kristian Rouz, is originally from the Ukraine and started his journalism career by writing articles for Sputnik News, which is affiliated with the Russian government. According to Herring Networks, Rouz was merely a freelancer for Sputnik who selected his own article topics for submission, and his work there had no significance toward his work for OAN.
Herring Networks alleged in the lawsuit filed last fall that Maddow made “utterly and completely false” statements because OAN “is wholly financed by the Herrings, an American family” and “has never been paid or received a penny from Russia or the Russian government.”
Bashant ruled that Maddow’s statement “is an opinion that cannot serve as the basis for a defamation claim,” and thus is protected under the First Amendment.
The San Diego-based judge ruled that most viewers would be able to conclude that Maddow was forwarding her opinion when she made the July 22 statements.
“For her to exaggerate the facts and call OAN Russian propaganda was consistent with her tone up to that point, and the court finds a reasonable viewer would not take the statement as factual given this context,” Bashant wrote. “The context of Maddow’s statement shows reasonable viewers would consider the contested statement to be opinion.”
In a motion to dismiss the case, Maddow’s attorneys allege Herrings Networks was not objecting to anything from the Daily Beast article, and conceded that Rouz worked for an organization affiliated with the Russian government.
Maddow’s attorneys maintained that her comments during the segment were opinions based entirely on the Daily Beast story, and “she nowhere indicates that she has separate knowledge about Mr. Rouz or the funding of OAN other than from that article.”
Bashant agreed, writing that viewers would “follow the facts of the Daily Beast article; that OAN and Sputnik share a reporter and both pay this reporter to write articles. Anything beyond this is Maddow’s opinion or her exaggeration of the facts.”
https://fox5sandiego.com/author/city-news-service/
A copy of the opinion is here: https://www.courthousenews.com/wp-content/uploads/2020/05/OAN-Maddow-DISMISSAL.pdf
Note: OAN has announced plans to appeal
: City News Service
Posted: May 22, 2020 / 01:01 PM PDT / Updated: May 22, 2020 / 01:04 PM PDT
SAN DIEGO (CNS) – A federal judge Friday dismissed a $10 million defamation lawsuit filed by the owners and operators of the San Diego-based One America News Network against MSNBC and political commentator Rachel Maddow for telling her viewers last summer that the conservative network “really literally is paid Russian propaganda.”
U.S. District Judge Cynthia Bashant dismissed Herring Networks’ suit with prejudice, ruling “there is no set of facts that could support a claim for defamation based on Maddow’s statement,” which was made during a July 22, 2019, segment of her show.
In that segment, Maddow cited a Daily Beast article stating that an OAN on-air reporter was “on the payroll for the Kremlin.”
Herring Networks’ court papers say the reporter, Kristian Rouz, is originally from the Ukraine and started his journalism career by writing articles for Sputnik News, which is affiliated with the Russian government. According to Herring Networks, Rouz was merely a freelancer for Sputnik who selected his own article topics for submission, and his work there had no significance toward his work for OAN.
Herring Networks alleged in the lawsuit filed last fall that Maddow made “utterly and completely false” statements because OAN “is wholly financed by the Herrings, an American family” and “has never been paid or received a penny from Russia or the Russian government.”
Bashant ruled that Maddow’s statement “is an opinion that cannot serve as the basis for a defamation claim,” and thus is protected under the First Amendment.
The San Diego-based judge ruled that most viewers would be able to conclude that Maddow was forwarding her opinion when she made the July 22 statements.
“For her to exaggerate the facts and call OAN Russian propaganda was consistent with her tone up to that point, and the court finds a reasonable viewer would not take the statement as factual given this context,” Bashant wrote. “The context of Maddow’s statement shows reasonable viewers would consider the contested statement to be opinion.”
In a motion to dismiss the case, Maddow’s attorneys allege Herrings Networks was not objecting to anything from the Daily Beast article, and conceded that Rouz worked for an organization affiliated with the Russian government.
Maddow’s attorneys maintained that her comments during the segment were opinions based entirely on the Daily Beast story, and “she nowhere indicates that she has separate knowledge about Mr. Rouz or the funding of OAN other than from that article.”
Bashant agreed, writing that viewers would “follow the facts of the Daily Beast article; that OAN and Sputnik share a reporter and both pay this reporter to write articles. Anything beyond this is Maddow’s opinion or her exaggeration of the facts.”
https://fox5sandiego.com/author/city-news-service/
A copy of the opinion is here: https://www.courthousenews.com/wp-content/uploads/2020/05/OAN-Maddow-DISMISSAL.pdf
Note: OAN has announced plans to appeal
Federal banking regulator pushes through rule changes that weaken Community Reinvestment Act investment incentives in low-income communities.
Excerpt:
In a statement, National Community Reinvestment Coalition CEO Jesse Van Tol laid out the high stakes: “The timing is shocking, in the middle of a pandemic that has been hardest on lower-income communities this law is supposed to protect. What an insulting and cruel moment to unleash new rules that will in some cases help banks to do less for some poor communities and communities of color. Those are the communities hit hardest by COVID-19.”
Read More Here: https://nonprofitquarterly.org/under-cover-of-covid-regulator-rolls-back-community-reinvestment-act-rules/
Excerpt:
In a statement, National Community Reinvestment Coalition CEO Jesse Van Tol laid out the high stakes: “The timing is shocking, in the middle of a pandemic that has been hardest on lower-income communities this law is supposed to protect. What an insulting and cruel moment to unleash new rules that will in some cases help banks to do less for some poor communities and communities of color. Those are the communities hit hardest by COVID-19.”
Read More Here: https://nonprofitquarterly.org/under-cover-of-covid-regulator-rolls-back-community-reinvestment-act-rules/
The Trump administration is supporting a lawsuit challenging the Illinois governor's stay-at-home order.
The legal maneuver marks the first time the U.S. Department of Justice has weighed in on state level COVID-19 policies that are unrelated to religious matters.
The department on Friday filed a statement of interest in the case against Democratic Gov. J.B. Pritzker, saying the protective coronavirus measures in place exceed the limits of his office.
"In response to the COVID-19 pandemic, the Governor of Illinois has, over the past two months, sought to rely on authority under the Illinois Emergency Management Agency Act to impose sweeping limitations on nearly all aspects of life for citizens of Illinois, significantly impairing in some instances their ability to maintain their economic livelihoods," the department said in a statement.
The government is siding with Republican state Rep. Darren Bailey who filed the initial suit in state court earlier this month. He argued that Pritzker's executive order violates a 30-day limit on the governor's emergency powers put in place by the state legislature.
Pritzker was ordered to respond to Bailey's motion for summary judgement by Thursday. But instead, he removed the case to federal district court.
Assistant Attorney General Eric Dreiband for the Civil Rights Division said Pritzker "owes it to the people of Illinois to allow his state's courts to adjudicate the question of whether Illinois law authorizes orders he issued to respond to COVID-19."
See https://www.npr.org/sections/coronavirus-live-updates/2020/05/22/861413069/justice-department-backs-challenge-to-illinois-stay-at-home-order
The legal maneuver marks the first time the U.S. Department of Justice has weighed in on state level COVID-19 policies that are unrelated to religious matters.
The department on Friday filed a statement of interest in the case against Democratic Gov. J.B. Pritzker, saying the protective coronavirus measures in place exceed the limits of his office.
"In response to the COVID-19 pandemic, the Governor of Illinois has, over the past two months, sought to rely on authority under the Illinois Emergency Management Agency Act to impose sweeping limitations on nearly all aspects of life for citizens of Illinois, significantly impairing in some instances their ability to maintain their economic livelihoods," the department said in a statement.
The government is siding with Republican state Rep. Darren Bailey who filed the initial suit in state court earlier this month. He argued that Pritzker's executive order violates a 30-day limit on the governor's emergency powers put in place by the state legislature.
Pritzker was ordered to respond to Bailey's motion for summary judgement by Thursday. But instead, he removed the case to federal district court.
Assistant Attorney General Eric Dreiband for the Civil Rights Division said Pritzker "owes it to the people of Illinois to allow his state's courts to adjudicate the question of whether Illinois law authorizes orders he issued to respond to COVID-19."
See https://www.npr.org/sections/coronavirus-live-updates/2020/05/22/861413069/justice-department-backs-challenge-to-illinois-stay-at-home-order
Non-Compete Agreements: Might They be Procompetitive in Healthcare?
By Paul Wong, Yun Ling, Emily Walden
There have been recent calls for nationwide bans on non-compete agreements. Such sentiment is no surprise in healthcare, particularly in physician labor markets. And yet there are many procompetitive justifications for non-compete agreements where they are an important tool to encourage investment. It is well-recognized that these agreements protect investments that would otherwise be expropriated due to hold-up, including trade secrets, customer relationships, recruitment of unique employees, specific training, and specialized capital investment.
The full article:
https://www.competitionpolicyinternational.com/non-compete-agreements-might-they-be-procompetitive-in-healthcare/Non-Compete
The FTC and States’ Complaint Regarding Daraprim--preventing generic competitionI
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May 18, 2020By Brendan Coffman, Thu Hoang & Nathan Mendelsohn (Wilson Sonsini Goodrich & Rosati)1
On January 27, 2020, the Federal Trade Commission (“FTC”) and the State of New York (“NY AG”) (collectively “Plaintiffs”) filed a Complaint against Phoenixus AG and Vyera Pharmaceuticals, LLC (collectively “Turing”), Martin Shkreli, and Kevin Mulleady. On April 14, 2020, Plaintiffs filed an amended Complaint, adding the states of California, Illinois, North Carolina, Ohio, and the commonwealths of Pennsylvania and Virginia.2 Plaintiffs allege an anticompetitive scheme to prevent generic versions of pyrimethamine (brand name Daraprim®) from launching. Specifically, Plaintiffs allege that Defendants are preventing generic manufacturers from launching by: (1) restricting sales of reference listed drug samples to generic manufacturers by instituting a restricted distribution program with distributors, (2) restricting sales of pyrimethamine API to generic manufacturers, and (3) agreeing with distributors to withhold sales data to prevent generic manufacturers from having a sense of Daraprim’s financial viability.
Full article, including access to Complaint https://www.competitionpolicyinternational.com/turing-the-screws-on-illegal-comprehensive-schemes-the-ftc-and-states-bold-complaint-regarding-daraprim/
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May 18, 2020By Brendan Coffman, Thu Hoang & Nathan Mendelsohn (Wilson Sonsini Goodrich & Rosati)1
On January 27, 2020, the Federal Trade Commission (“FTC”) and the State of New York (“NY AG”) (collectively “Plaintiffs”) filed a Complaint against Phoenixus AG and Vyera Pharmaceuticals, LLC (collectively “Turing”), Martin Shkreli, and Kevin Mulleady. On April 14, 2020, Plaintiffs filed an amended Complaint, adding the states of California, Illinois, North Carolina, Ohio, and the commonwealths of Pennsylvania and Virginia.2 Plaintiffs allege an anticompetitive scheme to prevent generic versions of pyrimethamine (brand name Daraprim®) from launching. Specifically, Plaintiffs allege that Defendants are preventing generic manufacturers from launching by: (1) restricting sales of reference listed drug samples to generic manufacturers by instituting a restricted distribution program with distributors, (2) restricting sales of pyrimethamine API to generic manufacturers, and (3) agreeing with distributors to withhold sales data to prevent generic manufacturers from having a sense of Daraprim’s financial viability.
Full article, including access to Complaint https://www.competitionpolicyinternational.com/turing-the-screws-on-illegal-comprehensive-schemes-the-ftc-and-states-bold-complaint-regarding-daraprim/
Facebook, YouTube remove viral 'Plandemic' video
BY ALICIA COHN - 05/08/20 08:34 AM EDT
Facebook, YouTube and other social media platforms have removed a viral documentary-style video titled "Plandemic" that promoted conspiracy theories about the coronavirus.
The 26-minute video, which was framed as part of a longer documentary on the coronavirus pandemic, promoted several false claims, including that wearing a face mask makes it easier to get the virus and that shelter-in-place orders hurt the immune system.
It also claimed without evidence that the coronavirus was invented in a laboratory in order to promote vaccinations. Judy Mikovits, an anti-vaccination activist, makes many of the claims in the video.
The video received more than 1 million videos on multiple platforms before it was removed, according to reports. It went viral on Thursday and was shared by users with large follower counts, including NFL players and Instagram influencers, according to NBC.
“Suggesting that wearing a mask can make you sick could lead to imminent harm, so we’re removing the video,” Facebook told Reuters.
YouTube told CNBC the video was removed for making claims about a cure for COVID-19 that is not backed by health officials.
Vimeo told The Washington Post the company “stands firm in keeping our platform safe from content that spreads harmful and misleading health information. The video in question has been removed ... for violating these very policies.”
Twitter also blocked the hashtags #PlagueofCorruption and #PlandemicMovie from trends and search and labeled the URL to the video as “unsafe," according to CNBC.
https://thehill.com/policy/technology/496757-facebook-and-youtube-remove-viral-plandemic-video-that-links-face-masks-to#bottom-story-socials
Labor activism against unsafe working conditions as obstacle to factory production
There’s been a surge in labor activism as people made to work in unsafe conditions stage strikes, walkouts and sickouts. “It sounds corny, but we’re moving towards a worker rebellion,” Ron Herrera, president of the Los Angeles County Federation of Labor, told The Los Angeles Times.
Meatpacking workers have been sickened with coronavirus at wildly disproportionate rates, and all over the country there have been protests outside of meatpacking plants demanding that they be temporarily closed, sometimes by the workers’ own children.
See https://www.nytimes.com/2020/05/18/opinion/coronavirus-reopen-workers.html?action=click&module=Opinion&pgtype=Homepage
Several states have been pushing employers to disclose when laid-off employees refuse to return to work.
About two weeks ago, the Vermont Labor Department launched a webpage for businesses to report employees who decline offers to return to work.
Several other states have set up similar websites for reporting employees, including Montana, Oklahoma, Tennessee and South Carolina.
It’s left some business owners, managers and workers in a difficult position where workers fear for their safety on the job.
https://www.marketplace.org/2020/05/14/should-employers-report-employees-who-dont-go-back-to-work
About two weeks ago, the Vermont Labor Department launched a webpage for businesses to report employees who decline offers to return to work.
Several other states have set up similar websites for reporting employees, including Montana, Oklahoma, Tennessee and South Carolina.
It’s left some business owners, managers and workers in a difficult position where workers fear for their safety on the job.
https://www.marketplace.org/2020/05/14/should-employers-report-employees-who-dont-go-back-to-work
Retailers Phase Out Coronavirus Hazard Pay for Essential Workers
Kroger and Rite Aid are among the firms paring back, as unions and employees say they still face risk
Some of the biggest U.S. retailers are ending the extra pay they gave to front-line workers as coronavirus-related costs pile up and the ranks of unemployed Americans surge.
Amazon.com Inc., Kroger Co. and Rite Aid Corp. are among the major companies that have ended or plan to stop paying higher wages for tens of thousands of workers in stores and warehouses and on the road.
Credit: WSJ 5-19 (paywall)
Kroger and Rite Aid are among the firms paring back, as unions and employees say they still face risk
Some of the biggest U.S. retailers are ending the extra pay they gave to front-line workers as coronavirus-related costs pile up and the ranks of unemployed Americans surge.
Amazon.com Inc., Kroger Co. and Rite Aid Corp. are among the major companies that have ended or plan to stop paying higher wages for tens of thousands of workers in stores and warehouses and on the road.
Credit: WSJ 5-19 (paywall)
Has Tyson’s been price gouging on beef?
State AGs have connected concerns about great market power and beef price gouging during the pandemic: "Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis." See the letter of multiple State AGs at https://www.azag.gov/sites/default/files/docs/press-releases/2020/letters/2020_05_05_Barr_AG_William.pdf
The backstory (see MSN news) is that since the beginning of March, coronavirus outbreaks among meatpacking workers forced the temporary closure of about two dozen major U.S. meat processing plants. The U.S. Department of Agriculture estimated that nationwide production of beef, pork and other red meat last week was about 28% lower than the same period last year, and the agency projected Tuesday that beef production in the second quarter of this year would be one-fifth below first-quarter levels.
Grocery stores and restaurants were paying more as a result. Wholesale ground-beef prices recently topped $6.21 a pound, according to the USDA, more than triple their cost at the beginning of March. Some steak prices doubled.
Tyson and other beef processors also have faced government scrutiny over their pricing. Despite beef growing more expensive in supermarkets, cattle prices have tumbled in the U.S. Plains states, prompting federal officials to investigate the way companies like Tyson price and purchase cattle.
Tyson most recently cut prices to supermarkets and other retailers by 20 to 30 percent. That may make beef more affordable for consumers, an admirable goal. But the move could be am effort by Tyson to deflect allegations of manipulating food prices in a time of food insecurity caused by the COVID pandemic. That would be, some have pointed out, an indication that Tyson has great market power.
By Don Allen Resnikoff
State AGs have connected concerns about great market power and beef price gouging during the pandemic: "Given the concentrated market structure of the beef industry, it may be particularly susceptible to market manipulation, particularly during times of food insecurity, such as the current COVID-19 crisis." See the letter of multiple State AGs at https://www.azag.gov/sites/default/files/docs/press-releases/2020/letters/2020_05_05_Barr_AG_William.pdf
The backstory (see MSN news) is that since the beginning of March, coronavirus outbreaks among meatpacking workers forced the temporary closure of about two dozen major U.S. meat processing plants. The U.S. Department of Agriculture estimated that nationwide production of beef, pork and other red meat last week was about 28% lower than the same period last year, and the agency projected Tuesday that beef production in the second quarter of this year would be one-fifth below first-quarter levels.
Grocery stores and restaurants were paying more as a result. Wholesale ground-beef prices recently topped $6.21 a pound, according to the USDA, more than triple their cost at the beginning of March. Some steak prices doubled.
Tyson and other beef processors also have faced government scrutiny over their pricing. Despite beef growing more expensive in supermarkets, cattle prices have tumbled in the U.S. Plains states, prompting federal officials to investigate the way companies like Tyson price and purchase cattle.
Tyson most recently cut prices to supermarkets and other retailers by 20 to 30 percent. That may make beef more affordable for consumers, an admirable goal. But the move could be am effort by Tyson to deflect allegations of manipulating food prices in a time of food insecurity caused by the COVID pandemic. That would be, some have pointed out, an indication that Tyson has great market power.
By Don Allen Resnikoff
Opinion from Lancet: The Trump administration has chipped away at the CDC's capacity to combat infectious diseases.
CDC staff in China were cut back with the last remaining CDC officer recalled home from the China CDC in July, 2019, leaving an intelligence vacuum when COVID-19 began to emerge. In a press conference on Feb 25, Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, warned US citizens to prepare for major disruptions to movement and everyday life. Messonnier subsequently no longer appeared at White House briefings on COVID-19. More recently, the Trump administration has questioned guidelines that the CDC has provided. These actions have undermined the CDC's leadership and its work during the COVID-19 pandemic.
From https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31140-5/fulltext
CDC staff in China were cut back with the last remaining CDC officer recalled home from the China CDC in July, 2019, leaving an intelligence vacuum when COVID-19 began to emerge. In a press conference on Feb 25, Nancy Messonnier, director of the CDC's National Center for Immunization and Respiratory Diseases, warned US citizens to prepare for major disruptions to movement and everyday life. Messonnier subsequently no longer appeared at White House briefings on COVID-19. More recently, the Trump administration has questioned guidelines that the CDC has provided. These actions have undermined the CDC's leadership and its work during the COVID-19 pandemic.
From https://www.thelancet.com/journals/lancet/article/PIIS0140-6736(20)31140-5/fulltext
The effect of mail-in balloting on the California special Congressional election in CA won by Mike Garcia
Every registered voter in the CA district received a postage-paid, mail-in ballot.
Voters who returned the mail-in ballot skewed overwhelmingly old, white and Republican, according to an analysis by the firm Political Data Inc., The younger the voter, the less likely to vote. Fewer than 20 percent of 18- to 34-year-olds cast ballots; twice as many voted who were between 50 and 65; and only among the oldest voters did turnout exceed 50 percent. Latinos were least likely to vote (21 percent), while 40 percent of whites cast ballots. The Political Data Analysis is at https://tableau.the-pdi.com/t/CampaignTools/views/25thCDSpecialAVTracker/2020SpecialElectionTrackerVB?%3AisGuestRedirectFromVizportal=y&%3Aembed=yO
Every registered voter in the CA district received a postage-paid, mail-in ballot.
Voters who returned the mail-in ballot skewed overwhelmingly old, white and Republican, according to an analysis by the firm Political Data Inc., The younger the voter, the less likely to vote. Fewer than 20 percent of 18- to 34-year-olds cast ballots; twice as many voted who were between 50 and 65; and only among the oldest voters did turnout exceed 50 percent. Latinos were least likely to vote (21 percent), while 40 percent of whites cast ballots. The Political Data Analysis is at https://tableau.the-pdi.com/t/CampaignTools/views/25thCDSpecialAVTracker/2020SpecialElectionTrackerVB?%3AisGuestRedirectFromVizportal=y&%3Aembed=yO
With regard to the conflict between the perceived personal right to do whatever, and the social obligation to protect others by wearing a face mask: Washington Metro will ask train and bus passengers to wear a mask starting Monday. But, if they don't, it's also unlikely there will be any kind of penalty
WMATA officials have suggested riders use masks for some time now, said Paul Wiedefeld, the system's general manager. He said he expects most people will follow the new policy, per general guidelines across Greater Washington to stymie the spread of Covid-19.
Though, when pressed by board members on how the system would carry out such a requirement, Wiedefeld acknowledged the challenge in enforcing it, describing it as more of an ask than a mandate.
"It's extremely difficult to enforce — we've all seen the videos on how this goes bad," Wiedefeld said at the board meeting. "We want to encourage to everyone that it's a social responsibility."
Metro workers won't specifically ask it of bus and train riders, and police likely won't write citations, he said. But WMATA might dig into its own stockpile of masks so officers can hand some out to commuters not wearing one. But Wiedefeld said it was unclear if the agency has the supply to provide such a service.
The requirements have varied across the region's borders. The District requires people to wear a mask or face covering while using public transit. Montgomery County has a similar rule for shoppers. While some Virginia counties have encouraged masks while in public, the state has not made that requirement for public transportation, to the chagrin of Metro's largest union, ATU Local 689.
From: https://www.bizjournals.com/washington/news/2020/05/14/metro-to-require-passengers-to-wear-masks.html?
WMATA officials have suggested riders use masks for some time now, said Paul Wiedefeld, the system's general manager. He said he expects most people will follow the new policy, per general guidelines across Greater Washington to stymie the spread of Covid-19.
Though, when pressed by board members on how the system would carry out such a requirement, Wiedefeld acknowledged the challenge in enforcing it, describing it as more of an ask than a mandate.
"It's extremely difficult to enforce — we've all seen the videos on how this goes bad," Wiedefeld said at the board meeting. "We want to encourage to everyone that it's a social responsibility."
Metro workers won't specifically ask it of bus and train riders, and police likely won't write citations, he said. But WMATA might dig into its own stockpile of masks so officers can hand some out to commuters not wearing one. But Wiedefeld said it was unclear if the agency has the supply to provide such a service.
The requirements have varied across the region's borders. The District requires people to wear a mask or face covering while using public transit. Montgomery County has a similar rule for shoppers. While some Virginia counties have encouraged masks while in public, the state has not made that requirement for public transportation, to the chagrin of Metro's largest union, ATU Local 689.
From: https://www.bizjournals.com/washington/news/2020/05/14/metro-to-require-passengers-to-wear-masks.html?
The Justice Department is considering whether to file criminal charges against pharmaceutical giant Teva for allegedly colluding with rivals to inflate the prices of widely used drugs, but Teva is betting that in the middle of a deadly pandemic, the Trump administration won’t dare to come down hard on the largest supplier of generic drugs in the United States.
According to the NY Times:oLawyers for Teva, which prosecutors believe was deeply involved in the conspiracy, until recently had been holding settlement negotiations with officials in the Justice Department’s antitrust division. But in April, the company all but walked away from the talks, essentially daring the Trump administration to file charges, according to people on both sides of the discussions.
The Times article is at https://www.nytimes.com/2020/05/15/us/politics/teva-antitrust-hydroxychloroquine-settlement.html
According to the NY Times:oLawyers for Teva, which prosecutors believe was deeply involved in the conspiracy, until recently had been holding settlement negotiations with officials in the Justice Department’s antitrust division. But in April, the company all but walked away from the talks, essentially daring the Trump administration to file charges, according to people on both sides of the discussions.
The Times article is at https://www.nytimes.com/2020/05/15/us/politics/teva-antitrust-hydroxychloroquine-settlement.html
The nonprofit organization run by President Donald Trump’s nominee to lead the federal agency with oversight of Voice of America is under investigation by the District of Columbia attorney general’s office.
The DC attorney general’s office is investigating whether Michael Pack’s use of funds from his nonprofit, Public Media Lab, was unlawful and whether he improperly used those funds to benefit himself.
The U.S. Agency for Global Media, the agency Pack is nominated to head, is the agency that oversees U.S. government broadcasting, including the Voice of America, among others.
New Jersey Senator Menendez said that since Pack's confirmation hearing in September, “Mr. Pack has refused to provide the Senate Foreign Relations Committee with documents it requested that get to the heart of the matter that the OAG (Office of Attorney General) is now investigating, or to correct false statements he made to the IRS.”
From https://www.voanews.com/usa/nominee-lead-us-media-agency-under-investigation
The DC attorney general’s office is investigating whether Michael Pack’s use of funds from his nonprofit, Public Media Lab, was unlawful and whether he improperly used those funds to benefit himself.
The U.S. Agency for Global Media, the agency Pack is nominated to head, is the agency that oversees U.S. government broadcasting, including the Voice of America, among others.
New Jersey Senator Menendez said that since Pack's confirmation hearing in September, “Mr. Pack has refused to provide the Senate Foreign Relations Committee with documents it requested that get to the heart of the matter that the OAG (Office of Attorney General) is now investigating, or to correct false statements he made to the IRS.”
From https://www.voanews.com/usa/nominee-lead-us-media-agency-under-investigation
From Public Citizen
Senate Judiciary Committee holds hearing on proposal to eliminate business liability to consumers for infecting them with Covid-19
Posted: 13 May 2020 09:22 AM PDT
by Jeff Sovern
The video and prepared testimony is here. If you have time to read only one, I recommend David Vladeck's excellent statement.
Though Senate Majority Leader Mitch McConnell has described this terrible proposal as a "red line" for future coronavirus bills, it appears he does not have the full support of his caucus. Republican Senator Mike Lee expressed concerns about the intrusion of a federal law into the state torts domain.
Senate Judiciary Committee holds hearing on proposal to eliminate business liability to consumers for infecting them with Covid-19
Posted: 13 May 2020 09:22 AM PDT
by Jeff Sovern
The video and prepared testimony is here. If you have time to read only one, I recommend David Vladeck's excellent statement.
Though Senate Majority Leader Mitch McConnell has described this terrible proposal as a "red line" for future coronavirus bills, it appears he does not have the full support of his caucus. Republican Senator Mike Lee expressed concerns about the intrusion of a federal law into the state torts domain.
Business Journal: How much liability should companies bear from workers and from customers by reopening in the midst of the pandemic?
The National Federation of Independent Business has proposed Liability Protection Principles that address coronavirus-related claims with employees through the worker's compensation system. The group proposes protections from customer claims unless a customer can prove injury and that a business knowingly neglected to develop a reasonable plan for reducing exposure to the coronavirus. NFIB also suggests that only those hospitalized with Covid-19 should be allowed to sue, with fines for “unscrupulous trial attorneys bringing frivolous Covid-19-related lawsuits.”
Worker and consumer advocates have cautioned against such measures. A coalition of labor unions, consumer rights groups and legal organizations strongly opposes any legislation that would grant nationwide immunity for businesses “that operate in an unreasonably unsafe manner” during the pandemic, according to a letter sent by a coalition of groups to U.S. House and Senate leaders. [The letter is at https://centerjd.org/content/group-letter-congress-opposing-business-immunity?]
Credit: Business Journal National Observer
An estimated 27 million Americans have lost employer-based health coverage during the pandemic
That is according to an analysis from the Kaiser Family Foundation. The estimate includes Americans who lost their employer-based health insurance and those whose family member lost their job and accompanying insurance. KFF estimates that 12.7 million people — nearly half of those who recently lost coverage — are eligible for Medicaid. Another 8.4 million are eligible for ACA marketplace subsidies. KFF also projects that 19 million people will switch to coverage offered by their partner's employer.
That is according to an analysis from the Kaiser Family Foundation. The estimate includes Americans who lost their employer-based health insurance and those whose family member lost their job and accompanying insurance. KFF estimates that 12.7 million people — nearly half of those who recently lost coverage — are eligible for Medicaid. Another 8.4 million are eligible for ACA marketplace subsidies. KFF also projects that 19 million people will switch to coverage offered by their partner's employer.
From DMN: Will Giants Rule the Post-COVID Music Industry? Artist Rights Alliance, Future of Music Coalition Support the Pandemic Anti-Monopoly Act
Amid widespread fiscal tumult and economic uncertainty, 25 organizations, including the Artist Rights Alliance (ARA), the Future of Music Coalition, and MoveOn, have sent a letter to Congress in support of the Pandemic Anti-Monopoly Act.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/post-covid-music-industry/
From DMN: 46 Music and Film Organizations Tell Congress: ‘The Reality of Our Situation Is Dire’
46 film and music organizations have submitted a letter to Congress highlighting perceived shortcomings in the $2.2 trillion CARES Act, as well as possible ways to address these points in future economic-aid legislation. The letter points to a seriously dire financial situation for creative professionals.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/music-film-organizations-call-on-congress/
Amid widespread fiscal tumult and economic uncertainty, 25 organizations, including the Artist Rights Alliance (ARA), the Future of Music Coalition, and MoveOn, have sent a letter to Congress in support of the Pandemic Anti-Monopoly Act.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/post-covid-music-industry/
From DMN: 46 Music and Film Organizations Tell Congress: ‘The Reality of Our Situation Is Dire’
46 film and music organizations have submitted a letter to Congress highlighting perceived shortcomings in the $2.2 trillion CARES Act, as well as possible ways to address these points in future economic-aid legislation. The letter points to a seriously dire financial situation for creative professionals.
The story continues here. https://www.digitalmusicnews.com/2020/05/08/music-film-organizations-call-on-congress/
More from Washington Business Journal: Covid-19 lawsuits? Battle lines form over whether businesses should be liable.
By Andy Medici / As economies and businesses reopen, the potential grounds for lawsuits will become a defining debate during the next congressional stimulus discussions.
Read Full Article https://www.bizjournals.com/washington/news/2020/05/08/worried-about-covid-19-lawsuits-battle-lines-form.html?
By Andy Medici / As economies and businesses reopen, the potential grounds for lawsuits will become a defining debate during the next congressional stimulus discussions.
Read Full Article https://www.bizjournals.com/washington/news/2020/05/08/worried-about-covid-19-lawsuits-battle-lines-form.html?
Much-anticipated CDC guidelines advising businesses and schools how they should reopen reportedly remain in limbo
Many companies reportedly are seeking out other sources for assistance on how to operate through an unprecedented crisis.
Click to read the leaked CDC "draft" guidelines: https://www.mercurynews.com/2020/05/07/read-full-text-of-cdc-reopening-guidelines-that-white-house-rejected/
Many companies reportedly are seeking out other sources for assistance on how to operate through an unprecedented crisis.
Click to read the leaked CDC "draft" guidelines: https://www.mercurynews.com/2020/05/07/read-full-text-of-cdc-reopening-guidelines-that-white-house-rejected/
To save their music venue businesses, more than 1,200 venues and promoters have formed an advocacy group, the National Independent Venue Association, with Dayna Frank as its board president.
The group does not include any venues owned by AEG or Live Nation.
Like other small companies, the venue operators say that Congress’s initial relief bills, like the $2 trillion CARES Act, were ill-suited to their business. Three-quarters of loan funds, for example, must go to payroll expenses within two months — though many promoters have had to furlough their employees, and worry it may be half a year before they have another show to staff. The new trade group has retained Akin Gump Strauss Hauer & Feld, the powerhouse lobbying firm, and its requests for lawmakers include tax relief and more flexible loan programs.
From https://www.nytimes.com/2020/05/06/arts/music/independent-venues-coronavirus.html
The group does not include any venues owned by AEG or Live Nation.
Like other small companies, the venue operators say that Congress’s initial relief bills, like the $2 trillion CARES Act, were ill-suited to their business. Three-quarters of loan funds, for example, must go to payroll expenses within two months — though many promoters have had to furlough their employees, and worry it may be half a year before they have another show to staff. The new trade group has retained Akin Gump Strauss Hauer & Feld, the powerhouse lobbying firm, and its requests for lawmakers include tax relief and more flexible loan programs.
From https://www.nytimes.com/2020/05/06/arts/music/independent-venues-coronavirus.html
WSJ video: slow consumer spending=possible slow recovery
https://www.wsj.com/video/the-latest-consumer-spending-report-explained/14661D9B-8251-43EB-B082-EDDE09187E2F.html
https://www.wsj.com/video/the-latest-consumer-spending-report-explained/14661D9B-8251-43EB-B082-EDDE09187E2F.html
EU Consumer Group Says Amazon/eBay Should Be Liable For Faulty Goods
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May 5, 2020Online marketplaces such as Amazon and eBay should be liable for any faulty and unsafe goods they sell, claimed the EU’s biggest consumer group, as Brussels prepares to overhaul its rules for internet platforms, reported the Financial Times.
The EU consumers’ organization (Beuc), which represents consumer bodies across 32 countries, accused online platforms of selling a wide range of goods that do not comply with EU safety standards.
In a test in February of 250 electrical goods, toys, cosmetics, and other products from Amazon, AliExpress, eBay, and Wish, two-thirds failed European safety laws. “The consequences for consumers, including children, of buying such failing products could range from electric shock, to fire or suffocation,” stated Beuc.
Platforms also needed to take more responsibility during the coronavirus crisis for the “numerous products with untenable health claims being marketed online.” Maryant Fernández, senior digital policy officer at Beuc, said the pandemic illustrated perfectly “the power and influence that online platforms can have on our society and our economy.”
“E-commerce shops have become more relevant than ever during the pandemic and we need to hold them accountable,” she said. “It cannot continue to be the case that it’s very easy for a platform to make money from illegal online sales, but that it’s very difficult to put an end to them.”
Full Content: Financ
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May 5, 2020Online marketplaces such as Amazon and eBay should be liable for any faulty and unsafe goods they sell, claimed the EU’s biggest consumer group, as Brussels prepares to overhaul its rules for internet platforms, reported the Financial Times.
The EU consumers’ organization (Beuc), which represents consumer bodies across 32 countries, accused online platforms of selling a wide range of goods that do not comply with EU safety standards.
In a test in February of 250 electrical goods, toys, cosmetics, and other products from Amazon, AliExpress, eBay, and Wish, two-thirds failed European safety laws. “The consequences for consumers, including children, of buying such failing products could range from electric shock, to fire or suffocation,” stated Beuc.
Platforms also needed to take more responsibility during the coronavirus crisis for the “numerous products with untenable health claims being marketed online.” Maryant Fernández, senior digital policy officer at Beuc, said the pandemic illustrated perfectly “the power and influence that online platforms can have on our society and our economy.”
“E-commerce shops have become more relevant than ever during the pandemic and we need to hold them accountable,” she said. “It cannot continue to be the case that it’s very easy for a platform to make money from illegal online sales, but that it’s very difficult to put an end to them.”
Full Content: Financ
California sue Uber and Lyft, alleging the ride-hailing companies have illegally treated their drivers as independent contractors
Misclassification is alleged to deprive drivers of worker protections and benefits such as minimum wage and unemployment insurance.
The lawsuit, brought by state Atty. Gen. Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco, seeks restitution for unpaid wages it says are owed to drivers, and it requests that the court force the companies to immediately classify their drivers as employees.
Full article: https://www.latimes.com/business/technology/story/2020-05-05/california-sues-uber-lyft-alleging-ab5-worker-misclassification
Misclassification is alleged to deprive drivers of worker protections and benefits such as minimum wage and unemployment insurance.
The lawsuit, brought by state Atty. Gen. Xavier Becerra and the city attorneys of Los Angeles, San Diego and San Francisco, seeks restitution for unpaid wages it says are owed to drivers, and it requests that the court force the companies to immediately classify their drivers as employees.
Full article: https://www.latimes.com/business/technology/story/2020-05-05/california-sues-uber-lyft-alleging-ab5-worker-misclassification
The consensus of investment gurus is that the stock market is overvalued, suggesting future problems for the rest of us.
By Don Allen Resnikoff
For those of us who pay some attention to financial news, Bloomberg and CNBC on TV, The WSJ Journal, etc., it is hard not to notice that most investment gurus think that the stock market is overvalued. The stories noted below are illustrative.
Here's what the Marketwatch piece has to say, in part:
An environment of low interest rates has set off a search for yield and created stretched valuations in risk assets, including the U.S. equity market, according to an International Monetary Fund report released Wednesday.
“Equity markets appear to be overvalued in Japan and the United States,” the IMF said, in its latest Global Financial Stability report.
The U.S. stock market just became overvalued since the spring. When markets have stretched valuations, it raises the possibility of sharp sudden adjustments, the report warned.
The IMF said investors seem to believe that the Federal Reserve and other central banks will respond quickly to sharp tightening in financial conditions, “hence implicitly providing insurance against significant declines in stock prices.”
If the stock market is overvalued, then what may follow is a correction, obviously. For those whose money comes from wages, and not stockholdings, the problems that may follow are similarly obvious. In the 2008 meltdown, a serious stock market correction was a companion to a recession that was very painful for ordinary consumers. The number of jobless workers more than doubled in the aftermath while the stock market lost more than half its value.
The New York Times reports that some veterans of that 2008 tailspin — the worst since the Great Depression — say today’s epidemic is hammering the economy in complex ways that could prove even more difficult to combat. “The problem is everyone in America is cutting back their consumption,” said Jason Furman, who led the Council of Economic Advisers during the Obama administration. “A lot of sectors are being hit, especially the services sector. A lot of income and spending is being reduced. That’s just an enormous shock to the economy.”
https://www.forbes.com/sites/garrettgunderson/2020/03/10/the-stock-market-is-overvalued-heres-why/#54814edefb7e
https://www.marketwatch.com/story/us-stock-market-is-overvalued-imf-says-2019-10-16
https://www.fool.com/investing/2020/04/29/the-market-is-overvalued-these-two-stocks-prove-it.aspx
By Don Allen Resnikoff
For those of us who pay some attention to financial news, Bloomberg and CNBC on TV, The WSJ Journal, etc., it is hard not to notice that most investment gurus think that the stock market is overvalued. The stories noted below are illustrative.
Here's what the Marketwatch piece has to say, in part:
An environment of low interest rates has set off a search for yield and created stretched valuations in risk assets, including the U.S. equity market, according to an International Monetary Fund report released Wednesday.
“Equity markets appear to be overvalued in Japan and the United States,” the IMF said, in its latest Global Financial Stability report.
The U.S. stock market just became overvalued since the spring. When markets have stretched valuations, it raises the possibility of sharp sudden adjustments, the report warned.
The IMF said investors seem to believe that the Federal Reserve and other central banks will respond quickly to sharp tightening in financial conditions, “hence implicitly providing insurance against significant declines in stock prices.”
If the stock market is overvalued, then what may follow is a correction, obviously. For those whose money comes from wages, and not stockholdings, the problems that may follow are similarly obvious. In the 2008 meltdown, a serious stock market correction was a companion to a recession that was very painful for ordinary consumers. The number of jobless workers more than doubled in the aftermath while the stock market lost more than half its value.
The New York Times reports that some veterans of that 2008 tailspin — the worst since the Great Depression — say today’s epidemic is hammering the economy in complex ways that could prove even more difficult to combat. “The problem is everyone in America is cutting back their consumption,” said Jason Furman, who led the Council of Economic Advisers during the Obama administration. “A lot of sectors are being hit, especially the services sector. A lot of income and spending is being reduced. That’s just an enormous shock to the economy.”
https://www.forbes.com/sites/garrettgunderson/2020/03/10/the-stock-market-is-overvalued-heres-why/#54814edefb7e
https://www.marketwatch.com/story/us-stock-market-is-overvalued-imf-says-2019-10-16
https://www.fool.com/investing/2020/04/29/the-market-is-overvalued-these-two-stocks-prove-it.aspx
D.C. is getting a pair of new hospitals
Excerpt of article by By Sara Gilgore and Drew Hansen – Washington Business Journal May 1, 2020, 2:39pm EDT
While two new D.C. hospitals aren’t done deals just yet, the District’s agreements for both projects bring more clarity to two situations that have been riddled with unknowns.
The new hospitals — a Ward 8 facility at the St. Elizabeths East campus in Southeast, to be run by George Washington University Hospital majority owner Universal Health Services Inc. (NYSE: UHS), and a new hospital on Howard University’s campus in Northwest — would create a comprehensive and integrated system of care for some of the city’s most vulnerable residents, a need only underscored by the coronavirus pandemic and health disparities that stand to further worsen patient outcomes.
See for full article: https://www.bizjournals.com/washington/news/2020/05/01/d-c-is-getting-a-pair-of-new-hospitals-here-are-5.html?ana=e_wash_bn_editorschoice_editorschoice&j=90506553&t=Breaking%20News&mkt_tok=eyJpIjoiTVRReFlUSTBZelprTkRreCIsInQiOiJGaDRwVVwvTEdlaWt2cnE3UGt5WGhDZDkwS0F5dm94MUdIa2pHVE9rOG5IVk5ERmFWMWwxaFlJY1E4MUVPMVhGV1h3SU1qNExlZFcwUE0zbktnUDVGNXZZN1JSQ0x0bjBpV3RiTUNLcmJDS1NSZUtPVUpRTU5sM3F2NEZ2QWpoeUlEd3YwNndzV29Yb0JvcmNrOTdMWG5nPT0ifQ%3D%3D
Excerpt of article by By Sara Gilgore and Drew Hansen – Washington Business Journal May 1, 2020, 2:39pm EDT
While two new D.C. hospitals aren’t done deals just yet, the District’s agreements for both projects bring more clarity to two situations that have been riddled with unknowns.
The new hospitals — a Ward 8 facility at the St. Elizabeths East campus in Southeast, to be run by George Washington University Hospital majority owner Universal Health Services Inc. (NYSE: UHS), and a new hospital on Howard University’s campus in Northwest — would create a comprehensive and integrated system of care for some of the city’s most vulnerable residents, a need only underscored by the coronavirus pandemic and health disparities that stand to further worsen patient outcomes.
See for full article: https://www.bizjournals.com/washington/news/2020/05/01/d-c-is-getting-a-pair-of-new-hospitals-here-are-5.html?ana=e_wash_bn_editorschoice_editorschoice&j=90506553&t=Breaking%20News&mkt_tok=eyJpIjoiTVRReFlUSTBZelprTkRreCIsInQiOiJGaDRwVVwvTEdlaWt2cnE3UGt5WGhDZDkwS0F5dm94MUdIa2pHVE9rOG5IVk5ERmFWMWwxaFlJY1E4MUVPMVhGV1h3SU1qNExlZFcwUE0zbktnUDVGNXZZN1JSQ0x0bjBpV3RiTUNLcmJDS1NSZUtPVUpRTU5sM3F2NEZ2QWpoeUlEd3YwNndzV29Yb0JvcmNrOTdMWG5nPT0ifQ%3D%3D
From Andy Medici – Washington Business Journal
Apr 30, 2020, 12:11pm EDT Updated Apr 30, 2020, 1:59pm EDT
The Federal Reserve has expanded its $600 billion Main Street Lending Program to serve much smaller businesses.
The move, announced Thursday, comes after the Federal Reserve accepted more than 2,200 comments about the proposed lending program from people, businesses and nonprofits. And while the program was first announced April 9, the Fed has yet to set a start date, saying that will be "announced soon."
As for the expanded program, here's what you need to know:
The Main Street Lending Program is funded by $75 billion from the the $2.3 trillion CARES Act signed into law March 27 and is part of a larger $454 billion in CARES Act funding earmarked for the Fed to help backstop programs meant to help businesses. The money bolsters the Fed’s ability to add credit to the existing monetary system, thus increasing the overall amount of dollars available to lend and fuels a slate of new programs meant to combat the economic damage caused by Covid-19 and social distancing measures put in place in recent weeks.
The other Federal Reserve programs include a loan facility for the PPP to allow banks to lend more to their customers by using existing loans as collateral for fresh money, as well as a new Municipal Liquidity Facility that will buy up to $500 billion in state and local governments' debt to allow them to continue to borrow at reasonable rates — and avoid drastic cuts in services and jobs when citizens and small businesses need them most.
The changes also come as hundreds of thousands of small businesses rush to claim a portion of the hundreds of billions of dollars set aside for the second round of the SBA's PPP, a forgivable loan in which most of the proceeds must go to payroll expenses. That money is expected to be fully authorized in the next few days.
Apr 30, 2020, 12:11pm EDT Updated Apr 30, 2020, 1:59pm EDT
The Federal Reserve has expanded its $600 billion Main Street Lending Program to serve much smaller businesses.
The move, announced Thursday, comes after the Federal Reserve accepted more than 2,200 comments about the proposed lending program from people, businesses and nonprofits. And while the program was first announced April 9, the Fed has yet to set a start date, saying that will be "announced soon."
As for the expanded program, here's what you need to know:
- The minimum loan amount under the program will now be $500,000 for new loans and priority loans, down from the originally proposed $1 million, opening up the program to smaller businesses. The "expanded" loan type will be a minimum of $10 million, designed for larger businesses.
- The ceiling for loans will also be raised to companies with up to 15,000 employees or up to $5 billion in annual revenue, compared with original thresholds of 10,000 employees or $2.5 billion in revenue when the program was first announced. That means much larger companies will now qualify for the program.
- There will be a new type of "priority loan" in which the Federal Reserve will buy 85% of the loan made by a bank, as opposed to the 95% the Fed will buy through its Main Street New Loan Facility and Main Street Expanded Loan Facility, announced earlier this month.
- All the loans will be for four-year terms with an adjustable rate of the London Interbank Offered Rate, or Libor, plus 3%,which means a range of around 2.5% to 4%, with interest and payments deferred for a year.
- Companies that have received funding from the Small Business Administration's Paycheck Protection Program can still be eligible for Main Street funding provided they meet the latter program's criteria.
- For qualifying businesses, the process is the same as with the PPP: Go through partner banks to either take out new Main Street loans or receive boosts to existing loans. The businesses must “commit to make reasonable efforts” to maintain staffs and payroll.
The Main Street Lending Program is funded by $75 billion from the the $2.3 trillion CARES Act signed into law March 27 and is part of a larger $454 billion in CARES Act funding earmarked for the Fed to help backstop programs meant to help businesses. The money bolsters the Fed’s ability to add credit to the existing monetary system, thus increasing the overall amount of dollars available to lend and fuels a slate of new programs meant to combat the economic damage caused by Covid-19 and social distancing measures put in place in recent weeks.
The other Federal Reserve programs include a loan facility for the PPP to allow banks to lend more to their customers by using existing loans as collateral for fresh money, as well as a new Municipal Liquidity Facility that will buy up to $500 billion in state and local governments' debt to allow them to continue to borrow at reasonable rates — and avoid drastic cuts in services and jobs when citizens and small businesses need them most.
The changes also come as hundreds of thousands of small businesses rush to claim a portion of the hundreds of billions of dollars set aside for the second round of the SBA's PPP, a forgivable loan in which most of the proceeds must go to payroll expenses. That money is expected to be fully authorized in the next few days.
PBS Newshour presents Main Street Alliance's Amanda Ballantyne and Brad Close of the National Federation of Independent Businesses and others on shortfalls of CARES Act help to very small businesses and non-profits
https://www.youtube.com/watch?v=hgjoYlrxLW8
The distribution of CARES Act that money continues to be a source of controversy, and the program has been mired with technical problems. PBS reports and talks to the Main Street Alliance's Amanda Ballantyne and Brad Close of the National Federation of Independent Businesses.
The discussants do a good job of pointing out shortfalls in the CARES Act.
Postin by DAR-- opinon expressed is his responsibility
https://www.youtube.com/watch?v=hgjoYlrxLW8
The distribution of CARES Act that money continues to be a source of controversy, and the program has been mired with technical problems. PBS reports and talks to the Main Street Alliance's Amanda Ballantyne and Brad Close of the National Federation of Independent Businesses.
The discussants do a good job of pointing out shortfalls in the CARES Act.
Postin by DAR-- opinon expressed is his responsibility
It is bad but it could be even worse: Because farmers have been plowing under vegetable fields, dumping milk and smashing eggs that cannot be sold because the coronavirus pandemic has shut down restaurants, hotels and schools, there is action by the Trump administration and state governments, as well as grass-roots efforts.
Over the next few weeks, the Department of Agriculture will begin spending $300 million a month to buy surplus vegetables, fruit, milk and meat from distributors and ship them to food banks. The federal grants will also subsidize boxing up the purchases and transporting them to charitable groups — tasks that farmers have said they cannot afford, giving them few options other than to destroy the food.
Gov. Andrew M. Cuomo’s office has said New York will give food banks $25 million to buy products made from excess milk on farms in the state; the state is working with manufacturers like Chobani, Hood and Cabot to turn the milk into cheese, yogurt and butter. Some of the state subsidy can also be used to buy apples, potatoes and other produce that farms have in storage.
Nationally, the Dairy Farmers of America, the largest dairy co-op in the United States, has diverted almost a quarter of a million gallons of milk to food banks.
“It’s just a drop in the bucket,” said Jackie Klippenstein, a senior vice president at the co-op. “But we had to do something.”
* * *
“These are not insolvable problems,” said Marion Nestle, a food studies professor at New York University. “These are problems that require a lot of people, sums of money and some thought. If the government were really interested in making sure that hungry people got fed and farmers were supported, they would figure out a way to do it.”
From https://www.msn.com/en-us/news/us/we-had-to-do-something-trying-to-prevent-massive-food-waste/ar-BB13wa4I?ocid=msedgdhp
Private school Sidwell Friends decision to accept Federal Cares Act fund makes the news
On Wednesday, the board of trustees at Sidwell Friends, Chelsea Clinton’s alma mater, said in a memo to the school community that it would accept a $5.2 million loan “in light of actual and anticipated shortfalls, mounting uncertainty” and “the importance of maintaining employment levels.”
“We recognize that our decision to accept this loan may draw criticism from some quarters of the community,” said the school, which has a $53.4 million endowment, “but are fully united in our decision.”
Continue reading the story https://www.nytimes.com/2020/04/29/us/prep-schools-coronavirus-loans.html#after-story-ad-2
Sidwell Friends Philosophy Statement-- https://www.sidwell.edu/about
Sidwell Friends School is a dynamic educational community grounded in the Quaker belief that there is “that of God in everyone.” Individually and collectively, we challenge ourselves to pursue excellence in academic, athletic, and artistic realms. We are committed to the joys of exploration and discovery. Differences among us enhance intellectual inquiry, expand understanding, and deepen empathy. The Quaker pillars of the School inspire active engagement in environmental stewardship, global citizenship, and service. We find strength in reflection and shared silence. At the heart of each endeavor, we strive to discern deeper truths about ourselves and our common humanity, preparing students and adults to “let their lives speak.”
Board of Trustees
Approved September 10, 2015
On Wednesday, the board of trustees at Sidwell Friends, Chelsea Clinton’s alma mater, said in a memo to the school community that it would accept a $5.2 million loan “in light of actual and anticipated shortfalls, mounting uncertainty” and “the importance of maintaining employment levels.”
“We recognize that our decision to accept this loan may draw criticism from some quarters of the community,” said the school, which has a $53.4 million endowment, “but are fully united in our decision.”
Continue reading the story https://www.nytimes.com/2020/04/29/us/prep-schools-coronavirus-loans.html#after-story-ad-2
Sidwell Friends Philosophy Statement-- https://www.sidwell.edu/about
Sidwell Friends School is a dynamic educational community grounded in the Quaker belief that there is “that of God in everyone.” Individually and collectively, we challenge ourselves to pursue excellence in academic, athletic, and artistic realms. We are committed to the joys of exploration and discovery. Differences among us enhance intellectual inquiry, expand understanding, and deepen empathy. The Quaker pillars of the School inspire active engagement in environmental stewardship, global citizenship, and service. We find strength in reflection and shared silence. At the heart of each endeavor, we strive to discern deeper truths about ourselves and our common humanity, preparing students and adults to “let their lives speak.”
Board of Trustees
Approved September 10, 2015
Maryland cancels a $12.5 million order of masks and other personal protective equipment from a politically connected firm, and had asked the state attorney general’s office to investigate whether the company misrepresented its ability to deliver the badly needed supplies.
The state signed a purchase order on April 1 to buy the supplies from Blue Flame Medical, a recently launched firm led by John Thomas, a Republican political strategist, and Mike Gula, a Republican fund-raiser, according to a state official. Maryland paid the firm a 50 percent down payment of $6,271,000, the official said.
The shipping date for the order was April 14, and Maryland’s Department of General Services issued a warning letter to the company on Thursday, when there was no indication that the supplies were on their way, the official said. State officials then moved to cancel the order.
“We have determined that since it has been one month since the order was placed with no confirmation of shipment, we are in the process of canceling the order and have referred this matter to the attorney general,” said Nick Cavey, a spokesman for the Maryland Department of General Services.
From: https://www.nytimes.com/2020/05/02/us/coronavirus-updates.html
The state signed a purchase order on April 1 to buy the supplies from Blue Flame Medical, a recently launched firm led by John Thomas, a Republican political strategist, and Mike Gula, a Republican fund-raiser, according to a state official. Maryland paid the firm a 50 percent down payment of $6,271,000, the official said.
The shipping date for the order was April 14, and Maryland’s Department of General Services issued a warning letter to the company on Thursday, when there was no indication that the supplies were on their way, the official said. State officials then moved to cancel the order.
“We have determined that since it has been one month since the order was placed with no confirmation of shipment, we are in the process of canceling the order and have referred this matter to the attorney general,” said Nick Cavey, a spokesman for the Maryland Department of General Services.
From: https://www.nytimes.com/2020/05/02/us/coronavirus-updates.html
The text of the CDC recommendations affected by the President's Executive Order that meat plants open
https://covid.sd.gov/docs/smithfield_recs.pdf
Court orders Smithfield Foods to comply with health guidelines
See https://www.meatpoultry.com/articles/23035-court-orders-smithfield-foods-to-comply-with-health-guidelines
Washington Post: President's Executive Order attempts to countermand the Court Order and CDC directives on safety in meat plants affected by COVID-19
https://www.washingtonpost.com/business/2020/04/28/trump-meat-plants-dpa/
https://covid.sd.gov/docs/smithfield_recs.pdf
Court orders Smithfield Foods to comply with health guidelines
See https://www.meatpoultry.com/articles/23035-court-orders-smithfield-foods-to-comply-with-health-guidelines
Washington Post: President's Executive Order attempts to countermand the Court Order and CDC directives on safety in meat plants affected by COVID-19
https://www.washingtonpost.com/business/2020/04/28/trump-meat-plants-dpa/
US Chamber of Commerce warns of impending harmful coronavirus lawsuit epidemic
April 24, 2020The world has not seen a pandemic like the coronavirus in a century. It will cost millions of Americans their jobs and tens of thousands of Americans their lives. While our nation struggles to address this pandemic and the recession it has created, we also face the possibility of a “lawsuit epidemic,” according to an editorial in The Wall Street Journal.
As the Journal writes, due to COVID-19 related stay at home orders, media consumption is at an all-time high, and the plaintiff bar is using that to their advantage by airing thousands of advertisements seeking clients. With America being inundated with these ads, it is likely that we will see a wave of COVID-19 related lawsuits. These lawsuits will cripple our nation’s economic recovery, and so it falls to Congress to ensure those businesses and healthcare workers operating in good faith aren’t rewarded with a lawsuit.
https://www.instituteforlegalreform.com/resource/the-wall-street-journal--stopping-a-lawsuit-epidemic
On the other hand, some say that Congressional action to limit company liability is a bad idea:
Unions and labor groups are concerned that any congressional action to limit company liability could put workers at risk. Jona Rosen, associate general counsel for the AFL-CIO, said the union opposes such proposals as they diminish employers' responsibility to provide a safe environment for workers during the crisis. She said the deadly outbreaks among meatpacking workers and transit workers reveal the "insufficient protections and insufficient concerns about the health and safety of people working in these jobs."
https://www.cnn.com/2020/04/29/business/business-liability-congress/index.html
April 24, 2020The world has not seen a pandemic like the coronavirus in a century. It will cost millions of Americans their jobs and tens of thousands of Americans their lives. While our nation struggles to address this pandemic and the recession it has created, we also face the possibility of a “lawsuit epidemic,” according to an editorial in The Wall Street Journal.
As the Journal writes, due to COVID-19 related stay at home orders, media consumption is at an all-time high, and the plaintiff bar is using that to their advantage by airing thousands of advertisements seeking clients. With America being inundated with these ads, it is likely that we will see a wave of COVID-19 related lawsuits. These lawsuits will cripple our nation’s economic recovery, and so it falls to Congress to ensure those businesses and healthcare workers operating in good faith aren’t rewarded with a lawsuit.
https://www.instituteforlegalreform.com/resource/the-wall-street-journal--stopping-a-lawsuit-epidemic
On the other hand, some say that Congressional action to limit company liability is a bad idea:
Unions and labor groups are concerned that any congressional action to limit company liability could put workers at risk. Jona Rosen, associate general counsel for the AFL-CIO, said the union opposes such proposals as they diminish employers' responsibility to provide a safe environment for workers during the crisis. She said the deadly outbreaks among meatpacking workers and transit workers reveal the "insufficient protections and insufficient concerns about the health and safety of people working in these jobs."
https://www.cnn.com/2020/04/29/business/business-liability-congress/index.html
Leading Cancer Treatment Center Admits to Antitrust Crime and Agrees to Pay $100 Million Criminal Penalty -- Florida Cancer Specialists & Research
Institute LLC (FCS), an oncology group headquartered in Fort Myers, Florida, was charged with conspiring to allocate medical and radiation oncology treatments for cancer patients in Southwest Florida, the Department of Justice announced. This charge is the first in the department’s ongoing investigation into market allocation in the oncology industry.
According to a one-count felony charge filed today in the U.S. District Court in Fort Myers, Florida, FCS participated in a criminal antitrust conspiracy with a competing oncology group in Collier, Lee, and Charlotte counties (Southwest Florida). FCS and its co-conspirators agreed not to compete to provide chemotherapy and radiation treatments to cancer patients in Southwest Florida. Beginning as early as 1999 and continuing until at least 2016, FCS entered into an illegal agreement that allocated chemotherapy treatments to FCS and radiation treatments to a competing oncology group. This conspiracy allowed FCS to operate with minimal competition in Southwest Florida and limited valuable integrated care options and choices for cancer patients.
The Antitrust Division also announced a deferred prosecution agreement (DPA) resolving the charge against FCS, under which the company admitted to conspiring to allocate chemotherapy and radiation treatments for cancer patients. FCS has agreed to pay a $100 million criminal penalty —the statutory maximum— and to cooperate fully with the Antitrust Division’s ongoing investigation. FCS has also agreed to maintain an effective compliance program designed to prevent and detect criminal antitrust violations.
From: https://www.justice.gov/opa/pr/leading-cancer-treatment-center-admits-antitrust-crime-and-agrees-pay-100-million-criminal
Robert Connolly, Former Antitrust Division prosecutor, published the following comment:.
Interesting, but sad to see case. Market Allocation. Another Deferred Prosecution Agreement. A continuing investigation. And very sad to see collusion against cancer patients. Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division said "For almost two decades, FCS and its co-conspirators agreed to cheat by limiting treatment options available to cancer patients in order to line their pockets. The Antitrust Division is continuing its investigation to ensure that all responsible participants are held accountable to the maximum extent possible.”
Institute LLC (FCS), an oncology group headquartered in Fort Myers, Florida, was charged with conspiring to allocate medical and radiation oncology treatments for cancer patients in Southwest Florida, the Department of Justice announced. This charge is the first in the department’s ongoing investigation into market allocation in the oncology industry.
According to a one-count felony charge filed today in the U.S. District Court in Fort Myers, Florida, FCS participated in a criminal antitrust conspiracy with a competing oncology group in Collier, Lee, and Charlotte counties (Southwest Florida). FCS and its co-conspirators agreed not to compete to provide chemotherapy and radiation treatments to cancer patients in Southwest Florida. Beginning as early as 1999 and continuing until at least 2016, FCS entered into an illegal agreement that allocated chemotherapy treatments to FCS and radiation treatments to a competing oncology group. This conspiracy allowed FCS to operate with minimal competition in Southwest Florida and limited valuable integrated care options and choices for cancer patients.
The Antitrust Division also announced a deferred prosecution agreement (DPA) resolving the charge against FCS, under which the company admitted to conspiring to allocate chemotherapy and radiation treatments for cancer patients. FCS has agreed to pay a $100 million criminal penalty —the statutory maximum— and to cooperate fully with the Antitrust Division’s ongoing investigation. FCS has also agreed to maintain an effective compliance program designed to prevent and detect criminal antitrust violations.
From: https://www.justice.gov/opa/pr/leading-cancer-treatment-center-admits-antitrust-crime-and-agrees-pay-100-million-criminal
Robert Connolly, Former Antitrust Division prosecutor, published the following comment:.
Interesting, but sad to see case. Market Allocation. Another Deferred Prosecution Agreement. A continuing investigation. And very sad to see collusion against cancer patients. Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division said "For almost two decades, FCS and its co-conspirators agreed to cheat by limiting treatment options available to cancer patients in order to line their pockets. The Antitrust Division is continuing its investigation to ensure that all responsible participants are held accountable to the maximum extent possible.”
AG James' Statement on Firing of Amazon Worker Who Organized Walkout
NEW YORK – New York Attorney General Letitia James tonight released the following statement in response to news that Amazon employee Chris Smalls was terminated today after he organized a walkout to protest health conditions at his workplace, amidst the coronavirus disease 2019 (COVID-19) outbreak:
“It is disgraceful that Amazon would terminate an employee who bravely stood up to protect himself and his colleagues. At the height of a global pandemic, Chris Smalls and his colleagues publicly protested the lack of precautions that Amazon was taking to protect them from COVID-19. Today, Chris Smalls was fired. In New York, the right to organize is codified into law, and any retaliatory action by management related thereto is strictly prohibited. At a time when so many New Yorkers are struggling and are deeply concerned about their safety, this action was also immoral and inhumane. The Office of the Attorney General is considering all legal options, and I am calling on the National Labor Relations Board to investigate this incident.”
Employees that believe their employers are in violation of either existing labor laws or recently issued New York State executive orders should contact the Office of the Attorney General by emailing Labor.Bureau@ag.ny.gov or calling (212) 416-8700 to file a complaint.
https://ag.ny.gov/press-release/2020/ag-james-statement-firing-amazon-worker-who-organized-walkout
NEW YORK – New York Attorney General Letitia James tonight released the following statement in response to news that Amazon employee Chris Smalls was terminated today after he organized a walkout to protest health conditions at his workplace, amidst the coronavirus disease 2019 (COVID-19) outbreak:
“It is disgraceful that Amazon would terminate an employee who bravely stood up to protect himself and his colleagues. At the height of a global pandemic, Chris Smalls and his colleagues publicly protested the lack of precautions that Amazon was taking to protect them from COVID-19. Today, Chris Smalls was fired. In New York, the right to organize is codified into law, and any retaliatory action by management related thereto is strictly prohibited. At a time when so many New Yorkers are struggling and are deeply concerned about their safety, this action was also immoral and inhumane. The Office of the Attorney General is considering all legal options, and I am calling on the National Labor Relations Board to investigate this incident.”
Employees that believe their employers are in violation of either existing labor laws or recently issued New York State executive orders should contact the Office of the Attorney General by emailing Labor.Bureau@ag.ny.gov or calling (212) 416-8700 to file a complaint.
https://ag.ny.gov/press-release/2020/ag-james-statement-firing-amazon-worker-who-organized-walkout
Fixing the CARES Act and its Payroll Protection Plan to help really small businesses, and non-profits
Posting by Don Allen Resnikoff
The media is full of sorrowful stories of very small business owners who have applied for help under the CARES Act and its Payroll Protection Plan (PPP) and been rejected. The media also reports stories of large public companies that qualified as small under the Cares Act and received large sums of money.
The New York Times reports that the average PPP loan size was about $200,000, but 4 percent of the loans accounted for 43 percent of the dollars. Nearly three-quarters of the loans made were for less than $150,000, but those loans accounted for only 17 percent of the funds. That report is based on government data at https://www.sba.gov/sites/default/files/2020-04/PPP%20Deck%20copy.pdf
The skew of lending to bigger businesses has fueled an outcry against companies like Ruth’s Chris Steak House, which got $20 million, and Shake Shack, which received $10 million. They were part of the 0.25 percent of the 1.66 million applicants that each received more than $5 million. Both companies have public-relations concerns and later announced that they would return the money, but many other similarly large companies that are less concerned with public relations did not return money.
There has also been an outcry against banks that gave CARES Act lending priority to relatively large businesses that were established bank customers, while giving short shrift to very small businesses. The experience of JPMorgan Chase customers, as recounted by the Philadephia Enquirer, tells the story. JPMorgan said it approved only 26,500 loans out of the 300,000 PPP applications, or about 9%. Of those, about 8,500 went to clients of JPMorgan’s elite wealth management and corporate banking departments. Most who applied through those bank departments were approved, unlike those who applied without that edge.
Some small businesses went so far as to bring litigation challenging Bank of America’s shutting them out, based on a Bank requirement that PPP applicants have a previous relationship with the Bank and have no lending relationship with any other bank. (See https://www.reuters.com/article/us-otc-ppp-idUSKCN21V20K)
Arguably the most important complaints about the CARES Act are not about business practices by banks that exclude very small business borrowers, or greed of big company borrowers like Shake Shack and Ruth’s Chris. As important as these are, the more important complaints may be about shortfalls in the legislative drafting of the CARES Act, particularly shortfalls not remedied by the April 23 Congressional statute providing more than $300 billion in new funding for the PPP. The April 23 statute did include some reforms, including broadening of lending institutions who can make PPP loans. The April 23 statute includes $60 billion of set-asides for issuance of PPP loans by community development lenders, credit unions and certain other smaller lenders.
It is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last.
Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Perhaps the most obvious suggestion for improvement concerns the amounts of money available for small business and non-profit relief. The amounts made available in the new legislation are likely to run out well before all qualified small businesses and non-profits receive money. More money is likely to be needed.
Another obvious suggestion concerns the sort of legislative loopholes that allowed Ruth's Chis and Shake Shack to get money. The government has since published new guidance discouraging public companies from using the government program and urging those that did take the money to return it. But that guidance may not be a sufficient cure; better legislative drafting might help. It should be clear that large companies do not qualify for PPP loans.
Also, the entities chosen to administer the CARES program might be further improved -- the most recent statute's broadening of lending institutions that administer the PPP may not be enough. Alternatives include administering the CARES Act programs through strengthened government entities, and further expanding the list of private entities that can administer PPP loans.
With regard to financial institutions authorized to administer the PPP program, a major proposal is eliminating or reducing the requirement of the CARES Act that lenders apply the Bank Secrecy Act (BSA) provisions that require the lending institution to have a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program. The thought is that eliminating or reducing those requirements will facilitate lending to very small businesses and non-profits that are not well known to the lender. (See the April 21 commentary by Manatt, Phelps & Phillips, LLP at https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/)
A recent American Bankers Association letter reflected the concern that mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements impede CARES Act PPP loan process for small business applicants. The letter suggested the legislative improvement that banks be “exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily be accomplished by exempting these loans from the definition of new accounts for the purposes of FinCEN requirements.” See https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
The perceived need for lending institutions to reach out into the broader community is not a new idea. The Community Reinvestment Act (CRA (12 U.S.C. 2901 et seq.) is a decades old statute designed to encourage regulated financial institutions to help meet the credit needs of their entire communities. CRA regulations require relevant government agencies to assess lending institutions’ record of helping to meet the credit needs of its community, including in low- and moderate-income neighborhoods.
Some have questioned the basic concept of keying small business loans to payroll costs. They suggest that the current focus on payroll prejudices businesses whose major expenses lie elsewhere, such as in storefront rent. One publication wrote: “PPP is a good start, but there's more to a business than meeting payroll . . . . The SBA has allowed PPP recipients some discretion in using loans to support overhead such as utilities, rent and debt service. But if, as the Business Journals survey suggests, most of those funds will be used for salaries and health care benefits for workers, then many PPP recipients will still be needing cash for other operating needs.”
Finally, with regard to regulatory agency implementation, some have wondered whether application requirements could be simplified so that forms like the one at https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form-Fillable.pdf could be more accessible to small businesses and non-profits that lack sophisticated accounting help. One suggestion would allow applicants to rely on IRS and other previously filed forms that contain needed information such as employee payroll data.
In summary, it is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last. Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Don Allen Resnikoff takes full responsibility for the content of his posting
_
Posting by Don Allen Resnikoff
The media is full of sorrowful stories of very small business owners who have applied for help under the CARES Act and its Payroll Protection Plan (PPP) and been rejected. The media also reports stories of large public companies that qualified as small under the Cares Act and received large sums of money.
The New York Times reports that the average PPP loan size was about $200,000, but 4 percent of the loans accounted for 43 percent of the dollars. Nearly three-quarters of the loans made were for less than $150,000, but those loans accounted for only 17 percent of the funds. That report is based on government data at https://www.sba.gov/sites/default/files/2020-04/PPP%20Deck%20copy.pdf
The skew of lending to bigger businesses has fueled an outcry against companies like Ruth’s Chris Steak House, which got $20 million, and Shake Shack, which received $10 million. They were part of the 0.25 percent of the 1.66 million applicants that each received more than $5 million. Both companies have public-relations concerns and later announced that they would return the money, but many other similarly large companies that are less concerned with public relations did not return money.
There has also been an outcry against banks that gave CARES Act lending priority to relatively large businesses that were established bank customers, while giving short shrift to very small businesses. The experience of JPMorgan Chase customers, as recounted by the Philadephia Enquirer, tells the story. JPMorgan said it approved only 26,500 loans out of the 300,000 PPP applications, or about 9%. Of those, about 8,500 went to clients of JPMorgan’s elite wealth management and corporate banking departments. Most who applied through those bank departments were approved, unlike those who applied without that edge.
Some small businesses went so far as to bring litigation challenging Bank of America’s shutting them out, based on a Bank requirement that PPP applicants have a previous relationship with the Bank and have no lending relationship with any other bank. (See https://www.reuters.com/article/us-otc-ppp-idUSKCN21V20K)
Arguably the most important complaints about the CARES Act are not about business practices by banks that exclude very small business borrowers, or greed of big company borrowers like Shake Shack and Ruth’s Chris. As important as these are, the more important complaints may be about shortfalls in the legislative drafting of the CARES Act, particularly shortfalls not remedied by the April 23 Congressional statute providing more than $300 billion in new funding for the PPP. The April 23 statute did include some reforms, including broadening of lending institutions who can make PPP loans. The April 23 statute includes $60 billion of set-asides for issuance of PPP loans by community development lenders, credit unions and certain other smaller lenders.
It is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last.
Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Perhaps the most obvious suggestion for improvement concerns the amounts of money available for small business and non-profit relief. The amounts made available in the new legislation are likely to run out well before all qualified small businesses and non-profits receive money. More money is likely to be needed.
Another obvious suggestion concerns the sort of legislative loopholes that allowed Ruth's Chis and Shake Shack to get money. The government has since published new guidance discouraging public companies from using the government program and urging those that did take the money to return it. But that guidance may not be a sufficient cure; better legislative drafting might help. It should be clear that large companies do not qualify for PPP loans.
Also, the entities chosen to administer the CARES program might be further improved -- the most recent statute's broadening of lending institutions that administer the PPP may not be enough. Alternatives include administering the CARES Act programs through strengthened government entities, and further expanding the list of private entities that can administer PPP loans.
With regard to financial institutions authorized to administer the PPP program, a major proposal is eliminating or reducing the requirement of the CARES Act that lenders apply the Bank Secrecy Act (BSA) provisions that require the lending institution to have a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program. The thought is that eliminating or reducing those requirements will facilitate lending to very small businesses and non-profits that are not well known to the lender. (See the April 21 commentary by Manatt, Phelps & Phillips, LLP at https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/)
A recent American Bankers Association letter reflected the concern that mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements impede CARES Act PPP loan process for small business applicants. The letter suggested the legislative improvement that banks be “exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily be accomplished by exempting these loans from the definition of new accounts for the purposes of FinCEN requirements.” See https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
The perceived need for lending institutions to reach out into the broader community is not a new idea. The Community Reinvestment Act (CRA (12 U.S.C. 2901 et seq.) is a decades old statute designed to encourage regulated financial institutions to help meet the credit needs of their entire communities. CRA regulations require relevant government agencies to assess lending institutions’ record of helping to meet the credit needs of its community, including in low- and moderate-income neighborhoods.
Some have questioned the basic concept of keying small business loans to payroll costs. They suggest that the current focus on payroll prejudices businesses whose major expenses lie elsewhere, such as in storefront rent. One publication wrote: “PPP is a good start, but there's more to a business than meeting payroll . . . . The SBA has allowed PPP recipients some discretion in using loans to support overhead such as utilities, rent and debt service. But if, as the Business Journals survey suggests, most of those funds will be used for salaries and health care benefits for workers, then many PPP recipients will still be needing cash for other operating needs.”
Finally, with regard to regulatory agency implementation, some have wondered whether application requirements could be simplified so that forms like the one at https://home.treasury.gov/system/files/136/PPP-Borrower-Application-Form-Fillable.pdf could be more accessible to small businesses and non-profits that lack sophisticated accounting help. One suggestion would allow applicants to rely on IRS and other previously filed forms that contain needed information such as employee payroll data.
In summary, it is important to focus on further needed improvements that will allow the CARES Act to better achieve its announced purpose, because the statute passed by the House on April 23, 2020 may not be the last. Proposals discussed here for further improving the CARES Act simply reflect a few of the reform proposals previously raised by industry players. They illustrate the need for more discussion of improvements.
Don Allen Resnikoff takes full responsibility for the content of his posting
_
Bill Baer: Antitrust enforcers must be vigilant in attacking efforts by firms to limit competition in a time of crisis.
Baer writes: Those of us involved over the years in investigating and prosecuting price fixing and bid rigging know well that the urge to cartelize markets is strongest in the face of falling prices triggered by reduced demand. Although it is often rationalized during tough economic times as “not raising prices, just stabilizing them,” or “just protecting our margins, not increasing them,” agreements between companies that restrict competition are per se unlawful and subject the companies and their executives to criminal prosecution. Consumers deserve the benefit of market competition regardless of where we are in the economic cycle.
Excerpt from: https://www.brookings.edu/blog/techtank/2020/04/22/why-we-need-antitrust-enforcement-during-the-covid-19-pandemic/
Baer writes: Those of us involved over the years in investigating and prosecuting price fixing and bid rigging know well that the urge to cartelize markets is strongest in the face of falling prices triggered by reduced demand. Although it is often rationalized during tough economic times as “not raising prices, just stabilizing them,” or “just protecting our margins, not increasing them,” agreements between companies that restrict competition are per se unlawful and subject the companies and their executives to criminal prosecution. Consumers deserve the benefit of market competition regardless of where we are in the economic cycle.
Excerpt from: https://www.brookings.edu/blog/techtank/2020/04/22/why-we-need-antitrust-enforcement-during-the-covid-19-pandemic/
New Visa and MasterCard coding procedures increase the price of mobile payment apps drawing on your credit card
To use an app for cash transfers, customers typically connect it to an outside payment source. Most users link their debit card or a bank account, since in most cases that lets them transfer money without charge. A few apps, however, also give customers the option to link to a credit card and pay a small fee (about 3 percent) for “peer to peer” payments, like splitting the dinner tab. Those apps include PayPal and its Venmo arm, as well as Cash App, which is owned by Square. (Zelle, the app backed by traditional banks, doesn’t accept credit cards.)
But there has been a change in the way the money transfers are coded as they move through the Visa and Mastercard payment networks. That change enables banks to also charge their own, separate cash advance fees — typically $10 but sometimes much more — for payments made using credit cards on those networks. The fees don’t apply when customers make a purchase.
Card-issuing banks now ask that the apps and payment networks code cash transfers to distinguish them from purchases, and put higher fees on cash transfers. The coding change formally took effect in September.
Source: https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html DAR Comment: There is no indication in the NYT article concerning whether Visa and MasterCard or client banks coordinated the coding changes, or whether all or most banks follow similar fee practices for transactions newly coded as money transfers.
To use an app for cash transfers, customers typically connect it to an outside payment source. Most users link their debit card or a bank account, since in most cases that lets them transfer money without charge. A few apps, however, also give customers the option to link to a credit card and pay a small fee (about 3 percent) for “peer to peer” payments, like splitting the dinner tab. Those apps include PayPal and its Venmo arm, as well as Cash App, which is owned by Square. (Zelle, the app backed by traditional banks, doesn’t accept credit cards.)
But there has been a change in the way the money transfers are coded as they move through the Visa and Mastercard payment networks. That change enables banks to also charge their own, separate cash advance fees — typically $10 but sometimes much more — for payments made using credit cards on those networks. The fees don’t apply when customers make a purchase.
Card-issuing banks now ask that the apps and payment networks code cash transfers to distinguish them from purchases, and put higher fees on cash transfers. The coding change formally took effect in September.
Source: https://www.nytimes.com/2020/04/24/your-money/fees-mobile-app-payments.html DAR Comment: There is no indication in the NYT article concerning whether Visa and MasterCard or client banks coordinated the coding changes, or whether all or most banks follow similar fee practices for transactions newly coded as money transfers.
Bank Secrecy Act Compliance Issues for Small-Business Lending Under the CARES Act
With many banks and credit unions electing to limit Paycheck Protection Program (PPP) loans to existing customers, many nonbank lenders are scrambling to fill the gap and take part in the $349 billion program prior to the end of the application period on June 30, 2020. There is, however, at least one major obstacle preventing many nonbank lenders from qualifying to lend under the PPP—the requirement under Section 1102 of the CARES Act that they apply “the [Bank Secrecy Act (BSA)] requirements of an equivalent federally regulated financial institution,” which requires having a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program.
Basic Elements of BSA Compliance for Nonbank Financial Institutions
Compliance with the BSA requires financial institutions to, among other things, maintain an adequate AML and KYC program, which must be founded upon the well-known “five pillars” of BSA compliance: (1) a system of internal controls to ensure ongoing compliance, (2) independent testing for compliance, (3) a designated AML officer to coordinate and monitor day-to-day compliance, (4) ongoing training for applicable personnel, and (5) procedures for ongoing customer due diligence that include, among other things, procedures for identifying the “beneficial ownership” of legal entity customers.
Compliance with the BSA also requires that the institution file currency transaction reports (CTRs) for cash transactions involving more than $10,000, and file suspicious activity reports (SARs) when the institution “knows, suspects, or has reason to suspect that the transaction (or pattern of transactions of which the transaction is a part)” involves money laundering, is designed to evade the requirements of the BSA, serves no apparent lawful purpose, or facilitates criminal activity.
Developing and maintaining an adequate AML and KYC compliance program can be both time-consuming and expensive, which is why many fintechs and other prospective nonbank lenders have been effectively shut out of PPP lending (fintechs with payments businesses are a notable exception, as they already have these programs in place). Developing an AML program can take many weeks, if not months, making it unlikely that a prospective PPP lender without an existing compliant program could qualify well enough in advance of the program’s application deadline of June 30, 2020. Additionally, becoming BSA compliant may be cost-prohibitive for many prospective PPP lenders when weighed against the risks of making loans with a 1% interest rate and no payments for six months, even with processing fees of up to 5% of the loan amount.
The time commitment and expense of conducting KYC diligence into customer identity and beneficial ownership explains in part many banks’ reluctance or refusal to accept PPP applications from new small-business customers. Recognizing the urgency of facilitating PPP lending and the growing regulatory bottleneck over BSA compliance, the Financial Crimes Enforcement Network (FinCEN) issued guidance on April 3, 2020, relaxing beneficial ownership information collection for existing small-business customers and suspending implementation of a February 6, 2020 ruling on CTR filing obligations when reporting transactions involving sole proprietorships and entities operating under a “doing business as” name. FinCEN also set up a new online contact mechanism for institutions to communicate to FinCEN COVID-19-related concerns, including delays in the filing of BSA reports. In response to FinCEN’s April 3 notice, and to assure banks that its regulator is on board, the Office of the Comptroller of the Currency (OCC) issued a bulletin on April 7, 2020, expressing support for FinCEN’s guidance. Should BSA compliance obligations continue to inhibit the flow of PPP loan applications for bank and nonbank financial institutions, FinCEN and the prudential regulators may need to issue further guidance relaxing certain BSA requirements.
Source: https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/ April 21, 2020
With many banks and credit unions electing to limit Paycheck Protection Program (PPP) loans to existing customers, many nonbank lenders are scrambling to fill the gap and take part in the $349 billion program prior to the end of the application period on June 30, 2020. There is, however, at least one major obstacle preventing many nonbank lenders from qualifying to lend under the PPP—the requirement under Section 1102 of the CARES Act that they apply “the [Bank Secrecy Act (BSA)] requirements of an equivalent federally regulated financial institution,” which requires having a robust anti-money laundering (AML) and Know-Your-Customer (KYC) compliance program.
Basic Elements of BSA Compliance for Nonbank Financial Institutions
Compliance with the BSA requires financial institutions to, among other things, maintain an adequate AML and KYC program, which must be founded upon the well-known “five pillars” of BSA compliance: (1) a system of internal controls to ensure ongoing compliance, (2) independent testing for compliance, (3) a designated AML officer to coordinate and monitor day-to-day compliance, (4) ongoing training for applicable personnel, and (5) procedures for ongoing customer due diligence that include, among other things, procedures for identifying the “beneficial ownership” of legal entity customers.
Compliance with the BSA also requires that the institution file currency transaction reports (CTRs) for cash transactions involving more than $10,000, and file suspicious activity reports (SARs) when the institution “knows, suspects, or has reason to suspect that the transaction (or pattern of transactions of which the transaction is a part)” involves money laundering, is designed to evade the requirements of the BSA, serves no apparent lawful purpose, or facilitates criminal activity.
Developing and maintaining an adequate AML and KYC compliance program can be both time-consuming and expensive, which is why many fintechs and other prospective nonbank lenders have been effectively shut out of PPP lending (fintechs with payments businesses are a notable exception, as they already have these programs in place). Developing an AML program can take many weeks, if not months, making it unlikely that a prospective PPP lender without an existing compliant program could qualify well enough in advance of the program’s application deadline of June 30, 2020. Additionally, becoming BSA compliant may be cost-prohibitive for many prospective PPP lenders when weighed against the risks of making loans with a 1% interest rate and no payments for six months, even with processing fees of up to 5% of the loan amount.
The time commitment and expense of conducting KYC diligence into customer identity and beneficial ownership explains in part many banks’ reluctance or refusal to accept PPP applications from new small-business customers. Recognizing the urgency of facilitating PPP lending and the growing regulatory bottleneck over BSA compliance, the Financial Crimes Enforcement Network (FinCEN) issued guidance on April 3, 2020, relaxing beneficial ownership information collection for existing small-business customers and suspending implementation of a February 6, 2020 ruling on CTR filing obligations when reporting transactions involving sole proprietorships and entities operating under a “doing business as” name. FinCEN also set up a new online contact mechanism for institutions to communicate to FinCEN COVID-19-related concerns, including delays in the filing of BSA reports. In response to FinCEN’s April 3 notice, and to assure banks that its regulator is on board, the Office of the Comptroller of the Currency (OCC) issued a bulletin on April 7, 2020, expressing support for FinCEN’s guidance. Should BSA compliance obligations continue to inhibit the flow of PPP loan applications for bank and nonbank financial institutions, FinCEN and the prudential regulators may need to issue further guidance relaxing certain BSA requirements.
Source: https://www.jdsupra.com/legalnews/bank-secrecy-act-compliance-issues-for-79714/ April 21, 2020
Excerpt from American Bankers Association letter expressing concern that mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements impede CARES Act PPP loan process for small business applicants
[Excerpt from letter of Rob Nichols, ABA President and CEO]
I want to assure you that bankers share your frustration with the PPP loan process, yet they are committed to ensuring that all small businesses--both current business banking customers and non-customers--have access to the SBA program. However, the overwhelming demand for the program, along with mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements, have led many banks to initially limit the application process to existing customers for whom banks have previously conducted the bank’s Customer Due Diligence (CDD) process. While the CARES Act calls for speed, other existing banking laws require banks to take the time to verify important borrower information.
The key to speeding up the process for all financial institutions is the temporary –and appropriate –adjustment of KYC/AML requirements. As noted by former Treasury Secretary Jacob Lew, during this very unusual time, it is important to introduce flexibility into the program to ensure that funds flow to where they are needed, particularly to borrowers that do not traditionally borrow from banks.
The clock is ticking to distribute –fairly –an unprecedented amount of funding through agency infrastructure built for much smaller volumes. Forthis reason, we urge policymakers to identify the appropriate balance between KYC/AML requirements and the urgent need to get funds into the communities. SenatorsKaine, Coons, and KingApril13, 2020Page 2
This situation is further complicated by the ongoing pandemic. Due to social distancing requirements, bank personnel, including their anti-money laundering staffs, are working from home. Not only do they face challenges handling normal day-to-day operations, but they also have no present capacity to devise, implement and test new methods for identifying fraud in these new government programs, and operational errors in authenticating borrowers.
Accordingly, former Federal Reserve Board Chair Yellen recently urged policymakers to address “...banks’ concern about liability [that] could cause them to restrict the loans they initiate andengage in due diligence that could slow down payments,” possibly through creation of a safe harbor.
Building on Chair Yellen’s comments, we recommend that FinCEN and the banking agencies issue joint guidance stating that:
• Banks are exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily beaccomplished by exempting theseloans from the definition of new accounts for the purposes of FinCEN requirements.
• Similarly, for any renewals, modifications or extensions of existing loans or lines of credit, banks may rely on the CDDalready on file without taking further steps.
• For any new account opened during thenational emergency for a current legal entity customer and for which the institution already has beneficial owner information on file, the bank can rely on the existing information with no further expectation that the bank will examine or confirm that theinformation is still current.
• Similarly, for any account opened for a new customer during the national emergency, the bank will be permitted to collect beneficial ownership information after the account is established, similar to current requirements forCustomer Identification Programs established under Section 326 of the USA PATRIOT Act
.• For any account opened for a new customer during the national emergency by a business that already has an established bank account with any other financial institution, it will be presumed by law that the customer has been examined for the appropriate due diligence.
• A bank may rely on the information submitted by any loan applicant on one of the Small Business Administration forms provided for the purpose of these loans. Absent a reason to suspect otherwise evident on the face of the application, the bank may take the information provided as accurate.
•A bank shall not be required to conduct a KYC/AML risk assessment for any customer applying to open an account for disbursement of these funds. The bank shall have a reasonable time after the loan is established to conduct a risk assessment of the customer.
ABA believes that these modest changes will streamline the process and help banks get much needed funds into the small businesses that serve their local communities.
Excerpt from https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
[Excerpt from letter of Rob Nichols, ABA President and CEO]
I want to assure you that bankers share your frustration with the PPP loan process, yet they are committed to ensuring that all small businesses--both current business banking customers and non-customers--have access to the SBA program. However, the overwhelming demand for the program, along with mandatory Know-Your-Customer (KYC) and anti-money laundering (AML) requirements, have led many banks to initially limit the application process to existing customers for whom banks have previously conducted the bank’s Customer Due Diligence (CDD) process. While the CARES Act calls for speed, other existing banking laws require banks to take the time to verify important borrower information.
The key to speeding up the process for all financial institutions is the temporary –and appropriate –adjustment of KYC/AML requirements. As noted by former Treasury Secretary Jacob Lew, during this very unusual time, it is important to introduce flexibility into the program to ensure that funds flow to where they are needed, particularly to borrowers that do not traditionally borrow from banks.
The clock is ticking to distribute –fairly –an unprecedented amount of funding through agency infrastructure built for much smaller volumes. Forthis reason, we urge policymakers to identify the appropriate balance between KYC/AML requirements and the urgent need to get funds into the communities. SenatorsKaine, Coons, and KingApril13, 2020Page 2
This situation is further complicated by the ongoing pandemic. Due to social distancing requirements, bank personnel, including their anti-money laundering staffs, are working from home. Not only do they face challenges handling normal day-to-day operations, but they also have no present capacity to devise, implement and test new methods for identifying fraud in these new government programs, and operational errors in authenticating borrowers.
Accordingly, former Federal Reserve Board Chair Yellen recently urged policymakers to address “...banks’ concern about liability [that] could cause them to restrict the loans they initiate andengage in due diligence that could slow down payments,” possibly through creation of a safe harbor.
Building on Chair Yellen’s comments, we recommend that FinCEN and the banking agencies issue joint guidance stating that:
• Banks are exempt from collecting, identifying, verifying and certifying KYC/AMLinformation for accounts set up to accept funds provided under the CARES Act. This can easily beaccomplished by exempting theseloans from the definition of new accounts for the purposes of FinCEN requirements.
• Similarly, for any renewals, modifications or extensions of existing loans or lines of credit, banks may rely on the CDDalready on file without taking further steps.
• For any new account opened during thenational emergency for a current legal entity customer and for which the institution already has beneficial owner information on file, the bank can rely on the existing information with no further expectation that the bank will examine or confirm that theinformation is still current.
• Similarly, for any account opened for a new customer during the national emergency, the bank will be permitted to collect beneficial ownership information after the account is established, similar to current requirements forCustomer Identification Programs established under Section 326 of the USA PATRIOT Act
.• For any account opened for a new customer during the national emergency by a business that already has an established bank account with any other financial institution, it will be presumed by law that the customer has been examined for the appropriate due diligence.
• A bank may rely on the information submitted by any loan applicant on one of the Small Business Administration forms provided for the purpose of these loans. Absent a reason to suspect otherwise evident on the face of the application, the bank may take the information provided as accurate.
•A bank shall not be required to conduct a KYC/AML risk assessment for any customer applying to open an account for disbursement of these funds. The bank shall have a reasonable time after the loan is established to conduct a risk assessment of the customer.
ABA believes that these modest changes will streamline the process and help banks get much needed funds into the small businesses that serve their local communities.
Excerpt from https://www.aba.com/-/media/documents/letters-to-congress-and-regulators/aba-response-to-senators-kaine-coons-and-king-04132020.pdf?rev=2e24478b58c244cc8bf433d9eb3d7d7f
Congressional summary of the 4/21/20 coronavirus relief bill passed by the House on 4/24:
The text of the Senate’s 4/21/20 coronavirus relief bill (additional small business funding and more), passed by the House on 4/24 is available here, along with the NPR summary:
https://www.npr.org/2020/04/22/838870536/read-whats-in-the-latest-coronavirus-relief-bill … pic.twitter.com/662ZBR3CUp
Summary: $484 billion Phase 3.5 PackagePaycheck Protection Program Increase Act of 2020:
Source: https://www.akingump.com/en/experience/industries/national-security/covid-19-resource-center/covid-19-policy-update-april-21-2020.html
https://www.npr.org/2020/04/22/838870536/read-whats-in-the-latest-coronavirus-relief-bill … pic.twitter.com/662ZBR3CUp
Summary: $484 billion Phase 3.5 PackagePaycheck Protection Program Increase Act of 2020:
- Provides an additional $310 billion for the PPP, including $30 billion that must be set aside for PPP loans made by Insured Depository Institutions and Credit Unions that have assets between $10 billion and $50 billion, and $30 billion for loans made by Community Financial Institutions, Small Insured Depository Institutions and Credit Unions with assets less than $10 billion.
- Provides an additional $10 billion for the Emergency Economic Injury Disaster (EIDL) Grants.
- Allows agricultural enterprises with fewer than 500 employees to receive EIDL grants and loans.
- Provides an additional $2.1 billion for the Salaries and Expenses account.
- Provides an additional $50 billion for the Disaster Loans Program Account.
- Provides an additional $10 billion for Emergency EIDL Grants.
- Provides $75 billion for reimbursement to hospitals and healthcare providers to support the need for COVID-19 related expenses and lost revenue.
- Provides $25 billion to research, develop, validate, manufacture, purchase, administer and expand capacity for COVID-19 tests.
- Includes $6 million for HHS Office of Inspector General for oversight activities.
- Requires plan from States, localities, territories and tribes on how resources will be used for testing and easing COVID-19 community mitigation policies.
- Requires strategic plan related to providing assistance to States for testing and increasing testing capacity.
Source: https://www.akingump.com/en/experience/industries/national-security/covid-19-resource-center/covid-19-policy-update-april-21-2020.html
The growing shadow over a hydroxychloroquine Covid cure
The odds of success for President Donald Trump’s favored coronavirus treatment keep getting longer. On Tuesday, it was the U.S. government that erected new obstacles.
First, a panel of medical experts assembled by the National Institutes of Health recommended against using hydroxychloroquine, a malaria treatment, in combination with the antibiotic azithromycin to treat Covid-19. Though a few small, early studies raised hopes that the drug could help patients fight off coronavirus infections, hydroxychloroquine can also cause heart issues. Doctors, pharmacy experts and government researchers and officials advising NIH warned that taking the two potent medications together could lead to harm.
Trump had touted hydroxychloroquine as a potential “game-changer” in spite of the scant scientific evidence to support his claims. Dozens of other therapies are also being explored for treating the coronavirus, but Trump’s backing for the malaria drug has made it a cause celebre among his most ardent supporters. Some doctors have taken it as a prophylactic to ward off the disease, and hospitals have rushed to stockpile it. That’s left patients who need hydroxychloroquine to treat chronic diseases like lupus and rheumatoid arthritis searching for alternatives.
The second blow to hydroxychloroquine was delivered by an analysis of 368 patients from the Veterans Administration that looked at how people with Covid-19 fared after getting the standard of care, hydroxychloroquine alone, or the combination. In that study, which hasn’t yet been published or subjected to peer review, patients who got hydroxychloroquine alone had a higher death rate than those not getting it.
There is a long way to go. Other studies of the drug are continuing around the world. But the results so far underline how slippery science can be, most especially when the immediate health hopes of millions of people—and the political fortunes of a potential cure’s most enthusiastic partisans—are riding on it.--Tim Annett
Credit: Bloomberg coronavirus daily
The odds of success for President Donald Trump’s favored coronavirus treatment keep getting longer. On Tuesday, it was the U.S. government that erected new obstacles.
First, a panel of medical experts assembled by the National Institutes of Health recommended against using hydroxychloroquine, a malaria treatment, in combination with the antibiotic azithromycin to treat Covid-19. Though a few small, early studies raised hopes that the drug could help patients fight off coronavirus infections, hydroxychloroquine can also cause heart issues. Doctors, pharmacy experts and government researchers and officials advising NIH warned that taking the two potent medications together could lead to harm.
Trump had touted hydroxychloroquine as a potential “game-changer” in spite of the scant scientific evidence to support his claims. Dozens of other therapies are also being explored for treating the coronavirus, but Trump’s backing for the malaria drug has made it a cause celebre among his most ardent supporters. Some doctors have taken it as a prophylactic to ward off the disease, and hospitals have rushed to stockpile it. That’s left patients who need hydroxychloroquine to treat chronic diseases like lupus and rheumatoid arthritis searching for alternatives.
The second blow to hydroxychloroquine was delivered by an analysis of 368 patients from the Veterans Administration that looked at how people with Covid-19 fared after getting the standard of care, hydroxychloroquine alone, or the combination. In that study, which hasn’t yet been published or subjected to peer review, patients who got hydroxychloroquine alone had a higher death rate than those not getting it.
There is a long way to go. Other studies of the drug are continuing around the world. But the results so far underline how slippery science can be, most especially when the immediate health hopes of millions of people—and the political fortunes of a potential cure’s most enthusiastic partisans—are riding on it.--Tim Annett
Credit: Bloomberg coronavirus daily
From NCLC: Are There Special Limits on Judgment Creditors’ Garnishment of Stimulus Payments? (With cite to DC statute)
The CARES Act protects stimulus payments from certain offsets to collect debts owed to federal and state governments. The Act does not address either private creditors’ seizure of the checks from bank accounts to satisfy outstanding court judgments or the banks’ ability to seize the funds to pay other debts owed the bank or for overdrawn accounts. While advocacy efforts are ongoing to change the federal law or the way Treasury treats these payments [DAR: see next posting], as of the time the first set of payments were distributed (in mid-April 2020), these efforts have not been successful.
In a few states (such as New York), a certain dollar value in funds in a bank account is automatically protected from seizure, without requiring consumers to take any affirmative action.
Every state provides a method by which consumers can assert to a court that bank account funds are exempt under state law, but only after the account is frozen. Depending on the state, an exemption can be based on deposits up to a certain dollar amount, for public assistance benefits, under a “wild card” exemption which goes up to a certain dollar amount, or some similar category. See NCLC’s Collection Actions Appendix G (now open to all readers even without a subscription through May 3, 2020). But in a frustrating situation with constitutional due process implications, consumers may not have an opportunity to raise these rights. Many state courts are closed for most proceedings and consumers are unable to reach the courts in any event.
In a number of states and counties, orders are being issued to prevent garnishments of bank accounts. Examples include:
- • District of Columbia Act 23-286 http://lims.dccouncil.us/Download/44543/B23-0733-SignedAct.pdf [DR: see in particular Section 207]
From US PIRG: Debt collectors and CARES Act payments
Posted: 15 Apr 2020 09:34 AM PDT
This week, the Treasury Department will begin to send out the $1,200 CARES Act payments that Congress approved in response to the coronavirus crisis. The money will be wired to eligible recipients who previously authorized the IRS to post their refunds through direct deposit. The American Prospect reports, though that "Congress did not exempt CARES Act payments from private debt collection, and the Treasury Department has been reluctant to exempt them through its rulemaking authority. This means that individuals could see their payments transferred from their hands into the hands of their creditors, potentially leaving them with nothing."
The full article is here. And a follow-up article about the Department of Treasury allowing the debt collection is here.
From Washington Business Journal:
A guide to local resources for Greater Washington businesses
By Michael Neibauer
– Managing Editor, Washington Business Journal
Mar 24, 2020, 3:16pm EDT
Updated Apr 9, 2020, 5:38pm EDT
These are uncertain times for Greater Washington business, as the COVID-19 virus continues to spread rampantly throughout our region. As its effects grow — thousands of people losing their jobs and many others setting up at home offices — state and local leaders, nonprofits and corporations are stepping up with support of varying types, from emergency loans and grants to counseling and resource guides, free access to services and the basic necessities of life.
The Washington Business Journal is compiling a list of these resources to support our region's business community.
Keep checking back as this list will only grow. If you have something we should add, please email mneibauer@bizjournals.com.
A guide to local resources for Greater Washington businesses
By Michael Neibauer
– Managing Editor, Washington Business Journal
Mar 24, 2020, 3:16pm EDT
Updated Apr 9, 2020, 5:38pm EDT
These are uncertain times for Greater Washington business, as the COVID-19 virus continues to spread rampantly throughout our region. As its effects grow — thousands of people losing their jobs and many others setting up at home offices — state and local leaders, nonprofits and corporations are stepping up with support of varying types, from emergency loans and grants to counseling and resource guides, free access to services and the basic necessities of life.
The Washington Business Journal is compiling a list of these resources to support our region's business community.
Keep checking back as this list will only grow. If you have something we should add, please email mneibauer@bizjournals.com.
- See more resources from the federal government.https://www.bizjournals.com/washington/news/2020/03/27/federal-resources-small-businesses.html
- See more resources from the D.C., Virginia and Maryland state governments.https://www.bizjournals.com/washington/news/2020/03/27/state-resources-for-small-businesses-navigating.html
- See more resources from local governments across the D.C. region.https://www.bizjournals.com/washington/news/2020/03/27/local-resources-for-small-business-navigating-the.html
CNBC’s Jim Cramer on the paradox of a stock market that is heating up while the state of the economy appears to be crumbling
“At the end of the day, the stock market’s made up of big, huge companies, not the small- to medium-sized businesses that are the backbone of our economy,” the “Mad Money” host said. “You don’t have to like it — I know I don’t — but it’s the big dogs with pristine balance sheets and gigantic scale that can survive this lockdown.”
Cramer made the comments in response to a viral screenshot of a scene from his Thursday show that circulated online.
“There’s a seething anger sweeping this country and it’s directed point-blank at Wall Street,” Cramer said after the market staged another rally in Tuesday’s session. “This relentless rally seems unfair, it seems senseless and it seems heartless” amid a deadly coronavirus emergency.
The image, which juxtaposed a strong weekly gain for the Dow Jones index against multiple weeks of record job losses, was shared widely on social media platforms, including in a tweet by Rep. Alexandria Ocasio Cortez, D-New York, who sought to highlight a contradiction between Wall Street and Main Street.
https://www.cnbc.com/2020/04/14/jim-cramer-on-mad-money-viral-pic-seething-anger-for-wall-street.html?recirc=taboolainternal
“At the end of the day, the stock market’s made up of big, huge companies, not the small- to medium-sized businesses that are the backbone of our economy,” the “Mad Money” host said. “You don’t have to like it — I know I don’t — but it’s the big dogs with pristine balance sheets and gigantic scale that can survive this lockdown.”
Cramer made the comments in response to a viral screenshot of a scene from his Thursday show that circulated online.
“There’s a seething anger sweeping this country and it’s directed point-blank at Wall Street,” Cramer said after the market staged another rally in Tuesday’s session. “This relentless rally seems unfair, it seems senseless and it seems heartless” amid a deadly coronavirus emergency.
The image, which juxtaposed a strong weekly gain for the Dow Jones index against multiple weeks of record job losses, was shared widely on social media platforms, including in a tweet by Rep. Alexandria Ocasio Cortez, D-New York, who sought to highlight a contradiction between Wall Street and Main Street.
https://www.cnbc.com/2020/04/14/jim-cramer-on-mad-money-viral-pic-seething-anger-for-wall-street.html?recirc=taboolainternal
Avoiding Price Gouging, Price Fixing and Other Antitrust Risks During the COVID-19 Pandemic
Carl Hittinger, Ann Marie O'Brien
-
April 15, 2020
By Carl Hittinger & Ann O’Brien (BakerHostetler)1
The COVID-19 global pandemic has upended typical supply and demand in unprecedented ways. As the world struggles to contain the pandemic and faces tragic human suffering, the resulting states of emergency, need for medical supplies, and panic buying have caused overnight changes in supply and demand on an unparalleled global scale. Businesses face increased antitrust risk as they struggle to continue operations and meet historic demand. The Department of Justice (“DOJ”) has actively enforced the antitrust laws in response to previous natural disasters2 and financial crises,3 and federal and state antitrust authorities are again paying close attention as this global pandemic unfolds.
On March 9, 2020, the DOJ announced that it would ensure resources were available to enforce antitrust laws against “bad actors” that might take advantage of the current emergency situation.4 And as the pandemic has worsened, the DOJ announced recent changes that ramp up enforcement against hoarding of essential supplies, price gouging, price fixing, bid rigging and fraud, while working with the Federal Trade Commission (“FTC”) to increase flexibility in certain areas, such as competitor collaborations. Meanwhile, as demand and prices spike, so has state and local price-gouging enforcement.
This article discusses some of the evolving areas of antitrust risk during the COVID-19 crisis and contains information and best practices on how to avoid them.
The article is at https://www.competitionpolicyinternational.com/avoiding-price-gouging-price-fixing-and-other-antitrust-risks-during-the-covid-19-pandemic/
Carl Hittinger, Ann Marie O'Brien
-
April 15, 2020
By Carl Hittinger & Ann O’Brien (BakerHostetler)1
The COVID-19 global pandemic has upended typical supply and demand in unprecedented ways. As the world struggles to contain the pandemic and faces tragic human suffering, the resulting states of emergency, need for medical supplies, and panic buying have caused overnight changes in supply and demand on an unparalleled global scale. Businesses face increased antitrust risk as they struggle to continue operations and meet historic demand. The Department of Justice (“DOJ”) has actively enforced the antitrust laws in response to previous natural disasters2 and financial crises,3 and federal and state antitrust authorities are again paying close attention as this global pandemic unfolds.
On March 9, 2020, the DOJ announced that it would ensure resources were available to enforce antitrust laws against “bad actors” that might take advantage of the current emergency situation.4 And as the pandemic has worsened, the DOJ announced recent changes that ramp up enforcement against hoarding of essential supplies, price gouging, price fixing, bid rigging and fraud, while working with the Federal Trade Commission (“FTC”) to increase flexibility in certain areas, such as competitor collaborations. Meanwhile, as demand and prices spike, so has state and local price-gouging enforcement.
This article discusses some of the evolving areas of antitrust risk during the COVID-19 crisis and contains information and best practices on how to avoid them.
The article is at https://www.competitionpolicyinternational.com/avoiding-price-gouging-price-fixing-and-other-antitrust-risks-during-the-covid-19-pandemic/
WSJ on investor sentiment about economic recovery
Comment by DAR: President Trump and State governors are planning to revive the US economy in a manner that involves contention and uncertainty. According to the WSJ piece excerpted below, investors share that uncertainty. There is some suggestion from financial experts that investors are too optimistic about economic revival.
Safer assets from gold to Treasurys are rising alongside major indexes, a sign that the stock-market rebound hasn’t assuaged investors’ fears about the world economy.
The S&P 500 has rebounded 24% from its March 23 multiyear low. At the same time, gold on Tuesday climbed to its highest level in nearly 7½ years, bringing its gains for the year to 15%. Billions of dollars have flowed into gold exchange-traded funds, and sales of physical bars and coins have soared.'
Treasurys prices have joined the rally, pushing the yield on the benchmark 10-year U.S. Treasury note down to 0.64% from 1.26% on March 18. The Swiss franc and Japanese yen also have posted gains.
This is a reversal from mid-March, when investors sold a range of risky and safe assets to raise cash. Analysts attributed part of the widespread selling to banks demanding repayment from investors who had used their stock portfolios as collateral to buy other securities. Those margin calls then forced investors to sell unrelated assets.
But stocks and havens have risen in tandem since the Federal Reserve slashed interest rates near zero last month and stepped up lending programs and asset purchases. A roughly $2 trillion stimulus package passed by Congress last month—and discussions about more stimulus programs—also have helped markets stabilize despite the broad economic damage caused by the coronavirus.
Still, some analysts view the simultaneous rebounds as evidence of investors’ excessive optimism about how quickly the economy can rebound. Stock prices suggest a short recession with a swift rebound in corporate profits, while gains in havens signal worries about a longer downturn.
Tony Roth, chief investment officer at Wilmington Trust Investment Advisors, said the firm is holding a smaller position in stocks than the benchmark it tracks, believing it will take longer than expected to restart global commerce.
“We are seeing an increasing disconnect between how we expect the economy to perform and what stocks are doing,” he said.
From WSJ 4-16-2020
Comment by DAR: President Trump and State governors are planning to revive the US economy in a manner that involves contention and uncertainty. According to the WSJ piece excerpted below, investors share that uncertainty. There is some suggestion from financial experts that investors are too optimistic about economic revival.
Safer assets from gold to Treasurys are rising alongside major indexes, a sign that the stock-market rebound hasn’t assuaged investors’ fears about the world economy.
The S&P 500 has rebounded 24% from its March 23 multiyear low. At the same time, gold on Tuesday climbed to its highest level in nearly 7½ years, bringing its gains for the year to 15%. Billions of dollars have flowed into gold exchange-traded funds, and sales of physical bars and coins have soared.'
Treasurys prices have joined the rally, pushing the yield on the benchmark 10-year U.S. Treasury note down to 0.64% from 1.26% on March 18. The Swiss franc and Japanese yen also have posted gains.
This is a reversal from mid-March, when investors sold a range of risky and safe assets to raise cash. Analysts attributed part of the widespread selling to banks demanding repayment from investors who had used their stock portfolios as collateral to buy other securities. Those margin calls then forced investors to sell unrelated assets.
But stocks and havens have risen in tandem since the Federal Reserve slashed interest rates near zero last month and stepped up lending programs and asset purchases. A roughly $2 trillion stimulus package passed by Congress last month—and discussions about more stimulus programs—also have helped markets stabilize despite the broad economic damage caused by the coronavirus.
Still, some analysts view the simultaneous rebounds as evidence of investors’ excessive optimism about how quickly the economy can rebound. Stock prices suggest a short recession with a swift rebound in corporate profits, while gains in havens signal worries about a longer downturn.
Tony Roth, chief investment officer at Wilmington Trust Investment Advisors, said the firm is holding a smaller position in stocks than the benchmark it tracks, believing it will take longer than expected to restart global commerce.
“We are seeing an increasing disconnect between how we expect the economy to perform and what stocks are doing,” he said.
From WSJ 4-16-2020
SCOTUS Shows Interest in NFL Sunday Ticket Antitrust Case
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April 16, 2020The US Supreme Court signaled interest in the NFL’s bid to shut down an antitrust challenge to its “Sunday Ticket” DirecTV package, asking the plaintiffs to respond to the league’s petition after they initially declined the opportunity, reported Bloomberg.
The justices had been set to discuss whether to review the case at their April 24 conference. The request Monday, April 13, gave the sports bars leading the lawsuit a May 15 deadline to respond.
It came about a week after the US Chamber of Commerce and two groups of experts urged the high court to reverse the US Court of Appeals decision.
The NFL Sunday Ticket subscription package allows customers to watch every out-of-market game, rather than just the two or three broadcast free each Sunday.
The lawsuit challenges the licensing deals that make Sunday Ticket possible: an agreement among the teams to pool their broadcast rights, and the NFL’s sale of those rights to DirecTV. Teams would otherwise market their rights on competitive terms, giving out-of-town viewers better and cheaper options than subscribing to Sunday Ticket on an all-or-nothing basis, the suit claims.
A federal judge dismissed those claims in 2017. The deal between the league and DirecTV is exempt from antitrust scrutiny under the Sports Broadcasting Act, she said. The rights-pooling agreement isn’t, but it’s an “upstream” deal shielded by the federal bar on antitrust damages for “indirect purchasers,” the judge found.
A divided Ninth Circuit revived the case, saying the licensing deals fall within the indirect purchaser rule’s “co-conspirator” exception. The suit alleges that both agreements are part of “a single conspiracy to limit the output of NFL telecasts,” the majority noted.
But the dissent got it right, according to the Supreme Court petition filed by the NFL, its teams, and DirecTV. The Ninth Circuit also wrongly treated the teams as pure competitors, rather than participants in a joint venture, they argued.
Full Content: Bloomberg
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April 16, 2020The US Supreme Court signaled interest in the NFL’s bid to shut down an antitrust challenge to its “Sunday Ticket” DirecTV package, asking the plaintiffs to respond to the league’s petition after they initially declined the opportunity, reported Bloomberg.
The justices had been set to discuss whether to review the case at their April 24 conference. The request Monday, April 13, gave the sports bars leading the lawsuit a May 15 deadline to respond.
It came about a week after the US Chamber of Commerce and two groups of experts urged the high court to reverse the US Court of Appeals decision.
The NFL Sunday Ticket subscription package allows customers to watch every out-of-market game, rather than just the two or three broadcast free each Sunday.
The lawsuit challenges the licensing deals that make Sunday Ticket possible: an agreement among the teams to pool their broadcast rights, and the NFL’s sale of those rights to DirecTV. Teams would otherwise market their rights on competitive terms, giving out-of-town viewers better and cheaper options than subscribing to Sunday Ticket on an all-or-nothing basis, the suit claims.
A federal judge dismissed those claims in 2017. The deal between the league and DirecTV is exempt from antitrust scrutiny under the Sports Broadcasting Act, she said. The rights-pooling agreement isn’t, but it’s an “upstream” deal shielded by the federal bar on antitrust damages for “indirect purchasers,” the judge found.
A divided Ninth Circuit revived the case, saying the licensing deals fall within the indirect purchaser rule’s “co-conspirator” exception. The suit alleges that both agreements are part of “a single conspiracy to limit the output of NFL telecasts,” the majority noted.
But the dissent got it right, according to the Supreme Court petition filed by the NFL, its teams, and DirecTV. The Ninth Circuit also wrongly treated the teams as pure competitors, rather than participants in a joint venture, they argued.
Full Content: Bloomberg
American Antitrust Institute’s Unsure Trump Can Tackle Big Tech Issues-
April 16, 2020The American Antitrust Institute doesn’t have a lot of hope for the Trump Administration addressing concerns about whether Big Tech companies buying up potential competitors is an antitrust problem, reported John Eggerton.
.
Both the Justice Department and Federal Trade Commission have been looking into how Big Tech got that way, and whether any anticompetitive red flags were missed in the series of mergers, often with smaller start-ups fueled by venture capital, that allowed edge providers to become mammoth players in the US and world economy.
In a new analysis, “Antitrust Enforcement and Competition Policy in the US,” which suggests the Trump Administration antitrust enforcement has been lax, the institute claimed the urge to break up or regulate Big Tech has been a reaction to Trump Administration antitrust inaction, and that without aggressive action using a variety of antitrust enforcement tools, neither Congress not the Administration are likely to address concerns about the size and power of Big Tech.
According to Eggerton, it suggests that had the Administration had a more balanced antitrust toolkit that included competition, regulatory, interoperability, and intellectual property policies, the blunter instrument of breakup might not take such a potentially “outsized” role to solving the “economic, social, and even political problems” the institute concedes are raised by digital tech companies.
Full Content: Broadcasting Cable
April 16, 2020The American Antitrust Institute doesn’t have a lot of hope for the Trump Administration addressing concerns about whether Big Tech companies buying up potential competitors is an antitrust problem, reported John Eggerton.
.
Both the Justice Department and Federal Trade Commission have been looking into how Big Tech got that way, and whether any anticompetitive red flags were missed in the series of mergers, often with smaller start-ups fueled by venture capital, that allowed edge providers to become mammoth players in the US and world economy.
In a new analysis, “Antitrust Enforcement and Competition Policy in the US,” which suggests the Trump Administration antitrust enforcement has been lax, the institute claimed the urge to break up or regulate Big Tech has been a reaction to Trump Administration antitrust inaction, and that without aggressive action using a variety of antitrust enforcement tools, neither Congress not the Administration are likely to address concerns about the size and power of Big Tech.
According to Eggerton, it suggests that had the Administration had a more balanced antitrust toolkit that included competition, regulatory, interoperability, and intellectual property policies, the blunter instrument of breakup might not take such a potentially “outsized” role to solving the “economic, social, and even political problems” the institute concedes are raised by digital tech companies.
Full Content: Broadcasting Cable
What Issues Will Uninsured People Face with Testing and Treatment for COVID-19?
Jennifer Tolbert
Published: Mar 16, 2020
With COVID-19 cases rising in the US, issues surrounding access to testing and treatment for uninsured individuals have taken on heightened importance. Efforts to limit the spread of the coronavirus in the United States are dependent on people who may have been exposed to the virus or who are sick getting tested and seeking medical treatment. However, the uninsured are likely to face significant barriers to testing for COVID-19 and any care they may need should they contract the virus.
In 2018, there were nearly 28 million nonelderly people in the US who lacked health insurance. States that have not expanded Medicaid under the ACA generally have higher uninsured rates than states that did. Adults, low-income individuals and people of color are at greater risk of being uninsured. Most uninsured lack coverage because of high cost or because of a recent change in their situation that led to a loss of coverage, such as a loss of a job. Though most uninsured people have a full time worker (72%) or part-time worker (11%) in their family, many people do not have access to coverage through a job, and some people, particularly poor adults in states that did not expand Medicaid, remain ineligible for financial assistance for coverage.
Many uninsured adults work in jobs that may increase their risk of exposure to COVID-19. Most uninsured adults are working. Because of the jobs they have, uninsured workers may be at greater risk of exposure to the disease. Among the top ten occupations reported by the uninsured, many are service-oriented, such as drivers, cashiers, restaurant servers and cooks, and retail sales that cannot be performed through telework and bring the uninsured into regular contact with the public (Figure 1). In addition, data analysis finds that nearly six million adults who are at higher risk of getting a serious illness if they become infected with coronavirus are uninsured.
Uninsured workers who must take off work because they or family members are sick could face significant financial consequences. The U.S. does not have a federal law guaranteeing paid sick leave, and only 11 states and DC currently require paid sick leave. The burden of the lack of paid sick leave falls more heavily on low-wage and uninsured workers. In 2018, just over a quarter (26%) of uninsured workers said they had paid sick leave. Facing the risk of not getting paid or possibly losing their position if they do not show up for work, uninsured workers who are not provided sick leave may be reluctant to take time off, which could put their health at risk and could undermine efforts to control the spread of coronavirus.
Congress enacted legislation that would require certain employers to provide paid sick leave during this public health crisis; however, this new policy will not reach all uninsured workers. Under the emergency paid sick leave provisions in the Families First Coronavirus Response Act, workers in all public agencies as well as at some private firms with between 50 and 500 employees must be compensated at least a portion of their regular pay for 14 days if they take time off to address health needs for themselves or family members or to care for children due to school closures. If workers need more than 14 days off work to care for children due to school closures, they may be able to obtain up to 2/3 of their typical compensation for up to three months, but this policy does not extend to all workers and excludes employees at businesses with more than 500 employees. These new leave policies take effect two weeks after enactment of the legislation and the benefits are not retroactive, which means that uninsured workers who already took leave due to coronavirus would not be compensated for that time.
People who are uninsured will likely face unique barriers accessing COVID-19 testing and treatment services. Over half of the uninsured do not have a usual place to go when they need medical care, and one in five uninsured adults in 2018 went without needed medical care due to cost (Figure 2). Studies repeatedly demonstrate that uninsured people are less likely than those with insurance to receive services for major health conditions and chronic diseases. Without a usual source of care, the uninsured may not know where to go to get tested if they think they have been exposed to the virus and may forego testing or care out of fear of having to pay out-of-pocket for the test. The Emergency Medical Treatment and Labor Act requires hospitals to screen and stabilize patients with emergent conditions, however, they are not required to provide the care at no cost for patients who cannot pay, and they are not required to provide treatment for non-emergent conditions. As a result, uninsured individuals are less likely to use the emergency department than people with insurance, and the high costs of ED care may dissuade those without coverage from seeking care in that setting.
Uninsured individuals who contract COVID-19 and need medical care will likely receive large medical bills, even if they have low incomes and are unable to pay. When uninsured individuals need medical care, the costs can be prohibitive. Uninsured people pay the full cost of care, often at higher rates than those with insurance whose coverage may negotiate lower rates than a hospital otherwise charges. While some uninsured can get care at community health centers and other safety net providers, these providers have limited resources and capacity, and not all uninsured have geographic access to a safety net provider. Because the U.S. lacks a comprehensive hospital charity care policy, uninsured individuals who use hospital care will be billed for the services. Uninsured individuals who meet certain criteria may qualify for a hospital’s charity care program to reduce any hospital bills; however, not all hospitals are required to offer charity care programs, and among those that do, the eligibility criteria can vary widely. Fear of large and unaffordable medical bills can deter uninsured individuals from getting the care they need. In the context of a public health emergency, decisions to forego care because of costs can have devastating consequences.
Federal legislation enacted in response to the coronavirus crisis ensures free testing for uninsured individuals. The Families First Coronavirus Response Act signed into law on March 18, 2020 includes a provision that gives states the option to expand Medicaid coverage to uninsured individuals in their state to provide coverage for COVID-19 diagnosis and testing with 100% federal financing. Although the coverage is limited to testing services, it will ensure more uninsured can access free testing, since the legislation also requires state Medicaid programs to cover diagnosis and testing for COVID-19 with no cost sharing. The legislation also appropriates $1 billion to the National Disaster Medical System to provide reimbursement to providers for the costs associated with diagnosis and testing of uninsured individuals. However, the legislation does not address coverage of COVID-19 treatment costs for people who are uninsured.
While the federal legislation will reduce barriers to COVID-19 testing, additional steps will be required to reduce barriers to accessing treatment for uninsured individuals who get sick. Expanding comprehensive coverage options to the uninsured would facilitate access to COVID-19 treatment for those who need it. Decisions by states that have not yet adopted the Medicaid expansion to do so would provide eligibility for coverage to the 2.3 million nonelderly uninsured adults in the coverage gap. In addition to adopting the Medicaid expansion, the federal government could provide flexibility to states to use Medicaid Section 1115 waiver and/or Section 1135 waiver authority to cover individuals who would not otherwise be eligible for coverage during the public health crisis, and potentially beyond. These waivers have been used in past emergencies to expand coverage. Additionally, states that operate their own health insurance marketplaces could provide a special enrollment period (SEP) in response to the coronavirus outbreak to allow uninsured individuals to enroll in coverage. Washington, Massachusetts, and Maryland recently announced coronavirus-related SEPs for uninsured residents. The federal government could also establish a national special enrollment period that would apply across all states, allowing many more uninsured to sign up for coverage.
In lieu of expanding coverage, providing funding to providers to expand COVID-19 services to uninsured individuals or to reimburse them for uncompensated costs they incur could also facilitate access to needed care. The supplemental appropriations legislation to finance the response to coronavirus included $100 million to community health centers to support increased access to testing and primary care services in medically underserved areas. However, this funding does not address costs to hospitals for treatment of infected individuals. Congress could appropriate additional funds to cover hospital costs related to treating uninsured individuals who contract the disease and need hospital care. Programs such as the National Disaster Medical System (NDMS) or Disproportionate Share Hospital (DSH) program could be used to reimburse hospitals for uncompensated costs; however, additional funding would be needed to cover the treatment costs related to COVID-19. Democratic Presidential candidate, Joe Biden, has proposed utilizing the NDMS by expanding its authority to reimburse providers for the costs of testing, treatment, and vaccines associated with COVID-19 for uninsured individuals and by providing full funding of those costs.
From KFF: https://www.kff.org/uninsured/fact-sheet/what-issues-will-uninsured-people-face-with-testing-and-treatment-for-covid-19/
(See KFF document for graphics that are omitted here)
Jennifer Tolbert
Published: Mar 16, 2020
With COVID-19 cases rising in the US, issues surrounding access to testing and treatment for uninsured individuals have taken on heightened importance. Efforts to limit the spread of the coronavirus in the United States are dependent on people who may have been exposed to the virus or who are sick getting tested and seeking medical treatment. However, the uninsured are likely to face significant barriers to testing for COVID-19 and any care they may need should they contract the virus.
In 2018, there were nearly 28 million nonelderly people in the US who lacked health insurance. States that have not expanded Medicaid under the ACA generally have higher uninsured rates than states that did. Adults, low-income individuals and people of color are at greater risk of being uninsured. Most uninsured lack coverage because of high cost or because of a recent change in their situation that led to a loss of coverage, such as a loss of a job. Though most uninsured people have a full time worker (72%) or part-time worker (11%) in their family, many people do not have access to coverage through a job, and some people, particularly poor adults in states that did not expand Medicaid, remain ineligible for financial assistance for coverage.
Many uninsured adults work in jobs that may increase their risk of exposure to COVID-19. Most uninsured adults are working. Because of the jobs they have, uninsured workers may be at greater risk of exposure to the disease. Among the top ten occupations reported by the uninsured, many are service-oriented, such as drivers, cashiers, restaurant servers and cooks, and retail sales that cannot be performed through telework and bring the uninsured into regular contact with the public (Figure 1). In addition, data analysis finds that nearly six million adults who are at higher risk of getting a serious illness if they become infected with coronavirus are uninsured.
Uninsured workers who must take off work because they or family members are sick could face significant financial consequences. The U.S. does not have a federal law guaranteeing paid sick leave, and only 11 states and DC currently require paid sick leave. The burden of the lack of paid sick leave falls more heavily on low-wage and uninsured workers. In 2018, just over a quarter (26%) of uninsured workers said they had paid sick leave. Facing the risk of not getting paid or possibly losing their position if they do not show up for work, uninsured workers who are not provided sick leave may be reluctant to take time off, which could put their health at risk and could undermine efforts to control the spread of coronavirus.
Congress enacted legislation that would require certain employers to provide paid sick leave during this public health crisis; however, this new policy will not reach all uninsured workers. Under the emergency paid sick leave provisions in the Families First Coronavirus Response Act, workers in all public agencies as well as at some private firms with between 50 and 500 employees must be compensated at least a portion of their regular pay for 14 days if they take time off to address health needs for themselves or family members or to care for children due to school closures. If workers need more than 14 days off work to care for children due to school closures, they may be able to obtain up to 2/3 of their typical compensation for up to three months, but this policy does not extend to all workers and excludes employees at businesses with more than 500 employees. These new leave policies take effect two weeks after enactment of the legislation and the benefits are not retroactive, which means that uninsured workers who already took leave due to coronavirus would not be compensated for that time.
People who are uninsured will likely face unique barriers accessing COVID-19 testing and treatment services. Over half of the uninsured do not have a usual place to go when they need medical care, and one in five uninsured adults in 2018 went without needed medical care due to cost (Figure 2). Studies repeatedly demonstrate that uninsured people are less likely than those with insurance to receive services for major health conditions and chronic diseases. Without a usual source of care, the uninsured may not know where to go to get tested if they think they have been exposed to the virus and may forego testing or care out of fear of having to pay out-of-pocket for the test. The Emergency Medical Treatment and Labor Act requires hospitals to screen and stabilize patients with emergent conditions, however, they are not required to provide the care at no cost for patients who cannot pay, and they are not required to provide treatment for non-emergent conditions. As a result, uninsured individuals are less likely to use the emergency department than people with insurance, and the high costs of ED care may dissuade those without coverage from seeking care in that setting.
Uninsured individuals who contract COVID-19 and need medical care will likely receive large medical bills, even if they have low incomes and are unable to pay. When uninsured individuals need medical care, the costs can be prohibitive. Uninsured people pay the full cost of care, often at higher rates than those with insurance whose coverage may negotiate lower rates than a hospital otherwise charges. While some uninsured can get care at community health centers and other safety net providers, these providers have limited resources and capacity, and not all uninsured have geographic access to a safety net provider. Because the U.S. lacks a comprehensive hospital charity care policy, uninsured individuals who use hospital care will be billed for the services. Uninsured individuals who meet certain criteria may qualify for a hospital’s charity care program to reduce any hospital bills; however, not all hospitals are required to offer charity care programs, and among those that do, the eligibility criteria can vary widely. Fear of large and unaffordable medical bills can deter uninsured individuals from getting the care they need. In the context of a public health emergency, decisions to forego care because of costs can have devastating consequences.
Federal legislation enacted in response to the coronavirus crisis ensures free testing for uninsured individuals. The Families First Coronavirus Response Act signed into law on March 18, 2020 includes a provision that gives states the option to expand Medicaid coverage to uninsured individuals in their state to provide coverage for COVID-19 diagnosis and testing with 100% federal financing. Although the coverage is limited to testing services, it will ensure more uninsured can access free testing, since the legislation also requires state Medicaid programs to cover diagnosis and testing for COVID-19 with no cost sharing. The legislation also appropriates $1 billion to the National Disaster Medical System to provide reimbursement to providers for the costs associated with diagnosis and testing of uninsured individuals. However, the legislation does not address coverage of COVID-19 treatment costs for people who are uninsured.
While the federal legislation will reduce barriers to COVID-19 testing, additional steps will be required to reduce barriers to accessing treatment for uninsured individuals who get sick. Expanding comprehensive coverage options to the uninsured would facilitate access to COVID-19 treatment for those who need it. Decisions by states that have not yet adopted the Medicaid expansion to do so would provide eligibility for coverage to the 2.3 million nonelderly uninsured adults in the coverage gap. In addition to adopting the Medicaid expansion, the federal government could provide flexibility to states to use Medicaid Section 1115 waiver and/or Section 1135 waiver authority to cover individuals who would not otherwise be eligible for coverage during the public health crisis, and potentially beyond. These waivers have been used in past emergencies to expand coverage. Additionally, states that operate their own health insurance marketplaces could provide a special enrollment period (SEP) in response to the coronavirus outbreak to allow uninsured individuals to enroll in coverage. Washington, Massachusetts, and Maryland recently announced coronavirus-related SEPs for uninsured residents. The federal government could also establish a national special enrollment period that would apply across all states, allowing many more uninsured to sign up for coverage.
In lieu of expanding coverage, providing funding to providers to expand COVID-19 services to uninsured individuals or to reimburse them for uncompensated costs they incur could also facilitate access to needed care. The supplemental appropriations legislation to finance the response to coronavirus included $100 million to community health centers to support increased access to testing and primary care services in medically underserved areas. However, this funding does not address costs to hospitals for treatment of infected individuals. Congress could appropriate additional funds to cover hospital costs related to treating uninsured individuals who contract the disease and need hospital care. Programs such as the National Disaster Medical System (NDMS) or Disproportionate Share Hospital (DSH) program could be used to reimburse hospitals for uncompensated costs; however, additional funding would be needed to cover the treatment costs related to COVID-19. Democratic Presidential candidate, Joe Biden, has proposed utilizing the NDMS by expanding its authority to reimburse providers for the costs of testing, treatment, and vaccines associated with COVID-19 for uninsured individuals and by providing full funding of those costs.
From KFF: https://www.kff.org/uninsured/fact-sheet/what-issues-will-uninsured-people-face-with-testing-and-treatment-for-covid-19/
(See KFF document for graphics that are omitted here)
Ticket buyers and sellers say StubHub owes them after widespread event cancellations
WA public letter from StubHub explains:
When an event is canceled:
• You don’t need to contact us; we’ll email you to confirm
• We’ll add a coupon worth 120% of your original order to your StubHub account. You can apply this coupon to one or multiple StubHub orders in the same currency until Dec. 31, 2021. Just choose the coupon at checkout when you order.
See http://stubhub.custhelp.com/app/answers/answer_view/a_id/1001856/categoryRecordID/RN_CATEGORY_429/categorySelected/RN_CATEGORY_429
The problem is that the coupon offer is an alternative to a refund.
That refusal of a refund has led to a class action lawsuit. The Complaint is at https://www.courthousenews.com/wp-content/uploads/2020/04/StubHub.pdf The Complaint says in its opening paragraphs:
In the midst of the greatest public health and economic crisis in living memory, Defendants, which constitute a four-billion dollar enterprise, have sought to surreptitiously shift their losses onto their innocent customers. . . .
WA public letter from StubHub explains:
When an event is canceled:
• You don’t need to contact us; we’ll email you to confirm
• We’ll add a coupon worth 120% of your original order to your StubHub account. You can apply this coupon to one or multiple StubHub orders in the same currency until Dec. 31, 2021. Just choose the coupon at checkout when you order.
See http://stubhub.custhelp.com/app/answers/answer_view/a_id/1001856/categoryRecordID/RN_CATEGORY_429/categorySelected/RN_CATEGORY_429
The problem is that the coupon offer is an alternative to a refund.
That refusal of a refund has led to a class action lawsuit. The Complaint is at https://www.courthousenews.com/wp-content/uploads/2020/04/StubHub.pdf The Complaint says in its opening paragraphs:
In the midst of the greatest public health and economic crisis in living memory, Defendants, which constitute a four-billion dollar enterprise, have sought to surreptitiously shift their losses onto their innocent customers. . . .
Comment: Solutions needed for non-profit organizations eligible for CARES Act help
The Cares Act includes help for non-profits, a legislative innovation with positive potential. But, banks that are administering the Cares Act are reported to be giving priority to established bank customers, particularly customers with existing business loans. Non-profits are particularly unlikely to have the relationships with banks required to get to the head of the help line. The following article from the Non-Profit Quarterly offers some proposals to improve the situation for non-profits. [Comment by DAR]
The Cares Act includes help for non-profits, a legislative innovation with positive potential. But, banks that are administering the Cares Act are reported to be giving priority to established bank customers, particularly customers with existing business loans. Non-profits are particularly unlikely to have the relationships with banks required to get to the head of the help line. The following article from the Non-Profit Quarterly offers some proposals to improve the situation for non-profits. [Comment by DAR]
CARES Act: New Nonprofit Provisions Needed for Next Round of Relief Money
Ruth McCambridge
April 9, 2020
As many readers know, the Paycheck Protection Program of the Cares Act, which is supposed to relieve serious COVID-19 related financial pressures on small for-profit and nonprofit employers through $349 billion in forgivable loans, got off to a rocky start last Friday, as nonprofits by the thousands flocked to lenders only to get turned away in many cases. It appears the banks were largely unprepared to process applications, in large part because the Small Business Administration did not get either the applications or the guidelines to them before Thursday night.
But for nonprofits, there were even more fundamental problems, often related to tenuous or unformed relationships between lenders and nonprofits. This led to a lot of time wasted by nonprofits stalking bank officers who were giving priority to longstanding and more robust organizations (a problem when you advertise the program as “first come, first served”) or blocked by being unable to fill out some of the application questions that did not quite fit the nonprofit corporate structure.
Many small businesses, nonprofits and for-profits alike, ended up in a kind of limbo, listening to reports about the billions being approved yet having no idea where in the process their own applications were, or even if they were in the system yet. As far as we know, such dynamics also apply to small businesses that may not be frequent users of debt. So, while the country was promised an admittedly inconceivable one-day approval and payout process, a week out, many nonprofits are still wondering whether or not they made it into the queue in time. (We will address these issues tomorrow in a longer piece by Steve Dubb.)
A new set of unemployment figures came out today, documenting that another 6.6 million are unemployed, bringing the total added to the unemployment rolls over the past four weeks to an unfathomable 17 million. Talks have begun for a CARES Act 2.0, otherwise known as Phase 4 of Congress’s response to the coronavirus, and in light of this, national advocates are requesting some extra provisions for this next round of stimulus capital to make sure sufficient money is available to nonprofits. A Nonprofit Community Letter posted on the National Council of Nonprofits website and circulated to Congress yesterday lays out these potential provisions in detail.
Among the changes proposed by the more than 200 national signatories is “expanded nonprofit access to credit.” Funding exclusive to nonprofits would be made available within the two principal loan programs established in the CARES Act. Doing so would ensure that organizations dedicated to addressing immediate pandemic-related problems were included in relief efforts and not excluded or pushed to the back of the line.
In terms of the Paycheck Protection Program, they want the bill to “provide incentives to private lenders to prioritize processing of applications of small nonprofits and expand the eligibility for nonprofits to participate in the Paycheck Protection Program by modifying the current 500-employee cap or by other means.”
We like the first half of that proposition, but if the purpose is to open access to nonprofits unused to borrowing from banks, we are not completely sure how that cause would be advanced by the inclusion of nonprofits with more than 500 employees. While we are aware that some networks, like YMCAs, have been hit profoundly hard, in that they depend upon sites where people congregate, employ more part-time workers, and have laid off sometimes thousands within weeks of this crisis, we would rather see that category addressed more distinctly, excluding those large organizations that do not fit in that category. This is a provision that should be better defined to extend eligibility just to nonprofits on the cusp between the small-employer program and the mid-size employer loans contemplated in the CARES Act.
The entire sector should also be grateful for the quick work of this coalition, which has pushed for new provisions to:
https://nonprofitquarterly.org/cares-act-new-nonprofit-provisions-pushed-for-next-round-of-relief-money/
Ruth McCambridge
April 9, 2020
As many readers know, the Paycheck Protection Program of the Cares Act, which is supposed to relieve serious COVID-19 related financial pressures on small for-profit and nonprofit employers through $349 billion in forgivable loans, got off to a rocky start last Friday, as nonprofits by the thousands flocked to lenders only to get turned away in many cases. It appears the banks were largely unprepared to process applications, in large part because the Small Business Administration did not get either the applications or the guidelines to them before Thursday night.
But for nonprofits, there were even more fundamental problems, often related to tenuous or unformed relationships between lenders and nonprofits. This led to a lot of time wasted by nonprofits stalking bank officers who were giving priority to longstanding and more robust organizations (a problem when you advertise the program as “first come, first served”) or blocked by being unable to fill out some of the application questions that did not quite fit the nonprofit corporate structure.
Many small businesses, nonprofits and for-profits alike, ended up in a kind of limbo, listening to reports about the billions being approved yet having no idea where in the process their own applications were, or even if they were in the system yet. As far as we know, such dynamics also apply to small businesses that may not be frequent users of debt. So, while the country was promised an admittedly inconceivable one-day approval and payout process, a week out, many nonprofits are still wondering whether or not they made it into the queue in time. (We will address these issues tomorrow in a longer piece by Steve Dubb.)
A new set of unemployment figures came out today, documenting that another 6.6 million are unemployed, bringing the total added to the unemployment rolls over the past four weeks to an unfathomable 17 million. Talks have begun for a CARES Act 2.0, otherwise known as Phase 4 of Congress’s response to the coronavirus, and in light of this, national advocates are requesting some extra provisions for this next round of stimulus capital to make sure sufficient money is available to nonprofits. A Nonprofit Community Letter posted on the National Council of Nonprofits website and circulated to Congress yesterday lays out these potential provisions in detail.
Among the changes proposed by the more than 200 national signatories is “expanded nonprofit access to credit.” Funding exclusive to nonprofits would be made available within the two principal loan programs established in the CARES Act. Doing so would ensure that organizations dedicated to addressing immediate pandemic-related problems were included in relief efforts and not excluded or pushed to the back of the line.
In terms of the Paycheck Protection Program, they want the bill to “provide incentives to private lenders to prioritize processing of applications of small nonprofits and expand the eligibility for nonprofits to participate in the Paycheck Protection Program by modifying the current 500-employee cap or by other means.”
We like the first half of that proposition, but if the purpose is to open access to nonprofits unused to borrowing from banks, we are not completely sure how that cause would be advanced by the inclusion of nonprofits with more than 500 employees. While we are aware that some networks, like YMCAs, have been hit profoundly hard, in that they depend upon sites where people congregate, employ more part-time workers, and have laid off sometimes thousands within weeks of this crisis, we would rather see that category addressed more distinctly, excluding those large organizations that do not fit in that category. This is a provision that should be better defined to extend eligibility just to nonprofits on the cusp between the small-employer program and the mid-size employer loans contemplated in the CARES Act.
The entire sector should also be grateful for the quick work of this coalition, which has pushed for new provisions to:
- Strengthen Charitable Giving Incentives to encourage all Americans to help their communities through charitable donations during these challenging times by making donations on and after March 13 (date of national emergency declaration) and before July 16 to claim the deductions on their 2019 tax filings (applicable to itemized and above-the-line deductions) and improving the Above-the-Line Deduction in CARES Act Section 2204.
- Treat Self-Funded Nonprofits Fairly by increasing the federal unemployment insurance reimbursement for self-funded nonprofits to 100 percent of costs in CARES Act Section 2103.
- Increase Emergency Funding by appropriating funds for targeted state formula grants and programs that can provide a rapid infusion of cash to nonprofit organizations that are partnering with state and local governments to protect vulnerable families and frontline responders.
https://nonprofitquarterly.org/cares-act-new-nonprofit-provisions-pushed-for-next-round-of-relief-money/
For very small businesses that can't find a bank to help with a CARES Act loan
Very small businesses and not-for-profits without a history of bank lending are having trouble finding banks to make CARES Act Payroll Protection loans. Its a big problem that should be addressed by the SBA.
There are a number of on-line and other sources of pragmatic advice, although all are handicapped by problems of uncertainty and lack of resources in the government programs.
See, for example:
https://www.inc.com/video/what-you-need-to-know-to-get-your-stimulus-loan-faster.html
https://raskin.house.gov/coronavirus/federal-legislation-faqs-fact-sheets
Also, the NYT suggests that some lenders have said they will work with new customers. They include Ready Capital (a nonbank lender that already had approval to make S.B.A. loans) and Kabbage (an online lender that teamed up with a bank).
https://www.nytimes.com/article/small-business-loans-stimulus-grants-freelancers-coronavirus.html
Very small businesses and not-for-profits without a history of bank lending are having trouble finding banks to make CARES Act Payroll Protection loans. Its a big problem that should be addressed by the SBA.
There are a number of on-line and other sources of pragmatic advice, although all are handicapped by problems of uncertainty and lack of resources in the government programs.
See, for example:
https://www.inc.com/video/what-you-need-to-know-to-get-your-stimulus-loan-faster.html
https://raskin.house.gov/coronavirus/federal-legislation-faqs-fact-sheets
Also, the NYT suggests that some lenders have said they will work with new customers. They include Ready Capital (a nonbank lender that already had approval to make S.B.A. loans) and Kabbage (an online lender that teamed up with a bank).
https://www.nytimes.com/article/small-business-loans-stimulus-grants-freelancers-coronavirus.html
Rachel Carson Council: COVID and food insecurity
What COVID-19 is revealing is what some of us already knew — 40 million Americans were food insecure before the pandemic; now the numbers are rapidly rising. The people that were most vulnerable to food insecurity in this country are more vulnerable than ever before. With the economy getting worse and people unable to work, we need to call on our policy makers and legislators to ensure safety and security for our most at-risk populations. Just a few months before COVID-19, President Trump was creating new, restrictive SNAP eligibility requirements that were scheduled to go into effect on April 1st, excluding 700,000 people from the program. The pandemic has at least shown that SNAP is a basic necessity for many Americans. With public pressure, the newly-passed $2 trillion-dollar COVID-19 bill includes extra funding for federal food distribution and blocks any new SNAP requirements. And, most importantly, the Senate’s stimulus bill now includes $16 billion dollars’ worth of SNAP food assistance (Lisa Held, 2020).
Excerpt from https://rachelcarsoncouncil.org/covid-19-revealing-americas-food-insecurity/?eType=EmailBlastContent&eId=4bb8a44a-523a-4cc1-b610-1f069a663701
From JAMA Viewpoint
March 27, 2020
The Importance of Addressing Advance Care Planning and Decisions About Do-Not-Resuscitate Orders During Novel Coronavirus 2019 (COVID-19)
J. Randall Curtis, MD, MPH1,2; Erin K. Kross, MD1,2; Renee D. Stapleton, MD, PhD3
Published online March 27, 2020. doi:10.1001/jama.2020.4894
EXCERPT:
The novel coronavirus disease 2019 (COVID-19) pandemic is challenging health care systems worldwide and raising important ethical issues, especially regarding the potential need for rationing health care in the context of scarce resources and crisis capacity. Even if capacity to provide care is sufficient, one priority should be addressing goals of care in the setting of acute life-threatening illness, especially for patients with chronic, life-limiting disease.
Clinicians should ensure patients receive the care they want, aligning the care that is delivered with patients’ values and goals. The importance of goal-concordant care is not new or even substantially different in the context of this pandemic, but the importance of providing goal-concordant care is now heightened in several ways. Patients most likely to develop severe illness will be older and have greater burden of chronic illness—exactly those who may wish to forgo prolonged life support and who may find their quality of life unacceptable after prolonged life support.1 In addition, recent reports suggest that survival may be substantially lower when acute respiratory distress syndrome is associated with COVID-19 vs when it is associated with other etiologies.2,3
In this context, advance care planning prior to serious acute illness and discussions about goals of care at the onset of serious acute illness should be a high priority for 3 reasons.
First, clinicians should always strive to avoid intensive life-sustaining treatments when unwanted by patients.
Second, avoiding nonbeneficial or unwanted high-intensity care becomes especially important in times of stress on health care capacity.
Third, provision of nonbeneficial or unwanted high-intensity care may put other patients, family members, and health care workers at higher risk of transmission of severe acute respiratory syndrome coronavirus.
Now is the time to implement advance care planning to ensure patients do not receive care they would not want if they become too severely ill to make their own decisions. As eloquently pointed out by an intensivist, “If you do not talk with [your family] about this now, you may have to have a much more difficult conversation with me later.”4
Several online resources can guide these advance care planning discussions.5-7
Full article: https://jamanetwork.com/journals/jama/fullarticle/2763952?guestAccessKey=9207f0d4-7bcd-477b-9957-2e3c074d13a3&utm_content=weekly_highlights&utm_term=040420&utm_source=silverchair&utm_campaign=jama_network&cmp=1&utm_medium=email
March 27, 2020
The Importance of Addressing Advance Care Planning and Decisions About Do-Not-Resuscitate Orders During Novel Coronavirus 2019 (COVID-19)
J. Randall Curtis, MD, MPH1,2; Erin K. Kross, MD1,2; Renee D. Stapleton, MD, PhD3
Published online March 27, 2020. doi:10.1001/jama.2020.4894
EXCERPT:
The novel coronavirus disease 2019 (COVID-19) pandemic is challenging health care systems worldwide and raising important ethical issues, especially regarding the potential need for rationing health care in the context of scarce resources and crisis capacity. Even if capacity to provide care is sufficient, one priority should be addressing goals of care in the setting of acute life-threatening illness, especially for patients with chronic, life-limiting disease.
Clinicians should ensure patients receive the care they want, aligning the care that is delivered with patients’ values and goals. The importance of goal-concordant care is not new or even substantially different in the context of this pandemic, but the importance of providing goal-concordant care is now heightened in several ways. Patients most likely to develop severe illness will be older and have greater burden of chronic illness—exactly those who may wish to forgo prolonged life support and who may find their quality of life unacceptable after prolonged life support.1 In addition, recent reports suggest that survival may be substantially lower when acute respiratory distress syndrome is associated with COVID-19 vs when it is associated with other etiologies.2,3
In this context, advance care planning prior to serious acute illness and discussions about goals of care at the onset of serious acute illness should be a high priority for 3 reasons.
First, clinicians should always strive to avoid intensive life-sustaining treatments when unwanted by patients.
Second, avoiding nonbeneficial or unwanted high-intensity care becomes especially important in times of stress on health care capacity.
Third, provision of nonbeneficial or unwanted high-intensity care may put other patients, family members, and health care workers at higher risk of transmission of severe acute respiratory syndrome coronavirus.
Now is the time to implement advance care planning to ensure patients do not receive care they would not want if they become too severely ill to make their own decisions. As eloquently pointed out by an intensivist, “If you do not talk with [your family] about this now, you may have to have a much more difficult conversation with me later.”4
Several online resources can guide these advance care planning discussions.5-7
Full article: https://jamanetwork.com/journals/jama/fullarticle/2763952?guestAccessKey=9207f0d4-7bcd-477b-9957-2e3c074d13a3&utm_content=weekly_highlights&utm_term=040420&utm_source=silverchair&utm_campaign=jama_network&cmp=1&utm_medium=email
Strategy For Small Business Owners Frustrated With Troubled Paycheck Protection Program Launch
by Ryan Guina, Forbes Contributor
DAR editorial comment: I like the Guina piece excerpted below because it moves beyond complaining about the serious deficiencies to the Government's roleout of small business assistance to suggesting possible small business strategies.
The recently passed the Coronavirus Aid, Relief and Economic Security (CARES) Act included a potential lifeline for small businesses, a $349 billion loan program called the Paycheck Protection Program (PPP). The PPP Loan is designed to help small businesses keep their doors open during a time of social distancing and mandatory business closures.
Unfortunately, the program was rushed through the implementation process and was pushed live before banks had the ability to create stable processes for accepting and funding these loan applications.
The CARES Act was signed into law on Friday, March 27, 2020. The Small Business Administration (SBA) and Treasury announced that the first day banks would accept PPP Loan applications would be Friday, April 3, 2020, just one week after the Act was passed. The Interim Final Rule, which provides guidelines for how the program will be run, was released the evening of Thursday, April 2, 2020, only hours before the deadline banks were given to begin accepting loans.
Many Banks Simply Weren’t Ready to Handle This Program
While some smaller banks began accepting PPP Loan applications right away, many of the larger commercial banks informed their customers they were not currently accepting applications. Many other banks were limiting applications to current customers only.
Some banks even went so far as to limit applications to customers that had both an established bank account, and an existing loan product, such as a small business loan, business credit card or business line of credit.
This latter limitation is especially frustrating for small business owners.
* * *
Where Can Small Business Turn if Their Bank Isn’t Accepting PPP Loan Applications?
The SBA has announced that business owners can apply at any participating SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution.
However, many banks are currently limiting PP Loan applications to current customers.
If this describes your bank, then you have several choices:
There are pros and cons to each of these options.
Should Small Business Owners Wait Until Their Bank Begins Accepting Applications?
While the program is open through June 30, 2020, funds are limited. The CARES Act included $349 billion toward helping small businesses. Midway through the first day, Steven Mnuchin, the Secretary of the Treasury, tweeted that over $1.8 billion in PPP Loans had already been processed, primarily from community banks. Some big banks had already taken in large amounts as well, but were not included in those numbers.
Waiting is an option, but it is not without risk. The SBA expects this program to be oversubscribed and funds may run out in the next few weeks.
Should Small Business Owners Open an Account Elsewhere?
With many banks limiting access to current customers, opening a new business bank account is an option. However, this can take time, as opening a business bank account can take more time than opening a personal account, which can be opened online in just a few minutes.
In addition, some banks are limiting loan applications to clients that were already customers prior to the loan being announced. If you decide to open a new bank account, be sure to clarify whether or not you will be able to apply for the PPP loan.
Finding Another Participating SBA 7(a) Lender is Another Option
The SBA isn’t limiting the PPP Loan funding to banks. You can try finding another lender that will fund these loans. The SBA website has a list of the top 100 most active SBA 7(a) lenders.
At this point, it may be worth working through that list to see which lenders are accepting applications at this time.
Will The PPP Loan Program Run Out of Funds?
At this point, it is almost a given that the funds will run out. The question is when? And right now, no one knows when that will happen.
In addition to the numbers tweeted by Steven Mnuchin, Bank of America tweeted they processed over $6 billion in PPP loans in just the first day of the program.
* * *
Full article: https://www.forbes.com/sites/ryanguina/2020/04/04/small-business-owners-frustrated-with-failed-paycheck-protection-program-launch/#5bd4c3546500
by Ryan Guina, Forbes Contributor
DAR editorial comment: I like the Guina piece excerpted below because it moves beyond complaining about the serious deficiencies to the Government's roleout of small business assistance to suggesting possible small business strategies.
The recently passed the Coronavirus Aid, Relief and Economic Security (CARES) Act included a potential lifeline for small businesses, a $349 billion loan program called the Paycheck Protection Program (PPP). The PPP Loan is designed to help small businesses keep their doors open during a time of social distancing and mandatory business closures.
Unfortunately, the program was rushed through the implementation process and was pushed live before banks had the ability to create stable processes for accepting and funding these loan applications.
The CARES Act was signed into law on Friday, March 27, 2020. The Small Business Administration (SBA) and Treasury announced that the first day banks would accept PPP Loan applications would be Friday, April 3, 2020, just one week after the Act was passed. The Interim Final Rule, which provides guidelines for how the program will be run, was released the evening of Thursday, April 2, 2020, only hours before the deadline banks were given to begin accepting loans.
Many Banks Simply Weren’t Ready to Handle This Program
While some smaller banks began accepting PPP Loan applications right away, many of the larger commercial banks informed their customers they were not currently accepting applications. Many other banks were limiting applications to current customers only.
Some banks even went so far as to limit applications to customers that had both an established bank account, and an existing loan product, such as a small business loan, business credit card or business line of credit.
This latter limitation is especially frustrating for small business owners.
* * *
Where Can Small Business Turn if Their Bank Isn’t Accepting PPP Loan Applications?
The SBA has announced that business owners can apply at any participating SBA 7(a) lender or through any federally insured depository institution, federally insured credit union, or Farm Credit System institution.
However, many banks are currently limiting PP Loan applications to current customers.
If this describes your bank, then you have several choices:
- You can wait until your bank starts accepting PPP Loan applications;
- You can try to open a new bank account elsewhere;
- or you can apply through another participating SBA 7(a) lender. There are some companies that specialize in small business loans that have already streamlined the application process for this program.
There are pros and cons to each of these options.
Should Small Business Owners Wait Until Their Bank Begins Accepting Applications?
While the program is open through June 30, 2020, funds are limited. The CARES Act included $349 billion toward helping small businesses. Midway through the first day, Steven Mnuchin, the Secretary of the Treasury, tweeted that over $1.8 billion in PPP Loans had already been processed, primarily from community banks. Some big banks had already taken in large amounts as well, but were not included in those numbers.
Waiting is an option, but it is not without risk. The SBA expects this program to be oversubscribed and funds may run out in the next few weeks.
Should Small Business Owners Open an Account Elsewhere?
With many banks limiting access to current customers, opening a new business bank account is an option. However, this can take time, as opening a business bank account can take more time than opening a personal account, which can be opened online in just a few minutes.
In addition, some banks are limiting loan applications to clients that were already customers prior to the loan being announced. If you decide to open a new bank account, be sure to clarify whether or not you will be able to apply for the PPP loan.
Finding Another Participating SBA 7(a) Lender is Another Option
The SBA isn’t limiting the PPP Loan funding to banks. You can try finding another lender that will fund these loans. The SBA website has a list of the top 100 most active SBA 7(a) lenders.
At this point, it may be worth working through that list to see which lenders are accepting applications at this time.
Will The PPP Loan Program Run Out of Funds?
At this point, it is almost a given that the funds will run out. The question is when? And right now, no one knows when that will happen.
In addition to the numbers tweeted by Steven Mnuchin, Bank of America tweeted they processed over $6 billion in PPP loans in just the first day of the program.
* * *
Full article: https://www.forbes.com/sites/ryanguina/2020/04/04/small-business-owners-frustrated-with-failed-paycheck-protection-program-launch/#5bd4c3546500
Trump Administration Plans to Pay Hospitals to Treat Uninsured Coronavirus Patients--Update
By Stephanie Armour
The Trump administration is expected to use a federal stimulus package to pay hospitals that treat uninsured people with the new coronavirus as long as they agree not to bill the patients or issue unexpected charges, according to two people familiar with the planning.
The plan, which could be released Friday, comes as the White House faces mounting criticism for not launching a special enrollment period for people seeking coverage under the Affordable Care Act. Congressional Democrats also are pressuring the administration and insurers to waive treatment costs for the growing number of Americans who are losing employer-provided health coverage as job losses mount.
Hospitals treating the uninsured often bill patients for the difference between the amount they get from the government and the cost of care. The uninsured also may get bills for care provided by doctors who aren't directly employed by the hospital. Both would be barred under the administration proposal, and hospitals would likely be reimbursed at current Medicare rates, people familiar with the planning said.
Hospitals are eager to get funding and administration officials are working now to determine how the money will be divided, according to one of the people familiar with the planning. It will go toward revenue assistance, covering the costs of the uninsured, and the needs of hospitals. For example, needs may be higher for hospitals in hotspots hard-hit by the pandemic.
Hospitals, which typically bear the brunt of costs for uncompensated care, have been bracing for an influx of patients. Hospitals of all types provided more than $38 billion in uncompensated care in 2017, according to the American Hospital Association.
Full article: https://ih.advfn.com/stock-market/stock-news/82165041/trump-administration-plans-to-pay-hospitals-to-tre
By Stephanie Armour
The Trump administration is expected to use a federal stimulus package to pay hospitals that treat uninsured people with the new coronavirus as long as they agree not to bill the patients or issue unexpected charges, according to two people familiar with the planning.
The plan, which could be released Friday, comes as the White House faces mounting criticism for not launching a special enrollment period for people seeking coverage under the Affordable Care Act. Congressional Democrats also are pressuring the administration and insurers to waive treatment costs for the growing number of Americans who are losing employer-provided health coverage as job losses mount.
Hospitals treating the uninsured often bill patients for the difference between the amount they get from the government and the cost of care. The uninsured also may get bills for care provided by doctors who aren't directly employed by the hospital. Both would be barred under the administration proposal, and hospitals would likely be reimbursed at current Medicare rates, people familiar with the planning said.
Hospitals are eager to get funding and administration officials are working now to determine how the money will be divided, according to one of the people familiar with the planning. It will go toward revenue assistance, covering the costs of the uninsured, and the needs of hospitals. For example, needs may be higher for hospitals in hotspots hard-hit by the pandemic.
Hospitals, which typically bear the brunt of costs for uncompensated care, have been bracing for an influx of patients. Hospitals of all types provided more than $38 billion in uncompensated care in 2017, according to the American Hospital Association.
Full article: https://ih.advfn.com/stock-market/stock-news/82165041/trump-administration-plans-to-pay-hospitals-to-tre
Open Technology Institute
Easing the Home Connectivity Crunch
Wi-Fi's Role in the 5G Wireless Ecosystem
RSVP
The widespread work and school closures that are disrupting daily life and the economy have highlighted how critical it is to have affordable, high-capacity internet connectivity throughout every home. Stay-at-home orders are turning homes into classrooms and offices, with parents and kids sharing available bandwidth on multiple laptops, tablets, and smartphones.
Even homes with gigabit-capable fiber or cable service are discovering that today’s Wi-Fi is constrained in supporting multiple users engaged in video conferencing, streaming video, and other high-bandwidth applications.
Beyond the current crisis, future 5G applications, such as virtual and augmented reality, will require more and more bandwidth. Smart homes and enterprises need affordable bandwidth to connect the emerging Internet of Things (IoT). In rural and small town areas, more unlicensed spectrum will allow wireless internet service providers (WISPs) to provide higher-capacity service. And in lower-income areas, enhanced Wi-Fi can help narrow the digital divide.
FCC Chairman Ajit Pai will join us to discuss the importance of Next Generation Wi-Fi (Wi-Fi 6) as a complement to 5G mobile networks and as a pillar of a world-leading 5G wireless ecosystem.
The FCC is considering two proposals to open more than 1200 megahertz of unlicensed spectrum in the 5 and 6 GHz bands capable of supporting the very wide channels of spectrum for Wi-Fi 6 and Wi-Fi 7 (160 megahertz and beyond) and paving the way for a new era of wireless innovation.
Responding to the Chairman’s remarks, a panel discussion featuring experts with a variety of perspectives on future use cases for Wi-Fi and wireless connectivity will join us.
Keynote Discussion:
Chairman Ajit Pai, Federal Communications Commission, @AjitPaiFCC
Discussion Panel:
Ross Marchand, @RossAMarchand
Policy Director, Taxpayer Protection Alliance
Christina Mason, @WISPAnews
Vice President for Legislative Affairs, Wireless Internet Service Providers Association (WISPA)
John Windhausen, @shlbcoalition
Executive Director, Schools, Health & Libraries Broadband (SHLB) Coalition
Audrey Connors, @CharterGOV
Vice President, Government Affairs, Charter Communications
Chris Szymanski, @C_Szymanski
Director, Product Marketing & Global Government Affairs, Broadcom Inc.
Michael Calabrese, @MCalabreseNAF (Moderator)
Director, Wireless Future Project, New America’s Open Technology Institute
Please note that this event will be online only.
You can register for the event via Zoom by clicking here.
If you have any questions about accessing the webcast, please reach out to events@newamerica.org.
This event is co-sponsored by the Taxpayers Protection Alliance.
Easing the Home Connectivity Crunch: Wi-Fi’s Role in the 5G Wireless Ecosystem
Monday, April 6, 2020
1:00 PM – 2:15 PM ET
ONLINE
RSVP
Tweet about mergers and ventilators by Michael Carrier -- Rutgers Law School
https://www.linkedin.com/in/michael-carrier-7029b81?miniProfileUrn=urn%3Ali%3Afs_miniProfile%3AACoAAABTcPIBXTA3LBC9u5ZoPTkDJWFXxmKxY20
We don’t have enough ventilators. A decade ago, the gov’t chose small company Newport to supply it with inexpensive versions. But Newport was swallowed up by Covidien to protect its existing ventilator business. Textbook example of consolidation harms, Innovator’s Dilemma (company protects its business), killer acquisitions (acquire/quash rival to maintain existing model).
* * *
The Carrier tweet refers to this NYT article
The U.S. Tried to Build a New Fleet of Ventilators. The Mission Failed. nytimes.com https://www.nytimes.com/2020/03/29/business/coronavirus-us-ventilator-shortage.html?referringSource=articleShare
The Federal Government's clouded crystal ball revisited
“I don’t think corona is as big a threat as people make it out to be,” the acting chairman of the Council of Economic Advisers, Tomas Philipson, told reporters during a Feb. 18 briefing
"I have all this data about I.C.U. capacity . . . . "I'm doing my own projections, and I've gotten a lot smarter about this. New York doesn't need all the ventilators." Jared Kushner
Posting by DAR
“I don’t think corona is as big a threat as people make it out to be,” the acting chairman of the Council of Economic Advisers, Tomas Philipson, told reporters during a Feb. 18 briefing
"I have all this data about I.C.U. capacity . . . . "I'm doing my own projections, and I've gotten a lot smarter about this. New York doesn't need all the ventilators." Jared Kushner
Posting by DAR
Advice for small businesses and not-for-profits seeking CARES Act loan help
With $2 trillion allocated for businesses, not-for-profits, individuals, federal agencies, and state and local governments, the CARES Act has been designed to distribute capital broadly. There are a number of provisions that impact small businesses and not-for-profits. It’s early to expect regulations and procedural advice from the federal Small Business Administration or banks that will help administer the CARES Act. But we have found some information that may help with early planning.
There is useful information in the U.S. Chamber of Commerce Guide to the recently passed Coronavirus Aid, Relief, and Economic Security Act (https://www.uschamber.com/co/start/strategy/cares-act-small-business-guide ) (see the statute at https://www.govinfo.gov/content/pkg/CREC-2020-03-27/pdf/CREC-2020-03-27.pdf)
The Chamber’s Guide to the CARES Act explains that currently, the SBA guarantees small business loans that are given out by a network of more than 800 lenders across the U.S. The new CARES Paycheck Protection Program creates a type of emergency loan that can be forgiven when used to maintain payroll through June and expands the network beyond SBA so that more banks, credit unions and lenders can issue those loans. The basic purpose is to incentivize small businesses to not lay off workers and to rehire laid-off workers that lost jobs due to COVID-19 disruptions.
The Guide explains that the Paycheck Protection Program, one of the largest sections of the CARES Act, is the most important provision in the new stimulus bill for most small businesses. This new program sets aside $350 billion in government-backed loans, and it is modeled after the existing SBA 7(a) loan program (see https://www.uschamber.com/co/run/business-financing/guide-to-sba-loans)
The Paycheck Protection Program offers loans for small businesses with fewer than 500 employees, select types of businesses with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(c)(19) veteran organizations. Additionally, the self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply. Businesses, even without a personal guarantee or collateral, can get a loan as long as they were operational on February 15, 2020.
The maximum loan amount under the Paycheck Protection Act is $10 million, with an interest rate no higher than 4%. No personal guarantee or collateral is required for the loan. The lenders, including banks that will work in cooperation with the federal government, are expected to defer fees, principal and interest for no less than six months and no more than one year.
Small businesses that take out these loans can get some or all of their loans forgiven. The Guide explains that, generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven.
The Chamber Guide points out that another important aspect of the CARES Act for small businesses is that it expands eligibility for the SBA’s Economic Injury Disaster Loans (EIDLs). [See https://www.uschamber.com/co/start/strategy/applying-for-sba-disaster-relief-loan] In early March, prior to passage of the CARES Act, the SBA’s disaster loan program was extended to all small businesses affected by COVID-19, but the CARES Act opens this program up further and makes it easier to apply.
The Guide points out the following changes worked by the CARES Act concerning the the SBA’s Economic Injury Disaster Loans (EIDLs):
In the meanwhile, there is some additional pragmatic advice available, including advice from Peter Reilly at https://www.forbes.com/sites/peterjreilly/2020/03/28/paycheck-protection-programdevilish-detailssome-uncertainty/#5ba2051f652f).
Reilly emphasizes that the new CARES Act Paycheck Protection Program is an extension of the Small Business Administration 7(a) program. Reilly further points out that the SBA needs to make up the exact rules and then the rules have to be implemented by the 1,800 banks that are part of the program. Reilly recommends that “to participate you need to contact a bank.” Reilly helpfully advises that “US Bank has a pre-application you can do on-line and they will get back to you.” [https://apply.usbank.com/applications/business/InquiryForm] Reilly says that he did not get anywhere with the other large banks he contacted. He says that “If you have an existing banking relationship, you should contact that bank first thing.”
Reilly offers useful advice on what borrowers will need to demonstrate to lenders. Besides promising that you are only going to take out one loan under the Payroll Protection Program, you have to certify two things. One is that you intend to use the money to retain workers, maintain payroll or make mortgage lease or utility payments. The other thing you have to certify is that “uncertainty of current economic conditions makes necessary the loan request” to support your ongoing operations.
Another point emphasized by Reilly is that no collateral or personal guaranty is required. Interest is no more than 4% and repayment, if required, can be over a period as long as ten years. You don’t have to show that you can’t borrow the money elsewhere.
Finally, here is an excerpt from the Reilly/Forbes article that includes useful comment on aspects of the CARES Act that will require further clarification:
There are three important things that people want to know about this program. How much can you borrow? How are you supposed to spend the money? And how much of the loan will be forgiven?
It can be somewhat confusing because each set of rules uses some of the same elements, but they are different in how they are combined.
“Payroll costs” is the most important concept and thankfully is defined the same way throughout.
“Payroll costs” is defined very broadly and includes salary, wage, commission, or similar compensation, payment of cash tip or equivalent, payment for vacation, parental, family, medical, or sick leave, allowance for dismissal or separation, payment required for the provisions of group health care benefits, including insurance premiums, payment of any retirement benefit, and payment of State or local tax assessed on the compensation of employees.
And there is one more thing included in payroll costs that I find pretty puzzling:
“the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period”
Now I am not sure exactly what that last item means. I read it to mean that you also include the people you are paying as independent contractors and if you are a sole proprietor whatever your schedule C profit was (up to $100,000) and something similar for partnerships.
Including your Schedule C profit would put you in a similar position (slightly better maybe) as an S corporation owner who paid himself a reasonable salary. An S corporation owner that did not pay himself salary might be worse off.
Excluded from payroll costs are amounts attributable to payroll over $100,000 and amounts for which you are getting credit under the Families First Coronavirus Response Act.
How Much Can You Borrow?
This is a little confusing. There are things that you can use the loan for besides “payroll costs”, but the maximum loan computation is based solely on “payroll costs”. It is 2.5 times the average monthly amount from “ the 1-year period before the date on which the loan is made” unless the Administrator, whoever that is, says that you are seasonal. If you are seasonal it is the amount you paid in 2019 for the 12 week period beginning February 15, 2019 or at your election March 1 to June 30.
And there is a $10,000,000 limit, but if your payroll is that large, you should have staff figuring this out for you.
“The 1-year period before the date on which the loan is made” strikes me as something of a moving target.
What Can You Use The Loan For?
Besides payroll costs you can use the loan funds for:
“(II) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
“(III) employee salaries, commissions, or similar compensations;
“(IV) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
“(V) rent (including rent under a lease agreement);
“(VI) utilities; and
“(VII) interest on any other debt obligations that were incurred before the covered period.
There does seem to be some redundancy there.
I would recommend that you seriously consider opening an account where you deposit the loan proceeds and using that account to pay permitted expenses. That would give you a very easy audit trail.
How Much Can Be Forgiven?
This gets very tricky, because the forgiveness section uses the term “covered period”, but defines it differently than the loan amount section. It is the eight-week period beginning with the origination of the loan.
Here is the actual language:
“Forgiveness.—An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
(1) Payroll costs.
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.”
It would seem that you are on a kind of hybrid accounting method in measuring the forgiveness amount. Things that you paid during the covered period that you incurred before and things that you incur during the period that you pay after seem to count. I wouldn’t plan on that being the right interpretation, but keep it in mind.
But then there is a reduction in the forgiveness amount based on a headcount fraction.
“ (A) IN GENERAL.—The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing--
(i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
(ii) (I) at the election of the borrower--
(aa) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or
(bb) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or
(II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
(B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.—For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.”
There is also a carve-back in the forgiveness amount if there is a reduction in pay of more than 25% of any individual full-time employee.
These reductions, however, are not implemented if you are fully staffed up by June 30.
All Might Not Be Forgiven
Even if you spend all the money on permitted expenses, the difference in the definition of “covered period” might mean that you won’t have the full amount forgiven. And then there is that headcount problem.
[end of the Reilly excerpt from Forbes]
This posting is by Don Allen Resnikoff
With $2 trillion allocated for businesses, not-for-profits, individuals, federal agencies, and state and local governments, the CARES Act has been designed to distribute capital broadly. There are a number of provisions that impact small businesses and not-for-profits. It’s early to expect regulations and procedural advice from the federal Small Business Administration or banks that will help administer the CARES Act. But we have found some information that may help with early planning.
There is useful information in the U.S. Chamber of Commerce Guide to the recently passed Coronavirus Aid, Relief, and Economic Security Act (https://www.uschamber.com/co/start/strategy/cares-act-small-business-guide ) (see the statute at https://www.govinfo.gov/content/pkg/CREC-2020-03-27/pdf/CREC-2020-03-27.pdf)
The Chamber’s Guide to the CARES Act explains that currently, the SBA guarantees small business loans that are given out by a network of more than 800 lenders across the U.S. The new CARES Paycheck Protection Program creates a type of emergency loan that can be forgiven when used to maintain payroll through June and expands the network beyond SBA so that more banks, credit unions and lenders can issue those loans. The basic purpose is to incentivize small businesses to not lay off workers and to rehire laid-off workers that lost jobs due to COVID-19 disruptions.
The Guide explains that the Paycheck Protection Program, one of the largest sections of the CARES Act, is the most important provision in the new stimulus bill for most small businesses. This new program sets aside $350 billion in government-backed loans, and it is modeled after the existing SBA 7(a) loan program (see https://www.uschamber.com/co/run/business-financing/guide-to-sba-loans)
The Paycheck Protection Program offers loans for small businesses with fewer than 500 employees, select types of businesses with fewer than 1,500 employees, 501(c)(3) non-profits with fewer than 500 workers and some 501(c)(19) veteran organizations. Additionally, the self-employed, sole proprietors, and freelance and gig economy workers are also eligible to apply. Businesses, even without a personal guarantee or collateral, can get a loan as long as they were operational on February 15, 2020.
The maximum loan amount under the Paycheck Protection Act is $10 million, with an interest rate no higher than 4%. No personal guarantee or collateral is required for the loan. The lenders, including banks that will work in cooperation with the federal government, are expected to defer fees, principal and interest for no less than six months and no more than one year.
Small businesses that take out these loans can get some or all of their loans forgiven. The Guide explains that, generally speaking, as long as employers continue paying employees at normal levels during the eight weeks following the origination of the loan, then the amount they spent on payroll costs (excluding costs for any compensation above $100,000 annually), mortgage interest, rent payments and utility payments can be combined and that portion of the loan will be forgiven.
The Chamber Guide points out that another important aspect of the CARES Act for small businesses is that it expands eligibility for the SBA’s Economic Injury Disaster Loans (EIDLs). [See https://www.uschamber.com/co/start/strategy/applying-for-sba-disaster-relief-loan] In early March, prior to passage of the CARES Act, the SBA’s disaster loan program was extended to all small businesses affected by COVID-19, but the CARES Act opens this program up further and makes it easier to apply.
The Guide points out the following changes worked by the CARES Act concerning the the SBA’s Economic Injury Disaster Loans (EIDLs):
- EIDLs are now also available to ESOPs with fewer than 500 employees. (An employee stock ownership plan (ESOP) is an employee benefit plan that gives workers ownership interest in the company.) They are also available to all non-profit organizations, including 501(c)(6)s, and to individuals operating as sole proprietors or independent contractors.
- EIDLs can be approved by the SBA based solely on an applicant’s credit score.
- EIDLs that are smaller than $200,000 can be approved without a personal guarantee.
- Borrowers can receive a $10,000 emergency grant cash advance that can be forgiven if spent on paid leave, maintaining payroll, increased costs due to supply chain disruption, mortgage or lease payments or repaying obligations that cannot be met due to revenue losses.
In the meanwhile, there is some additional pragmatic advice available, including advice from Peter Reilly at https://www.forbes.com/sites/peterjreilly/2020/03/28/paycheck-protection-programdevilish-detailssome-uncertainty/#5ba2051f652f).
Reilly emphasizes that the new CARES Act Paycheck Protection Program is an extension of the Small Business Administration 7(a) program. Reilly further points out that the SBA needs to make up the exact rules and then the rules have to be implemented by the 1,800 banks that are part of the program. Reilly recommends that “to participate you need to contact a bank.” Reilly helpfully advises that “US Bank has a pre-application you can do on-line and they will get back to you.” [https://apply.usbank.com/applications/business/InquiryForm] Reilly says that he did not get anywhere with the other large banks he contacted. He says that “If you have an existing banking relationship, you should contact that bank first thing.”
Reilly offers useful advice on what borrowers will need to demonstrate to lenders. Besides promising that you are only going to take out one loan under the Payroll Protection Program, you have to certify two things. One is that you intend to use the money to retain workers, maintain payroll or make mortgage lease or utility payments. The other thing you have to certify is that “uncertainty of current economic conditions makes necessary the loan request” to support your ongoing operations.
Another point emphasized by Reilly is that no collateral or personal guaranty is required. Interest is no more than 4% and repayment, if required, can be over a period as long as ten years. You don’t have to show that you can’t borrow the money elsewhere.
Finally, here is an excerpt from the Reilly/Forbes article that includes useful comment on aspects of the CARES Act that will require further clarification:
There are three important things that people want to know about this program. How much can you borrow? How are you supposed to spend the money? And how much of the loan will be forgiven?
It can be somewhat confusing because each set of rules uses some of the same elements, but they are different in how they are combined.
“Payroll costs” is the most important concept and thankfully is defined the same way throughout.
“Payroll costs” is defined very broadly and includes salary, wage, commission, or similar compensation, payment of cash tip or equivalent, payment for vacation, parental, family, medical, or sick leave, allowance for dismissal or separation, payment required for the provisions of group health care benefits, including insurance premiums, payment of any retirement benefit, and payment of State or local tax assessed on the compensation of employees.
And there is one more thing included in payroll costs that I find pretty puzzling:
“the sum of payments of any compensation to or income of a sole proprietor or independent contractor that is a wage, commission, income, net earnings from self-employment, or similar compensation and that is in an amount that is not more than $100,000 in 1 year, as prorated for the covered period”
Now I am not sure exactly what that last item means. I read it to mean that you also include the people you are paying as independent contractors and if you are a sole proprietor whatever your schedule C profit was (up to $100,000) and something similar for partnerships.
Including your Schedule C profit would put you in a similar position (slightly better maybe) as an S corporation owner who paid himself a reasonable salary. An S corporation owner that did not pay himself salary might be worse off.
Excluded from payroll costs are amounts attributable to payroll over $100,000 and amounts for which you are getting credit under the Families First Coronavirus Response Act.
How Much Can You Borrow?
This is a little confusing. There are things that you can use the loan for besides “payroll costs”, but the maximum loan computation is based solely on “payroll costs”. It is 2.5 times the average monthly amount from “ the 1-year period before the date on which the loan is made” unless the Administrator, whoever that is, says that you are seasonal. If you are seasonal it is the amount you paid in 2019 for the 12 week period beginning February 15, 2019 or at your election March 1 to June 30.
And there is a $10,000,000 limit, but if your payroll is that large, you should have staff figuring this out for you.
“The 1-year period before the date on which the loan is made” strikes me as something of a moving target.
What Can You Use The Loan For?
Besides payroll costs you can use the loan funds for:
“(II) costs related to the continuation of group health care benefits during periods of paid sick, medical, or family leave, and insurance premiums;
“(III) employee salaries, commissions, or similar compensations;
“(IV) payments of interest on any mortgage obligation (which shall not include any prepayment of or payment of principal on a mortgage obligation);
“(V) rent (including rent under a lease agreement);
“(VI) utilities; and
“(VII) interest on any other debt obligations that were incurred before the covered period.
There does seem to be some redundancy there.
I would recommend that you seriously consider opening an account where you deposit the loan proceeds and using that account to pay permitted expenses. That would give you a very easy audit trail.
How Much Can Be Forgiven?
This gets very tricky, because the forgiveness section uses the term “covered period”, but defines it differently than the loan amount section. It is the eight-week period beginning with the origination of the loan.
Here is the actual language:
“Forgiveness.—An eligible recipient shall be eligible for forgiveness of indebtedness on a covered loan in an amount equal to the sum of the following costs incurred and payments made during the covered period:
(1) Payroll costs.
(2) Any payment of interest on any covered mortgage obligation (which shall not include any prepayment of or payment of principal on a covered mortgage obligation).
(3) Any payment on any covered rent obligation.
(4) Any covered utility payment.”
It would seem that you are on a kind of hybrid accounting method in measuring the forgiveness amount. Things that you paid during the covered period that you incurred before and things that you incur during the period that you pay after seem to count. I wouldn’t plan on that being the right interpretation, but keep it in mind.
But then there is a reduction in the forgiveness amount based on a headcount fraction.
“ (A) IN GENERAL.—The amount of loan forgiveness under this section shall be reduced, but not increased, by multiplying the amount described in subsection (b) by the quotient obtained by dividing--
(i) the average number of full-time equivalent employees per month employed by the eligible recipient during the covered period; by
(ii) (I) at the election of the borrower--
(aa) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019; or
(bb) the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on January 1, 2020 and ending on February 29, 2020; or
(II) in the case of an eligible recipient that is seasonal employer, as determined by the Administrator, the average number of full-time equivalent employees per month employed by the eligible recipient during the period beginning on February 15, 2019 and ending on June 30, 2019.
(B) CALCULATION OF AVERAGE NUMBER OF EMPLOYEES.—For purposes of subparagraph (A), the average number of full-time equivalent employees shall be determined by calculating the average number of full-time equivalent employees for each pay period falling within a month.”
There is also a carve-back in the forgiveness amount if there is a reduction in pay of more than 25% of any individual full-time employee.
These reductions, however, are not implemented if you are fully staffed up by June 30.
All Might Not Be Forgiven
Even if you spend all the money on permitted expenses, the difference in the definition of “covered period” might mean that you won’t have the full amount forgiven. And then there is that headcount problem.
[end of the Reilly excerpt from Forbes]
This posting is by Don Allen Resnikoff
Coronavirus stimulus bill designates D.C. as a territory
The $2 trillion coronavirus stimulus legislation designates Washington, D.C., as a territory, meaning the District is poised to get $500 million while states will receive at least $1.25 billion apiece. Mayor Muriel Bowser said the funding level is "unconscionable ... especially given the unique challenges we take on as the seat of the federal government," and Sen. Chris Van Hollen, D-Md., said he aims to provide the additional money to the District retroactively.
Full Story: The Washington Post (tiered subscription model) (3/26), CNN (3/26)
The $2 trillion coronavirus stimulus legislation designates Washington, D.C., as a territory, meaning the District is poised to get $500 million while states will receive at least $1.25 billion apiece. Mayor Muriel Bowser said the funding level is "unconscionable ... especially given the unique challenges we take on as the seat of the federal government," and Sen. Chris Van Hollen, D-Md., said he aims to provide the additional money to the District retroactively.
Full Story: The Washington Post (tiered subscription model) (3/26), CNN (3/26)
The DC attorney general's office has sent out five cease-and-desist letters warning area stores and an online seller to stop price gouging,
news release at https://thedcline.org/2020/03/26/press-release-ag-racine-sends-cease-and-desist-letters-to-stop-price-gouging-by-district-stores-and-online-sellers/
One Southeast store reportedly upped the price for an eight-ounce bottle of hand sanitizer to $15; another charged $19.99 for a container of Lysol. "D.C. residents who are seeking scarce and essential goods to protect their health should not have to worry about paying illegally inflated prices," said AG Karl Racine.
news release at https://thedcline.org/2020/03/26/press-release-ag-racine-sends-cease-and-desist-letters-to-stop-price-gouging-by-district-stores-and-online-sellers/
One Southeast store reportedly upped the price for an eight-ounce bottle of hand sanitizer to $15; another charged $19.99 for a container of Lysol. "D.C. residents who are seeking scarce and essential goods to protect their health should not have to worry about paying illegally inflated prices," said AG Karl Racine.
Politics and the virus: Ohio and Texas have moved to make abortion inaccessible under directives seeking to free up hospital beds by postponing “elective” and “nonessential” procedures.
The American College of Obstetricians and Gynecologists and the American Board of Obstetrics and Gynecology issued a statement saying that abortion should not fall into the category of procedures that can be delayed during the coronavirus outbreak, calling it “an essential component of comprehensive health care. The statement is at https://www.acog.org/news/news-releases/2020/03/joint-statement-on-abortion-access-during-the-covid-19-outbreak
State AGs Ask Amazon, Facebook & Others To Help With COVID-19 Price Gouging
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A group of 33 attorneys general from U.S. states and territories called on Amazon, eBay, Facebook, Walmart and Craigslist to prevent price gouging on coronavirus-related products.
The coalition, led by Pennsylvania’s Democratic Attorney General Josh Shapiro, sent a letter to the companies saying they “have an ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time.” Attorneys general from California, Colorado and the District of Columbia were among those involved in the effort.
https://www.cnbc.com/2020/03/25/state-ags-call-on-amazon-and-others-to-prevent-coronavirus-price-gouging.html
-
A group of 33 attorneys general from U.S. states and territories called on Amazon, eBay, Facebook, Walmart and Craigslist to prevent price gouging on coronavirus-related products.
The coalition, led by Pennsylvania’s Democratic Attorney General Josh Shapiro, sent a letter to the companies saying they “have an ethical obligation and patriotic duty to help your fellow citizens in this time of need by doing everything in your power to stop price gouging in real-time.” Attorneys general from California, Colorado and the District of Columbia were among those involved in the effort.
https://www.cnbc.com/2020/03/25/state-ags-call-on-amazon-and-others-to-prevent-coronavirus-price-gouging.html
Drivers Say Uber and Lyft Are Blocking Unemployment Pay
States like New York and California have made gig workers eligible for jobless benefits and sick days. But the companies have resisted complying.
See https://www.nytimes.com/2020/03/24/business/economy/coronavirus-uber-lyft-drivers-unemployment.html
States like New York and California have made gig workers eligible for jobless benefits and sick days. But the companies have resisted complying.
See https://www.nytimes.com/2020/03/24/business/economy/coronavirus-uber-lyft-drivers-unemployment.html
From DMN: Spinrilla Sues the RIAA for Issuing False Takedown Notices
Independent hip-hop discovery app Spinrilla is suing the Recording Industry Association of America (RIAA) for allegedly issuing false DMCA takedown notices.
The story continues here.https://www.digitalmusicnews.com/2020/03/23/spinrilla-sues-riaa-for-false-takedown-notices/
Independent hip-hop discovery app Spinrilla is suing the Recording Industry Association of America (RIAA) for allegedly issuing false DMCA takedown notices.
The story continues here.https://www.digitalmusicnews.com/2020/03/23/spinrilla-sues-riaa-for-false-takedown-notices/
DOJ moves against ‘despicable scammers’ operating fake Covid-19 vaccine website
In the first federal action against fraud involving the coronavirus outbreak, the DOJ obtained a temporary restraining order against a website selling a bogus vaccine.
The DOJ said Sunday that operators of the website “coronavirusmedicalkit.com” were engaging in an alleged wire fraud scheme to profit from the confusion and fear surrounding Covid-19.
Full article:https://fcpablog.com/2020/03/23/doj-moves-against-dispicable-scammers-operating-fake-covid-19-vaccine-website/
In the first federal action against fraud involving the coronavirus outbreak, the DOJ obtained a temporary restraining order against a website selling a bogus vaccine.
The DOJ said Sunday that operators of the website “coronavirusmedicalkit.com” were engaging in an alleged wire fraud scheme to profit from the confusion and fear surrounding Covid-19.
Full article:https://fcpablog.com/2020/03/23/doj-moves-against-dispicable-scammers-operating-fake-covid-19-vaccine-website/
Amazon Accused of Monopolization, Massive Price-Fixing Scheme
Amazon.com Inc. was hit with antitrust claims in Seattle federal court over an alleged “pricing scheme that broadly and anti-competitively impacts virtually all products offered for sale in the U.S. retail e-commerce market.”
“Amazon’s horizontal price-fixing agreement with its two million sellers is a per se violation of antitrust law,” the lawsuit says.
The proposed consumer class action targeting the e-commerce giant, which is responsible for 49% of U.S. online retail sales, was filed late Thursday in the U.S. District Court for the Western District of Washington.
The suit accuses Amazon of continuing to enforce de facto “most favored nation” pricing terms against 2 million third-party sellers offering 600 million products, despite promising the Federal Trade Commission last year that it would stop.
When the mega-retailer abandoned that policy, it was supposed to begin permitting merchants to offer lower prices through cheaper competing platforms, like eBay or their own websites, according to the complaint.
From https://news.bloomberglaw.com/mergers-and-antitrust/amazon-accused-of-monopolization-massive-price-fixing-scheme
Amazon.com Inc. was hit with antitrust claims in Seattle federal court over an alleged “pricing scheme that broadly and anti-competitively impacts virtually all products offered for sale in the U.S. retail e-commerce market.”
“Amazon’s horizontal price-fixing agreement with its two million sellers is a per se violation of antitrust law,” the lawsuit says.
The proposed consumer class action targeting the e-commerce giant, which is responsible for 49% of U.S. online retail sales, was filed late Thursday in the U.S. District Court for the Western District of Washington.
The suit accuses Amazon of continuing to enforce de facto “most favored nation” pricing terms against 2 million third-party sellers offering 600 million products, despite promising the Federal Trade Commission last year that it would stop.
When the mega-retailer abandoned that policy, it was supposed to begin permitting merchants to offer lower prices through cheaper competing platforms, like eBay or their own websites, according to the complaint.
From https://news.bloomberglaw.com/mergers-and-antitrust/amazon-accused-of-monopolization-massive-price-fixing-scheme
DNEW YORK/WASHINGTON (Reuters) - https://www.reuters.com/article/us-health-coronavirus-usa-amazon-com/amazon-asks-shoppers-to-cooperate-with-u-s-probe-of-coronavirus-price-gouging-idUSKBN21636U
Amazon.com Inc notified a customer about a Department of Justice criminal investigation of price-gouging by third-party sellers on its e-commerce marketplace.
The email was sent by Joell Parks, a senior law enforcement response specialist at Amazon to a Reuters editor, who is also an Amazon customer.
“We wanted to notify you directly about this matter in the event that you are contacted by the Department of Justice in connection with its investigation,” Parks said in his email.
The company has come under pressure from lawmakers to nab sellers engaged in price-gouging amid the coronavirus outbreak.
DC OAG issues price gouging alert
OFFICE OF THE ATTORNEY GENERAL:
REPORT PRICE GOUGING: Submit a complaint: OAG has established a rapid-response team to investigate consumer complaints about price gouging. If you believe you have been overcharged, you can report price gouging to OAG by calling(202) 442-9828, emailingConsumer.Protection@dc.gov, submitting a complaint online at oag.dc.gov/ConsumerComplaint. Scammers may attempt to defraud consumers by selling products that are ineffective at preventing the disease and spreading misinformation through social media and other channels. Other scammers may pretend to solicit donations to help coronavirus victims, but instead are stealing consumers’ money and personal information. Here are some tips to protect yourself from these scams: The District's price gouging consumer protection law is now in effect during the state of emergency. District law prevents any individual or company from overcharging for similar goods or services that were sold in the 90 days before the Mayor’s emergency declaration (e.g., overcharging for products such as sanitizer, tissue paper, cleaning and disinfecting products, among others). Individuals and companies that break the law are subject to $5,000 fines per violation and the revocation of licenses and permits.
PROTECT YOURSELF FROM SCAMS AND FRAUD Coronavirus (COVID-19):Know Your Rights The Office of the Attorney General (OAG) is closely monitoring the Coronavirus (COVID-19) public health situation and following the Mayor’s emergency declaration. To ensure that District residents know their rights, here are some important tips for consumers about scams, frauds, and price gouging; tips for workers about paid sick leave; and free health resources about Coronavirus (COVID-19). For the latest information, visitoag.dc.gov/coronavirus.
Beware of emails claiming to be from the CDC or experts saying that they have information about the virus. For the most up-to-date information about the Coronavirus and prevention tips, visit the Centers for DiseaseControl and Prevention (CDC) and the World Health Organization (WHO).
Consult a medical professional for questions about prevention and treatment. Ignore offers for vaccinations and be wary of advertisements for cures or treatments for the disease. While the best way to prevent this illness is to avoid exposure to the virus, the CDC and the DC Department of Health have tips to prevent the spread of respiratory illnesses.
Do your own research before donating to a charity. Remember that an organization may not be authentic just because it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials. There are a number of independent online sources you can use to verify that a charity is legitimate.
Use OAG’s free resource to learn more tips on how to avoid falling victim to charity scams. Report scams to the Office of the Attorney General (OAG): If you believe you have been the victim of a scam, contact OAG by calling 202-442-9828, emailing consumer.protection@dc.gov, or submitting a complaint online atoag.dc.gov/ConsumerComplaint.
Amazon.com Inc notified a customer about a Department of Justice criminal investigation of price-gouging by third-party sellers on its e-commerce marketplace.
The email was sent by Joell Parks, a senior law enforcement response specialist at Amazon to a Reuters editor, who is also an Amazon customer.
“We wanted to notify you directly about this matter in the event that you are contacted by the Department of Justice in connection with its investigation,” Parks said in his email.
The company has come under pressure from lawmakers to nab sellers engaged in price-gouging amid the coronavirus outbreak.
DC OAG issues price gouging alert
OFFICE OF THE ATTORNEY GENERAL:
REPORT PRICE GOUGING: Submit a complaint: OAG has established a rapid-response team to investigate consumer complaints about price gouging. If you believe you have been overcharged, you can report price gouging to OAG by calling(202) 442-9828, emailingConsumer.Protection@dc.gov, submitting a complaint online at oag.dc.gov/ConsumerComplaint. Scammers may attempt to defraud consumers by selling products that are ineffective at preventing the disease and spreading misinformation through social media and other channels. Other scammers may pretend to solicit donations to help coronavirus victims, but instead are stealing consumers’ money and personal information. Here are some tips to protect yourself from these scams: The District's price gouging consumer protection law is now in effect during the state of emergency. District law prevents any individual or company from overcharging for similar goods or services that were sold in the 90 days before the Mayor’s emergency declaration (e.g., overcharging for products such as sanitizer, tissue paper, cleaning and disinfecting products, among others). Individuals and companies that break the law are subject to $5,000 fines per violation and the revocation of licenses and permits.
PROTECT YOURSELF FROM SCAMS AND FRAUD Coronavirus (COVID-19):Know Your Rights The Office of the Attorney General (OAG) is closely monitoring the Coronavirus (COVID-19) public health situation and following the Mayor’s emergency declaration. To ensure that District residents know their rights, here are some important tips for consumers about scams, frauds, and price gouging; tips for workers about paid sick leave; and free health resources about Coronavirus (COVID-19). For the latest information, visitoag.dc.gov/coronavirus.
Beware of emails claiming to be from the CDC or experts saying that they have information about the virus. For the most up-to-date information about the Coronavirus and prevention tips, visit the Centers for DiseaseControl and Prevention (CDC) and the World Health Organization (WHO).
Consult a medical professional for questions about prevention and treatment. Ignore offers for vaccinations and be wary of advertisements for cures or treatments for the disease. While the best way to prevent this illness is to avoid exposure to the virus, the CDC and the DC Department of Health have tips to prevent the spread of respiratory illnesses.
Do your own research before donating to a charity. Remember that an organization may not be authentic just because it uses words like “CDC” or “government” in its name or has reputable looking seals or logos on its materials. There are a number of independent online sources you can use to verify that a charity is legitimate.
Use OAG’s free resource to learn more tips on how to avoid falling victim to charity scams. Report scams to the Office of the Attorney General (OAG): If you believe you have been the victim of a scam, contact OAG by calling 202-442-9828, emailing consumer.protection@dc.gov, or submitting a complaint online atoag.dc.gov/ConsumerComplaint.
Open Markets Calls for Ban on Takeovers by Large Corporation and Funds for Duration of Crisis
As Congress continues to debate its response to the COVID-19 outbreak, Open Markets Institute released the statement below, calling for an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue.
The Open Markets Institute calls on Congress, the Trump administration, and federal and state law enforcement agencies to use their various powers to impose an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue, and by any financial institution or equity fund with more than $100 million in capitalization. The ban should remain in place for the duration of the present crisis.
The immediate reason for this ban is the present inability of the Antitrust Division of the Department of Justice (DOJ), the Federal Trade Commission (FTC), and other competition law enforcement agencies to effectively evaluate mergers, given the semi-closure of government due to the present crisis. According to Politico, the DOJ has already asked for more time to review existing proposals for mergers, even in advance of any potential surge in deals.
More fundamentally, the ban is needed to prevent a wholesale concentration of additional power by corporations that already dominate or largely dominate their industries, especially in ways that may significantly worsen the crisis that now threatens America’s health, social, and economic systems. The history of the Panic of 2008 and the subsequent Great Recession instructs us that such a massive, uncontrolled consolidation will result in the unnecessary firing of millions of employees, the unnecessary bankrupting of innumerable independent businesses, a dramatic slowing of innovation in vital industries such as pharmaceuticals, and a further concentration of power and control dangerous both to our democracy and our open commercial systems. [1]
Excerpt from posting at https://openmarketsinstitute.org/
As Congress continues to debate its response to the COVID-19 outbreak, Open Markets Institute released the statement below, calling for an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue.
The Open Markets Institute calls on Congress, the Trump administration, and federal and state law enforcement agencies to use their various powers to impose an immediate ban on all mergers and acquisitions by any corporation with more than $100 million in annual revenue, and by any financial institution or equity fund with more than $100 million in capitalization. The ban should remain in place for the duration of the present crisis.
The immediate reason for this ban is the present inability of the Antitrust Division of the Department of Justice (DOJ), the Federal Trade Commission (FTC), and other competition law enforcement agencies to effectively evaluate mergers, given the semi-closure of government due to the present crisis. According to Politico, the DOJ has already asked for more time to review existing proposals for mergers, even in advance of any potential surge in deals.
More fundamentally, the ban is needed to prevent a wholesale concentration of additional power by corporations that already dominate or largely dominate their industries, especially in ways that may significantly worsen the crisis that now threatens America’s health, social, and economic systems. The history of the Panic of 2008 and the subsequent Great Recession instructs us that such a massive, uncontrolled consolidation will result in the unnecessary firing of millions of employees, the unnecessary bankrupting of innumerable independent businesses, a dramatic slowing of innovation in vital industries such as pharmaceuticals, and a further concentration of power and control dangerous both to our democracy and our open commercial systems. [1]
Excerpt from posting at https://openmarketsinstitute.org/
From Open Markets: Coronavirus and the Fragility of Industrial and Financial Systems - An Open Markets Primer
In recent weeks, people around the world have watched in horror as key supply systems have failed or come close to failing, in ways that have greatly exacerbated both the health and economic threats posed by the coronavirus pandemic. Problems include a severe shortage of masks and respirators to protect front-line medical workers and the public at large, and a likely shortage of ventilators for people suffering from the disease. Problems also include the cascading shutdown of many large-scale production systems, such as automobile manufacturing, because of the shutdown of highly concentrated parts production systems, with tens of thousands of manufacturing workers joining the ranks of the unemployed.
These are issues that the Open Markets team knows a lot about. Indeed, our work grew out of a book that Barry Lynn published in 2005, called End of the Line: The Rise and Coming Fall of the Global Corporation (Doubleday), which in turn was based on a 2002 article in Harper’s Magazine, “Unmade in America.” In those works, Lynn provided pioneering research and reporting on how how concentration of capacity made vital production systems subject to cascading and potentially catastrophic collapse because of any of a variety of shocks, including pandemics.
In the years since, the Open Markets team has covered this topic in greater depth than any other group of researchers and thinkers, whether in academia, government, or the private sector, with the partial exception of Yossi Sheffi at MIT and the University of Minnesota epidemiologist Michael Osterholm. This includes pioneering analyses of the effects on international supply systems of the 2008 Lehman Brothers crash, of the 2011 Tohoku disaster in Japan, and of Superstorm Sandy in 2012. It also includes extensive discussions of the complicated and highly dangerous political dimensions of such extreme industrial interdependence.
At Open Markets, we understand that Americans are still in the very early stages of making sense of the threats posed by the coronavirus pandemic and the resulting crash of stock markets around the world. But for those who seek to understand why these events have proven to be so disruptive, and what we can do to prevent a repetition in the future, we have created a new primer on our website, here, which includes links to a number of pioneering articles and papers on these issues.
And read a recent interview of Lynn by David Dayen of The American Prospect here. https://prospect.org/economy/the-man-who-knew/
In recent weeks, people around the world have watched in horror as key supply systems have failed or come close to failing, in ways that have greatly exacerbated both the health and economic threats posed by the coronavirus pandemic. Problems include a severe shortage of masks and respirators to protect front-line medical workers and the public at large, and a likely shortage of ventilators for people suffering from the disease. Problems also include the cascading shutdown of many large-scale production systems, such as automobile manufacturing, because of the shutdown of highly concentrated parts production systems, with tens of thousands of manufacturing workers joining the ranks of the unemployed.
These are issues that the Open Markets team knows a lot about. Indeed, our work grew out of a book that Barry Lynn published in 2005, called End of the Line: The Rise and Coming Fall of the Global Corporation (Doubleday), which in turn was based on a 2002 article in Harper’s Magazine, “Unmade in America.” In those works, Lynn provided pioneering research and reporting on how how concentration of capacity made vital production systems subject to cascading and potentially catastrophic collapse because of any of a variety of shocks, including pandemics.
In the years since, the Open Markets team has covered this topic in greater depth than any other group of researchers and thinkers, whether in academia, government, or the private sector, with the partial exception of Yossi Sheffi at MIT and the University of Minnesota epidemiologist Michael Osterholm. This includes pioneering analyses of the effects on international supply systems of the 2008 Lehman Brothers crash, of the 2011 Tohoku disaster in Japan, and of Superstorm Sandy in 2012. It also includes extensive discussions of the complicated and highly dangerous political dimensions of such extreme industrial interdependence.
At Open Markets, we understand that Americans are still in the very early stages of making sense of the threats posed by the coronavirus pandemic and the resulting crash of stock markets around the world. But for those who seek to understand why these events have proven to be so disruptive, and what we can do to prevent a repetition in the future, we have created a new primer on our website, here, which includes links to a number of pioneering articles and papers on these issues.
And read a recent interview of Lynn by David Dayen of The American Prospect here. https://prospect.org/economy/the-man-who-knew/
March 21, 2020 01:42 PM
Providers warn Senate GOP coronavirus funding proposal will not be enough
Hospitals, physicians, nurses and community health centers are warning that funding proposed by Senate Republicans for a third coronavirus response package will not be enough to prepare for an onslaught of COVID-19 patients and critical shortage of medical supplies.
Senate Republicans included a Medicare payment bump and a hospital add-on payment in their first draft of an economic stimulus package. But comments by Senate leaders indicate direct funding for hospitals, money to purchase more medical supplies and increase testing capacity could be left for later.
It's unclear when Congress would get to major legislation after it passes this third response package. Providers are saying they can't wait.
"This is very urgent and I don't know that we can wait for a fourth package," American Hospital Association President and CEO Rick Pollack told reporters Saturday. "We need to make sure that it is in this package."
The AHA, American Medical Association and American Nurses Association asked Congress for a $100 billion to provide an emergency fund for hospitals' COVID-19 costs, childcare for frontline healthcare workers and money to bolster surge capacity.
AHA also suggested ensuring that hospitals were eligible for low-cost loans, as many small and mid-sized hospitals have faced cashflow concerns. Most hospitals would not be eligible for the small business loan assistance outlined in the Senate GOP proposal, the AHA said.
Washington Gov. Jay Inslee (D) on Thursday called for a halt to elective surgeries and dental services. That followed a March 18 guidance from the CMS recommending that hospitals postpone all non-essential medical and surgical procedures until the pandemic subsides. J. Scott Graham, the CEO of Three Rivers and North Valley rural hospitals in Brewster, Wash.,, said he fears having to close if he can't make payroll or pay suppliers for protective equipment.
"In terms of planning, we know we need to ramp up, but we are concerned that we will not be able to be around by the time the surge hits," Graham said Saturday.
AHA Executive Vice President Tom Nickels said he expects the Senate GOP's opening offer will be "massaged and improved," and believes more funding for providers will be added during negotiations.
The Federation of American Hospitals on Friday hiked its funding request for hospital aid to $225 billion, including $90 billion for bi-weekly supplemental payments to help with hospitals' cashflow, and $100 billion loan backstop program.
"The truth is the care will not be there without Congress ensuring hospitals are properly funded. It's never been more important that policymakers take bold action now to assure care and save lives," said FAH President and CEO Chip Kahn.
Community health centers were set to receive $1.3 billion in new payments under Senate Republicans' initial offer, but the National Association of Community Health Centers ripped the funding as inadequate. Ongoing federal funding for the centers will expire May 22, and the group has agitated for $3 billion in emergency funds and a longer longer-term funding guarantee.
"The COVID-19 crisis demands health centers stay on the front lines, but their mandatory funding runs out on May 22 and not a single dollar of emergency funds has reached them yet," NACHC President and CEO Tom Van Coverden.
Physician groups, including the AMA, American College of Physicians, American Academy of Family Physicians, American College of Surgeons, and Medical Group Management Association, called for tax relief, no-interest loans, and additional steps to accelerate telehealth services.
The draft text would allow the HHS secretary to develop and implement a new payment rule for federally qualified health centers and rural health clinics that provide telehealth services to eligible patients. Payment rates would be based on payment that currently applies to comparable telehealth services under the physician fee schedule, according to the text.
It's a continuation of recent efforts from lawmakers and the Trump administration to reduce telehealth restrictions in the wake of the COVID-19 outbreak.
AMA also asked Congress for additional medical supplies and workforce support to expand paid family, medical and sick leave. Healthcare workers could be exempted from paid leave provided in Congress' second aid package.
AMA President Dr. Patrice Harris, who participated in a virtual meeting with President Donald Trump and Vice President Mike Pence on March 18, said she told them that alleviating personal protective equipment shortages and testing shortages are the group's top priorities. A March 19 MGMA survey found that 89% of physician practices surveyed reported experiencing shortages of critical PPE.
"The funding that Congress has already approved must be increased, and all possible actions must be taken to increase the capacity to manufacture, acquire, and distribute PPE," AMA Executive Vice President and CEO Dr. James Madara wrote in a letter to congressional leaders.
https://www.modernhealthcare.com/politics-policy/providers-warn-senate-gop-coronavirus-funding-proposal-will-not-be-enough
COVID-19 poses long-term impact to not-for-profit hospitals
A myriad of factors will buffet hospitals as they scramble to deal with COVID-19, Moody's Investors Service analysts project as they adjust not-for-profits' outlook from stable to negative.
Read More https://www.modernhealthcare.com/providers/covid-19-poses-long-term-impact-not-profit-hospitals?utm_source=modern-healthcare-covid-19-coverage&utm_medium=email&utm_campaign=20200320&utm_content=article1-readmore
A myriad of factors will buffet hospitals as they scramble to deal with COVID-19, Moody's Investors Service analysts project as they adjust not-for-profits' outlook from stable to negative.
Read More https://www.modernhealthcare.com/providers/covid-19-poses-long-term-impact-not-profit-hospitals?utm_source=modern-healthcare-covid-19-coverage&utm_medium=email&utm_campaign=20200320&utm_content=article1-readmore
Hospital beds in short supply
from https://thehill.com/homenews/state-watch/487869-maryland-ny-move-to-boost-hospital-capacity-ahead-of-coronavirus-wave
In separate announcements, Maryland Gov. Larry Hogan (R) and New York Gov. Andrew Cuomo (D) said they had ordered state health officials to reopen closed hospitals and to convert other facilities in order to accommodate patients.
In an interview, Hogan said the projected number of cases he has seen in scenarios developed by the state's health experts show the need to bolster capacity. Maryland has about 8,000 hospital beds, and Hogan's order will boost capacity by an additional 6,000.
"We don't have exact numbers, but it goes from really bad to terrible," Hogan said of the projections he has seen. "None of [the projections] look good. What we're really all working on, we're all trying to bend the curve down. If we can stretch this out and slow it down by social distancing and all these unprecedented actions we're taking, then it looks a lot different."
In New York, Cuomo's order will add an additional 9,000 beds to the 53,000 beds already available around the state.
"I need, first and foremost, to find available facilities that can be converted. I'm asking local governments, especially in the most dense area, to immediately identify a number of beds in facilities that are available," Cuomo said Monday. "This is very expensive and I don't want to pay money for acquisition of property and real estate. But we need the communities that are most effected to begin finding available beds."
Cuomo said New York City would need an estimated 5,000 additional beds by itself. Nassau and Suffolk counties likely need another 1,000 beds each, and Westchester County — at the heart of the state's outbreak in New Rochelle — needs 2,000 new beds.
Since the beginning of the outbreak in late January, health officials and elected officials have worried about overwhelming the existing health care system. The nation has about 924,000 hospital beds, according to the American Hospital Association, including just under 100,000 that can serve people in intensive care.
Without action, Cuomo said at a Monday news conference, "you overwhelm the hospitals. You have people on gurneys in hallways. That is what is going to happen now if we do nothing. That is what is going to happen now if we do nothing. And that, my friends, will be a tragedy."
from https://thehill.com/homenews/state-watch/487869-maryland-ny-move-to-boost-hospital-capacity-ahead-of-coronavirus-wave
In separate announcements, Maryland Gov. Larry Hogan (R) and New York Gov. Andrew Cuomo (D) said they had ordered state health officials to reopen closed hospitals and to convert other facilities in order to accommodate patients.
In an interview, Hogan said the projected number of cases he has seen in scenarios developed by the state's health experts show the need to bolster capacity. Maryland has about 8,000 hospital beds, and Hogan's order will boost capacity by an additional 6,000.
"We don't have exact numbers, but it goes from really bad to terrible," Hogan said of the projections he has seen. "None of [the projections] look good. What we're really all working on, we're all trying to bend the curve down. If we can stretch this out and slow it down by social distancing and all these unprecedented actions we're taking, then it looks a lot different."
In New York, Cuomo's order will add an additional 9,000 beds to the 53,000 beds already available around the state.
"I need, first and foremost, to find available facilities that can be converted. I'm asking local governments, especially in the most dense area, to immediately identify a number of beds in facilities that are available," Cuomo said Monday. "This is very expensive and I don't want to pay money for acquisition of property and real estate. But we need the communities that are most effected to begin finding available beds."
Cuomo said New York City would need an estimated 5,000 additional beds by itself. Nassau and Suffolk counties likely need another 1,000 beds each, and Westchester County — at the heart of the state's outbreak in New Rochelle — needs 2,000 new beds.
Since the beginning of the outbreak in late January, health officials and elected officials have worried about overwhelming the existing health care system. The nation has about 924,000 hospital beds, according to the American Hospital Association, including just under 100,000 that can serve people in intensive care.
Without action, Cuomo said at a Monday news conference, "you overwhelm the hospitals. You have people on gurneys in hallways. That is what is going to happen now if we do nothing. That is what is going to happen now if we do nothing. And that, my friends, will be a tragedy."
A pre-Covid-19 warning from 2018:
Safety-Net Health Systems At Risk: Who Bears The Burden Of Uncompensated Care?
May 10, 2018 10.1377/hblog20180503.138516 Safety-net health systems play an essential role in the US health care system by providing care to low-income and vulnerable populations, including the uninsured and individuals with Medicaid. Even after coverage expansions under the Affordable Care Act (ACA), about 27 million Americans remain uninsured and millions more underinsured, for whom safety-net health systems play a major role in providing inpatient, emergency, and ambulatory services.
The financial viability of safety-net health systems may be increasingly in peril given the recent elimination of the individual mandate penalty—which the Congressional Budget Office estimates may lead to 13 million additional uninsured people by 2027—and cuts to disproportionate-share hospital (DSH) payments. DSH payments offset the cost of caring for low-income patients. Although the Centers for Medicare and Medicaid Services (CMS) did recently signal a year-on-year increase of $1.6 billion in Medicare DSH payments, anticipating an increase in uninsured patients, overall DSH funding is set to fall by $44 billion in the coming decade. Many of the most affected hospitals are in weak financial condition. The recently passed budget bill delays cuts until 2020 but increases the annual reduction thereafter: $4 billion in 2020, followed by $8 billion per year through 2025.
Growing financial challenges faced by safety-net health systems should concern not just system administrators and low-income patients but also neighboring hospitals and state governments, for which safety-net systems help defray the costs of uncompensated and undercompensated care. When uninsured patients receive care, health systems often bear the cost: In 2016, hospitals alone provided $38.3 billion in uncompensated care, and by some estimates, government funding offsets only 65 percent of such costs. While policy debates focus on overall insurance coverage, less attention is paid to heterogeneous effects of coverage changes when considering the varying payer mix across providers. Hospital margins on average have risen to 30-year highs, driven by commercial prices, but hospitals with fewer commercially insured patients face a different reality.
Effects Of Safety-Net Hospital Closures
Recent years have brought a wave of hospital closures, especially in rural and suburban areas where hospitals are struggling financially. What happens when a safety-net health system closes? Evidence suggests that the total demand for uncompensated care in a health care market does not change and that there is nearly complete spillover of uncompensated care to remaining hospitals. Each newly uninsured individual is associated with a $900 increase in uncompensated care annually, and some recent Medicaid disenrollment has likely resulted in even larger per capita uncompensated cost growth. While it is widely believed that commercial insurers subsidize care for Medicaid and uninsured patients, research suggests that hospitals cannot fully shift increased costs onto commercially insured patients. Medicaid expansion appears to have helped hospitals; reductions in uncompensated care through state Medicaid expansions were associated with substantially lower likelihood of hospital closures, especially in rural areas and in those with large numbers of uninsured patients.
Historical examples of safety-net hospital closures or privatization are telling. In the 1990s, Milwaukee, Wisconsin, Boston, Massachusetts, and Tampa, Florida, all experienced restructuring or mergers of their major safety-net hospitals amid fiscal pressures. In each case, local uncompensated care cost growth exceeded public funding. The situation in Milwaukee was particularly stark: The percentage of countywide uncompensated care delivered at the safety-net hospital post-merger declined from 45 percent to 19 percent, while the share delivered at the next two largest area hospitals increased from 19 percent to 40 percent.
Safety-net health systems thus provide financial protection not only to the patients they serve but also to neighboring hospitals that would otherwise be required to take on an increased uncompensated care burden. Federal law requires that hospitals treat patients regardless of their ability to pay—even though the federal government does not ensure that all individuals have insurance. Programs such as Emergency Medicaid provide some payment for lifesaving treatments and limited recovery services, but longer-term care—including negative-margin services such as psychiatric care—is also disproportionately delivered by safety-net health systems.
Steps To Protect The Safety Net
What can be done to protect the viability of safety-net health systems and the health of the populations they serve?
First, Congress should revisit whether DSH cuts should not just be delayed but also curtailed. The ACA’s DSH payment reductions were designed to be offset by insurance expansions. However, the decline in uncompensated care has not been proportionate with proposed DSH reductions in part because many states have chosen not to expand Medicaid. States that expanded Medicaid have experienced a greater decline in uncompensated care costs compared to non-expansion states, but they too struggle to provide care to low-income populations. These challenges may be exacerbated by elimination of the individual mandate penalty and the expected rise in the uninsured population. Neighboring providers should also organize against DSH cuts because they will likely shoulder a larger burden of uncompensated care if safety-net health systems are no longer able to do so.
Second, states should consider more targeted distribution of DSH funding. Currently, states have wide latitude in how they can distribute DSH funding. They are required to make payments to “deemed-DSH” hospitals—those with a Medicaid utilization rate one standard deviation above the mean or with a low-income inpatient utilization rate higher than 25 percent—but may distribute funding much more broadly if they choose. While only a few hospitals in some states receive DSH funding, other states disburse this funding to nearly all hospitals, and those with the greatest need may receive a small fraction of the funding. The consequences of DSH cuts may be most salient in states such as Texas and Georgia that did not expand Medicaid and that distribute DSH funding across a relatively large group of hospitals.
Third, nonprofit hospitals’ community benefit obligations could be leveraged to decrease the burden on safety net health systems. While all nonprofit health systems enjoy tax-exempt status if they engage in activities that benefit their communities, there is broad variation in what constitutes “community benefit” and how much health systems spend on such activities. As one suggestion, nonprofit hospitals that are not safety-net systems could be expected to assume longer-term responsibility for patients they care for in emergency and inpatient settings as part of their community benefit requirements. Currently, many uninsured patients stabilized at non-safety-net hospitals are referred to safety-net hospitals for follow-up care. Requiring non-safety-net health systems to make accommodations for ongoing management after acute episodes would help ease this burden on safety-net health systems.
Finally, for the sake of their constituent providers and low-income populations, state Medicaid agencies and CMS should re-evaluate Section 1115 waivers that impose work requirements and other strategies to restrict Medicaid eligibility. Kentucky’s recently approved waiver, for example, may result in a 15 percent decrease in Medicaid enrollment by its fifth year, which may negatively affect the financial stability of safety-net providers and have underappreciated spillover effects on non-safety-net providers. Kentucky’s waiver—similar to those proposed in Indiana, Arkansas, and several other states—also terminates retroactive Medicaid coverage, which allows providers to receive payment for care delivered to patients who were eligible for, but not enrolled in, Medicaid at the time of care. Retroactive coverage helps increase financial stability for safety-net providers and, importantly, protects other providers from bearing these costs.
Policies that threaten the viability of safety-net health systems may harm vulnerable populations and have underappreciated spillover effects for neighboring hospitals and state governments. When patients are uninsured or underinsured, safety-net health systems often bear the cost—and their closure or downscaling may have downstream consequences for the payer mix and financial stability of other area providers, and the health of both privately and publicly insured patients.
https://www.healthaffairs.org/do/10.1377/hblog20180503.138516/full/
- The Coming Bailout Is a Moral Failure
- Congress has leverage to rebalance the economy, but so far, it isn’t using it.
Franklin Foer
From The Atlantic
This is the story of an unnatural disaster.
In the meantime, the lobbyists are set to plunder. This morning I heard Nicholas Calio on the radio. During George W. Bush’s administration, he was the White House’s smooth operator on the Hill, a kibitzer and arm-twister who advanced its legislative agenda. Now he works for the airline industry, and he was pleading on its behalf. Of course, there’s every reason to keep vital industries afloat. A vibrant economy needs a transit system. But the injustice of spending $50 billion on the airlines should drive the public to apoplexy. The companies that used their fat profits to buy back stocks as they constricted the distance between seats, that only managed to innovate by charging new fees, will be the ones the government chooses to salvage.
The coming bailout is a familiar moral catastrophe. During the financial crisis, the government saved the banking industry’s bacon, while asking exceedingly little of the culprits. When the government spends billions of dollars to save industries, it has enormous leverage. This is the moment when Congress can shape an economy. It should demand, for instance, that the airlines keep their workers in their jobs; it should place hard caps on executive pay and prohibit stock buybacks; it can demand that airlines take steps to reduce their Sasquatch-size carbon footprint. (And, damnit, Congress should require that their seats actually recline!) If the industry wants the public’s money, it will have to deal with it.
In a crisis, the government can’t save everything. Just as hospitals must ration ventilators, the government must make choices. These choices are excruciating because every industry that perishes will take down workers and investors with it. But just because choices are excruciating doesn’t mean that they shouldn’t be made. Rather, if the public doesn’t make moral demands of its politicians, then the politicians will protect the well connected; they will siphon money to cronies: The Trump administration is considering billions in aid to casino magnates like Steve Wynn and Sheldon Adelson. While casinos are important employers, they also preside over a gambling industry that addicts and abuses citizens—why should they get pulled from the fire while independent booksellers and local florists wither and die?
Mitt Romney had the best idea for how to stimulate the economy and get through the next few months: The government should pay $1,000 to every household in America. (Or even more than that, as Michael Bennet, Cory Booker, and Sherrod Brown have proposed.) That’s a stimulus with immediate impact. Some vital parts of the American economy, like the airlines, might need help bridging the gap until demand returns, since their failure carries systemic risks. But the reconstruction of the American economy isn’t something that should happen in a back room, as the rest of the country fears for its life. Lobbyists shouldn’t be rewarded at a moment like this one, when protesting their greed in the streets would carry mortal risk. Even before this crisis, American capitalism desperately needed rebalancing. What emerges from this economic collapse should be shaped by political choices and moral thinking, not by crony capitalists seeking to jam a sick nation.
Franklin Foer is a staff writer for The Atlantic. He is the author of World Without Mind and How Soccer Explains the World: An Unlikely Theory of Globalization.
COMPETITION POLICY IN TROUBLED TIMES
By John Fingleton[59]
CEO, Office of Fair Trading
20 January 2009
SUMMARY
While recent years have witnessed growing public confidence in the ability of competitive markets to deliver positive outcomes, the credit crunch and the recession have shocked markets, policy-makers and the general public and risk damaging that confidence.
Recession is potentially hostile towards competition policy: the less visible and less immediate costs of restricting competition can look more attractive to policy-makers faced with a range of unpalatable options. Policies to relax competition in the US in the 1930s and in Japan in the 1990s arguably added to the duration of recession in both countries. Learning from history and the robust economic evidence linking competition to productivity growth, we need to ensure that today's solutions do not inadvertently become tomorrow's problems.
It is essential that the causes of the credit crunch are properly diagnosed so that the policy response is targeted "micro-surgery" rather than drastic amputation. If we mistake regulatory failure for market failure, we risk undermining the source of much of the wealth creation that came from the opening of markets to competition.
Intervention to rescue the financial system from systemic collapse in exceptional circumstances can be crucial, but should not be seen as a reason to suspend the importance of competition in other sectors, either via State aid, anti-competitive mergers or cartels.
Subsidies are rarely ideal: they are costly for the taxpayer, can prop-up less efficient firms, create dependency, and ultimately damage competitive incentives. Restrictions on competition are worse. In addition to higher consumer prices and the inefficiency, they are less transparent and can result in permanent changes to market structure. Ad hoc changes to the competition rules can also remove consistency and predictability for business, with additional harm to efficiency. Naturally, incumbent business will rarely object to subsidies or restrictions on competition.
The OFT—and other competition agencies—need to be able to respond quickly to changing priorities, and display a degree of pragmatism in recognising times when other policy interests may over-ride competition policy. At the same time, our role as advocates of competition, within government, with fair-dealing businesses and beyond has never been more important; supporting governments in tackling powerful private vested interests whose solutions would cost us dearly well into the future.
The full article is at https://publications.parliament.uk/pa/cm200809/cmselect/cmdereg/329/329we12.htm
Frequent Uber and Lyft Foe Says Misclassification of Drivers Is Worsening the Global Health Crisis
In a pair of emergency motions for preliminary injunction, lawyers from Lichten & Liss Riordan who represent classes of Uber and Lyft employees are asking the U.S. District Court for the Northern District of California to find that they should be classified as employees, so that they can take advantage of state-mandated sick leave.
https://www.law.com/therecorder/2020/03/20/frequent-uber-and-lyft-foe-says-miclassification-of-drivers-is-worsening-the-global-health-crisis/?kw=Frequent%20Uber%20and%20Lyft%20Foe%20Says%20Misclassification%20of%20Drivers%20is%20Worsening%20the%20Global%20Health%20Crisis&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20200320&utm_term=ca
In a pair of emergency motions for preliminary injunction, lawyers from Lichten & Liss Riordan who represent classes of Uber and Lyft employees are asking the U.S. District Court for the Northern District of California to find that they should be classified as employees, so that they can take advantage of state-mandated sick leave.
https://www.law.com/therecorder/2020/03/20/frequent-uber-and-lyft-foe-says-miclassification-of-drivers-is-worsening-the-global-health-crisis/?kw=Frequent%20Uber%20and%20Lyft%20Foe%20Says%20Misclassification%20of%20Drivers%20is%20Worsening%20the%20Global%20Health%20Crisis&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20200320&utm_term=ca
Steve Pearlstein on the novel virus and political cynicism
Steve Pearlstein, the contrarian Washington Post commenter on economic and political issues, is willing to say the obvious, and say it plainly: politicians’ response to the corona virus tends to the cynical. Cynical in this context means self-serving as opposed to serving the public.
What may be open to debate is the detail of particular political actions that may be viewed as cynical. Pearlstein finds it to be cynical that both Republican and Democrat Congressional leaders are ready to send out large checks, including large numbers of recipients who do not need it, such as people who have not been laid off their jobs, and pensioners. He writes: “It is yet another sign of our political dysfunction that a government that dithered for weeks before getting serious about fighting a global pandemic now can’t take a few days for thoughtful debate about how to spend a trillion dollars to deal with the economic fallout.”
Government dithering has led to other cynical political behavior that Pearlstein does not talk about, but that is discussed elsewhere in the same newspaper. The hard news is that “Health officials in New York, California and other hard-hit parts of the country are restricting coronavirus testing to health care workers and the severely ill, saying the battle to contain the virus is lost and the country is moving into a new phase of the pandemic response. As cases spike sharply in those places, they are bracing for an onslaught and directing scarce resources where they are needed most to save people’s lives. Instead of encouraging broad testing of the public, they’re focused on conserving masks, ventilators and intensive care beds — and on getting still-limited tests to health-care workers and the most vulnerable. The shift is further evidence that rising levels of infection and illness have begun to overwhelm the health care system.”
Politicians put a political spin on the bad news that the U.S. health care system has been allowed to wither over recent decades, to the extent that it is easily overwhelmed, and that dithering has caused failure in the effort to contain the novel corona virus. Our political leaders do not present themselves as Monty Python characters leading a frantic retreat in a battle they failed to engage at an early point when disease containment was possible. No, they say they are courageous and far sighted war-time leaders, boldly directing business closures and stay-at-home rules. Necessary perhaps; heroic no.
The words of Vice-president Pence: “Thank you, Mr. President. It is . . .an inspiration to every American, because thanks to your leadership from early on, not only are we bringing a whole-of-government approach to confronting the coronavirus, we’re bringing and all-of-America approach. Mr. President, from early on, you took decisive action.”
Posting by Don Allen Resnikoff, who takes full responsibility for the content
Steve Pearlstein, the contrarian Washington Post commenter on economic and political issues, is willing to say the obvious, and say it plainly: politicians’ response to the corona virus tends to the cynical. Cynical in this context means self-serving as opposed to serving the public.
What may be open to debate is the detail of particular political actions that may be viewed as cynical. Pearlstein finds it to be cynical that both Republican and Democrat Congressional leaders are ready to send out large checks, including large numbers of recipients who do not need it, such as people who have not been laid off their jobs, and pensioners. He writes: “It is yet another sign of our political dysfunction that a government that dithered for weeks before getting serious about fighting a global pandemic now can’t take a few days for thoughtful debate about how to spend a trillion dollars to deal with the economic fallout.”
Government dithering has led to other cynical political behavior that Pearlstein does not talk about, but that is discussed elsewhere in the same newspaper. The hard news is that “Health officials in New York, California and other hard-hit parts of the country are restricting coronavirus testing to health care workers and the severely ill, saying the battle to contain the virus is lost and the country is moving into a new phase of the pandemic response. As cases spike sharply in those places, they are bracing for an onslaught and directing scarce resources where they are needed most to save people’s lives. Instead of encouraging broad testing of the public, they’re focused on conserving masks, ventilators and intensive care beds — and on getting still-limited tests to health-care workers and the most vulnerable. The shift is further evidence that rising levels of infection and illness have begun to overwhelm the health care system.”
Politicians put a political spin on the bad news that the U.S. health care system has been allowed to wither over recent decades, to the extent that it is easily overwhelmed, and that dithering has caused failure in the effort to contain the novel corona virus. Our political leaders do not present themselves as Monty Python characters leading a frantic retreat in a battle they failed to engage at an early point when disease containment was possible. No, they say they are courageous and far sighted war-time leaders, boldly directing business closures and stay-at-home rules. Necessary perhaps; heroic no.
The words of Vice-president Pence: “Thank you, Mr. President. It is . . .an inspiration to every American, because thanks to your leadership from early on, not only are we bringing a whole-of-government approach to confronting the coronavirus, we’re bringing and all-of-America approach. Mr. President, from early on, you took decisive action.”
Posting by Don Allen Resnikoff, who takes full responsibility for the content
On the destruction of trees when developers tear down small suburban houses and replace them with mini-mansions
Posting by Don Allen Resnikoff
Recently a neighbor in my suburban Bethesda, MD neighborhood wrote to say she had a heavy heart because of the recent removal of two gorgeous, healthy, “specimen” trees in our neighborhood. The removal was incidental to teardown of a small residence to make room for a larger one that would occupy more of the building lot. “The one at the very corner edge of the property was a splendid sweet gum tree whose gorgeous fall foliage and fruit in spring feed birds and wildlife and whose comforting shade is critical in the midst of a climate crisis. The other, a tulip poplar with a diameter of more than 7 feet, is one of the most important pollinating trees and is the sequoia of the east coast.”
It is easy to share my neighbor’s regrets, but it seems very likely that the property developer is in compliance with the relevant law. Local law provides for “mitigation” when a residential developer destroys trees, but the penalties for non-compliance are minimal. That makes it a law that expresses a conservationist’s goals, but is ineffective. The law requires reform if it is to accomplish its stated goal of mitigation.
Specifically, Montgomery County, Maryland has a Tree Canopy Law that requires mitigation for the area disturbed during development activity. Mitigation for felled trees is required in the form of shade trees planted on the same property where the disturbance occurred. Alternatively, applicants for sediment control permits can choose, for any reason, to pay a fee into the Tree Canopy Conservation Account. The Tree Canopy Law sets the fee at $250.
It is hard to imagine that a $250 fine for cutting down a tree is much of a deterrent on projects involving a property worth a million dollars or more. Advocating for the mitigation law to be more rigorous and costly to the developer might be something for Bethesda suburbanites to consider.
See https://www.montgomerycountymd.gov/DEP/Resources/Files/ReportsandPublications/Trees%20%26%20Air/Trees/County%20Reports/2017-Annual-Report.pdf
Posting by Don Allen Resnikoff
Recently a neighbor in my suburban Bethesda, MD neighborhood wrote to say she had a heavy heart because of the recent removal of two gorgeous, healthy, “specimen” trees in our neighborhood. The removal was incidental to teardown of a small residence to make room for a larger one that would occupy more of the building lot. “The one at the very corner edge of the property was a splendid sweet gum tree whose gorgeous fall foliage and fruit in spring feed birds and wildlife and whose comforting shade is critical in the midst of a climate crisis. The other, a tulip poplar with a diameter of more than 7 feet, is one of the most important pollinating trees and is the sequoia of the east coast.”
It is easy to share my neighbor’s regrets, but it seems very likely that the property developer is in compliance with the relevant law. Local law provides for “mitigation” when a residential developer destroys trees, but the penalties for non-compliance are minimal. That makes it a law that expresses a conservationist’s goals, but is ineffective. The law requires reform if it is to accomplish its stated goal of mitigation.
Specifically, Montgomery County, Maryland has a Tree Canopy Law that requires mitigation for the area disturbed during development activity. Mitigation for felled trees is required in the form of shade trees planted on the same property where the disturbance occurred. Alternatively, applicants for sediment control permits can choose, for any reason, to pay a fee into the Tree Canopy Conservation Account. The Tree Canopy Law sets the fee at $250.
It is hard to imagine that a $250 fine for cutting down a tree is much of a deterrent on projects involving a property worth a million dollars or more. Advocating for the mitigation law to be more rigorous and costly to the developer might be something for Bethesda suburbanites to consider.
See https://www.montgomerycountymd.gov/DEP/Resources/Files/ReportsandPublications/Trees%20%26%20Air/Trees/County%20Reports/2017-Annual-Report.pdf
Trump Administration Is Relaxing Oversight of Nursing Homes
A proposal would loosen federal rules meant to control infections, just as the coronavirus rips through nursing homes.
https://www.nytimes.com/2020/03/14/business/trump-administration-nursing-homes.html
A proposal would loosen federal rules meant to control infections, just as the coronavirus rips through nursing homes.
https://www.nytimes.com/2020/03/14/business/trump-administration-nursing-homes.html
Former U.S. Treasury Secretary Larry Summers warns of US economic stagnation threat
Former U.S. Treasury Secretary Larry Summers said the world’s largest economy now confronts a stagnation like Japan’s as government bond yields plunge to ultra-low levels.
“We’re essentially at the Japanese place,” Summers said in a Bloomberg Television interview Thursday. “That’s a place that’s very hard to get out of, as the Japanese experience suggests, and increasingly the European experience suggests.”
The spreading pandemic demands more aggressive action to avoid repeating the mistake of not injecting sufficient fiscal stimulus into the economy after Lehman Brothers failed.
https://www.bing.com/videos/search?q=larry+sommers+&view=detail&mid=52EE5C9825A76EF0BC5952EE5C9825A76EF0BC59&FORM=VIRE
Former U.S. Treasury Secretary Larry Summers said the world’s largest economy now confronts a stagnation like Japan’s as government bond yields plunge to ultra-low levels.
“We’re essentially at the Japanese place,” Summers said in a Bloomberg Television interview Thursday. “That’s a place that’s very hard to get out of, as the Japanese experience suggests, and increasingly the European experience suggests.”
The spreading pandemic demands more aggressive action to avoid repeating the mistake of not injecting sufficient fiscal stimulus into the economy after Lehman Brothers failed.
https://www.bing.com/videos/search?q=larry+sommers+&view=detail&mid=52EE5C9825A76EF0BC5952EE5C9825A76EF0BC59&FORM=VIRE
Klobuchar Presents New Antitrust Bill
Sen. Amy Klobuchar, ranking member of the Judiciary Committee, has introduced a bill that could give antitrust authorities more tools to pursue potentially anticompetitive edge giants, including by fining them up to 15% of revenues for violations.
The bill focuses on various forms of exclusionary behavior, and seeks to modify permissive standards often applied by courts. The text of the bill is at https://www.klobuchar.senate.gov/public/_cache/files/f/8/f81f969e-1c81-4d10-90aa-178a6cb4f159/3A75B8609ADDE8D20C57297DA5B687D7.aecpa.pdf
US Lawmakers Concern About College Textbook Merger
Two US lawmakers expressed serious concern on Tuesday about the effect of a planned merger of college textbook publishers Cengage Learning Holdings and McGraw-Hill Education, saying the deal would create a new industry leader with nearly half the market.
According to Reuters, [https://www.reuters.com/article/us-mcgrawhill-m-a-cengage/college-textbook-merger-raises-serious-concern-among-u-s-lawmakers-idUSKBN20X31R] Representatives David Cicilline, chair of the House Judiciary Committee’s antitrust panel, and Jan Schakowsky, chair of an Energy and Commerce consumer protection panel, urged the Justice Department to scrutinize the merger to ensure it is legal under antitrust law.
In a letter, Cicilline and Schakowsky noted how few college textbook makers were left in the market and that prices had risen 184% since 1998.
“It has also been reported that the merging companies are working to convert the market to all-digital course materials through an ‘inclusive access’ model, in which students are automatically billed for subscription access to textbooks,” the lawmakers wrote.
They said an all-digital model would prevent students from shopping around to get cheaper prices, and “destroy” the used book market.
California AG Drops Challenge To T-Mobile Sprint Merger
T-Mobile’s proposed $26 billion acquisition of Sprint inched closer Wednesday, when California’s Attorney General Xavier Becerra dropped his opposition to the deal in exchange for concessions from the telecoms.
From the AG's press release:
California Attorney General Xavier Becerra today announced a settlement with T-Mobile, resolving the state's challenge to the company's merger with Sprint. The settlement includes terms to protect low-income subscribers, extend access to underserved communities, protect current T-Mobile and Sprint employees, and create jobs in California. T-Mobile will reimburse California for the costs and fees of its investigation and its litigation challenging the merger. This settlement ends the legal challenge brought by Attorney General Becerra leading a multistate coalition, which alleged that the merger was unlawful and would lead to reduced competition and increased prices for consumers.
Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,said Attorney General Becerra. We took our case to court to ensure that, no matter its outcome, we'd protect innovation and fair prices. Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers. Most importantly, today's settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities."
As required by the settlement, the merged company is required to:
Sen. Amy Klobuchar, ranking member of the Judiciary Committee, has introduced a bill that could give antitrust authorities more tools to pursue potentially anticompetitive edge giants, including by fining them up to 15% of revenues for violations.
The bill focuses on various forms of exclusionary behavior, and seeks to modify permissive standards often applied by courts. The text of the bill is at https://www.klobuchar.senate.gov/public/_cache/files/f/8/f81f969e-1c81-4d10-90aa-178a6cb4f159/3A75B8609ADDE8D20C57297DA5B687D7.aecpa.pdf
US Lawmakers Concern About College Textbook Merger
Two US lawmakers expressed serious concern on Tuesday about the effect of a planned merger of college textbook publishers Cengage Learning Holdings and McGraw-Hill Education, saying the deal would create a new industry leader with nearly half the market.
According to Reuters, [https://www.reuters.com/article/us-mcgrawhill-m-a-cengage/college-textbook-merger-raises-serious-concern-among-u-s-lawmakers-idUSKBN20X31R] Representatives David Cicilline, chair of the House Judiciary Committee’s antitrust panel, and Jan Schakowsky, chair of an Energy and Commerce consumer protection panel, urged the Justice Department to scrutinize the merger to ensure it is legal under antitrust law.
In a letter, Cicilline and Schakowsky noted how few college textbook makers were left in the market and that prices had risen 184% since 1998.
“It has also been reported that the merging companies are working to convert the market to all-digital course materials through an ‘inclusive access’ model, in which students are automatically billed for subscription access to textbooks,” the lawmakers wrote.
They said an all-digital model would prevent students from shopping around to get cheaper prices, and “destroy” the used book market.
California AG Drops Challenge To T-Mobile Sprint Merger
T-Mobile’s proposed $26 billion acquisition of Sprint inched closer Wednesday, when California’s Attorney General Xavier Becerra dropped his opposition to the deal in exchange for concessions from the telecoms.
From the AG's press release:
California Attorney General Xavier Becerra today announced a settlement with T-Mobile, resolving the state's challenge to the company's merger with Sprint. The settlement includes terms to protect low-income subscribers, extend access to underserved communities, protect current T-Mobile and Sprint employees, and create jobs in California. T-Mobile will reimburse California for the costs and fees of its investigation and its litigation challenging the merger. This settlement ends the legal challenge brought by Attorney General Becerra leading a multistate coalition, which alleged that the merger was unlawful and would lead to reduced competition and increased prices for consumers.
Our coalition vigorously challenged the T-Mobile/Sprint telecom merger over concerns that it would thwart competition and leave consumers with higher prices,said Attorney General Becerra. We took our case to court to ensure that, no matter its outcome, we'd protect innovation and fair prices. Though the district court approved the merger, its decision also made clear to companies that local markets matter in assessing the competitive impact of a merger and that no one should underestimate the role of state enforcers. Most importantly, today's settlement locks in new jobs and protections for vulnerable consumers, and it extends access to telecom services for our most underserved and rural communities."
As required by the settlement, the merged company is required to:
- Make low-cost plans available in California for at least 5 years, including a plan offering 2 GB of high-speed data at $15 per month and 5 GB of high speed data at $25 per month;
- Extend for at least an additional two years the rate plans offered by T-Mobile pursuant to its earlier FCC commitment, ensuring Californians can retain T-Mobile plans held in February 2019 for a total of five years;
- Offer 100 GB of no-cost broadband internet service per year for five years and a free mobile Wi-Fi hotspot device to 10 million qualifying low-income households not currently connected to broadband nationwide, as well as the option to purchase select Wi-Fi enabled tablets at the company’s cost for each qualifying household;
- Protect California jobs by offering all California T-Mobile and Sprint retail employees in good standing an offer of substantially similar employment. T-Mobile also commits that three years after the closing date, the total number of new T-Mobile employees will be equal to or greater than the total number of employees of the unmerged Sprint and T-Mobile companies;
- Create approximately 1,000 new jobs in California with a customer service center in Kingsburg;
- Increase diversity by increasing the participation rate in its employee Diversity and Inclusion program to 60 percent participation within three years; and
- Reimburse California and other coalition states up to $15 million for the costs of the investigation and litigation challenging the merger.
The US Soccer Federation faced a barrage of public criticism after its lawyers wrote in a legal brief that players on the U.S. Women's National Team "do not perform equal work requiring equal skill, effort, and responsibility under similar working conditions."
Here is what the lawyers wrote (see https://www.courtlistener.com/recap/gov.uscourts.cacd.739234/gov.uscourts.cacd.739234.186.0.pdf):
C. WNT and MNT Players Do Not Perform Equal Work Requiring Equal Skill, Effort, and Responsibility Under Similar Working Conditions.
Even Plaintiffs acknowledge that the level of “skill” required for each job in question (WNT player and MNT player) must be “measured by the experience, ability, education, and training required to perform a job.” (Dkt. 170 at 15 (emphasis added), citing 29 C.F.R. § 1620.15.) The overall soccer-playing ability required to compete at the senior men’s national team level is materially influenced by the level of certain physical attributes, such as speed and strength, required for the job. (Morgan Dep. 212-13; Ellis Dep. 291-92.) As Plaintiff Carli Lloyd’s testimony admits, the WNT could not compete successfully against senior men’s national teams because competing against 16- or 17year-old boys “is about as old as [the WNT] can go.” (Lloyd Dep. 103-04, 106-07; Lloyd Dep. Ex. 15.) Plaintiffs ask the Court to conclude that the ability required of an WNT player is equal to the ability required of an MNT player, as a relative matter, by ignoring the materially higher level of speed and strength required to perform the job of an MNT player. The EPA does not allow this. Sims-Fingers v. City of Indianapolis, 493 F.3d 768, 771 (7th Cir. 2007) (EPA does not ensure equal pay for jobs requiring “proportional” skill level). Nor is it a “sexist stereotype” to recognize the different levels of speed and strength required for the two jobs, as Plaintiffs’ counsel contend. On the contrary, it is indisputable “science,” as even Plaintiff Lloyd described it in her testimony. (Lloyd Dep. 103-05.) See also Doraine Lambert Coleman, Sex in Sport,80LAW AND CONTEMPORARY PROBLEMS 63-126(2017)(available at: https://scholarship.law.duke.edu/lcp/vol80/iss4/5) (describing the scientific basis for “the average 10-12% performance gap between elite male and elite female athletes,” which includes differences between males and females in “skeletal structure, muscle composition, heart and lung capacity including VO2 max, red blood cell count, body fat, and the absolute ability to process carbohydrates,” and noting, by way of example, that “no matter how great the great Katie Ledecky gets . . . she will never beat Michael Phelps or his endurance counterparts in the pool”).
Here is what the lawyers wrote (see https://www.courtlistener.com/recap/gov.uscourts.cacd.739234/gov.uscourts.cacd.739234.186.0.pdf):
C. WNT and MNT Players Do Not Perform Equal Work Requiring Equal Skill, Effort, and Responsibility Under Similar Working Conditions.
Even Plaintiffs acknowledge that the level of “skill” required for each job in question (WNT player and MNT player) must be “measured by the experience, ability, education, and training required to perform a job.” (Dkt. 170 at 15 (emphasis added), citing 29 C.F.R. § 1620.15.) The overall soccer-playing ability required to compete at the senior men’s national team level is materially influenced by the level of certain physical attributes, such as speed and strength, required for the job. (Morgan Dep. 212-13; Ellis Dep. 291-92.) As Plaintiff Carli Lloyd’s testimony admits, the WNT could not compete successfully against senior men’s national teams because competing against 16- or 17year-old boys “is about as old as [the WNT] can go.” (Lloyd Dep. 103-04, 106-07; Lloyd Dep. Ex. 15.) Plaintiffs ask the Court to conclude that the ability required of an WNT player is equal to the ability required of an MNT player, as a relative matter, by ignoring the materially higher level of speed and strength required to perform the job of an MNT player. The EPA does not allow this. Sims-Fingers v. City of Indianapolis, 493 F.3d 768, 771 (7th Cir. 2007) (EPA does not ensure equal pay for jobs requiring “proportional” skill level). Nor is it a “sexist stereotype” to recognize the different levels of speed and strength required for the two jobs, as Plaintiffs’ counsel contend. On the contrary, it is indisputable “science,” as even Plaintiff Lloyd described it in her testimony. (Lloyd Dep. 103-05.) See also Doraine Lambert Coleman, Sex in Sport,80LAW AND CONTEMPORARY PROBLEMS 63-126(2017)(available at: https://scholarship.law.duke.edu/lcp/vol80/iss4/5) (describing the scientific basis for “the average 10-12% performance gap between elite male and elite female athletes,” which includes differences between males and females in “skeletal structure, muscle composition, heart and lung capacity including VO2 max, red blood cell count, body fat, and the absolute ability to process carbohydrates,” and noting, by way of example, that “no matter how great the great Katie Ledecky gets . . . she will never beat Michael Phelps or his endurance counterparts in the pool”).
Press Release: AG Racine Announces Victory for the District in LED Digital Sign Lawsuit
Press Release On Mar 10, 2020 Last updated Mar 10, 2020
Court Ruling Resolves 2016 Lawsuit Against Lumen Eight Media Group LLC for Illegal Outdoor LED Digital Signs
WASHINGTON, D.C. – Attorney General Karl A. Racine today issued the following statement announcing that Superior Court Judge Florence Pan has ruled in the District’s favor, granting its motion for summary judgment in a lawsuit against digital sign company Lumen Eight Media Group LLC (formerly known as Digi Media Communications LLC). The District sued the company in August 2016 because it flagrantly violated District law by erecting large Light-Emitting Diode (LED) digital signs without first obtaining the required licenses. Doubling down on its illegal action, the company ignored multiple stop-work orders directing it to cease and desist any further installation of digital LED signs without obtaining the required permits. AG Racine’s statement is below.
“Lumen Eight’s entire business model was based on its flagrant disregard of District law. This ruling is a major victory for the District. Judge Pan’s opinion affirmed that the company intentionally did not seek approval from District government for its signs, mischaracterized the nature of its work to avoid scrutiny, and then ignored DCRA’s stop-work orders altogether.”
“Most companies that conduct business in the District of Columbia follow the law, and achieve business success on the merits of the goods and services that they sell. Lawbreakers, including companies that regularly contribute money to D.C. politicians, are on notice that the Office of the Attorney General will investigate and prosecute, without fear nor favor, companies and individuals who violate the law. I am thankful to the Committee of 100 on the Federal City and industry competitors for bringing this matter to our attention and to our talented OAG attorneys that brought home this win for District residents.”
Image of Lumen Eight’s digital Light-Emitting Diode (LED) signs: https://oag.dc.gov/sites/default/files/2020-03/Sign-1-image.pdf
A copy of the judge’s ruling is at: https://oag.dc.gov/sites/default/files/2020-03/Lumen-Eight-Digi-Media-Opinion.pdf
Press Release On Mar 10, 2020 Last updated Mar 10, 2020
Court Ruling Resolves 2016 Lawsuit Against Lumen Eight Media Group LLC for Illegal Outdoor LED Digital Signs
WASHINGTON, D.C. – Attorney General Karl A. Racine today issued the following statement announcing that Superior Court Judge Florence Pan has ruled in the District’s favor, granting its motion for summary judgment in a lawsuit against digital sign company Lumen Eight Media Group LLC (formerly known as Digi Media Communications LLC). The District sued the company in August 2016 because it flagrantly violated District law by erecting large Light-Emitting Diode (LED) digital signs without first obtaining the required licenses. Doubling down on its illegal action, the company ignored multiple stop-work orders directing it to cease and desist any further installation of digital LED signs without obtaining the required permits. AG Racine’s statement is below.
“Lumen Eight’s entire business model was based on its flagrant disregard of District law. This ruling is a major victory for the District. Judge Pan’s opinion affirmed that the company intentionally did not seek approval from District government for its signs, mischaracterized the nature of its work to avoid scrutiny, and then ignored DCRA’s stop-work orders altogether.”
“Most companies that conduct business in the District of Columbia follow the law, and achieve business success on the merits of the goods and services that they sell. Lawbreakers, including companies that regularly contribute money to D.C. politicians, are on notice that the Office of the Attorney General will investigate and prosecute, without fear nor favor, companies and individuals who violate the law. I am thankful to the Committee of 100 on the Federal City and industry competitors for bringing this matter to our attention and to our talented OAG attorneys that brought home this win for District residents.”
Image of Lumen Eight’s digital Light-Emitting Diode (LED) signs: https://oag.dc.gov/sites/default/files/2020-03/Sign-1-image.pdf
A copy of the judge’s ruling is at: https://oag.dc.gov/sites/default/files/2020-03/Lumen-Eight-Digi-Media-Opinion.pdf
Antitrust Standing after Apple v. Pepper: Application to the Sports Betting Data Market
Ryan M. Rodenberg, FSU describes Antitrust Standing after Apple v. Pepper: Application to the Sports Betting Data Market.
ABSTRACT: In Apple v. Pepper, the U.S. Supreme Court expressed a largely permissive view about whether certain potential plaintiffs have legal standing to pursue antitrust lawsuits in federal court. The Apple v. Pepper ruling provided important clarity about the scope of the so-called indirect purchaser rule set forth forty-plus years earlier in Illinois Brick. This paper first summarizes the key takeaways from the Apple v. Pepper decision released on May 13, 2019, positioning the ruling vis-à-vis other standing-related cases that have sometimes closed the courtroom doors to plaintiffs alleging anticompetitive conduct under the Sherman Act and Clayton Act. This paper then applies the lessons from Apple v. Pepper to sports betting data, an emerging tech-focused market. This paper concludes by outlining how—and why—this market will likely be subject to antitrust scrutiny soon.
https://lawprofessors.typepad.com/antitrustprof_blog/2020/03/antitrust-standing-after-apple-v-pepper-application-to-the-sports-betting-data-market.html?
Ryan M. Rodenberg, FSU describes Antitrust Standing after Apple v. Pepper: Application to the Sports Betting Data Market.
ABSTRACT: In Apple v. Pepper, the U.S. Supreme Court expressed a largely permissive view about whether certain potential plaintiffs have legal standing to pursue antitrust lawsuits in federal court. The Apple v. Pepper ruling provided important clarity about the scope of the so-called indirect purchaser rule set forth forty-plus years earlier in Illinois Brick. This paper first summarizes the key takeaways from the Apple v. Pepper decision released on May 13, 2019, positioning the ruling vis-à-vis other standing-related cases that have sometimes closed the courtroom doors to plaintiffs alleging anticompetitive conduct under the Sherman Act and Clayton Act. This paper then applies the lessons from Apple v. Pepper to sports betting data, an emerging tech-focused market. This paper concludes by outlining how—and why—this market will likely be subject to antitrust scrutiny soon.
https://lawprofessors.typepad.com/antitrustprof_blog/2020/03/antitrust-standing-after-apple-v-pepper-application-to-the-sports-betting-data-market.html?
Yelp Tells Senators Why Google Needs To Be Broken Up
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March 10, 2020
Yelp, one of Google’s most enduring critics, got to share its grievances with senators on the Antitrust Subcommittee on Tuesday, reported CNBC. https://www.cnbc.com/2020/03/10/yelp-testifies-against-google-in-antitrust-senate-hearing.html
At a hearing dedicated to “Examining Self-Preferencing by Digital Platforms,” Luther Lowe, Yelp’s senior vice president of public policy, laid out the company’s long-standing claims against Google. Yelp, which delivers local search results for consumers looking for restaurants or other businesses, has persistently complained that Google favors its own products and services in search, often at the expense to consumers in terms of quality.
Now, Yelp isn’t the only one paying attention. Regulators and lawmakers across the political spectrum are raising concerns about the power Big Tech companies wield over competitors who also rely on their services. Tuesday’s hearing was another demonstration that Yelp’s complaints are finally resonating in the U.S. as lawmakers introduce new policies and ramp up oversight.
Google didn’t always try to stifle competition, according to Lowe, who acknowledged co-founder Larry Page’s 2004 claimthat, “We want to get you out of Google and to the right place as fast as possible.” But Lowe said Google’s approach later shifted from this model around 2007 when it added answer boxes or “OneBoxes” that surfaced what Google seemed to determine would be the most relevant result for a user.
Because Google displayed the answer boxes at the top of search results, Lowe argued in his prepared testimony, “it had conditioned consumers to expect for the best or most relevant results from around the web — even though they no longer were. By doing so, Google physically demoted non-Google results even if they contained information with higher quality scores than the information Google.” Some of those non-Google results included Yelp, which Lowe said gets about 80% of its web traffic from Google.
“We build Google Search for our users,” a Google spokesperson said in an emailed statement. “People want quick access to information and we’re constantly improving Search to help people easily find what they’re looking for, whether it’s information on a web page, directions on a map, products for sale or a translation.”
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March 10, 2020
Yelp, one of Google’s most enduring critics, got to share its grievances with senators on the Antitrust Subcommittee on Tuesday, reported CNBC. https://www.cnbc.com/2020/03/10/yelp-testifies-against-google-in-antitrust-senate-hearing.html
At a hearing dedicated to “Examining Self-Preferencing by Digital Platforms,” Luther Lowe, Yelp’s senior vice president of public policy, laid out the company’s long-standing claims against Google. Yelp, which delivers local search results for consumers looking for restaurants or other businesses, has persistently complained that Google favors its own products and services in search, often at the expense to consumers in terms of quality.
Now, Yelp isn’t the only one paying attention. Regulators and lawmakers across the political spectrum are raising concerns about the power Big Tech companies wield over competitors who also rely on their services. Tuesday’s hearing was another demonstration that Yelp’s complaints are finally resonating in the U.S. as lawmakers introduce new policies and ramp up oversight.
Google didn’t always try to stifle competition, according to Lowe, who acknowledged co-founder Larry Page’s 2004 claimthat, “We want to get you out of Google and to the right place as fast as possible.” But Lowe said Google’s approach later shifted from this model around 2007 when it added answer boxes or “OneBoxes” that surfaced what Google seemed to determine would be the most relevant result for a user.
Because Google displayed the answer boxes at the top of search results, Lowe argued in his prepared testimony, “it had conditioned consumers to expect for the best or most relevant results from around the web — even though they no longer were. By doing so, Google physically demoted non-Google results even if they contained information with higher quality scores than the information Google.” Some of those non-Google results included Yelp, which Lowe said gets about 80% of its web traffic from Google.
“We build Google Search for our users,” a Google spokesperson said in an emailed statement. “People want quick access to information and we’re constantly improving Search to help people easily find what they’re looking for, whether it’s information on a web page, directions on a map, products for sale or a translation.”
Federal rules centralize medical data online
The goal is to help doctors get a fuller picture of patient health and enabling patients to make more informed treatment choices.
One of the rules requires vendors of electronic health records to adopt software — known as application programming interfaces, or A.P.I.s. — to enable providers to send medical record data directly to patient-authorized apps. Another rule similarly requires Medicare and Medicaid plans to adopt A.P.I.s. That software will enable people to use apps to get their insurance claims and benefit information.
Health providers and health record vendors will have two years to comply with the A.P.I. requirements. Electronic health record vendors that impede such data-sharing — a practice called “information blocking” — could be fined up to $1 million per violation. Doctors accused of information blocking could be subject to federal investigation.
More at https://www.nytimes.com/2020/03/09/business/medical-app-patients-data-privacy.html
The goal is to help doctors get a fuller picture of patient health and enabling patients to make more informed treatment choices.
One of the rules requires vendors of electronic health records to adopt software — known as application programming interfaces, or A.P.I.s. — to enable providers to send medical record data directly to patient-authorized apps. Another rule similarly requires Medicare and Medicaid plans to adopt A.P.I.s. That software will enable people to use apps to get their insurance claims and benefit information.
Health providers and health record vendors will have two years to comply with the A.P.I. requirements. Electronic health record vendors that impede such data-sharing — a practice called “information blocking” — could be fined up to $1 million per violation. Doctors accused of information blocking could be subject to federal investigation.
More at https://www.nytimes.com/2020/03/09/business/medical-app-patients-data-privacy.html
Bloomberg News opinion:
Why testing matters
Uncertainty. It's as bad for public health as it is for markets.
Since the U.S.'s top health official announced plans in mid-February for wider testing of the coronavirus, there's been report after report of diagnostic kits malfunctioning or being shipped out late, and of symptomatic patients being told they don't fit the criteria to be tested.
That failure has hamstrung the U.S. government's response and doesn't make for good medicine. It's also stoking a deeper sense of unease that's eroding confidence in everything from the stock market to authorities' ability to handle a wider outbreak.
Checking large numbers of people would let the Trump administration back up its claims that it has the outbreak in hand. If more cases are found, health workers can take action to stop the virus from spreading. If only a few are, officials could reassure the public that the risk is less than feared.
Instead, we're left in the dark. At a Monday evening White House press conference, Health and Human Services Secretary Alex Azar couldn't say how many tests had been performed in the U.S. The Trump administration has repeatedly said the risk of Americans remains low, and that may be true.
But without good surveillance, it's still an educated guess.
That uncertainty is as detrimental to an effective public-health response as it is to rational behavior. If you worry about whether your family is safe, you panic-buy toilet paper and canned food, stop booking airline tickets, and quit going out. If you don't know whether an outbreak will cripple the economy, you get out of stocks.
Give people good information—even if it's a little scary—and they'll make better decisions. If you don't, they'll make worse, irrational ones. That goes for investors, government leaders, and the person next to you at the grocery store buying a shelf's worth of bleach. -- Drew Armstrong
Why testing matters
Uncertainty. It's as bad for public health as it is for markets.
Since the U.S.'s top health official announced plans in mid-February for wider testing of the coronavirus, there's been report after report of diagnostic kits malfunctioning or being shipped out late, and of symptomatic patients being told they don't fit the criteria to be tested.
That failure has hamstrung the U.S. government's response and doesn't make for good medicine. It's also stoking a deeper sense of unease that's eroding confidence in everything from the stock market to authorities' ability to handle a wider outbreak.
Checking large numbers of people would let the Trump administration back up its claims that it has the outbreak in hand. If more cases are found, health workers can take action to stop the virus from spreading. If only a few are, officials could reassure the public that the risk is less than feared.
Instead, we're left in the dark. At a Monday evening White House press conference, Health and Human Services Secretary Alex Azar couldn't say how many tests had been performed in the U.S. The Trump administration has repeatedly said the risk of Americans remains low, and that may be true.
But without good surveillance, it's still an educated guess.
That uncertainty is as detrimental to an effective public-health response as it is to rational behavior. If you worry about whether your family is safe, you panic-buy toilet paper and canned food, stop booking airline tickets, and quit going out. If you don't know whether an outbreak will cripple the economy, you get out of stocks.
Give people good information—even if it's a little scary—and they'll make better decisions. If you don't, they'll make worse, irrational ones. That goes for investors, government leaders, and the person next to you at the grocery store buying a shelf's worth of bleach. -- Drew Armstrong
“Sewer-service” in the District of Columbia’s Landlord-Tenant Court means that defendants do not appear for court because they do not know about their case
– blog entry by Don Allen Resnikoff
A few years ago, Adrian Gottshall wrote: "Years have passed since the first day that I observed ‘roll call’ in the District of Columbia Landlord and Tenant Branch, and I no longer wonder why some tenants in default fail to appear. I unequivocally know that service practices are unreliable and unfair. There are systemic due process violations occurring in the form of improper and ineffective service of process. Most troubling is that many defendants do not appear for court simply because they do not know about their case. Unreliable and unfair service practices are a national problem. They are not unique to the District of Columbia. At least three jurisdictions have recently attempted to address sewer service through litigation, resulting in multimillion dollar settlements for victims."[i]
Recently, litigation was filed alleging sewer service in the District of Columbia Landlord and Tenant Branch. The Complaint was filed in the U.S. District Court in the District of Columbia against Metropolitan Process Services, LLC and service person Stephens.[ii]
The Complaint in the D.C. litigation alleges that Defendant Stephens knowingly submitted false affidavits of service. The false affidavits asserted that he had attempted to serve and actually served process on Plaintiffs when in fact he did not.
The Complaint explains that Defendant Stephens and/or his company, Defendant Metropolitan Process Services, are the process servers of record for the vast majority of eviction cases filed in the Landlord-Tenant Branch of the District of Columbia Superior Court. “[F]or a significant percentage of the process they are retained to serve, Stephens and Metropolitan resort to “sewer service,” simply completing false affidavits to be used in L&T Court in which Defendants allege attempts at service that did not actually occur.”
The Plaintiffs’ allegations depend on looking at more than one affidavit of service in isolation: “Each of the affidavits of service submitted by Defendants, standing alone and viewed in the context of a single case, appears to be in order. However, when these affidavits of
service are reviewed together, obvious irregularities appear. For example: In most cases, Stephens did not even individually sign and swear to the affidavits. Hundreds of his affidavits, purportedly completed months apart, have the exact same signature in the exact same spot on the signature line, with the exact same notary seal, with the exact same smudge in the exact same
place on the seal, and in many cases with the exact same purported notary
signature.”
The Complaint promises statistical and other evidence of wrongdoing, such as Stephens’ filing affidavits in cases showing him to be in two distant places at the same time: “Examples abound of Stephens signing affidavits placing him in two different places at the same time. Indeed, on information and belief, Stephens submitted affidavits of service swearing to attempts at personal service on D.C. tenants at their residences at a time when he was physically present in Maryland state court for a hearing related to his arrest for drunk driving.”
The Plaintiffs in the U.S. District Court case allege that they are victims of Defendants’ sewer service, because Defendants falsified affidavits of service in connection with Plaintiffs’ eviction cases to falsely allege that Defendants had posted papers on Plaintiffs’ doors, when in fact there was no attempt at service at all.
Of course, the allegations of false affidavits and sewer service in the D.C. Landlord-Tenant Branch made in the U.S. District Court litigation are also a source of concern for the D.C. Superior Court, the D.C. Bar, and other groups interested in procedural fairness in the courts.
DAR
[i] January 2018 Solving Sewer Service: Fighting Fraud with Technology Adrian Gottshall University of the District of Columbia , https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1034&context=alr
[ii] Whitlock, et al, v. Metropolitan Process Services, LLC, et al., Case 1:20-cv-00339, assigned to Judge Leon
– blog entry by Don Allen Resnikoff
A few years ago, Adrian Gottshall wrote: "Years have passed since the first day that I observed ‘roll call’ in the District of Columbia Landlord and Tenant Branch, and I no longer wonder why some tenants in default fail to appear. I unequivocally know that service practices are unreliable and unfair. There are systemic due process violations occurring in the form of improper and ineffective service of process. Most troubling is that many defendants do not appear for court simply because they do not know about their case. Unreliable and unfair service practices are a national problem. They are not unique to the District of Columbia. At least three jurisdictions have recently attempted to address sewer service through litigation, resulting in multimillion dollar settlements for victims."[i]
Recently, litigation was filed alleging sewer service in the District of Columbia Landlord and Tenant Branch. The Complaint was filed in the U.S. District Court in the District of Columbia against Metropolitan Process Services, LLC and service person Stephens.[ii]
The Complaint in the D.C. litigation alleges that Defendant Stephens knowingly submitted false affidavits of service. The false affidavits asserted that he had attempted to serve and actually served process on Plaintiffs when in fact he did not.
The Complaint explains that Defendant Stephens and/or his company, Defendant Metropolitan Process Services, are the process servers of record for the vast majority of eviction cases filed in the Landlord-Tenant Branch of the District of Columbia Superior Court. “[F]or a significant percentage of the process they are retained to serve, Stephens and Metropolitan resort to “sewer service,” simply completing false affidavits to be used in L&T Court in which Defendants allege attempts at service that did not actually occur.”
The Plaintiffs’ allegations depend on looking at more than one affidavit of service in isolation: “Each of the affidavits of service submitted by Defendants, standing alone and viewed in the context of a single case, appears to be in order. However, when these affidavits of
service are reviewed together, obvious irregularities appear. For example: In most cases, Stephens did not even individually sign and swear to the affidavits. Hundreds of his affidavits, purportedly completed months apart, have the exact same signature in the exact same spot on the signature line, with the exact same notary seal, with the exact same smudge in the exact same
place on the seal, and in many cases with the exact same purported notary
signature.”
The Complaint promises statistical and other evidence of wrongdoing, such as Stephens’ filing affidavits in cases showing him to be in two distant places at the same time: “Examples abound of Stephens signing affidavits placing him in two different places at the same time. Indeed, on information and belief, Stephens submitted affidavits of service swearing to attempts at personal service on D.C. tenants at their residences at a time when he was physically present in Maryland state court for a hearing related to his arrest for drunk driving.”
The Plaintiffs in the U.S. District Court case allege that they are victims of Defendants’ sewer service, because Defendants falsified affidavits of service in connection with Plaintiffs’ eviction cases to falsely allege that Defendants had posted papers on Plaintiffs’ doors, when in fact there was no attempt at service at all.
Of course, the allegations of false affidavits and sewer service in the D.C. Landlord-Tenant Branch made in the U.S. District Court litigation are also a source of concern for the D.C. Superior Court, the D.C. Bar, and other groups interested in procedural fairness in the courts.
DAR
[i] January 2018 Solving Sewer Service: Fighting Fraud with Technology Adrian Gottshall University of the District of Columbia , https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1034&context=alr
[ii] Whitlock, et al, v. Metropolitan Process Services, LLC, et al., Case 1:20-cv-00339, assigned to Judge Leon
Local government needs more Coronavirus test kits
https://techcrunch.com/2020/03/08/u-s-response-to-the-covid-19-coronavirus-moves-from-containment-to-mitigation/
https://techcrunch.com/2020/03/08/u-s-response-to-the-covid-19-coronavirus-moves-from-containment-to-mitigation/
The Economist on politics and Coronavirus in China:
The virus outbreak could end swiftly, amid worldwide praise for the bravery of China’s doctors and nurses, the self-discipline of the public and the resolve of Chinese leaders, albeit after a slow start. If the crisis does not end well, scapegoats will be found, and underlings punished. That alone would not have to shake Mr Xi’s authority, which can always be shored up with repression, still greater ideological discipline and nationalist propaganda. But a botched response to the virus would lay bare tensions inherent in the party’s hybrid claims to legitimacy.
Mr Xi’s China is two things at once. It is a secretive, techno-authoritarian one-party state, ruled by grey men in unaccountable councils and secretive committees. It also claims to be a nation-sized family headed by a patriarch of unique wisdom and virtue, in a secular, 21st-century version of the mandate of Heaven. If forced to choose between those competing models, bet on cold, bureaucratic control to win out.
From https://www.economist.com/china/2020/01/30/xi-jinping-wants-to-be-both-feared-and-loved-by-chinas-people?cid1=cust/ednew/n/bl/n/2020/02/29n/owned/n/n/nwl/n/n/NA/415278/n
Posting by Don Resnikoff
The virus outbreak could end swiftly, amid worldwide praise for the bravery of China’s doctors and nurses, the self-discipline of the public and the resolve of Chinese leaders, albeit after a slow start. If the crisis does not end well, scapegoats will be found, and underlings punished. That alone would not have to shake Mr Xi’s authority, which can always be shored up with repression, still greater ideological discipline and nationalist propaganda. But a botched response to the virus would lay bare tensions inherent in the party’s hybrid claims to legitimacy.
Mr Xi’s China is two things at once. It is a secretive, techno-authoritarian one-party state, ruled by grey men in unaccountable councils and secretive committees. It also claims to be a nation-sized family headed by a patriarch of unique wisdom and virtue, in a secular, 21st-century version of the mandate of Heaven. If forced to choose between those competing models, bet on cold, bureaucratic control to win out.
From https://www.economist.com/china/2020/01/30/xi-jinping-wants-to-be-both-feared-and-loved-by-chinas-people?cid1=cust/ednew/n/bl/n/2020/02/29n/owned/n/n/nwl/n/n/NA/415278/n
Posting by Don Resnikoff
Are China’s Coronavirus Figures Reliable? China reports that new virus cases are declining, but the data may be tied to party politics.
BY JAMES PALMER
| FEBRUARY 19, 2020, 3:18 PM
In China, the death toll from the coronavirus has now topped 2,000, with over 70,000 cases confirmed. But if you follow Chinese state media, the tone is increasingly optimistic: Victory in the people’s war against the virus, led by President Xi Jinping, is coming! The official figures seem to bear this out: New infections outside of Hubei province, the virus epicenter, have dropped for more than 10 days straight, and the number of new cases inside Hubei has slowed to under 2,000 per day.
* * *
Party politics. One suspicious element is how consistent the drop in new virus cases has been. While there was a jump in numbers last Thursday, it was the result of changes in testing standards in Hubei—moving nearly 15,000 cases from “suspected” to “confirmed.” The announcement came as Hubei’s top officials were removed from their jobs—and Xi’s close ally Ying Yong, the former mayor of Shanghai, installed as the province’s party boss. As often happens, it seems the new boss wanted to blame the bad news on the old one.
* * *
Downward trend. The straight decline in new cases of the virus could be good news, or it could be statistical manipulation. Outside of Hubei, diagnostic test kits are in short supply, and other provinces haven’t switched to using the symptomatic diagnosis now accepted in Hubei. The kits are only being used to test people who came from Hubei and not for cases of transmission, so it’s unsurprising the numbers are dropping. Chinese doctors report that dozens of other hospital patients are being quarantined and treated but not officially diagnosed.
https://foreignpolicy.com/2020/02/19/china-coronavirus-figures-reliable-communist-party-politics-xi-jinping-quarantine-hubei/
Posting by Don Resnikoff
BY JAMES PALMER
| FEBRUARY 19, 2020, 3:18 PM
In China, the death toll from the coronavirus has now topped 2,000, with over 70,000 cases confirmed. But if you follow Chinese state media, the tone is increasingly optimistic: Victory in the people’s war against the virus, led by President Xi Jinping, is coming! The official figures seem to bear this out: New infections outside of Hubei province, the virus epicenter, have dropped for more than 10 days straight, and the number of new cases inside Hubei has slowed to under 2,000 per day.
* * *
Party politics. One suspicious element is how consistent the drop in new virus cases has been. While there was a jump in numbers last Thursday, it was the result of changes in testing standards in Hubei—moving nearly 15,000 cases from “suspected” to “confirmed.” The announcement came as Hubei’s top officials were removed from their jobs—and Xi’s close ally Ying Yong, the former mayor of Shanghai, installed as the province’s party boss. As often happens, it seems the new boss wanted to blame the bad news on the old one.
* * *
Downward trend. The straight decline in new cases of the virus could be good news, or it could be statistical manipulation. Outside of Hubei, diagnostic test kits are in short supply, and other provinces haven’t switched to using the symptomatic diagnosis now accepted in Hubei. The kits are only being used to test people who came from Hubei and not for cases of transmission, so it’s unsurprising the numbers are dropping. Chinese doctors report that dozens of other hospital patients are being quarantined and treated but not officially diagnosed.
https://foreignpolicy.com/2020/02/19/china-coronavirus-figures-reliable-communist-party-politics-xi-jinping-quarantine-hubei/
Posting by Don Resnikoff
Ride-Hailing Isn’t Really GreenThe Union of Concerned Scientists estimates that the environmental impact of Uber and Lyft rides is 69% worse than the transportation modes they replace.
Uber and Lyft have consumed a vast amount of attention since they arrived a decade ago. But in many ways, we’re just beginning to understand what ride-hailing is doing. A growing cache of research by academics and policymakers points to a host of negative impacts associated with the explosive popularity of on-demand rides, including increased traffic congestion, declines in public transit ridership and upticks in traffic fatalities.
A new report by the Union of Concerned Scientists evaluates another, less-examined ramification of the ride-hailing sector: its environmental toll. Read more at Citylab
Uber and Lyft have consumed a vast amount of attention since they arrived a decade ago. But in many ways, we’re just beginning to understand what ride-hailing is doing. A growing cache of research by academics and policymakers points to a host of negative impacts associated with the explosive popularity of on-demand rides, including increased traffic congestion, declines in public transit ridership and upticks in traffic fatalities.
A new report by the Union of Concerned Scientists evaluates another, less-examined ramification of the ride-hailing sector: its environmental toll. Read more at Citylab
Researchers who have examined the genomes of two coronavirus infections in Washington State say the similarities between the cases suggest that the virus may have been spreading in the state for weeks.
* * *
State and local health officials have been hamstrung in their ability to test widely for the coronavirus. Until very recently, the C.D.C. had insisted that only its test could be used, and only on patients who met specific criteria — those who had traveled to China within 14 days of developing symptoms or had contact with a known coronavirus case.
from: https://www.nytimes.com/2020/03/01/health/coronavirus-washington-spread.html
Posting by Don Resnikoff
* * *
State and local health officials have been hamstrung in their ability to test widely for the coronavirus. Until very recently, the C.D.C. had insisted that only its test could be used, and only on patients who met specific criteria — those who had traveled to China within 14 days of developing symptoms or had contact with a known coronavirus case.
from: https://www.nytimes.com/2020/03/01/health/coronavirus-washington-spread.html
Posting by Don Resnikoff
NYT Opinion: We Don’t Really Know How Many People Have Coronavirus. In an era when we get flash-flood warnings on phones, why is data on the new coronavirus so limited?
By Elisabeth Rosenthal
Ms. Rosenthal, a journalist and physician, is a contributing opinion writer.
In recent weeks, a smattering of scientific papers and government statements have begun to sketch the outlines of the epidemic. The Chinese national health commission has reported that more than 1,700 medical workers in the country had contracted the virus as of Feb 14. (That’s alarming). The Chinese Center for Disease Control and Prevention estimates that some 80 percent of those infected have a mild illness. (That’s comforting). Earlier this week, a joint W.H.O.-China mission announced that the death rate in Wuhan was 2 to 4 percent, but only .7 percent in the rest of China — a difference that makes little scientific sense.
In recent days the W.H.O. has complained that China has not been sharing data on infections in health care workers. Earlier this month, the editors of the journal Nature called on researchers to “ensure that their work on this outbreak is shared rapidly and openly.”
Much more could be known and, in all likelihood, some scientists out there have good, if not definitive, answers. And yet, the lack of consistent, reliable and regularly updated information on the key measures of this outbreak is startling. In an era when we get flash-flood warnings on phones and weekly influenza statistics from every state, why is data on the new coronavirus so limited?
Science, politics and pride have all, in various ways, conspired to keep potentially vital, lifesaving knowledge under wraps. That is problematic at a time when more information is needed to be strategic about preparedness.
It began early in the course of the epidemic. On Dec. 30, a Chinese doctor, Li Wenliang posted about a small number of people with an unusual pneumonia on social media. Though scientists in labs were already sequencing the virus, he was “warned and reprimanded” by local officials for rumor-mongering and the “illegal activity of publishing false information online.” (Dr. Li later died of the illness.)
There is a tradition in China (and likely much of the world) for local authorities not to report bad news to their superiors. During the Great Leap Forward, local officials reported exaggerated harvest yields even as millions were starving. More recently, officials in Henan Province denied there was an epidemic of AIDS spread through unsanitary blood collection practices.
Indeed, even when Beijing urges greater attention to scientific reality, compliance is mixed. On Feb. 13, the Communist Party secretaries of Wuhan and Hubei Province lost their jobs over their botched initial handling of the crisis. But damage had been done. As the virus was taking hold, doctors were not wearing proper protective equipment. Sick people, thinking they just had a cold, didn’t seek medical attention. And travelers continued to board cruise ships spreading a new pathogen.
“Early on, management was less than optimal in Hubei and they’re paying for that now,” Dr. Ian Lipkin, a professor of epidemiology at Columbia’s Mailman School of Public Health who has been working in China and advising the Chinese government since the SARS outbreak, told me.
There were, of course, some genuine barriers to understanding what exactly was happening in Wuhan: Pneumonias are not unusual in winter, and there was no way to know that there was a novel virus. (Dr. Lipkin’s group is working on building a new test that distinguishes between different cause of viral pneumonias, with a researcher headed to China next week for testing.)
Lest Americans feel that it could never happen here, Dr. Lipkin points out that it took many months for health officials in the United States to acknowledge and recognize H.I.V. as a new virus, despite the fact that gay men were turning up at alarming rates with unusual pneumonias and skin cancers.
Scientific competition has also slowed reaction and response, experts fear — leading to the extraordinary editors’ plea in Nature. For a young researcher, a paper in Nature or the New England Journal of Medicine is gold in career currency. Scientific prestige may encourage perfecting data for peer review, but preparedness requires rapid dissemination of information.
While federal officials in the United States warn Americans to be ready for the virus, there are some important aspects of its spread about which we have little information — even though they have likely already been studied by scientists and officials, in China, in Japan and elsewhere.
Scientists in various countries are presumably gathering large amounts of data day by day and the world deserves to see more of it.
“Were there patterns around infections, places, procedures? Maybe that is being collected and readied for the medical literature. But it would be hugely important to know,” said Dr. Tom Inglesby, director of the Center for Health Security of the Johns Hopkins Bloomberg School of Public Health, which studies epidemics.
For example: Of the more than 1,700 health workers who were infected in China, did those infections occur before they knew to wear protective equipment? Were they doing procedures that might lead to exposure? Those answers would quell fears about how the virus spreads and how to protect front line workers.
Likewise, there were hundreds of people who tested positive aboard the Diamond Princess cruise ship and were transferred to the hospital. But there has been little public information released about what shape they were in. How many in the cohort were really sick, how many just had minor symptoms and how many just needed isolation? Does the pattern of infection suggest a role for transmission via plumbing on the ship?
Finally, the world’s public health researchers need much more transparency about how officials are monitoring this epidemic. What exactly is
China’s surveillance strategy among the general population? To gauge the actual death rate of Covid-19, researchers would need to know how
many people actually have it, even if they have only mild symptoms. In-country surveillance may reveal a very large pool of people with mild or no symptoms at all.
Dr. Lipkin noted that because cases noted early in an epidemic are the most severe, early mortality estimates tend to be high. As more information comes out, the death rates are likely to fall. “We’re probably six months out from having a good picture and when we do I’d guess the mortality will drop dramatically,” he said.
Compared with the situation in 2003, when it took about five months for the Chinese central government to publicly acknowledge a deadly crisis associated with SARS, the flow of information has clearly improved. But since then, travel and commerce between China and the rest of the world has increased manifold. The spread of information about emerging infectious diseases needs to keep up with that new reality.
From: https://www.nytimes.com/2020/02/28/opinion/coronavirus-death-rate.html?action=click&module=Opinion&pgtype=Homepage
Elisabeth Rosenthal worked as an emergency room physician before becoming a journalist. A former New York Times correspondent, she is the author of “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back” and editor-in-chief of Kaiser Health News. @RosenthalHealth
By Elisabeth Rosenthal
Ms. Rosenthal, a journalist and physician, is a contributing opinion writer.
- Feb. 28, 2020
In recent weeks, a smattering of scientific papers and government statements have begun to sketch the outlines of the epidemic. The Chinese national health commission has reported that more than 1,700 medical workers in the country had contracted the virus as of Feb 14. (That’s alarming). The Chinese Center for Disease Control and Prevention estimates that some 80 percent of those infected have a mild illness. (That’s comforting). Earlier this week, a joint W.H.O.-China mission announced that the death rate in Wuhan was 2 to 4 percent, but only .7 percent in the rest of China — a difference that makes little scientific sense.
In recent days the W.H.O. has complained that China has not been sharing data on infections in health care workers. Earlier this month, the editors of the journal Nature called on researchers to “ensure that their work on this outbreak is shared rapidly and openly.”
Much more could be known and, in all likelihood, some scientists out there have good, if not definitive, answers. And yet, the lack of consistent, reliable and regularly updated information on the key measures of this outbreak is startling. In an era when we get flash-flood warnings on phones and weekly influenza statistics from every state, why is data on the new coronavirus so limited?
Science, politics and pride have all, in various ways, conspired to keep potentially vital, lifesaving knowledge under wraps. That is problematic at a time when more information is needed to be strategic about preparedness.
It began early in the course of the epidemic. On Dec. 30, a Chinese doctor, Li Wenliang posted about a small number of people with an unusual pneumonia on social media. Though scientists in labs were already sequencing the virus, he was “warned and reprimanded” by local officials for rumor-mongering and the “illegal activity of publishing false information online.” (Dr. Li later died of the illness.)
There is a tradition in China (and likely much of the world) for local authorities not to report bad news to their superiors. During the Great Leap Forward, local officials reported exaggerated harvest yields even as millions were starving. More recently, officials in Henan Province denied there was an epidemic of AIDS spread through unsanitary blood collection practices.
Indeed, even when Beijing urges greater attention to scientific reality, compliance is mixed. On Feb. 13, the Communist Party secretaries of Wuhan and Hubei Province lost their jobs over their botched initial handling of the crisis. But damage had been done. As the virus was taking hold, doctors were not wearing proper protective equipment. Sick people, thinking they just had a cold, didn’t seek medical attention. And travelers continued to board cruise ships spreading a new pathogen.
“Early on, management was less than optimal in Hubei and they’re paying for that now,” Dr. Ian Lipkin, a professor of epidemiology at Columbia’s Mailman School of Public Health who has been working in China and advising the Chinese government since the SARS outbreak, told me.
There were, of course, some genuine barriers to understanding what exactly was happening in Wuhan: Pneumonias are not unusual in winter, and there was no way to know that there was a novel virus. (Dr. Lipkin’s group is working on building a new test that distinguishes between different cause of viral pneumonias, with a researcher headed to China next week for testing.)
Lest Americans feel that it could never happen here, Dr. Lipkin points out that it took many months for health officials in the United States to acknowledge and recognize H.I.V. as a new virus, despite the fact that gay men were turning up at alarming rates with unusual pneumonias and skin cancers.
Scientific competition has also slowed reaction and response, experts fear — leading to the extraordinary editors’ plea in Nature. For a young researcher, a paper in Nature or the New England Journal of Medicine is gold in career currency. Scientific prestige may encourage perfecting data for peer review, but preparedness requires rapid dissemination of information.
While federal officials in the United States warn Americans to be ready for the virus, there are some important aspects of its spread about which we have little information — even though they have likely already been studied by scientists and officials, in China, in Japan and elsewhere.
Scientists in various countries are presumably gathering large amounts of data day by day and the world deserves to see more of it.
“Were there patterns around infections, places, procedures? Maybe that is being collected and readied for the medical literature. But it would be hugely important to know,” said Dr. Tom Inglesby, director of the Center for Health Security of the Johns Hopkins Bloomberg School of Public Health, which studies epidemics.
For example: Of the more than 1,700 health workers who were infected in China, did those infections occur before they knew to wear protective equipment? Were they doing procedures that might lead to exposure? Those answers would quell fears about how the virus spreads and how to protect front line workers.
Likewise, there were hundreds of people who tested positive aboard the Diamond Princess cruise ship and were transferred to the hospital. But there has been little public information released about what shape they were in. How many in the cohort were really sick, how many just had minor symptoms and how many just needed isolation? Does the pattern of infection suggest a role for transmission via plumbing on the ship?
Finally, the world’s public health researchers need much more transparency about how officials are monitoring this epidemic. What exactly is
China’s surveillance strategy among the general population? To gauge the actual death rate of Covid-19, researchers would need to know how
many people actually have it, even if they have only mild symptoms. In-country surveillance may reveal a very large pool of people with mild or no symptoms at all.
Dr. Lipkin noted that because cases noted early in an epidemic are the most severe, early mortality estimates tend to be high. As more information comes out, the death rates are likely to fall. “We’re probably six months out from having a good picture and when we do I’d guess the mortality will drop dramatically,” he said.
Compared with the situation in 2003, when it took about five months for the Chinese central government to publicly acknowledge a deadly crisis associated with SARS, the flow of information has clearly improved. But since then, travel and commerce between China and the rest of the world has increased manifold. The spread of information about emerging infectious diseases needs to keep up with that new reality.
From: https://www.nytimes.com/2020/02/28/opinion/coronavirus-death-rate.html?action=click&module=Opinion&pgtype=Homepage
Elisabeth Rosenthal worked as an emergency room physician before becoming a journalist. A former New York Times correspondent, she is the author of “An American Sickness: How Healthcare Became Big Business and How You Can Take It Back” and editor-in-chief of Kaiser Health News. @RosenthalHealth
NYT:New York City May Crack Down on Grubhub and Other Food Delivery Apps
The City Council will consider a package of bills aimed at limiting how much food delivery apps can charge restaurants.
Legislation to regulate food delivery apps in New York is expected to be broadly supported in the City Council. Credit...Jeenah Moon for The New York TimesBy Jeffery C. Mays and David Yaffe-Bellany
For almost a year, the City Council has warned major food delivery apps like Grubhub and Uber Eats that their business practices were hurting local restaurants in New York, and that legislation to regulate the industry might be in order.
Restaurants were being charged commissions ranging from 15 to 30 percent, and Grubhub was routinely billing restaurants for calls that did not result in orders.
Grubhub, facing scrutiny from its investors, responded by revising its phone ordering system to reduce errant charges, and ending its practice of creating competing websites for restaurants that used its service.
The changes were not enough.
The City Council will soon consider a package of bills that is believed to be the first local effort to regulate commissions, phone fees or some
other aspect of the on-demand food delivery economy.
From
The City Council will consider a package of bills aimed at limiting how much food delivery apps can charge restaurants.
Legislation to regulate food delivery apps in New York is expected to be broadly supported in the City Council. Credit...Jeenah Moon for The New York TimesBy Jeffery C. Mays and David Yaffe-Bellany
For almost a year, the City Council has warned major food delivery apps like Grubhub and Uber Eats that their business practices were hurting local restaurants in New York, and that legislation to regulate the industry might be in order.
Restaurants were being charged commissions ranging from 15 to 30 percent, and Grubhub was routinely billing restaurants for calls that did not result in orders.
Grubhub, facing scrutiny from its investors, responded by revising its phone ordering system to reduce errant charges, and ending its practice of creating competing websites for restaurants that used its service.
The changes were not enough.
The City Council will soon consider a package of bills that is believed to be the first local effort to regulate commissions, phone fees or some
other aspect of the on-demand food delivery economy.
From
U.S. consumer watchdog agrees to implement minority-lending protections after lawsuit
Katanga Johnson
WASHINGTON (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) has agreed to enforce data-collection requirements that aim to guard against discriminatory lending practices after being sued by a Washington-based advocacy group, the group said on Wednesday.
Democracy Forward sued the agency in May 2019 alleging it had flouted laws introduced following the 2007-2009 financial crisis that require it to collect and disclose data on lending to women-owned, minority-owned and small businesses.Excerpt from
Under the settlement filed in the U.S. District Court in the Northern District of California, the CFPB agreed by September to outline a proposed rule for collecting the data and to create a panel of small-business advocates to feed in to the process.
Excerpt from https://www.reuters.com/article/us-usa-cfpb-minoritybusinesses/u-s-consumer-watchdog-agrees-to-implement-minority-lending-protections-after-lawsuit-idUSKCN20K2OF
Katanga Johnson
WASHINGTON (Reuters) - The U.S. Consumer Financial Protection Bureau (CFPB) has agreed to enforce data-collection requirements that aim to guard against discriminatory lending practices after being sued by a Washington-based advocacy group, the group said on Wednesday.
Democracy Forward sued the agency in May 2019 alleging it had flouted laws introduced following the 2007-2009 financial crisis that require it to collect and disclose data on lending to women-owned, minority-owned and small businesses.Excerpt from
Under the settlement filed in the U.S. District Court in the Northern District of California, the CFPB agreed by September to outline a proposed rule for collecting the data and to create a panel of small-business advocates to feed in to the process.
Excerpt from https://www.reuters.com/article/us-usa-cfpb-minoritybusinesses/u-s-consumer-watchdog-agrees-to-implement-minority-lending-protections-after-lawsuit-idUSKCN20K2OF
Garrett speaks on lack of US coronavirus preparation
https://www.msnbc.com/rachel-maddow/watch/u-s-unready-to-deal-with-potential-coronavirus-spread-79446085581
https://www.msnbc.com/rachel-maddow/watch/u-s-unready-to-deal-with-potential-coronavirus-spread-79446085581
From Consumer Law & Policy Blog
Libel tourism in Virginia again used to seek to identify anonymous Twitter users
Posted: 24 Feb 2020 03:03 PM PST
Late last year, I wrote about an abusive subpoena that California Congressman Devin Nunes was pursuing in Virginia state court, seeking to identify the owner of a satirical Twitter account that makes fun of Nunes, referring to his family history in dairy farming, by using the Twitter handle “@Devin Cow” and including various puns referring to cow body parts, cow noises, and cowboys. We filed an amicus brief urging the state court judge to use the Dendrite standard to decide whether to compel Twitter to identify Nunes’ online detractor, and arguing that there was no basis for overcoming the Cow’s right to parody anonymously. The motion to quash that subpoena is still pending.
Nunes’ lawyer, Steven Biss, has recently tried another route to achieve the same objective. He is representing a communications specialist based in North Carolina named Trevor Fitzgibbon, who has been engaged in a protracted dispute with a Washington, D.C. lawyer named Jesselyn Radack who is, in turn, one of several women who have accused Fitzgibbon of untoward sexual conduct. Their first round of litigation, filed in the Eastern District of Virginia even though neither side lives there, ended in a harsh settlement that included a six-figure payment by Radack to Fitzgibbon as well as a clause forbidding each to talk about the other publicly. Fitzgibbon has again sued Radack in the Eastern District of Virginia, accusing her of breaching the settlement agreement, of fraudulently inducing him to sign that agreement in the first place, and of defamation. The complaint charges Radack with conspiring with various other people to defame Fitzgibbon, but only Radack is named as a defendant. Radack has counterclaimed against Fitzgibbon, making much the same accusations of breach of contract, fraudulent inducement, and defamation.
Although Fitzgibbon and Radack are entitled to their mutual antagonism, and to slug it out in federal court if they must, it is the abuse of the subpoena power that engages our attention. Supposedly for the purpose of pursuing his claims against Radack, Biss has served yet another subpoena on Twitter, claiming the right to be provided with identifying information about the owners of some twenty-two Twitter accounts.
Most of these accounts have been used to take part in the online discussion of the Fitzgibbon/Radack charges and countercharges, but the Twitter account holders are not named as defendants in the litigation. Fitzgibbon’s papers strongly suggest that he resents the participation of these Twitter users, and that he believes that some tweets have wrongly taken Radack’s side against him. However, but the asserted purpose of the subpoena is not to bring them into the litigation as defendants but only to ascertain whether they have information that he can use to establish Radack’s liability or to increase the level of damages he can seek.
The 2theMart Standard
Given that stated purpose, his subpoena is not subject to the Dendrite standard, but rather to a somewhat older, but less used standard, first adopted in a federal court decision from Seattle called Doe v. 2theMart, that governs subpoenas seeking to identify anonymous online speakers so that they may be asked to provide evidence in cases in which they have not, themselves, been accused of wrongdoing. The question presented by this new subpoena is whether a party to an online controversy can, simply by suing one detractor whose online statements are strongest and, perhaps, most susceptible to litigation, successfully sweep into the maw of the litigation everyone else who discusses the controversy online, just by saying that they are potential witnesses who must be interrogated about how they came to form their online opinions and whether they ever have communicated with each other privately. Needless to say, if that were enough reason to compel the identification of online speakers, the result could be a significant level of deterrence against participation in online discussions. An exhibit to our filing is an affidavit from one the Twitter account holders sought by the subpoena, explaining why she is afraid of having her information revealed.
Yet another one of subpoena targets, though, is @DevinCow, who has never said anything about Fitzgibbon, at least so far as we could see from Fitzgibbon’s brief. That Twitter user’s only involvement with the controversy appears to be Radack’s having expressed appreciation for something that @DevinCow said in a tweet; Radack's having listed the lawsuit against @DevinCow as one of a large number of lawsuits filed by Steven Biss that she considers abusive; and Radack’s speculation that a conservative Silicon Valley investor may be financing all of Biss’s litigation campaign. Considering the limited basis for identifying @DevinCow as a witness in the Fitzgibbon/Radack litigation, there is a good reason to infer that Biss maybe abusing his ready access to the federal court discovery process to attempt an end run around the roadblocks he has encountered to identifying @DevinCow in the state court litigation. And the 2theMart standard, unlike Dendrite, calls for explicit consideration of whether the subpoena has been served in good faith.
We have now filed an amicus brief urging that the very fact that Fitzgibbon’s attorney has included a demand for identification of @Devin Cow who seems to have little bearing on the Fitzgibbon / Radack quarrel, but who is a defendant in another lawsuit entirely, could be reason enough to condemn the subpoena as a product of bad faith. We also explain why the trial court should adopt the 2theMart standard and explain how it should be applied in this case even apart from the highly suspicious aspect of the subpoena aimed at @DevinCow.
As with our previous amicus brief in the Nnnes litigation itself, I am grateful to Matt Kelley of Ballard Spahr for participating as Virginia co-counsel on the amicus brief.
Read NCLC's critique of the CFPB's proposed debt-collection rule
Posted: 24 Feb 2020 09:30 AM PST
The National Consumer Law Center has issued this press release, entitled "CFPB Fails to Protect Consumers From Abusive Collection of Time-Barred Debts (Again)," which, among other things, castigates the CFPB for failing to flat-out "ban collection of time-barred debt in and out of court."
Libel tourism in Virginia again used to seek to identify anonymous Twitter users
Posted: 24 Feb 2020 03:03 PM PST
Late last year, I wrote about an abusive subpoena that California Congressman Devin Nunes was pursuing in Virginia state court, seeking to identify the owner of a satirical Twitter account that makes fun of Nunes, referring to his family history in dairy farming, by using the Twitter handle “@Devin Cow” and including various puns referring to cow body parts, cow noises, and cowboys. We filed an amicus brief urging the state court judge to use the Dendrite standard to decide whether to compel Twitter to identify Nunes’ online detractor, and arguing that there was no basis for overcoming the Cow’s right to parody anonymously. The motion to quash that subpoena is still pending.
Nunes’ lawyer, Steven Biss, has recently tried another route to achieve the same objective. He is representing a communications specialist based in North Carolina named Trevor Fitzgibbon, who has been engaged in a protracted dispute with a Washington, D.C. lawyer named Jesselyn Radack who is, in turn, one of several women who have accused Fitzgibbon of untoward sexual conduct. Their first round of litigation, filed in the Eastern District of Virginia even though neither side lives there, ended in a harsh settlement that included a six-figure payment by Radack to Fitzgibbon as well as a clause forbidding each to talk about the other publicly. Fitzgibbon has again sued Radack in the Eastern District of Virginia, accusing her of breaching the settlement agreement, of fraudulently inducing him to sign that agreement in the first place, and of defamation. The complaint charges Radack with conspiring with various other people to defame Fitzgibbon, but only Radack is named as a defendant. Radack has counterclaimed against Fitzgibbon, making much the same accusations of breach of contract, fraudulent inducement, and defamation.
Although Fitzgibbon and Radack are entitled to their mutual antagonism, and to slug it out in federal court if they must, it is the abuse of the subpoena power that engages our attention. Supposedly for the purpose of pursuing his claims against Radack, Biss has served yet another subpoena on Twitter, claiming the right to be provided with identifying information about the owners of some twenty-two Twitter accounts.
Most of these accounts have been used to take part in the online discussion of the Fitzgibbon/Radack charges and countercharges, but the Twitter account holders are not named as defendants in the litigation. Fitzgibbon’s papers strongly suggest that he resents the participation of these Twitter users, and that he believes that some tweets have wrongly taken Radack’s side against him. However, but the asserted purpose of the subpoena is not to bring them into the litigation as defendants but only to ascertain whether they have information that he can use to establish Radack’s liability or to increase the level of damages he can seek.
The 2theMart Standard
Given that stated purpose, his subpoena is not subject to the Dendrite standard, but rather to a somewhat older, but less used standard, first adopted in a federal court decision from Seattle called Doe v. 2theMart, that governs subpoenas seeking to identify anonymous online speakers so that they may be asked to provide evidence in cases in which they have not, themselves, been accused of wrongdoing. The question presented by this new subpoena is whether a party to an online controversy can, simply by suing one detractor whose online statements are strongest and, perhaps, most susceptible to litigation, successfully sweep into the maw of the litigation everyone else who discusses the controversy online, just by saying that they are potential witnesses who must be interrogated about how they came to form their online opinions and whether they ever have communicated with each other privately. Needless to say, if that were enough reason to compel the identification of online speakers, the result could be a significant level of deterrence against participation in online discussions. An exhibit to our filing is an affidavit from one the Twitter account holders sought by the subpoena, explaining why she is afraid of having her information revealed.
Yet another one of subpoena targets, though, is @DevinCow, who has never said anything about Fitzgibbon, at least so far as we could see from Fitzgibbon’s brief. That Twitter user’s only involvement with the controversy appears to be Radack’s having expressed appreciation for something that @DevinCow said in a tweet; Radack's having listed the lawsuit against @DevinCow as one of a large number of lawsuits filed by Steven Biss that she considers abusive; and Radack’s speculation that a conservative Silicon Valley investor may be financing all of Biss’s litigation campaign. Considering the limited basis for identifying @DevinCow as a witness in the Fitzgibbon/Radack litigation, there is a good reason to infer that Biss maybe abusing his ready access to the federal court discovery process to attempt an end run around the roadblocks he has encountered to identifying @DevinCow in the state court litigation. And the 2theMart standard, unlike Dendrite, calls for explicit consideration of whether the subpoena has been served in good faith.
We have now filed an amicus brief urging that the very fact that Fitzgibbon’s attorney has included a demand for identification of @Devin Cow who seems to have little bearing on the Fitzgibbon / Radack quarrel, but who is a defendant in another lawsuit entirely, could be reason enough to condemn the subpoena as a product of bad faith. We also explain why the trial court should adopt the 2theMart standard and explain how it should be applied in this case even apart from the highly suspicious aspect of the subpoena aimed at @DevinCow.
As with our previous amicus brief in the Nnnes litigation itself, I am grateful to Matt Kelley of Ballard Spahr for participating as Virginia co-counsel on the amicus brief.
Read NCLC's critique of the CFPB's proposed debt-collection rule
Posted: 24 Feb 2020 09:30 AM PST
The National Consumer Law Center has issued this press release, entitled "CFPB Fails to Protect Consumers From Abusive Collection of Time-Barred Debts (Again)," which, among other things, castigates the CFPB for failing to flat-out "ban collection of time-barred debt in and out of court."
AG voids hundreds of predatory loans, orders $2.2M in restitution
By: Heather Cobun Daily Record Legal Affairs Writer February 21, 2020
A loan business was ordered recently to pay $2.2 million to consumers for making unlicensed and predatory title loans.
Cash-N-Go Inc. and its owner, Brent M. Jackson, were charged by the Maryland Office of the Attorney General last year with violations of the Maryland Consumer Protection Act. The office announced Friday that it had issued a final order against Jackson and his businesses making all Cash-N-Go loans void and unenforceable.
“The Cash-N-Go companies and their owner, Brent Jackson, preyed on Maryland consumers in financial distress,” Attorney General Brian E. Frosh said in a statement. “Jackson victimized vulnerable people for his personal financial benefit.”
The final order requires Cash-N-Go to pay more than $2.2 million in restitution to consumers and a $1.2 million penalty to the state.
The defendants were represented by Douglas Gansler, partner at Cadwalader, Wickersham & Taft LLP in Washington. Gansler, the Maryland Attorney General from 2007 to 2015, did not respond to a call seeking comment Friday.
The various Cash-N-Go businesses offered short-term, high-interest loans secured by a customer’s vehicle, purporting to be a pawn transaction, according to the release. Cash-N-Go kept the title and the vehicle would be repossessed if a customer failed to make a payment.
So-called title loans or title pawns are consumer loans under Maryland law and are subject to loan licensing requirements and interest rate caps, but Jackson’s companies were never licensed and charged more than 10 times the maximum legal rate of interest, which is 33%, according to the release.
Under the final order, Cash-N-Go is prohibited from collecting any money related to the loans or repossessing vehicles, according to the release. The companies must also return any previously repossessed vehicles to their owners. They can continue operating as a check cashing businesses and pawn brokers, according to the release.
The businesses allegedly made more than 1,700 title loans to Maryland consumers between 2007 and 2016 for amounts ranging from several hundred dollars to $6,000, according to the charges, filed in April 2019. They collected more than $2.2 million from consumers in repayment and tens of thousands of dollars from sales of repossessed vehicles.
AG Racine Announces Real Estate Company to Pay $900K for Discriminating Against Low-Income District Renters
OAG press release: Largest OAG Civil Rights Settlement Resolves Lawsuit Against Curtis Investment Group for Refusing to Rent to Housing Voucher Recipients
https://oag.dc.gov/release/ag-racine-announces-real-estate-company-pay-900k
OAG press release: Largest OAG Civil Rights Settlement Resolves Lawsuit Against Curtis Investment Group for Refusing to Rent to Housing Voucher Recipients
https://oag.dc.gov/release/ag-racine-announces-real-estate-company-pay-900k
Delrahim: T-Mobile/Sprint Ruling Will Make It Harder For States To Challenge Mergers
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February 19, 2020The court ruling in favor of the T-Mobile/Sprint merger last week sets a high bar for state challenges and prevents highly decentralized antitrust enforcement, said Makan Delrahim, assistant attorney general of the Department of Justice’s (DOJ) Antitrust Division, reported CNBC.
“Had that gone the other way, you would have had 53 antitrust agencies,” Delrahim said in an interview Wednesday on CNBC’s “Squawk Box,” adding that it would have allowed every state to have “whacks of the pinata.”
Attorneys general from 13 states and the District of Columbia sued to block the US$26 billion telecom merger after the DOJ and Federal Communications Commission cleared the deal with certain remedies. The states argued that combining the No. 3 and No. 4 US carriers would result in higher prices for consumers due to limited competition. The companies countered that the merger would enable them to effectively compete against top players AT&Tand Verizon.
In his decision, Judge Victor Marrero wrote, “The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger.”
The ruling could open the door for future mergers in the industry and has also raised fears of a chilling effect on state actions. New York Attorney General Letitia James, who helped lead the states’ effort, said Sunday, February 16, that she would not move forward with an appeal.
Full Content: CNBC
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February 19, 2020The court ruling in favor of the T-Mobile/Sprint merger last week sets a high bar for state challenges and prevents highly decentralized antitrust enforcement, said Makan Delrahim, assistant attorney general of the Department of Justice’s (DOJ) Antitrust Division, reported CNBC.
“Had that gone the other way, you would have had 53 antitrust agencies,” Delrahim said in an interview Wednesday on CNBC’s “Squawk Box,” adding that it would have allowed every state to have “whacks of the pinata.”
Attorneys general from 13 states and the District of Columbia sued to block the US$26 billion telecom merger after the DOJ and Federal Communications Commission cleared the deal with certain remedies. The states argued that combining the No. 3 and No. 4 US carriers would result in higher prices for consumers due to limited competition. The companies countered that the merger would enable them to effectively compete against top players AT&Tand Verizon.
In his decision, Judge Victor Marrero wrote, “The resulting stalemate leaves the Court lacking sufficiently impartial and objective ground on which to rely in basing a sound forecast of the likely competitive effects of a merger.”
The ruling could open the door for future mergers in the industry and has also raised fears of a chilling effect on state actions. New York Attorney General Letitia James, who helped lead the states’ effort, said Sunday, February 16, that she would not move forward with an appeal.
Full Content: CNBC
Opinion: be mad about your internet bill
In 2019, New York University economist Thomas Philippon did a deep dive into market concentration and monopolies in The Great Reversal: How America Gave Up on Free Markets. And one of his touchpoints for the book is the internet. Looking at the data, he found that the United States has fallen behind other developed economies in broadband penetration and that prices are significantly higher. In 2017, the average monthly cost of broadband in America was $66.17; in France, it was $38.10, in Germany, $35.71, and in South Korea, $29.90. How did this happen? In his view, a lot of it comes down to competition — or, rather, lack thereof.
To a certain extent, telecommunications companies and internet service providers are a sort of natural monopoly, meaning high infrastructure costs and other barriers to entry give early entrants a significant advantage. It costs money to install a cable system because you have to dig up streets, access buildings, etc., and once one company does that, there’s not a ton of incentive to do it all over again. On top of that, telecom companies paid what were often super-low fees -- maybe enough to create a public access studio — to wire up cities and towns in exchange for, essentially, getting a monopoly.
But that’s where the government could come in by regulating the network or forcing the company that built it to lease out parts of it to rivals. As Philippon notes, that’s what happened in France: An incumbent carrier was compelled to lease out the “last mile” of its network — basically, the last bit of cable that gets to your house or apartment building — and therefore let competitors have a chance at also appealing to customers.
IN 2017, THE AVERAGE MONTHLY COST OF BROADBAND IN AMERICA WAS $66.17; IN FRANCE, IT WAS $38.10, AND IN SOUTH KOREA, $29.90In the US, however, just a few big companies, often without overlap, control much of the telecom industry, and the result is high prices and uneven connectivity.
In 2018, Harvard law professor Susan Crawford examined the case of, what do you know, New York City in an article for Wired. The city was supposed to be “a model for big-city high-speed internet,” she explained, after then-Mayor Mike Bloomberg struck a deal with Verizon to install its FiOS fiber service in residential buildings in 2008, ending what was then Time Warner Cable’s local monopoly. In 2015, a quarter of New York City’s residential blocks still didn’t have FiOS, and one in five New Yorkers still don’t have internet access at home.
“New York City could be in a very different position today if those Bloomberg officials had called for a city-overseen fiber network. The creation of a neutral, unlit ‘last mile’ network that reaches every building in the city, like a street grid, would have allowed the city to ensure fiber access to everyone,” Crawford wrote.
Instead, multiple states (though not New York) have put up roadblocks to municipal broadband to keep cities from providing alternatives to and competing with local entities. It’s an example of lobbying at its finest, so that powerful corporations can keep competitors out and charge whatever they want.
Excerpt from article by Emily Stewart at https://www.vox.com/the-goods/2020/2/18/21126347/antitrust-monopolies-internet-telecommunications-cheerleading
DC educators target white racial bias in social studies standards as State Board launches rewrite
By Graham Vyse on Dec 3, 2019 Last updated Dec 12, 2019
Excerpt:
The DC State Board of Education is launching a three-year effort to change how public schools teach social studies, rewriting state academic standards to improve civics learning and promote more culturally relevant instruction for students in the nation’s capital.
The board is partnering with the Office of the State Superintendent of Education (OSSE) on the first update of these standards since 2006, and DC Public Schools (DCPS) hopes the process will address perceptions of white, Western bias in curricula.
“We frequently hear from teachers and students that our standards are not culturally relevant, sustaining or affirming,” Lindsey McCrea, the DCPS manager for social studies content and curriculum, told the State Board at its Nov. 20 monthly meeting. “The dominant narrative of Western European powers and the decisions of white Americans are the primary focus of the standards from kindergarten through 12th grade, while the experiences of marginalized people continue to be marginalized in DC state standards. All of our students deserve to see their own cultural, racial and social backgrounds reflected in the curriculum.”
https://thedcline.org/2019/12/03/dcps-targets-white-racial-bias-in-social-studies-education-standards-as-state-board-launches-rewrite/
By Graham Vyse on Dec 3, 2019 Last updated Dec 12, 2019
Excerpt:
The DC State Board of Education is launching a three-year effort to change how public schools teach social studies, rewriting state academic standards to improve civics learning and promote more culturally relevant instruction for students in the nation’s capital.
The board is partnering with the Office of the State Superintendent of Education (OSSE) on the first update of these standards since 2006, and DC Public Schools (DCPS) hopes the process will address perceptions of white, Western bias in curricula.
“We frequently hear from teachers and students that our standards are not culturally relevant, sustaining or affirming,” Lindsey McCrea, the DCPS manager for social studies content and curriculum, told the State Board at its Nov. 20 monthly meeting. “The dominant narrative of Western European powers and the decisions of white Americans are the primary focus of the standards from kindergarten through 12th grade, while the experiences of marginalized people continue to be marginalized in DC state standards. All of our students deserve to see their own cultural, racial and social backgrounds reflected in the curriculum.”
https://thedcline.org/2019/12/03/dcps-targets-white-racial-bias-in-social-studies-education-standards-as-state-board-launches-rewrite/
On Watergate, Nixon, and USDOJ independence from political interference
After President Richard Nixon resigned, Attorney General Griffin Bell gathered Justice Department lawyers in the department's elaborate Great Hall to address their independence in the post-Watergate world.
"The partisan activities of some attorneys general ... combined with the unfortunate legacy of Watergate, have given rise to the understandable public concern that some decisions at Justice may be the products of favor, or pressure, or politics," he said in the September 6, 1978 address. https://www.justice.gov/sites/default/files/ag/legacy/2011/08/23/09-06-1978b.pdf
Resulting Justice Department rules limited White House involvement with law enforcement decisions. The reforms emerged from Nixon's use of the department to conceal his administration's involvement in the break-in at the Democratic National Committee in the Watergate building.
The regulations that were put into place were intended to insulate the USDoJ from political interference. US attorneys were to be independent.
White House officials and justice department lawyers weren’t supposed to exchange information about ongoing criminal investigations or civil enforcement actions. A 2007 memorandum allowed the department to advise the White House of criminal or civil enforcement matters “only where it is important for the performance of the president’s duties and where appropriate from a law enforcement perspective”.
Recent events, very well reported in the press, create worry about political misuse of the USDOJ. Recently, more than 2000 former USDOJ attorneys publicly expressed their concern, and a national association of federal judges has called an emergency meeting Tuesday to address growing concerns about the intervention of Justice Department officials and President Donald Trump in politically sensitive cases,. https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
Posted by Don Allen Resnikoff, who takes full responsibility for the content
https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
After President Richard Nixon resigned, Attorney General Griffin Bell gathered Justice Department lawyers in the department's elaborate Great Hall to address their independence in the post-Watergate world.
"The partisan activities of some attorneys general ... combined with the unfortunate legacy of Watergate, have given rise to the understandable public concern that some decisions at Justice may be the products of favor, or pressure, or politics," he said in the September 6, 1978 address. https://www.justice.gov/sites/default/files/ag/legacy/2011/08/23/09-06-1978b.pdf
Resulting Justice Department rules limited White House involvement with law enforcement decisions. The reforms emerged from Nixon's use of the department to conceal his administration's involvement in the break-in at the Democratic National Committee in the Watergate building.
The regulations that were put into place were intended to insulate the USDoJ from political interference. US attorneys were to be independent.
White House officials and justice department lawyers weren’t supposed to exchange information about ongoing criminal investigations or civil enforcement actions. A 2007 memorandum allowed the department to advise the White House of criminal or civil enforcement matters “only where it is important for the performance of the president’s duties and where appropriate from a law enforcement perspective”.
Recent events, very well reported in the press, create worry about political misuse of the USDOJ. Recently, more than 2000 former USDOJ attorneys publicly expressed their concern, and a national association of federal judges has called an emergency meeting Tuesday to address growing concerns about the intervention of Justice Department officials and President Donald Trump in politically sensitive cases,. https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
Posted by Don Allen Resnikoff, who takes full responsibility for the content
https://www.msn.com/en-us/news/politics/federal-judges-association-calls-emergency-meeting-after-doj-intervenes-in-case-of-trump-ally-roger-stone/ar-BB1068Le
From AAI:
District Court Opinion in State’s Challenge to Sprint-T-Mobile Marks New Low in Weak Merger Control; Consumers Will Bear the Burden
Today, a U.S. district court in New York issued its opinion rejecting the challenge brought by a coalition of state Attorneys General seeking to block the merger of Sprint and T-Mobile. The decision clears the way for the proposed merger to proceed. Separately, a U.S. district court in Washington, D.C. has yet to decide whether to approve the proposed settlement between the merging parties and the U.S. Department of Justice (DOJ). Approval of the settlement would push the deal toward completion.
“The States deserve enormous credit for bringing this case in the wake of failed federal enforcement,” said American Antitrust Institute (AAI) President Diana Moss. “Consumers will bear the ultimate burden of this disappointing decision through higher prices, lower quality, and diminished innovation in essential wireless telecommunications services,” she added.
AAI expressed alarm that the opinion ignores the basic economic reality that, in a market with only three remaining players, incentives to compete are substantially weakened. AAI’s past analysis of the Sprint-T-Mobile merger highlights the considerable economic evidence demonstrating that four-to-three mergers increase incentives for firms to collude and harm consumers.
Read More
District Court Opinion in State’s Challenge to Sprint-T-Mobile Marks New Low in Weak Merger Control; Consumers Will Bear the Burden
Today, a U.S. district court in New York issued its opinion rejecting the challenge brought by a coalition of state Attorneys General seeking to block the merger of Sprint and T-Mobile. The decision clears the way for the proposed merger to proceed. Separately, a U.S. district court in Washington, D.C. has yet to decide whether to approve the proposed settlement between the merging parties and the U.S. Department of Justice (DOJ). Approval of the settlement would push the deal toward completion.
“The States deserve enormous credit for bringing this case in the wake of failed federal enforcement,” said American Antitrust Institute (AAI) President Diana Moss. “Consumers will bear the ultimate burden of this disappointing decision through higher prices, lower quality, and diminished innovation in essential wireless telecommunications services,” she added.
AAI expressed alarm that the opinion ignores the basic economic reality that, in a market with only three remaining players, incentives to compete are substantially weakened. AAI’s past analysis of the Sprint-T-Mobile merger highlights the considerable economic evidence demonstrating that four-to-three mergers increase incentives for firms to collude and harm consumers.
Read More
DOJ & FTC Argue Opposite Sides Of Qualcomm Suit
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February 9, 2020According to the Financial Times, https://www.ft.com/content/adbca366-49d3-11ea-aeb3-955839e06441 [oaywall] the Trump administration is set for an unusual courtroom showdown on Thursday, February 13, between lawyers of two federal antitrust agencies who will argue opposite sides of a Qualcomm case that could help shape the race to develop 5G technology.
The Department of Justice (DOJ) has taken the US chipmaker’s side as Qualcomm tries to overturn its loss at trial last year in a Federal Trade Commission (FTC) lawsuit filed in the final days of the Obama administration.
Lawyers for the DOJ’s antitrust division, headed by Makan Delrahim, a former Qualcomm lobbyist recused from the case, have argued that US national security is at stake, while FTC attorneys have accused the DOJ of interfering with antitrust enforcement.
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February 9, 2020According to the Financial Times, https://www.ft.com/content/adbca366-49d3-11ea-aeb3-955839e06441 [oaywall] the Trump administration is set for an unusual courtroom showdown on Thursday, February 13, between lawyers of two federal antitrust agencies who will argue opposite sides of a Qualcomm case that could help shape the race to develop 5G technology.
The Department of Justice (DOJ) has taken the US chipmaker’s side as Qualcomm tries to overturn its loss at trial last year in a Federal Trade Commission (FTC) lawsuit filed in the final days of the Obama administration.
Lawyers for the DOJ’s antitrust division, headed by Makan Delrahim, a former Qualcomm lobbyist recused from the case, have argued that US national security is at stake, while FTC attorneys have accused the DOJ of interfering with antitrust enforcement.
From Ars Technica
https://arstechnica.com/information-technology/2020/02/att-lost-1-2b-by-preventing-time-warner-shows-from-airing-on-netflix/
AT&T withholds content to give its own planned service, HBO Max, exclusivity:
"AT&T's actual Q4 2019 revenue was $46.8 billion, but the company said it would have been $48 billion if not for "HBO Max investments in the form of foregone WarnerMedia content licensing revenues."
"An AT&T spokesperson told Ars that the $1.2 billion in lost revenue was primarily caused by the decision "not to sell existing content—mainly Friends, The Big Bang Theory, and Fresh Prince—to third parties such as Netflix." As we've previously reported, AT&T took Time Warner shows off Netflix in order to give the exclusive streaming rights to AT&T's HBO Max, which is scheduled to debut in May 2020 for $14.99 a month."
DAR comment (attention DC and other AGs): A possible candidate for State or Federal enforcement?
https://arstechnica.com/information-technology/2020/02/att-lost-1-2b-by-preventing-time-warner-shows-from-airing-on-netflix/
AT&T withholds content to give its own planned service, HBO Max, exclusivity:
"AT&T's actual Q4 2019 revenue was $46.8 billion, but the company said it would have been $48 billion if not for "HBO Max investments in the form of foregone WarnerMedia content licensing revenues."
"An AT&T spokesperson told Ars that the $1.2 billion in lost revenue was primarily caused by the decision "not to sell existing content—mainly Friends, The Big Bang Theory, and Fresh Prince—to third parties such as Netflix." As we've previously reported, AT&T took Time Warner shows off Netflix in order to give the exclusive streaming rights to AT&T's HBO Max, which is scheduled to debut in May 2020 for $14.99 a month."
DAR comment (attention DC and other AGs): A possible candidate for State or Federal enforcement?
NYT: Bill Barr’s striking plan to counter Huawei
President Trump has made it very clear that he is worried about Huawei’s leading role in 5G wireless technology. Now his attorney general, Bill Barr, has offered a radical solution: having the U.S. invest in the Chinese company’s European counterparts.
The U.S. doesn’t have a homegrown competitor to Huawei, Mr. Barr noted in a speech yesterday. The only viable rivals are Ericsson of Sweden and Nokia of Finland.
“Our economic future is at stake,” Mr. Barr said. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
So he has an idea:
• “Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”
• “Putting our large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power,” Mr. Barr adds. “We and our closest allies certainly need to be actively considering this approach.”
https://www.nytimes.com/2020/02/07/business/dealbook/bill-barr-huawei-nokia-ericsson.html
Mr. Barr's speech is at https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-keynote-address-department-justices-china
President Trump has made it very clear that he is worried about Huawei’s leading role in 5G wireless technology. Now his attorney general, Bill Barr, has offered a radical solution: having the U.S. invest in the Chinese company’s European counterparts.
The U.S. doesn’t have a homegrown competitor to Huawei, Mr. Barr noted in a speech yesterday. The only viable rivals are Ericsson of Sweden and Nokia of Finland.
“Our economic future is at stake,” Mr. Barr said. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
So he has an idea:
• “Some propose that these concerns could be met by the United States aligning itself with Nokia and/or Ericsson through American ownership of a controlling stake, either directly or through a consortium of private American and allied companies.”
• “Putting our large market and financial muscle behind one or both of these firms would make it a more formidable competitor and eliminate concerns over its staying power,” Mr. Barr adds. “We and our closest allies certainly need to be actively considering this approach.”
https://www.nytimes.com/2020/02/07/business/dealbook/bill-barr-huawei-nokia-ericsson.html
Mr. Barr's speech is at https://www.justice.gov/opa/speech/attorney-general-william-p-barr-delivers-keynote-address-department-justices-china
Texas AG Accuses Google Of Delaying Antitrust Investigation
The state attorney general leading a broad antitrust investigation into Google is accusing the tech giant of delaying the case and vowed to see it through to the end.
https://www.cnbc.com/2020/02/05/texas-ag-paxton-says-google-delaying-antitrust-investigation.html
AAI Says DOJ Missed the Opportunity to Bust a Monopoly: Letter Unpacks Government’s Response to Live Nation-Ticketmaster’s Violations of the 2010 Merger Settlement
Today, AAI submitted a letter to the U.S. Department of Justice, Antitrust Division regarding its recent enforcement action in U.S v. Ticketmaster Entertainment, Inc., and Live Nation Entertainment, Inc. The decade-old merger of Live Nation and Ticketmaster melded together artist management, concert promotion, venue operation, and ticketing in a monolithic, multi-level supply chain in the live music business.
Read More https://www.antitrustinstitute.org/work-product/aai-says-doj-missed-the-opportunity-to-bust-a-monopoly-letter-unpacks-governments-response-to-live-nation-ticketmasters-violations-of-the-2010-merger-settlement/
Today, AAI submitted a letter to the U.S. Department of Justice, Antitrust Division regarding its recent enforcement action in U.S v. Ticketmaster Entertainment, Inc., and Live Nation Entertainment, Inc. The decade-old merger of Live Nation and Ticketmaster melded together artist management, concert promotion, venue operation, and ticketing in a monolithic, multi-level supply chain in the live music business.
Read More https://www.antitrustinstitute.org/work-product/aai-says-doj-missed-the-opportunity-to-bust-a-monopoly-letter-unpacks-governments-response-to-live-nation-ticketmasters-violations-of-the-2010-merger-settlement/
Laurie Garrett: Trump Has Sabotaged America’s Coronavirus Response
As it improvises its way through a public health crisis, the United States has never been less prepared for a pandemic.
BY LAURIE GARRETT
| JANUARY 31, 2020, 11:07 AM
When Tedros Adhanom Ghebreyesus, the director-general of the World Health Organization (WHO), declared the Wuhan coronavirus a public health emergency of international concern on Thursday, he praised China for taking “unprecedented” steps to control the deadly virus. “I have never seen for myself this kind of mobilization,” he noted. “China is actually setting a new standard for outbreak response.”
The epidemic control efforts unfolding today in China—including placing some 100 million citizens on lockdown, shutting down a national holiday, building enormous quarantine hospitals in days’ time, and ramping up 24-hour manufacturing of medical equipment—are indeed gargantuan. It’s impossible to watch them without wondering, “What would we do? How would my government respond if this virus spread across my country?”
For the United States, the answers are especially worrying because the government has intentionally rendered itself incapable. In 2018, the Trump administration fired the government’s entire pandemic response chain of command, including the White House management infrastructure. In numerous phone calls and emails with key agencies across the U.S. government, the only consistent response I encountered was distressed confusion. If the United States still has a clear chain of command for pandemic response, the White House urgently needs to clarify what it is
If the United States still has a clear chain of command for pandemic response, the White House urgently needs to clarify what it is
—not just for the public but for the government itself, which largely finds itself in the dark.
When Ebola broke out in West Africa in 2014, President Barack Obama recognized that responding to the outbreak overseas, while also protecting Americans at home, involved multiple U.S. government departments and agencies, none of which were speaking to one another. Basically, the U.S. pandemic infrastructure was an enormous orchestra full of talented, egotistical players, each jockeying for solos and fame, refusing to rehearse, and demanding higher salaries—all without a conductor. To bring order and harmony to the chaos, rein in the agency egos, and create a coherent multiagency response overseas and on the homefront, Obama anointed a former vice presidential staffer, Ronald Klain, as a sort of “epidemic czar” inside the White House, clearly stipulated the roles and budgets of various agencies, and placed incident commanders in charge in each Ebola-hit country and inside the United States. The orchestra may have still had its off-key instruments, but it played the same tune.
Building on the Ebola experience, the Obama administration set up a permanent epidemic monitoring and command group inside the White House National Security Council (NSC) and another in the Department of Homeland Security (DHS)—both of which followed the scientific and public health leads of the National Institutes of Health (NIH) and the Centers for Disease Control and Prevention (CDC) and the diplomatic advice of the State Department.
On the domestic front, the real business of assuring public health and safety is a local matter, executed by state, county, and city departments that operate under a mosaic of laws and regulations that vary jurisdiction by jurisdiction. Some massive cities, such as New York City or Boston, have large budgets, clear regulations, and epidemic experiences that have left deep benches of medical and public health talent. But much of the United States is less fortunate on the local level, struggling with underfunded agencies, understaffing, and no genuine epidemic experience. Large and small, America’s localities rely in times of public health crisis on the federal government.
Bureaucracy matters. Without it, there’s nothing to coherently manage an alphabet soup of agencies housed in departments ranging from Defense to Commerce, Homeland Security to Health and Human Services (HHS).
But that’s all gone now.
In the spring of 2018, the White House pushed Congress to cut funding for Obama-era disease security programs, proposing to eliminate $252 million in previously committed resources for rebuilding health systems in Ebola-ravaged Liberia, Sierra Leone, and Guinea. Under fire from both sides of the aisle, President Donald Trump dropped the proposal to eliminate Ebola funds a month later. But other White House efforts included reducing $15 billion in national health spending and cutting the global disease-fighting operational budgets of the CDC, NSC, DHS, and HHS. And the government’s $30 million Complex Crises Fund was eliminated.
REIn May 2018, Trump ordered the NSC’s entire global health security unit shut down, calling for reassignment of Rear Adm. Timothy Ziemer and dissolution of his team inside the agency. The month before, then-White House National Security Advisor John Bolton pressured Ziemer’s DHS counterpart, Tom Bossert, to resign along with his team. Neither the NSC nor DHS epidemic teams have been replaced. The global health section of the CDC was so drastically cut in 2018 that much of its staff was laid off and the number of countries it was working in was reduced from 49 to merely 10. Meanwhile, throughout 2018, the U.S. Agency for International Development and its director, Mark Green, came repeatedly under fire from both the White House and Secretary of State Mike Pompeo. And though Congress has so far managed to block Trump administration plans to cut the U.S. Public Health Service Commissioned Corps by 40 percent, the disease-fighting cadres have steadily eroded as retiring officers go unreplaced.
Public health advocates have been ringing alarm bells to no avail.
Public health advocates have been ringing alarm bells to no avail.
Klain has been warning for two years that the United States was in grave danger should a pandemic emerge. In 2017 and 2018, the philanthropist billionaire Bill Gates met repeatedly with Bolton and his predecessor, H.R. McMaster, warning that ongoing cuts to the global health disease infrastructure would render the United States vulnerable to, as he put it, the “significant probability of a large and lethal modern-day pandemic occurring in our lifetimes.” And an independent, bipartisan panel formed by the Center for Strategic and International Studies concluded that lack of preparedness was so acute in the Trump administration that the “United States must either pay now and gain protection and security or wait for the next epidemic and pay a much greater price in human and economic costs.”
The next epidemic is now here; we’ll soon know the costs imposed by the Trump administration’s early negligence and present panic. On Jan. 29, Trump announced the creation of the President’s Coronavirus Task Force, an all-male group of a dozen advisors, five from the White House staff. Chaired by Secretary of Health and Human Services Alex Azar, the task force includes men from the CDC, State Department, DHS, the Office of Management and Budget, and the Transportation Department. It’s not clear how this task force will function or when it will even convene.
In the absence of a formal structure, the government has resorted to improvisation. In practical terms, the U.S. government’s public health effort is led by Daniel Jernigan, the incident commander for the Wuhan coronavirus response at the CDC. Jernigan is responsible for convening meetings of the nation’s state health commissioners and briefing CDC Director Robert Redfield and his boss, Azar. Meanwhile, state-level health leaders told me that they have been sharing information with one another and deciding how best to prepare their medical and public health workers without waiting for instructions from federal leadership. The most important federal program for local medical worker and hospital epidemic training, however, will run out of money in May, as Congress has failed to vote on its funding. The HHS Office of the Assistant Secretary for Preparedness and Response (ASPR) is the bulwark between hospitals and health departments versus pandemic threats; last year HHS requested $2.58 billion, but Congress did not act.
On Thursday, the CDC confirmed the first human-to-human spread of the Wuhan coronavirus inside the United States, between a husband and wife in Chicago. While the wife acquired her infection traveling in China, she passed the virus to her husband on return to the United States. Though only six Wuhan coronavirus cases have been confirmed in the United States, with no deaths, Nancy Messonnier of the CDC told reporters on Thursday: “Moving forward, we can expect to see more cases, and more cases mean the potential for more person-to-person spread.”
As the number of coronavirus cases increases, Americans are growing more fearful, which is creating new problems that the government is leaving unaddressed.
As the number of coronavirus cases increases, Americans are growing more fearful, which is creating new problems that the government is leaving unaddressed.
Surveying the largest drug store chains in New York City on Wednesday, I found that all were sold out of medical face masks and latex gloves, as is Amazon. Searching online for protective masks reveals that dozens of products intended for use to block dust and particles far larger than viruses are garnering brisk sales—and none available that can actually prevent viral exposure. The surge in mask and glove sales to worried citizens all over the world needs refereeing. Bona fide anti-viral masks should be prioritized to front-line medical and public health staff, and the populace shouldn’t be misled into purchasing and wearing products that offer no genuine protection.
Countering misinformation, conspiracy theories, rumormongering, and discriminatory behavior against people believed to be disease spreaders requires thoughtful communication from leadership at the highest levels of government. None is in evidence. Instead, Commerce Secretary Wilbur Ross appeared on Fox Business on Thursday to fan the flames of fear for the sake of hypothetical business opportunities. “It does give businesses yet another thing to consider when they go through their review of their supply chain,” Ross said. “It’s another risk factor that people need to take into account. So, I think it will help accelerate the return of jobs to North America, some to the U.S., probably some to Mexico as well.” Meanwhile, Trump, asked at the recent World Economic Forum gathering in Davos, Switzerland how he intended to respond to the epidemic, said the situation was under control and a world away from the United States.
In a statement released this week, Pompeo sought to calm Americans, saying, “People should know that there are enormous efforts underway by the United States government to make sure that we do everything we can to protect the American people and to reduce the risk all around the globe.” But late Thursday night, the secretary—in clear defiance of WHO’s admonishment against restricting travel to and from China--issued an advisory saying, “Those currently in China should consider departing.”
In recent days, a handful of policy leaders have been shifted from government positions focused on weapons of mass destruction and bioterrorism to the slowly emerging epidemic response infrastructure, such as Matthew Pottinger, Philip Ferro, and David Wade on the NSC and the bioterrorism expert Anthony Ruggiero. It’s not at all clear how they would handle an explosion of coronavirus cases, were such a dreadful thing to occur in the United States. “The full weight of the US Government is working on this,” a senior administration official told CNN on Tuesday. “As with any interagency effort of this scale, the National Security Council works closely with the whole of government to ensure a coordinated and unified effort.”
The last time the U.S. government and its many local and state counterparts faced an explosive pandemic on American soil was 2009, with the spread of H1N1, or swine flu. The then-new Obama administration was still filling key positions across the executive branch when the epidemic emerged that spring, and it struggled to set the proper tone in reaction to what turned out to be an exceptionally contagious, but not unusually virulent, form of influenza. The challenge revealed enormous gaps in America’s ability to swiftly manufacture vaccines, stock-outs of face masks and vital hospital supplies, and serious difficulty in keeping ahead of outright lies, conspiracy theories, and rumormongering on cable TV and social media. The much more deadly pandemic test came in 1981, with the arrival of HIV: It did not go well, as history has well established, because homophobia was so pervasive in the country and within government that gay men, rather than the virus killing them, were treated as a national scourge.
Since the great influenza pandemic of 1918, the United States has been spared terrifying epidemics. Americans now are epidemic voyeurs. They watch YouTube videos of China’s struggles. They see the government attack its epidemic by building a 1,000-bed quarantine hospital in a single week, lock down cities larger than New York or Los Angeles, ramp up 24/7 manufacture of face masks and protective gear, deploy its armed forces medical corps to treat ailing citizens, send enormous convoys of food and supplies to anxious citizens of Wuhan, and release terrifying, growing tallies daily of its swelling patient populations. They look in horror at panicked lines of masked people waiting to learn if their fevers are caused by the deadly disease, at bodies lying on cold floors in overcrowded hospitals, and at people crying out from behind their masks for help. And they ask, “What would the United States do? What would the White House do?” The answers are not reassuring.
Laurie Garrett is a former senior fellow for global health at the Council on Foreign Relations and a Pulitzer Prize winning science writer. https://foreignpolicy.com/2020/01/31/coronavirus-china-trump-united-states-public-health-emergency-response/
February 6, 2020
Adventist HealthCare officially takes over Howard University Hospital
.
By Sara Gilgore / Per their new management services agreement, Adventist takes over the D.C. facility later this month, opening the door to potential major changes down the road, including perhaps a relocation.
Read Full Article https://www.bizjournals.com/washington/news/2020/02/06/exclusive-adventist-healthcare-officially-takes.html?
Adventist HealthCare officially takes over Howard University Hospital
.
By Sara Gilgore / Per their new management services agreement, Adventist takes over the D.C. facility later this month, opening the door to potential major changes down the road, including perhaps a relocation.
Read Full Article https://www.bizjournals.com/washington/news/2020/02/06/exclusive-adventist-healthcare-officially-takes.html?
Paige W. Cunningham on Healthcare and the 2020 Election; notes variations in health care policy among States
In the presidential election, healthcare is the number one issue for voters in both parties. Paige Winfield Cunningham is a national reporter at the Washington Post, focusing specifically on healthcare policy. Despite the healthcare wars within the Democratic Party—and between Democrats and the GOP—Cunningham tells Hari that neither party will make major changes.
READ TRANSCRIPT: https://www.pbs.org/wnet/amanpour-and-company/video/paige-w-cunningham-on-healthcare-and-the-2020-election/
WATCH FULL EPISODE https://www.pbs.org/wnet/amanpour-and-company/video/february-3-2020-gdj4hf/
In the presidential election, healthcare is the number one issue for voters in both parties. Paige Winfield Cunningham is a national reporter at the Washington Post, focusing specifically on healthcare policy. Despite the healthcare wars within the Democratic Party—and between Democrats and the GOP—Cunningham tells Hari that neither party will make major changes.
READ TRANSCRIPT: https://www.pbs.org/wnet/amanpour-and-company/video/paige-w-cunningham-on-healthcare-and-the-2020-election/
WATCH FULL EPISODE https://www.pbs.org/wnet/amanpour-and-company/video/february-3-2020-gdj4hf/
NYT recap of U.S. policies on Huawei
“Our economic future is at stake,” Mr. Barr said in a speech delivered during a conference in Washington on threats that China poses to the United States. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
Mr. Barr noted that two Chinese telecom giants, Huawei and ZTE, account for about 40 percent of the global 5G infrastructure market, which is expected to serve as the backbone for trillions of dollars’ worth of economic and industrial activity in an increasingly digital global economy. 5G networks promise substantially faster network speeds and prospects for new commercial applications in multiple industries like transportation and health care.
Mr. Barr said it was the first time in history that the United States was not the leader in a major technological sector that will underpin future innovation.
The next generation of telecom networks — and the equipment for them that is currently being built — has emerged as a key fight in the battle between the United States and China for technology supremacy. American intelligence officials also say that equipment made by Chinese telecom companies could pose a threat to national security and have urged allies not to use it in their systems.
The White House and American national security experts have said that companies including Huawei are too closely tied to the Chinese government, and that their equipment could give Chinese officials unlawful access to data and communications if networks across the world decide to use it. The companies have long denied that they are beholden to the government.
“No country poses a greater threat than communist China,” John Brown, the assistant director of the F.B.I.’s counterintelligence division, said during separate remarks at the conference. He said that the world must decide whether its communications will go through China or the United States.
But the Trump administration has taken an inconsistent approach toward Huawei and ZTE and those companies continue to play an essential role in the new, 5G telecom networks being built around the globe.
A proposed rule change that would restrict sales of American computer processing chips to Huawei was placed on hold after Defense Department officials argued that such a move could undermine national security by discouraging the use of American components abroad.
Mr. Trump’s response to the security issues posed by 5G has been mixed. Last summer he said that “Huawei is something that is very dangerous.” But during the same remarks, he raised the prospect of including Huawei in a trade deal with China. “If we made a deal, I can imagine Huawei being included in some form or some part,” he said.
And in 2018, Mr. Trump lifted tough sanctions that the United States had imposed on ZTE, which had violated sanctions on Iran and North Korea and that defense advisers said posed a threat to national security. President Xi Jinping of China had personally asked Mr. Trump to intervene.
Intelligence officials and Republican lawmakers decried the move, saying that ZTE had not only failed to remedy its sanctions issues but had also lied about its efforts.
Nevertheless, the Trump administration has asked allies not to use equipment made by Huawei, in some cases threatening to withhold intelligence from countries that do not ban the company. But that pressure campaign has had limited success. China has threatened to economically retaliate against countries that ban equipment made by its technology companies.
Last month, Britain, one of the United States’ closest allies and part of the so-called Five Eyes intelligence-sharing alliance, decided to allow Huawei on its new 5G wireless network.
The British government said that it would only use Huawei in the parts of its new wireless network that would not compromise its national security. Officials also said it had to use Huawei because — after years of mergers and industry consolidation — there are too few competitors in the network-equipment space. It asked allies to work with the private sector to foster more competition.
Mr. Barr agreed that too few companies were making 5G equipment; Nokia and Ericsson are the only other global competitors. He said that proposals had already been floated to address this problem, including the possibility that a consortium of private American and allied companies could put financial might “behind one or both of those firms” to make them more competitive and guarantee their staying power.
“It’s all very well to tell our friends and allies that they shouldn't install Huawei, but whose infrastructure are they going to install?” Mr. Barr said.
https://www.nytimes.com/2020/02/06/us/politics/barr-5g.html
“Our economic future is at stake,” Mr. Barr said in a speech delivered during a conference in Washington on threats that China poses to the United States. “The risk of losing the 5G struggle with China should vastly outweigh other considerations.”
Mr. Barr noted that two Chinese telecom giants, Huawei and ZTE, account for about 40 percent of the global 5G infrastructure market, which is expected to serve as the backbone for trillions of dollars’ worth of economic and industrial activity in an increasingly digital global economy. 5G networks promise substantially faster network speeds and prospects for new commercial applications in multiple industries like transportation and health care.
Mr. Barr said it was the first time in history that the United States was not the leader in a major technological sector that will underpin future innovation.
The next generation of telecom networks — and the equipment for them that is currently being built — has emerged as a key fight in the battle between the United States and China for technology supremacy. American intelligence officials also say that equipment made by Chinese telecom companies could pose a threat to national security and have urged allies not to use it in their systems.
The White House and American national security experts have said that companies including Huawei are too closely tied to the Chinese government, and that their equipment could give Chinese officials unlawful access to data and communications if networks across the world decide to use it. The companies have long denied that they are beholden to the government.
“No country poses a greater threat than communist China,” John Brown, the assistant director of the F.B.I.’s counterintelligence division, said during separate remarks at the conference. He said that the world must decide whether its communications will go through China or the United States.
But the Trump administration has taken an inconsistent approach toward Huawei and ZTE and those companies continue to play an essential role in the new, 5G telecom networks being built around the globe.
A proposed rule change that would restrict sales of American computer processing chips to Huawei was placed on hold after Defense Department officials argued that such a move could undermine national security by discouraging the use of American components abroad.
Mr. Trump’s response to the security issues posed by 5G has been mixed. Last summer he said that “Huawei is something that is very dangerous.” But during the same remarks, he raised the prospect of including Huawei in a trade deal with China. “If we made a deal, I can imagine Huawei being included in some form or some part,” he said.
And in 2018, Mr. Trump lifted tough sanctions that the United States had imposed on ZTE, which had violated sanctions on Iran and North Korea and that defense advisers said posed a threat to national security. President Xi Jinping of China had personally asked Mr. Trump to intervene.
Intelligence officials and Republican lawmakers decried the move, saying that ZTE had not only failed to remedy its sanctions issues but had also lied about its efforts.
Nevertheless, the Trump administration has asked allies not to use equipment made by Huawei, in some cases threatening to withhold intelligence from countries that do not ban the company. But that pressure campaign has had limited success. China has threatened to economically retaliate against countries that ban equipment made by its technology companies.
Last month, Britain, one of the United States’ closest allies and part of the so-called Five Eyes intelligence-sharing alliance, decided to allow Huawei on its new 5G wireless network.
The British government said that it would only use Huawei in the parts of its new wireless network that would not compromise its national security. Officials also said it had to use Huawei because — after years of mergers and industry consolidation — there are too few competitors in the network-equipment space. It asked allies to work with the private sector to foster more competition.
Mr. Barr agreed that too few companies were making 5G equipment; Nokia and Ericsson are the only other global competitors. He said that proposals had already been floated to address this problem, including the possibility that a consortium of private American and allied companies could put financial might “behind one or both of those firms” to make them more competitive and guarantee their staying power.
“It’s all very well to tell our friends and allies that they shouldn't install Huawei, but whose infrastructure are they going to install?” Mr. Barr said.
https://www.nytimes.com/2020/02/06/us/politics/barr-5g.html
From New York's Street Vendor Project
http://streetvendor.org/
There are as many as 20,000 street vendors in New York City — hot dog vendors, flower vendors, t-shirt vendors, street artists, fancy food trucks, and many others. They are small businesspeople struggling to make ends meet. Most are immigrants and people of color. Some are US military veterans who served their country. They work long hours under harsh conditions, asking for nothing more than a chance to sell their goods on the public sidewalk.
Yet, in recent years, vendors have been victims of New York’s aggressive “quality of life” crackdown. They have been denied access to vending licenses. Many streets have been closed to them at the urging of powerful business groups. They receive exorbitant tickets for minor violations like vending too close to a crosswalk — more than any big businesses are required to pay for similar violations.
The Street Vendor Project is a membership-based project with more than 2,000 vendor members who are working together to create a vendors’ movement for permanent change. We reach out to vendors in the streets and storage garages and teach them about their legal rights and responsibilities. We hold meetings where we plan collective actions for getting our voices heard. We publish reports and file lawsuits to raise public awareness about vendors and the enormous contribution they make to our city.
Finally, we help vendors grow their businesses by linking them with small business training and loans.The Street Vendor Project is part of the Urban Justice Center, a non-profit organization that provides legal representation and advocacy to various marginalized groups of New Yorkers.
http://streetvendor.org/
There are as many as 20,000 street vendors in New York City — hot dog vendors, flower vendors, t-shirt vendors, street artists, fancy food trucks, and many others. They are small businesspeople struggling to make ends meet. Most are immigrants and people of color. Some are US military veterans who served their country. They work long hours under harsh conditions, asking for nothing more than a chance to sell their goods on the public sidewalk.
Yet, in recent years, vendors have been victims of New York’s aggressive “quality of life” crackdown. They have been denied access to vending licenses. Many streets have been closed to them at the urging of powerful business groups. They receive exorbitant tickets for minor violations like vending too close to a crosswalk — more than any big businesses are required to pay for similar violations.
The Street Vendor Project is a membership-based project with more than 2,000 vendor members who are working together to create a vendors’ movement for permanent change. We reach out to vendors in the streets and storage garages and teach them about their legal rights and responsibilities. We hold meetings where we plan collective actions for getting our voices heard. We publish reports and file lawsuits to raise public awareness about vendors and the enormous contribution they make to our city.
Finally, we help vendors grow their businesses by linking them with small business training and loans.The Street Vendor Project is part of the Urban Justice Center, a non-profit organization that provides legal representation and advocacy to various marginalized groups of New Yorkers.
Press release:AG Racine Joins Multistate Lawsuit Challenging Trump Administration Attack on Health Care Access and Reproductive Rights
January 30, 2020 New HHS Rule Threatens Abortion Coverage Provided by ACA Insurance Plans to 20K+ DC Residents
WASHINGTON, D.C. – Attorney General Karl A. Racine today joined six other Attorneys General in filing a lawsuit to stop the Trump administration from threatening access to safe and legal abortion care for individuals who purchase health insurance through state health care exchanges. This coalition, led by California and New York, is challenging a new rule issued by the Department of Health and Human Services (HHS) which unlawfully reinterprets part of the Affordable Care Act (ACA). The new rule imposes expensive and confusing billing requirements on health plans that cover abortion care and are sold through state insurance exchanges. This change creates major burdens for state insurance exchanges and puts millions of consumers at risk of accidentally losing health insurance coverage. The lawsuit is seeking to stop the rule’s implementation.
“The Trump administration’s relentless attack on safe and accessible abortion care puts tens of thousands of District residents and workers in jeopardy of losing their health care access through our exchange,” said AG Racine. “If this rule is implemented, it would dramatically increase health care costs for residents and the District—and the burdens it imposes could mean that insurance companies stop offering abortion care entirely. We filed this lawsuit to stand up for the rights of District women and families to make their own reproductive decisions.”
From https://oag.dc.gov/release/ag-racine-joins-multistate-lawsuit-challenging
HHS Secretary Alex Azar voiced frustration over stakeholders who are "fiercely" pushing back against the department's proposed interoperability rules.
"Health records today are stored in a segmented, balkanized system," Azar said during keynote remarks at the 2020 annual meeting of the department's Office of the National Coordinator for Health Information Technology in Washington, D.C. "Unfortunately, some are defending the balkanized, outdated status quo and fighting our proposals fiercely."
But defending the current system is "a pretty unpopular place to be," he added.
The two interoperability proposals, released by the ONC and the CMS early last year, are a core component of the Trump administration's larger vision of "putting patients at the center of American healthcare," Azar said.
From https://www.modernhealthcare.com/information-technology/azar-scare-tactics-wont-stall-interoperability-rules?utm_source=modern-healthcare-am-tuesday&utm_medium=email&utm_campaign=20200127&utm_content=article1-readmore
"Health records today are stored in a segmented, balkanized system," Azar said during keynote remarks at the 2020 annual meeting of the department's Office of the National Coordinator for Health Information Technology in Washington, D.C. "Unfortunately, some are defending the balkanized, outdated status quo and fighting our proposals fiercely."
But defending the current system is "a pretty unpopular place to be," he added.
The two interoperability proposals, released by the ONC and the CMS early last year, are a core component of the Trump administration's larger vision of "putting patients at the center of American healthcare," Azar said.
From https://www.modernhealthcare.com/information-technology/azar-scare-tactics-wont-stall-interoperability-rules?utm_source=modern-healthcare-am-tuesday&utm_medium=email&utm_campaign=20200127&utm_content=article1-readmore
Epic, Cerner & 5 more health IT stakeholders react to HHS' interoperability rule
Jackie Drees - Tuesday, January 28th, 2020 Print | Email
Epic, Cerner, Microsoft and other prominent health IT companies and executives are speaking up about HHS' proposed interoperability rule ahead of its anticipated finalization next month.
The regulations, which were issued by CMS and ONC last year to support the MyHealthEData and 21st Century Cures Act, would require the health IT industry to adopt application programming interfaces to help patients more easily access their health data. The rule would also prohibit healthcare organizations from employing information blocking practices.
The rule is currently under review by the Office of Management and Budget and is expected to be finalized in February.
Here are reactions from seven health IT companies and executives about the rules:
1. Epic. The EHR giant has voiced its opposition of the proposed rule, citing privacy concerns relating to third-party use of patient data. The company released a statement on Jan. 27 saying that while it supports HHS' effort to improve data sharing for patients, the rule presents "serious risks to patient privacy."
Earlier this month, Epic CEO Judy Faulkner sent emails to some of the company's largest U.S. hospital clients, urging them to voice their opposition of the proposed interoperability rules. Ms. Faulkner also said Epic may consider suing HHS if the finalized version of the interoperability rule does not support adequate safety regulations.
2. Cerner. Epic's largest EHR competitor appears to be in favor of the rule. Cerner CEO Brent Shafer on Jan. 27 tweeted the following statement about ONC's proposed information blocking rule: "Let me be abundantly clear: [Cerner] embraces interoperability and the flow of information across disparate systems and healthcare entities. We fully support the proposed rule and the rulemaking process."
Cerner is also a member of the CARIN Alliance, a multi-sector alliance that aims to work with the government to overhaul barriers to consumer-directed data exchange. Representatives from the EHR vendor reportedly attended the organization's Jan. 27 event to discuss initiatives to give patients more access to their health data.
3. CARIN Alliance. The organization, which comprises more than 85 members including Google, Apple and Microsoft, met with OMB on Jan. 27 to discuss HHS' proposed rules. In its key request, the alliance asked the federal government to finalize and release the rules immediately.
"Although we may slightly differ in the specific details regarding how the proposed rules should be implemented, we are united regarding consumer access sections of the two proposed rules and in our belief that both proposed rules should be finalized and released immediately," the alliance said in a statement.
4. Microsoft Healthcare. Peter Lee, corporate vice president of Microsoft Healthcare, said the technology giant endorses the proposed rules, adding that the regulations "are correct because they're based on modern data standards."
5. Tommy Thompson. The former HHS secretary and Wisconsin governor argued that the proposed interoperability rule would force Epic to hand over its trade secrets to competitors and "unfairly harm" the state's economy, according to a Jan. 10 op-ed he wrote for the Wisconsin State Journal.
6. Aneesh Chopra. In response to Epic CEO Judy Faulkner's emailed letter to hospital and health system execs, the former White House CTO told CNBC it was "unfortunate to see this much effort placed at stalling the important, bipartisan progress we have made to open up health information — at a minimum to consumers and institutions they trust."
7. Stephanie Reel. CIO of Baltimore-based Johns Hopkins University and Health System and a member of ONC's Health IT Policy Committee’s Information Exchange Workgroup told Becker's Hospital Review: "We are committed and continue to be focused on interoperability, and we are also focused on privacy and confidentiality of the patient information and protection of all of our information assets. It is one of the most challenging times as we think about the right balance in each of these areas. The angst that I feel about the recent interoperability conversation is around the risk to innovation. I think we need to find a balance that allows us to protect each individual patient, wisely leverage our data assets, while being equally cautious about the protection of intellectual property.
I worry a bit about too much control or reluctance to expand our thinking in an innovative way. The next big discovery will come from the very creative and innovative use of technology and information. I don't want us to err on the side of being too careful and too controlling because I think there is some risk that we will not make that next big discovery or cure that dreadful form of cancer."
https://www.beckershospitalreview.com/ehrs/epic-cerner-4-more-health-it-stakeholders-react-to-hhs-interoperability-rule.html?origin=bhre&utm_source=bhre&oly_enc_id=
Why electronic patient record interoperability matters: the March 10, 2014 submission of DCCRC to the FTC
The purpose of the attached comment letter of the DC Consumer Rights Coalition is to highlight competition-related policy issues likely to arise in emerging technology markets that are subject to "network" effects, such as the growing markets for Health Information Technology ("HIT") products, including Electronic Health Records ("EHR") products. We believe that the FTC should be cognizant of the potential danger to competition should healthcare providers adopt software and other technology that incorporates exclusionary proprietary standards. The danger is that the company that offers such technology may use it to disadvantage competitors by denying them access to the proprietary standards. Such problematic situations have arisen in other markets in the past, involving, for example, AT&T, IBM, and, more recently, Microsoft. Antitrust issues raised by such exclusionary conduct may be addressed through antitrust enforcement after the fact, of course. But we believe that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the HIT markets.
The DCCRC comment (by Don Allen Resnikoff and Katherine Jones) is here:
00020-88806.pdf (78.25 KB)
The purpose of the attached comment letter of the DC Consumer Rights Coalition is to highlight competition-related policy issues likely to arise in emerging technology markets that are subject to "network" effects, such as the growing markets for Health Information Technology ("HIT") products, including Electronic Health Records ("EHR") products. We believe that the FTC should be cognizant of the potential danger to competition should healthcare providers adopt software and other technology that incorporates exclusionary proprietary standards. The danger is that the company that offers such technology may use it to disadvantage competitors by denying them access to the proprietary standards. Such problematic situations have arisen in other markets in the past, involving, for example, AT&T, IBM, and, more recently, Microsoft. Antitrust issues raised by such exclusionary conduct may be addressed through antitrust enforcement after the fact, of course. But we believe that a preferable approach is proactive government engagement that avoids the antitrust problem by facilitating and encouraging interoperability among products of competitors in the HIT markets.
The DCCRC comment (by Don Allen Resnikoff and Katherine Jones) is here:
00020-88806.pdf (78.25 KB)
Big tech giants Apple and Microsoft are joining health IT vendors and health plans to meet with federal officials today to voice strong support for efforts to give patients access to their health data.
The Carin Alliance, a private sector collaboration made up of major health insurers, providers, health IT companies and tech giants, announced last week that it is meeting with the Office of Management and Budget (OMB) OMB to request the agency to finalize and release the proposed interoperability rules "without further delay."
It came just days after the head of electronic health record (EHR) vendor Epic emailed CEOs and presidents of hospital systems urging recipients to sign a letter alongside Epic that voices disapproval for proposed interoperability rules from the Department of Health and Human Services (HHS).
Carin Alliance released a list of attendees for the Monday meeting and talking points (PDF) on its website Friday. Among the attendees are representatives from Apple, Microsoft, Humana, Walgreens, Blue Shield of California, Salesforce, Omada Health, major health information exchange Manifest MedEx, and Mount Sinai Health System. Also on the list were representatives of Cerner, an EHR vendor and competitor to Epic.
RELATED: Epic CEO emails hospital customers urging them to speak out against ONC interoperability rule
About 40 people representing some of the biggest companies in the industry are planning to attend, either in person or by phone.
Many of the organizations are members of the Carin Alliance.
"Although we may slightly differ in the specific details regarding how the proposed rules should be implemented, we are united regarding the consumer access sections of the two proposed rules and in our belief that both proposed rules should be finalized and released immediately," the Carin Alliance said in the talking points. "It will be to the benefit of all stakeholders to finalize the rules so the industry can work on implementation while continuing to work with the public sector to improve the rules over time."
In February 2019, the Office of the National Coordinator for Health IT (ONC) issued a proposed interoperability and information-blocking rule (PDF) that defines the demands on healthcare providers and electronic health record (EHR) vendors for data sharing. The rule also outlines exceptions to the prohibition against information blocking and provides standardized criteria for application programming interface development.
The ONC rule is currently under review by the OMB, the last step before publication. The Centers for Medicare & Medicaid Services' proposed interoperability rule (PDF) also is under review at OMB.
RELATED: Anthem, Humana along with Apple and Google testing API for patient access to claims data
During the ONC Annual Meeting in Washington D.C. Monday morning, Steve Posnack, Deputy National Coordinator for Health IT, said ONC's data-sharing rule would not be released during the annual meeting, taking place today and Tuesday.
The Carin Alliance said the organizations support the timely release of the interoperability rules "with the understanding that CMS and ONC have incorporated the consensus recommendations made by the public during the comment period and with the assumption the public and private sectors can work together to improve and build upon the rules after they are released."
Google was not listed as a meeting attendee, but the tech giant is among 20 organizations—including Apple, Anthem, Blue Cross Blue Shield, Cambia Health Solutions, and Humana—involved in an initiative to do “real-world testing” of an application programming interface (API) to standardize claims data sharing.
From: https://www.fiercehealthcare.com/tech/apple-microsoft-cerner-and-major-health-plans-call-for-omb-to-release-interoperability-rules?mkt_tok=eyJpIjoiTkdSbVl6SmxNV0l5WVdReiIsInQiOiJ6ZE5UR0VHSG50K3ZIZXJIY1N1NWRld1Q1REJ3K1VzeURGRDJcL0JPN3ZpQ1U0eVRIWjJ2NERhU1pweFFTMHhBd3JjRXpQNkNGOEtsSmJXcjBnMGx3aXNKcjRESGdzcjJzVXVOeGNFVFpQaDhxQWpsNkt5OWdQa0ZwZ1hyNXlCTXoifQ%3D%3D&mrkid=730008
The Carin Alliance, a private sector collaboration made up of major health insurers, providers, health IT companies and tech giants, announced last week that it is meeting with the Office of Management and Budget (OMB) OMB to request the agency to finalize and release the proposed interoperability rules "without further delay."
It came just days after the head of electronic health record (EHR) vendor Epic emailed CEOs and presidents of hospital systems urging recipients to sign a letter alongside Epic that voices disapproval for proposed interoperability rules from the Department of Health and Human Services (HHS).
Carin Alliance released a list of attendees for the Monday meeting and talking points (PDF) on its website Friday. Among the attendees are representatives from Apple, Microsoft, Humana, Walgreens, Blue Shield of California, Salesforce, Omada Health, major health information exchange Manifest MedEx, and Mount Sinai Health System. Also on the list were representatives of Cerner, an EHR vendor and competitor to Epic.
RELATED: Epic CEO emails hospital customers urging them to speak out against ONC interoperability rule
About 40 people representing some of the biggest companies in the industry are planning to attend, either in person or by phone.
Many of the organizations are members of the Carin Alliance.
"Although we may slightly differ in the specific details regarding how the proposed rules should be implemented, we are united regarding the consumer access sections of the two proposed rules and in our belief that both proposed rules should be finalized and released immediately," the Carin Alliance said in the talking points. "It will be to the benefit of all stakeholders to finalize the rules so the industry can work on implementation while continuing to work with the public sector to improve the rules over time."
In February 2019, the Office of the National Coordinator for Health IT (ONC) issued a proposed interoperability and information-blocking rule (PDF) that defines the demands on healthcare providers and electronic health record (EHR) vendors for data sharing. The rule also outlines exceptions to the prohibition against information blocking and provides standardized criteria for application programming interface development.
The ONC rule is currently under review by the OMB, the last step before publication. The Centers for Medicare & Medicaid Services' proposed interoperability rule (PDF) also is under review at OMB.
RELATED: Anthem, Humana along with Apple and Google testing API for patient access to claims data
During the ONC Annual Meeting in Washington D.C. Monday morning, Steve Posnack, Deputy National Coordinator for Health IT, said ONC's data-sharing rule would not be released during the annual meeting, taking place today and Tuesday.
The Carin Alliance said the organizations support the timely release of the interoperability rules "with the understanding that CMS and ONC have incorporated the consensus recommendations made by the public during the comment period and with the assumption the public and private sectors can work together to improve and build upon the rules after they are released."
Google was not listed as a meeting attendee, but the tech giant is among 20 organizations—including Apple, Anthem, Blue Cross Blue Shield, Cambia Health Solutions, and Humana—involved in an initiative to do “real-world testing” of an application programming interface (API) to standardize claims data sharing.
From: https://www.fiercehealthcare.com/tech/apple-microsoft-cerner-and-major-health-plans-call-for-omb-to-release-interoperability-rules?mkt_tok=eyJpIjoiTkdSbVl6SmxNV0l5WVdReiIsInQiOiJ6ZE5UR0VHSG50K3ZIZXJIY1N1NWRld1Q1REJ3K1VzeURGRDJcL0JPN3ZpQ1U0eVRIWjJ2NERhU1pweFFTMHhBd3JjRXpQNkNGOEtsSmJXcjBnMGx3aXNKcjRESGdzcjJzVXVOeGNFVFpQaDhxQWpsNkt5OWdQa0ZwZ1hyNXlCTXoifQ%3D%3D&mrkid=730008
The Fed Wants to Loosen Rules Around Big Banks and Venture Capital
Proposed tweaks to the Volcker Rule, which curbs bank risk-taking, would allow firms to invest heavily in funds backing start-ups.
https://www.nytimes.com/2020/01/30/business/economy/volcker-rule-banks-venture-capital.html
Proposed tweaks to the Volcker Rule, which curbs bank risk-taking, would allow firms to invest heavily in funds backing start-ups.
https://www.nytimes.com/2020/01/30/business/economy/volcker-rule-banks-venture-capital.html
La. Supreme Court reviews life sentence for conviction in $30 marijuana sale
Some justices on the Louisiana Supreme Court expressed doubts regarding Derek Harris's life sentence for his conviction in a $30 marijuana sale. Harris -- who had previously been convicted of charges including dealing cocaine and simple robbery -- says ineffective counsel resulted in his lack of a challenge to the constitutionality of his conviction, although state court precedent has prevented such challenges once direct appeals are exhausted.
The Times-Picayune | The New Orleans Advocate (1/27) https://www.nola.com/news/courts/article_0e00a78a-4156-11ea-90fc-eb90a76b692f.html
Some justices on the Louisiana Supreme Court expressed doubts regarding Derek Harris's life sentence for his conviction in a $30 marijuana sale. Harris -- who had previously been convicted of charges including dealing cocaine and simple robbery -- says ineffective counsel resulted in his lack of a challenge to the constitutionality of his conviction, although state court precedent has prevented such challenges once direct appeals are exhausted.
The Times-Picayune | The New Orleans Advocate (1/27) https://www.nola.com/news/courts/article_0e00a78a-4156-11ea-90fc-eb90a76b692f.html
From DMN: British Government Refuses to Implement the EU Copyright Directive
With Brexit rapidly approaching, the United Kingdom has decided it will not enforce the EU’s Copyright Directive.
The story continues here. https://www.digitalmusicnews.com/2020/01/27/copyright-directive-british-government-eu/
From DMN: Fender Fined $6 Million for Illegal Price-Fixing Scheme
Fender has been fined 4.5 million pounds (nearly $6 million) in the UK after admitting to price-fixing. The move breaks competition laws and prevents retailers from discounting instruments.
The story continues here.
With Brexit rapidly approaching, the United Kingdom has decided it will not enforce the EU’s Copyright Directive.
The story continues here. https://www.digitalmusicnews.com/2020/01/27/copyright-directive-british-government-eu/
From DMN: Fender Fined $6 Million for Illegal Price-Fixing Scheme
Fender has been fined 4.5 million pounds (nearly $6 million) in the UK after admitting to price-fixing. The move breaks competition laws and prevents retailers from discounting instruments.
The story continues here.
DC AG announces "wage theft and worker misclassification" case win
The AG press release:
In a big win for District workers, our office announced that Power Design—a major electrical contractor—will pay $2.75 million to resolve a wage theft and worker misclassification case. The settlement will return nearly $880,000 to workers, provide $50,000 to support workforce development programs, and require a $1.8 million payment to the District. This settlement is our office’s largest wage theft recovery to date, both in value and the number of affected workers it will help.
In our 2018 lawsuit, we alleged Power Design misclassified over 500 electrical workers as independent contractors instead of employees to cut costs and avoid legal responsibilities, like overtime, paid sick leave, and taxes. This form of payroll fraud is especially common in the construction industry and allows companies to gain an unfair advantage over law-abiding competitors.
'
This is the latest effort in OAG’s fight to protect District workers. In 2017, OAG worked with the D.C. Council to obtain independent authority to investigate and bring wage theft cases. Since then, we have launched over 30 investigations and recovered millions of dollars from businesses that have stolen wages from D.C. workers. We also recently testified before Congress about our new economic report on how misclassification hurts workers, undercuts law-abiding businesses, and cheats taxpayers.
If you believe your rights have been violated by your employer, report it to OAG at (202) 727-3400 or submit a complaint to the District’s Department of Employment Services. Workers can also learn more about their rights under District law by accessing our resources.
Karl A. Racine
Attorney General
https://outlook.live.com/mail/0/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgADHkpl1QAAAA%3D%3D
The AG press release:
In a big win for District workers, our office announced that Power Design—a major electrical contractor—will pay $2.75 million to resolve a wage theft and worker misclassification case. The settlement will return nearly $880,000 to workers, provide $50,000 to support workforce development programs, and require a $1.8 million payment to the District. This settlement is our office’s largest wage theft recovery to date, both in value and the number of affected workers it will help.
In our 2018 lawsuit, we alleged Power Design misclassified over 500 electrical workers as independent contractors instead of employees to cut costs and avoid legal responsibilities, like overtime, paid sick leave, and taxes. This form of payroll fraud is especially common in the construction industry and allows companies to gain an unfair advantage over law-abiding competitors.
'
This is the latest effort in OAG’s fight to protect District workers. In 2017, OAG worked with the D.C. Council to obtain independent authority to investigate and bring wage theft cases. Since then, we have launched over 30 investigations and recovered millions of dollars from businesses that have stolen wages from D.C. workers. We also recently testified before Congress about our new economic report on how misclassification hurts workers, undercuts law-abiding businesses, and cheats taxpayers.
If you believe your rights have been violated by your employer, report it to OAG at (202) 727-3400 or submit a complaint to the District’s Department of Employment Services. Workers can also learn more about their rights under District law by accessing our resources.
Karl A. Racine
Attorney General
https://outlook.live.com/mail/0/inbox/id/AQMkADAwATM3ZmYAZS04MTcxLTJmMjgtMDACLTAwCgBGAAADRnoWw%2B1oGkecPn377%2FL9tQcA97M33DyMxEGb7MCV%2BuIrtgAAAgEMAAAA97M33DyMxEGb7MCV%2BuIrtgADHkpl1QAAAA%3D%3D
From NYT
Tougher Huawei Restrictions Stall After Defense Department Objects
Proposed changes to further limit U.S. shipments to Huawei have been delayed amid arguments they could backfire.
By Ana Swanson
· Jan. 24, 2020, 8:47 a.m. ET
WASHINGTON — The Trump administration has put on hold a proposed rule change that would further restrict American sales to Huawei, the Chinese telecom giant, after some officials in the Department of Defense and other agencies argued that the measure, which was intended to protect national security, could backfire and actually harm it, according to people familiar with the matter.
The rule change, which is currently being reviewed, would close a loophole that allowed technology companies like Intel and Micron to continue shipping some products to Huawei, even after the Chinese firm was placed on a blacklist that prevented it from buying some American products last May.
But some officials have objected to the change, arguing that it would encourage foreign companies to stop using American components, ultimately weakening American firms and the country’s technological competitiveness.
Excerpt from:https://www.nytimes.com/2020/01/24/business/economy/huawei-restrictions.html
Tougher Huawei Restrictions Stall After Defense Department Objects
Proposed changes to further limit U.S. shipments to Huawei have been delayed amid arguments they could backfire.
By Ana Swanson
· Jan. 24, 2020, 8:47 a.m. ET
WASHINGTON — The Trump administration has put on hold a proposed rule change that would further restrict American sales to Huawei, the Chinese telecom giant, after some officials in the Department of Defense and other agencies argued that the measure, which was intended to protect national security, could backfire and actually harm it, according to people familiar with the matter.
The rule change, which is currently being reviewed, would close a loophole that allowed technology companies like Intel and Micron to continue shipping some products to Huawei, even after the Chinese firm was placed on a blacklist that prevented it from buying some American products last May.
But some officials have objected to the change, arguing that it would encourage foreign companies to stop using American components, ultimately weakening American firms and the country’s technological competitiveness.
Excerpt from:https://www.nytimes.com/2020/01/24/business/economy/huawei-restrictions.html
Attorney General Karl A. Racine has announced a lawsuit against the 58th Presidential Inaugural Committee and two entities that own or control the Trump International Hotel in Washington, D.C. for abusing nonprofit funds to enrich the Trump family.
In its lawsuit, the Office of the Attorney General (OAG) alleges that the Inaugural Committee, a nonprofit corporation, coordinated with the Trump family to grossly overpay for event space in the Trump International Hotel. Although the Inaugural Committee was aware that it was paying far above market rates, it never considered less expensive alternatives, and even paid for space on days when it did not hold events. The Committee also improperly used non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars. OAG’s lawsuit seeks to recover the amount improperly paid to the Trump Hotel, and to direct those funds to suitable nonprofit purposes.
“District law requires nonprofits to use their funds for their stated public purpose, not to benefit private individuals or companies,” said AG Racine. “In this case, we are seeking to recover the nonprofit funds that were improperly funneled directly to the Trump family business.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-01/Trump-PIC-Complaint.pdf
A copy of the supplemental investigation documents is available at: http://bit.ly/Trump-PIC-Complaint-Supporting-Documents
In its lawsuit, the Office of the Attorney General (OAG) alleges that the Inaugural Committee, a nonprofit corporation, coordinated with the Trump family to grossly overpay for event space in the Trump International Hotel. Although the Inaugural Committee was aware that it was paying far above market rates, it never considered less expensive alternatives, and even paid for space on days when it did not hold events. The Committee also improperly used non-profit funds to throw a private party for the Trump family costing several hundred thousand dollars. OAG’s lawsuit seeks to recover the amount improperly paid to the Trump Hotel, and to direct those funds to suitable nonprofit purposes.
“District law requires nonprofits to use their funds for their stated public purpose, not to benefit private individuals or companies,” said AG Racine. “In this case, we are seeking to recover the nonprofit funds that were improperly funneled directly to the Trump family business.”
A copy of the complaint is available at: https://oag.dc.gov/sites/default/files/2020-01/Trump-PIC-Complaint.pdf
A copy of the supplemental investigation documents is available at: http://bit.ly/Trump-PIC-Complaint-Supporting-Documents
Maryland bill would allow auto dealers to advertise a price below manufacturers Minimum Advertised Price requirement
Currently, if a dealer advertises a price below the manufacturer's MAP, the dealer loses advertising or other support that the manufacturer gives to dealers who comply with the MAP advertised prices. The amount of manufacturer money that's at stake is so high that dealers will comply. That creates a problem for consumers who want to compare prices online, from the comfort of their home. If dealers are allowed to advertise low low prices for a vehicle, other sellers of that brand have to compete on price –a benefit for consumers.
The bill is SB 178, which is coming up for a hearing before the Judicial Proceedings Committee in the Maryland Senate this coming Tuesday (Jan. 28) at 1pm. Supporters of the bill include Maryland Consumer Rights Coalition and the Consumer Federation of America.
Posting by Don Allen Resnikoff
Currently, if a dealer advertises a price below the manufacturer's MAP, the dealer loses advertising or other support that the manufacturer gives to dealers who comply with the MAP advertised prices. The amount of manufacturer money that's at stake is so high that dealers will comply. That creates a problem for consumers who want to compare prices online, from the comfort of their home. If dealers are allowed to advertise low low prices for a vehicle, other sellers of that brand have to compete on price –a benefit for consumers.
The bill is SB 178, which is coming up for a hearing before the Judicial Proceedings Committee in the Maryland Senate this coming Tuesday (Jan. 28) at 1pm. Supporters of the bill include Maryland Consumer Rights Coalition and the Consumer Federation of America.
Posting by Don Allen Resnikoff
Michigan, Tesla Cut Deal Ending Direct Sale Suit
Tesla Inc. and the Michigan Attorney General's Office have reached an agreement that will end the electric car manufacturer's federal suit attacking a 2014 law that prevented it from selling vehicles directly to consumers in the state. But -- The deal requires Michigan buyers to title their cars elsewhere, even though they'll be able to purchase them without leaving the state.
Currently, it’s tough to buy and own a Tesla in Michigan. For starters, there aren't any places allowed to sell you one; you have to physically go to another state to buy the car. But the new settlement between Tesla and the state of Michigan, reportedly about to be finalized in U.S. District Court, should allow the California EV carmaker to directly sell to customers in Michigan.
Tesla Buying (and Updating)
Credit: https://www.reuters.com/article/us-tesla-michigan/michigan-tesla-reach-agreement-for-direct-car-sales-source-idUSKBN1ZK2LP
Tesla Inc. and the Michigan Attorney General's Office have reached an agreement that will end the electric car manufacturer's federal suit attacking a 2014 law that prevented it from selling vehicles directly to consumers in the state. But -- The deal requires Michigan buyers to title their cars elsewhere, even though they'll be able to purchase them without leaving the state.
Currently, it’s tough to buy and own a Tesla in Michigan. For starters, there aren't any places allowed to sell you one; you have to physically go to another state to buy the car. But the new settlement between Tesla and the state of Michigan, reportedly about to be finalized in U.S. District Court, should allow the California EV carmaker to directly sell to customers in Michigan.
Tesla Buying (and Updating)
Credit: https://www.reuters.com/article/us-tesla-michigan/michigan-tesla-reach-agreement-for-direct-car-sales-source-idUSKBN1ZK2LP
New vertical merger guidelines disappoint antitrust experts
Excerpt from article by HARRIS MEYER at https://www.modernhealthcare.com/mergers-acquisitions/new-vertical-merger-guidelines-disappoint-antitrust-experts?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20200121&utm_content=article1-readmoreMany healthcare antitrust experts are disappointed that the federal government's new proposed guidelines on vertical mergers give little detail on how the government will analyze deals between firms at different levels in the supply chain, such as hospitals and physician groups.
While the Federal Trade Commission and U.S. Justice Department highlighted potential competition risks from vertical mergers in the long-anticipated guidelines, the first update since 1984, some elected officials and antitrust attorneys say the release still doesn't give enough information to step up oversight of physician practice acquisitions by hospitals, insurers and private-equity firms.
"The guidelines are short and don't say much," said Douglas Ross, a veteran antitrust attorney at Davis Wright Tremaine in Seattle. "They don't really do much new, and they don't refer at all to healthcare or use any healthcare-related examples."
Vertical mergers create some specific competitive risks including preventing rivals from accessing products from the downstream merger partner, sharing sensitive business information about competitors and enabling coordinated interaction that hobbles rival firms.
The guidance update, released on Jan. 10, comes as concerns mount over the growing consolidation of hospitals and physician practices and the impact on prices and total health spending. There is also concern about more unorthodox vertical deals like those between CVS and Aetna and between UnitedHealth Group and DaVita.
The federal government has rarely challenged vertical mergers in any industry, in contrast to its more aggressive policy toward horizontal mergers between firms competing head to head. Antitrust enforcers and courts traditionally have viewed vertical mergers as much less likely to threaten competition than horizontal mergers. They often consider such deals pro-competitive.
But the new guidance included some surprises, according to Debbie Feinstein, a former top FTC official who heads Arnold & Porter's global antitrust group.
It proposed a safe harbor for vertical mergers if the merging firms have a combined share in the relevant market of less than 20%, and the "related product" produced by the downstream partner is used in less than 20% of the relevant market.
That's widely seen as an unusually low threshold, given that antitrust enforcers generally rule out action on mergers affecting less than 30% of a market at the very least.
Second, Feinstein said the draft has "no real discussion" of the standards by which the agencies will evaluate the ability of merging companies to reduce or cut off the supply of downstream products to rival firms, known as foreclosure.
That is what the agencies, as well as state attorneys general, have examined in recent vertical transactions. Those cases involved claims that acquisition of physician groups by insurers or hospitals may foreclose competition by making it more difficult or costly for rivals to obtain physician services.
Excerpt from article by HARRIS MEYER at https://www.modernhealthcare.com/mergers-acquisitions/new-vertical-merger-guidelines-disappoint-antitrust-experts?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20200121&utm_content=article1-readmoreMany healthcare antitrust experts are disappointed that the federal government's new proposed guidelines on vertical mergers give little detail on how the government will analyze deals between firms at different levels in the supply chain, such as hospitals and physician groups.
While the Federal Trade Commission and U.S. Justice Department highlighted potential competition risks from vertical mergers in the long-anticipated guidelines, the first update since 1984, some elected officials and antitrust attorneys say the release still doesn't give enough information to step up oversight of physician practice acquisitions by hospitals, insurers and private-equity firms.
"The guidelines are short and don't say much," said Douglas Ross, a veteran antitrust attorney at Davis Wright Tremaine in Seattle. "They don't really do much new, and they don't refer at all to healthcare or use any healthcare-related examples."
Vertical mergers create some specific competitive risks including preventing rivals from accessing products from the downstream merger partner, sharing sensitive business information about competitors and enabling coordinated interaction that hobbles rival firms.
The guidance update, released on Jan. 10, comes as concerns mount over the growing consolidation of hospitals and physician practices and the impact on prices and total health spending. There is also concern about more unorthodox vertical deals like those between CVS and Aetna and between UnitedHealth Group and DaVita.
The federal government has rarely challenged vertical mergers in any industry, in contrast to its more aggressive policy toward horizontal mergers between firms competing head to head. Antitrust enforcers and courts traditionally have viewed vertical mergers as much less likely to threaten competition than horizontal mergers. They often consider such deals pro-competitive.
But the new guidance included some surprises, according to Debbie Feinstein, a former top FTC official who heads Arnold & Porter's global antitrust group.
It proposed a safe harbor for vertical mergers if the merging firms have a combined share in the relevant market of less than 20%, and the "related product" produced by the downstream partner is used in less than 20% of the relevant market.
That's widely seen as an unusually low threshold, given that antitrust enforcers generally rule out action on mergers affecting less than 30% of a market at the very least.
Second, Feinstein said the draft has "no real discussion" of the standards by which the agencies will evaluate the ability of merging companies to reduce or cut off the supply of downstream products to rival firms, known as foreclosure.
That is what the agencies, as well as state attorneys general, have examined in recent vertical transactions. Those cases involved claims that acquisition of physician groups by insurers or hospitals may foreclose competition by making it more difficult or costly for rivals to obtain physician services.
STATEMENT OF FTC COMMISSIONER ROHIT CHOPRA Regarding the Request for Comment on Vertical Merger Guidelines
Summary
• The 1984 Non-Horizontal Merger Guidelines should be rescinded, as they represent an antiquated, narrow, and overly permissive mode of thinking that is not reflective of today’s economy or the current approach to enforcement.
• The U.S. economy is far different than it was forty years ago. Increasing concentration, declining new firm formation, and other market trends necessitate a modernization of vertical merger review.
• The draft guidelines released for public comment miss the mark. They are not supported by an analysis of past enforcement decisions, perpetuate an overdependence on theoretical models, and do not reflect all of the ways that competition can be harmed.
• Any new guidelines must establish a comprehensive framework for assessing the modern threats to competition posed by prospective vertical mergers. I agree with rescinding the outdated and permissive 1984 Non-Horizontal Merger Guidelines1 and engaging the public in the process of putting into place a new framework. I share the objective of my colleague Chairman Simons that we must “…make clear that anticompetitive vertical mergers are not unicorns, and there should not be a presumption that all vertical mergers are benign.” However, I disagree with proposing the draft guidelines published today because they are not comprehensive or reflective of modern economic realities.
Read the full statement at https://www.ftc.gov/system/files/documents/public_statements/1561727/p810034chopravmgabstain.pdf
Summary
• The 1984 Non-Horizontal Merger Guidelines should be rescinded, as they represent an antiquated, narrow, and overly permissive mode of thinking that is not reflective of today’s economy or the current approach to enforcement.
• The U.S. economy is far different than it was forty years ago. Increasing concentration, declining new firm formation, and other market trends necessitate a modernization of vertical merger review.
• The draft guidelines released for public comment miss the mark. They are not supported by an analysis of past enforcement decisions, perpetuate an overdependence on theoretical models, and do not reflect all of the ways that competition can be harmed.
• Any new guidelines must establish a comprehensive framework for assessing the modern threats to competition posed by prospective vertical mergers. I agree with rescinding the outdated and permissive 1984 Non-Horizontal Merger Guidelines1 and engaging the public in the process of putting into place a new framework. I share the objective of my colleague Chairman Simons that we must “…make clear that anticompetitive vertical mergers are not unicorns, and there should not be a presumption that all vertical mergers are benign.” However, I disagree with proposing the draft guidelines published today because they are not comprehensive or reflective of modern economic realities.
Read the full statement at https://www.ftc.gov/system/files/documents/public_statements/1561727/p810034chopravmgabstain.pdf
Is Current Medicare Working For Patients When Doctors "Opt Out"? Will Medicare For All Work Better?
My wife and I, who are both over 65, recently received a letter from our primary care physician informing us that she and her office will be "opting out" of the Medicare program. We did a little research and learned that "opting out" of Medicare means that a physician will no longer have any contractual relationship with Medicare. More specifically, Medicare will not cover any portion of the physician's fees or pay for any services provided by the practice. The practice cannot submit any claims to Medicare. The patient also cannot submit any claims to Medicare for the services provided by the practice.
Furthermore, if you are a Medicare beneficiary and decide to continue using the practice, Medicare requires that you enter into a contract with the practice. The required contract says that the patient understands that Medicare payments will not be made for any services provided by the practice and that the patient cannot submit any claims to Medicare for services provided by the "opt- out" provider.
As a practical matter the physician's "opt out" gives us no other choice than to leave the practice, and find a doctor who has not "opted-out" of Medicare.
My wife and I have lots of insurance coverage: primary coverage from Medicare A and B, and secondary coverage from an Aetna plan. In spite of all of this coverage the contract agreement required of us by our physician will leave us with zero reimbursement for any of her services. The "Medicare Private Contract" with the physician precludes us from seeking a Medicare B denial that would be needed so we could submit a claim to Aetna as secondary insurer.
We are in the world of Catch 22. Even if we would be willing to forgo reimbursement from Medicare B and then pay the physician and then chase our Aetna insurance reimbursement, the contract language the doctor’s opt-out letter requires simply does not permit that. And our Aetna insurer will not pay a claim until there is a denial from Medicare B.
We recognize that our doctor thinks she can profitably opt out of Medicare because we are in a wealthy zip code where some people can pay medical bills without relying on Medicare, or even without private insurance. And, perhaps our doctor’s business judgment on the opt-out point is misguided. But we do not see this story as an example of Medicare working smoothly. Would Medicare for All work better? It could, but the answer does not lie in soaring rhetoric suggesting Medicare for All as a panacea.
My wife and I would like to be insured so that we receive reimbursement to see a primary care physician who will be a thoughtful helper with health problems, not merely a person who spends brief periods of time with us and relies on sending us to specialists. As older people we have had our share of serious illnesses and chronic conditions. During the past decade we have relied on our trusted primary care physician. She has provided each of us with quality information that has helped us maintain our health. We had hoped that we would continue seeing her as we age.
It strikes us that the Catch 22 problem we face applies prospectively to any patient who plans to reach age 65 and go on Medicare. At that point, age 65, they can lose all coverage for the opt-out physician’s services - a discouraging prospect for her patients of all ages.
Again, would Medicare for All work better? It could, I suppose.
Posting is by Don Allen Resnikoff, who takes full responsibility for the content
My wife and I, who are both over 65, recently received a letter from our primary care physician informing us that she and her office will be "opting out" of the Medicare program. We did a little research and learned that "opting out" of Medicare means that a physician will no longer have any contractual relationship with Medicare. More specifically, Medicare will not cover any portion of the physician's fees or pay for any services provided by the practice. The practice cannot submit any claims to Medicare. The patient also cannot submit any claims to Medicare for the services provided by the practice.
Furthermore, if you are a Medicare beneficiary and decide to continue using the practice, Medicare requires that you enter into a contract with the practice. The required contract says that the patient understands that Medicare payments will not be made for any services provided by the practice and that the patient cannot submit any claims to Medicare for services provided by the "opt- out" provider.
As a practical matter the physician's "opt out" gives us no other choice than to leave the practice, and find a doctor who has not "opted-out" of Medicare.
My wife and I have lots of insurance coverage: primary coverage from Medicare A and B, and secondary coverage from an Aetna plan. In spite of all of this coverage the contract agreement required of us by our physician will leave us with zero reimbursement for any of her services. The "Medicare Private Contract" with the physician precludes us from seeking a Medicare B denial that would be needed so we could submit a claim to Aetna as secondary insurer.
We are in the world of Catch 22. Even if we would be willing to forgo reimbursement from Medicare B and then pay the physician and then chase our Aetna insurance reimbursement, the contract language the doctor’s opt-out letter requires simply does not permit that. And our Aetna insurer will not pay a claim until there is a denial from Medicare B.
We recognize that our doctor thinks she can profitably opt out of Medicare because we are in a wealthy zip code where some people can pay medical bills without relying on Medicare, or even without private insurance. And, perhaps our doctor’s business judgment on the opt-out point is misguided. But we do not see this story as an example of Medicare working smoothly. Would Medicare for All work better? It could, but the answer does not lie in soaring rhetoric suggesting Medicare for All as a panacea.
My wife and I would like to be insured so that we receive reimbursement to see a primary care physician who will be a thoughtful helper with health problems, not merely a person who spends brief periods of time with us and relies on sending us to specialists. As older people we have had our share of serious illnesses and chronic conditions. During the past decade we have relied on our trusted primary care physician. She has provided each of us with quality information that has helped us maintain our health. We had hoped that we would continue seeing her as we age.
It strikes us that the Catch 22 problem we face applies prospectively to any patient who plans to reach age 65 and go on Medicare. At that point, age 65, they can lose all coverage for the opt-out physician’s services - a discouraging prospect for her patients of all ages.
Again, would Medicare for All work better? It could, I suppose.
Posting is by Don Allen Resnikoff, who takes full responsibility for the content
Opinion: Is Obamacare Really Unconstitutional?
https://www.nejm.org/doi/full/10.1056/NEJMp1917063
On December 18, 2019, just 3 days after the close of open enrollment on the exchanges and on the same day the House of Representatives impeached President Donald Trump, a conservative appeals court handed the President a major victory in his crusade against the Affordable Care Act (ACA). Over a stern dissent, the U.S. Court of Appeals for the Fifth Circuit declared that the law’s individual mandate is unconstitutional and that the entire rest of the law might therefore be invalid.
The full consequences of the ruling are not yet clear. Instead of deciding for itself how much or how little of the ACA could stand, the appeals court asked the Texas judge who originally decided the case to take a second look at the question. In the meantime, a consortium of Democrat-led states may ask the Supreme Court to intervene. But it’s by no means assured that the Court will take up the invitation.
We’re in for a long period of uncertainty, and it’s unlikely that we’ll know the fate of the ACA before the 2020 election. At risk are the law’s protections for people with preexisting conditions, its prohibitions on abusive insurance practices, the Medicaid expansion, subsidies for private coverage, and much more. And whether the law survives this latest brush with death may depend on whether Trump secures a second term in office.
The lawsuit arose out of congressional Republicans’ failure to repeal the ACA after Trump’s election. They didn’t have the votes for that, but they did have enough to eliminate the ACA’s penalty for going without insurance. At the time, Trump crowed that “the very unfair and unpopular Individual Mandate has been terminated.”1
The Fifth Circuit, however, saw matters differently. For the court, it was constitutionally significant that Congress, when it repealed the penalty, hadn’t actually repealed the part of the law that says that people “shall” buy insurance. The instruction was still on the books, though it was now completely unenforceable.
Why did that matter? Back in 2012, the Supreme Court held that the individual mandate would be unconstitutional if that “shall” were read as a command.2 Congress didn’t have the power to force people to buy insurance. But the Supreme Court reasoned that “shall” didn’t have to be read as a command. To avoid constitutional difficulties, the Court read the ACA as imposing a tax: either buy insurance or pay a penalty. You’ve got a choice. Since Congress undeniably has the power to levy taxes, the individual mandate — that “shall” language — was perfectly constitutional.
Once Congress wiped out the penalty, however, the law looked less like a tax: after all, it would no longer raise any revenue. And so the Fifth Circuit said that the only way to read “shall” is as a coercive command — the sort of law that, under the Supreme Court’s 2012 decision, is unconstitutional.
Lawyers of all political stripes have derided the court’s conclusion. When Congress eliminated the penalty for going without insurance, it made the individual mandate less coercive, not more so. And the Supreme Court, in 2012, already interpreted “shall” as affording people “a lawful choice.” Congress didn’t revisit that conclusion when it eliminated the penalty. The appeals court is bound by the Supreme Court’s conclusion, whether it likes it or not.
On its face, too, the decision betrays just how partisan the litigation over the ACA has become. The opinion reports, for example, that “some opponents” think “that the entire law was enacted as part of a fraud on the American people.” That kind of gratuitous jab may help to explain why the opinion is so difficult to defend in traditional legal terms. It reads, instead, as an exercise of raw political power.
What does the constitutional holding mean for the rest of the ACA? The judge who first heard the case held that the mandate’s unconstitutionality required the invalidation of the entire ACA — to use the legal jargon, that it could not be “severed” from the rest of the law. In his view, the same Congress that wiped out the tax penalty also believed that the mandate — even without a penalty — was an essential part of the entire law. No part could be saved.
On that, the appeals court disagreed. Severability analysis, it held, requires a court to use a “finer-toothed comb” when reviewing legislation. The court reasoned that parts of the ACA — including, for example, the part requiring chain restaurants to post calorie counts on their menus — don’t have much to do with the mandate at all. They could perhaps be salvaged, even if the mandate is struck down. So the Fifth Circuit sent the case back to the judge and told him to try again. Yet the court offered no guidance about “how fine-toothed that comb should be.” It was even open to the possibility that the judge could reach exactly the same conclusion: “it may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded.”
Here, too, the Fifth Circuit’s decision is difficult to defend. As the dissenting judge wrote, if Congress in 2017 had viewed the mandate “as so essential to the rest of the ACA that it intended the entire statute to rise and fall with the coverage requirement, it is inconceivable that Congress would have declawed [it] as it did.” A hortatory instruction to buy insurance can’t be essential to anything.
With that in mind, the Fifth Circuit could simply have struck down the mandate and kept the rest of the ACA intact. Had it done so, the case, for all practical purposes, would be over: no one cares whether an unenforceable instruction to buy insurance remains on the books. Instead, the court sent the case back down to a judge with a partisan reputation who had previously invalidated the entire law. He is likely to make a similarly expansive decision the second time around.
But the process will take time — perhaps another 2 years for the Fifth Circuit to decide the inevitable appeal from the judge’s do-over, followed by another high-stakes Supreme Court case. It’s hard to resist the conclusion that the delay is strategic: declaring all or part of the ACA invalid would probably have been bad for Republicans in the 2020 election. Many parts of the ACA are quite popular, especially the protections for people with preexisting conditions and the Medicaid expansion. Invalidating those parts might have provoked a political backlash. Punting to the district court gives Republicans a little more breathing room.
Unless, of course, the Supreme Court chooses to intervene at this stage. And it might do so: the validity of the ACA is an issue of national importance, and the Fifth Circuit’s decision is absurd. Plus, it takes only four votes for the Supreme Court to agree to hear a case, and the four liberal justices can probably count on Chief Justice John Roberts, who has twice turned back more substantial challenges to the law and is unlikely to embrace a lawsuit as weak as this one. The liberal justices might opt to hear the case now instead of running the risk that Trump will be reelected and will stack the Court with hard-liners.
That said, the justices generally dislike hearing cases before they’re final. They may be especially disinclined given that the ACA will remain intact during the additional proceedings on severability. Roberts may look like a safe bet, but you never know. And the Court may prefer to avoid such a politically salient case during an election year. Perhaps the more prudent course is to wait.
Regardless, the ACA will have a cloud over it for the foreseeable future. Republicans haven’t been able to repeal the ACA through Congress. But they’re still working hard to repeal it in the courts.
- Nicholas Bagley, J.D.
https://www.nejm.org/doi/full/10.1056/NEJMp1917063
On December 18, 2019, just 3 days after the close of open enrollment on the exchanges and on the same day the House of Representatives impeached President Donald Trump, a conservative appeals court handed the President a major victory in his crusade against the Affordable Care Act (ACA). Over a stern dissent, the U.S. Court of Appeals for the Fifth Circuit declared that the law’s individual mandate is unconstitutional and that the entire rest of the law might therefore be invalid.
The full consequences of the ruling are not yet clear. Instead of deciding for itself how much or how little of the ACA could stand, the appeals court asked the Texas judge who originally decided the case to take a second look at the question. In the meantime, a consortium of Democrat-led states may ask the Supreme Court to intervene. But it’s by no means assured that the Court will take up the invitation.
We’re in for a long period of uncertainty, and it’s unlikely that we’ll know the fate of the ACA before the 2020 election. At risk are the law’s protections for people with preexisting conditions, its prohibitions on abusive insurance practices, the Medicaid expansion, subsidies for private coverage, and much more. And whether the law survives this latest brush with death may depend on whether Trump secures a second term in office.
The lawsuit arose out of congressional Republicans’ failure to repeal the ACA after Trump’s election. They didn’t have the votes for that, but they did have enough to eliminate the ACA’s penalty for going without insurance. At the time, Trump crowed that “the very unfair and unpopular Individual Mandate has been terminated.”1
The Fifth Circuit, however, saw matters differently. For the court, it was constitutionally significant that Congress, when it repealed the penalty, hadn’t actually repealed the part of the law that says that people “shall” buy insurance. The instruction was still on the books, though it was now completely unenforceable.
Why did that matter? Back in 2012, the Supreme Court held that the individual mandate would be unconstitutional if that “shall” were read as a command.2 Congress didn’t have the power to force people to buy insurance. But the Supreme Court reasoned that “shall” didn’t have to be read as a command. To avoid constitutional difficulties, the Court read the ACA as imposing a tax: either buy insurance or pay a penalty. You’ve got a choice. Since Congress undeniably has the power to levy taxes, the individual mandate — that “shall” language — was perfectly constitutional.
Once Congress wiped out the penalty, however, the law looked less like a tax: after all, it would no longer raise any revenue. And so the Fifth Circuit said that the only way to read “shall” is as a coercive command — the sort of law that, under the Supreme Court’s 2012 decision, is unconstitutional.
Lawyers of all political stripes have derided the court’s conclusion. When Congress eliminated the penalty for going without insurance, it made the individual mandate less coercive, not more so. And the Supreme Court, in 2012, already interpreted “shall” as affording people “a lawful choice.” Congress didn’t revisit that conclusion when it eliminated the penalty. The appeals court is bound by the Supreme Court’s conclusion, whether it likes it or not.
On its face, too, the decision betrays just how partisan the litigation over the ACA has become. The opinion reports, for example, that “some opponents” think “that the entire law was enacted as part of a fraud on the American people.” That kind of gratuitous jab may help to explain why the opinion is so difficult to defend in traditional legal terms. It reads, instead, as an exercise of raw political power.
What does the constitutional holding mean for the rest of the ACA? The judge who first heard the case held that the mandate’s unconstitutionality required the invalidation of the entire ACA — to use the legal jargon, that it could not be “severed” from the rest of the law. In his view, the same Congress that wiped out the tax penalty also believed that the mandate — even without a penalty — was an essential part of the entire law. No part could be saved.
On that, the appeals court disagreed. Severability analysis, it held, requires a court to use a “finer-toothed comb” when reviewing legislation. The court reasoned that parts of the ACA — including, for example, the part requiring chain restaurants to post calorie counts on their menus — don’t have much to do with the mandate at all. They could perhaps be salvaged, even if the mandate is struck down. So the Fifth Circuit sent the case back to the judge and told him to try again. Yet the court offered no guidance about “how fine-toothed that comb should be.” It was even open to the possibility that the judge could reach exactly the same conclusion: “it may still be that none of the ACA is severable from the individual mandate, even after this inquiry is concluded.”
Here, too, the Fifth Circuit’s decision is difficult to defend. As the dissenting judge wrote, if Congress in 2017 had viewed the mandate “as so essential to the rest of the ACA that it intended the entire statute to rise and fall with the coverage requirement, it is inconceivable that Congress would have declawed [it] as it did.” A hortatory instruction to buy insurance can’t be essential to anything.
With that in mind, the Fifth Circuit could simply have struck down the mandate and kept the rest of the ACA intact. Had it done so, the case, for all practical purposes, would be over: no one cares whether an unenforceable instruction to buy insurance remains on the books. Instead, the court sent the case back down to a judge with a partisan reputation who had previously invalidated the entire law. He is likely to make a similarly expansive decision the second time around.
But the process will take time — perhaps another 2 years for the Fifth Circuit to decide the inevitable appeal from the judge’s do-over, followed by another high-stakes Supreme Court case. It’s hard to resist the conclusion that the delay is strategic: declaring all or part of the ACA invalid would probably have been bad for Republicans in the 2020 election. Many parts of the ACA are quite popular, especially the protections for people with preexisting conditions and the Medicaid expansion. Invalidating those parts might have provoked a political backlash. Punting to the district court gives Republicans a little more breathing room.
Unless, of course, the Supreme Court chooses to intervene at this stage. And it might do so: the validity of the ACA is an issue of national importance, and the Fifth Circuit’s decision is absurd. Plus, it takes only four votes for the Supreme Court to agree to hear a case, and the four liberal justices can probably count on Chief Justice John Roberts, who has twice turned back more substantial challenges to the law and is unlikely to embrace a lawsuit as weak as this one. The liberal justices might opt to hear the case now instead of running the risk that Trump will be reelected and will stack the Court with hard-liners.
That said, the justices generally dislike hearing cases before they’re final. They may be especially disinclined given that the ACA will remain intact during the additional proceedings on severability. Roberts may look like a safe bet, but you never know. And the Court may prefer to avoid such a politically salient case during an election year. Perhaps the more prudent course is to wait.
Regardless, the ACA will have a cloud over it for the foreseeable future. Republicans haven’t been able to repeal the ACA through Congress. But they’re still working hard to repeal it in the courts.
The USDOJ’s Antitrust Division is asking to take part in legal arguments at Qualcomm’s February 13 appeals court hearing.
The USDOJ wishes to support Qualcomm’s attempt to overturn a ruling requiring the remedy of compulsory licensing.
The antitrust fight between the USDOJ and the FTC is unusual, particularly since the USDOJ’s position is based on a concern that is generally considered outside of the realm of antitrust: the concern is that forced licensing will compromise U.S. national security and harm an important U.S. company.
The back-story is that when the Federal Trade Commission, an independent regulatory agency, obtained a trial court level order requiring compulsory licensing of certain patents by Qualcomm, the US Department of Justice, an executive branch agency, pushed back. The USDOJ filing at document/file/1183936/download , is styled UNITED STATES’ STATEMENT OF INTEREST CONCERNING QUALCOMM’S MOTION FOR PARTIAL STAY OF INJUNCTION PENDING APPEAL.
USDOJ concern about Chinese commercial rivalry in 5G is a prominent part of the story.
The USDOJ filing explains: “Immediate implementation of the remedy could put our nation’s security at risk, potentially undermining U.S. leadership in 5G technology and standard-setting, which is vital to military readiness and other critical national interests. . . . According to the Committee on Foreign Investment in the United States (CFIUS), Qualcomm is ‘the current leading company in 5G technology development and standard setting’ due primarily to ‘its unmatched expertise and research and development (‘R&D’) expenditure. . . . [A] reduction in Qualcomm’s leadership in 5G innovation and standard-setting, ‘even in the short-term,’ could ‘significantly impact U.S. national security’ by enabling foreign-owned firms to expand their influence. [citation omitted] This is a ‘critical period of time,’ and allowing foreign-aligned firms to drive the development of 5G standards could have long-term ramifications, including cyberespionage.’”
There are complexities with regard to the contract and antitrust rationale for the FTC’s concerns about Qualcomm’s licensing practices. But we do not need to get deeply into those complexities here. For further analysis of the FTC position see https://www.essentialpatentblog.com/2019/08/ninth-circuit-stays-judge-kohs-injuncton-in-the-ftc-v-doj-competition-brawl-ftc-v-qualcomm/ Important elements of the story of the FTC prosecution and USDOJ opposition can be found in the USDOJ “STATEMENT OF INTEREST filing” cited earlier. See also BRIEF FOR THE AMERICAN ANTITRUST INSTITUTE AND PUBLIC KNOWLEDGE AS AMICI CURIAE IN SUPPORT OF PLAINTIFF-APPELLEE, filed with the Ninth Circuit Court of Appeals,[ file:///C:/Users/resni/Downloads/TSAC%20Amicus%20Br.%20of%20AAI-PK_FTC%20v.%20Qualcomm%20-%20Corrected.pdf]
Posting by Don Allen Resnikoff, who is responsible for the content
The USDOJ wishes to support Qualcomm’s attempt to overturn a ruling requiring the remedy of compulsory licensing.
The antitrust fight between the USDOJ and the FTC is unusual, particularly since the USDOJ’s position is based on a concern that is generally considered outside of the realm of antitrust: the concern is that forced licensing will compromise U.S. national security and harm an important U.S. company.
The back-story is that when the Federal Trade Commission, an independent regulatory agency, obtained a trial court level order requiring compulsory licensing of certain patents by Qualcomm, the US Department of Justice, an executive branch agency, pushed back. The USDOJ filing at document/file/1183936/download , is styled UNITED STATES’ STATEMENT OF INTEREST CONCERNING QUALCOMM’S MOTION FOR PARTIAL STAY OF INJUNCTION PENDING APPEAL.
USDOJ concern about Chinese commercial rivalry in 5G is a prominent part of the story.
The USDOJ filing explains: “Immediate implementation of the remedy could put our nation’s security at risk, potentially undermining U.S. leadership in 5G technology and standard-setting, which is vital to military readiness and other critical national interests. . . . According to the Committee on Foreign Investment in the United States (CFIUS), Qualcomm is ‘the current leading company in 5G technology development and standard setting’ due primarily to ‘its unmatched expertise and research and development (‘R&D’) expenditure. . . . [A] reduction in Qualcomm’s leadership in 5G innovation and standard-setting, ‘even in the short-term,’ could ‘significantly impact U.S. national security’ by enabling foreign-owned firms to expand their influence. [citation omitted] This is a ‘critical period of time,’ and allowing foreign-aligned firms to drive the development of 5G standards could have long-term ramifications, including cyberespionage.’”
There are complexities with regard to the contract and antitrust rationale for the FTC’s concerns about Qualcomm’s licensing practices. But we do not need to get deeply into those complexities here. For further analysis of the FTC position see https://www.essentialpatentblog.com/2019/08/ninth-circuit-stays-judge-kohs-injuncton-in-the-ftc-v-doj-competition-brawl-ftc-v-qualcomm/ Important elements of the story of the FTC prosecution and USDOJ opposition can be found in the USDOJ “STATEMENT OF INTEREST filing” cited earlier. See also BRIEF FOR THE AMERICAN ANTITRUST INSTITUTE AND PUBLIC KNOWLEDGE AS AMICI CURIAE IN SUPPORT OF PLAINTIFF-APPELLEE, filed with the Ninth Circuit Court of Appeals,[ file:///C:/Users/resni/Downloads/TSAC%20Amicus%20Br.%20of%20AAI-PK_FTC%20v.%20Qualcomm%20-%20Corrected.pdf]
Posting by Don Allen Resnikoff, who is responsible for the content
Opinion from Public Citizen: Revised NAFTA Cements New Floor for Trade PactsPharma Giveaways, Extreme Investor Rights in Past Pacts Are Out, Better Labor and Environmental Terms In After Democrats Forced Trump to Redo His 2018 NAFTA 2.0 Deal
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Note: The U.S. Senate today passed the revised North American Free Trade Agreement (NAFTA) by a margin of 89 to 10. This follows passage in the U.S. House of Representatives by a margin of 385 to 41 in December 2019.
The unusually large, bipartisan votes in the Senate and House on the revised NAFTA set a new standard that to be politically viable, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopoly protections for Big Pharma and must have enforceable labor and environmental standards, in contrast to the 2016 Trans-Pacific Partnership, which never got close to congressional majority support.
Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as creating a good trade agreement that creates jobs, raises wages and protects the environment and public health. That would additionally require climate provisions, stronger labor and environmental terms, and truly enforceable currency disciplines, and not limit consumer protections for food and product safety and labeling, the service sector, online platforms and more.
The NAFTA 2.0 deal that President Donald Trump initially signed in 2018 betrayed his campaign promise to fix NAFTA: It included new Big Pharma giveaways that lock in high drug prices, making it worse than the original, and its labor and environmental terms were too weak to counteract NAFTA’s outsourcing of jobs and pollution.
However, after congressional Democrats, unions and consumer groups forced Trump to remove Big Pharma giveaways and improve labor and environmental terms, the final revised deal is better than the original and might reduce some of NAFTA’s ongoing damage to workers and the environment. Although the new deal still includes problematic terms, the alternative is status quo NAFTA, not a more improved deal.
But this new NAFTA won’t bring back hundreds of thousands of manufacturing jobs, as Trump nonsensically claims. Nothing makes that clearer than U.S. auto manufacturers’ recent announcements that they plan to increase production in Mexico – from Ford’s decision to make its new Mustang electric SUV in Mexico to GM closing U.S. auto plants while expanding production in Mexico.
One clear and important win for consumers, workers and the environment is the gutting of NAFTA’s Investor-State Dispute Settlement (ISDS) regime. ISDS empowers multinational corporations to go before panels of three corporate lawyers to demand unlimited compensation from taxpayers over claims that domestic laws, regulations and court rulings violate special investor privileges. The lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits. To date, corporations have extracted almost $400 million from North American taxpayers after attacks on energy, water, timber and toxics policies. Largely eliminating ISDS will foreclose numerous corporate attacks on environmental, health and other public interest policies and send a signal worldwide to the many countries also eager to exit the illegitimate ISDS regime.
The new NAFTA is not a template for future agreements; rather, it sets the floor from which we will fight for good trade policies that put working people and the planet first.
Source: https://www.citizen.org/news/broad-bipartisan-congressional-votes-on-revised-nafta-cement-new-floor-for-trade-pacts-pharma-giveaways-extreme-investor-rights-in-past-pacts-are-out-better-labor-and-environmental-terms-in-after/
Statement of Lori Wallach, Director, Public Citizen’s Global Trade Watch
Note: The U.S. Senate today passed the revised North American Free Trade Agreement (NAFTA) by a margin of 89 to 10. This follows passage in the U.S. House of Representatives by a margin of 385 to 41 in December 2019.
The unusually large, bipartisan votes in the Senate and House on the revised NAFTA set a new standard that to be politically viable, U.S. trade pacts no longer can include extreme corporate investor privileges or broad monopoly protections for Big Pharma and must have enforceable labor and environmental standards, in contrast to the 2016 Trans-Pacific Partnership, which never got close to congressional majority support.
Renegotiating the existing NAFTA to try to reduce its ongoing damage is not the same as creating a good trade agreement that creates jobs, raises wages and protects the environment and public health. That would additionally require climate provisions, stronger labor and environmental terms, and truly enforceable currency disciplines, and not limit consumer protections for food and product safety and labeling, the service sector, online platforms and more.
The NAFTA 2.0 deal that President Donald Trump initially signed in 2018 betrayed his campaign promise to fix NAFTA: It included new Big Pharma giveaways that lock in high drug prices, making it worse than the original, and its labor and environmental terms were too weak to counteract NAFTA’s outsourcing of jobs and pollution.
However, after congressional Democrats, unions and consumer groups forced Trump to remove Big Pharma giveaways and improve labor and environmental terms, the final revised deal is better than the original and might reduce some of NAFTA’s ongoing damage to workers and the environment. Although the new deal still includes problematic terms, the alternative is status quo NAFTA, not a more improved deal.
But this new NAFTA won’t bring back hundreds of thousands of manufacturing jobs, as Trump nonsensically claims. Nothing makes that clearer than U.S. auto manufacturers’ recent announcements that they plan to increase production in Mexico – from Ford’s decision to make its new Mustang electric SUV in Mexico to GM closing U.S. auto plants while expanding production in Mexico.
One clear and important win for consumers, workers and the environment is the gutting of NAFTA’s Investor-State Dispute Settlement (ISDS) regime. ISDS empowers multinational corporations to go before panels of three corporate lawyers to demand unlimited compensation from taxpayers over claims that domestic laws, regulations and court rulings violate special investor privileges. The lawyers can award the corporations unlimited sums to be paid by taxpayers, including for the loss of expected future profits. To date, corporations have extracted almost $400 million from North American taxpayers after attacks on energy, water, timber and toxics policies. Largely eliminating ISDS will foreclose numerous corporate attacks on environmental, health and other public interest policies and send a signal worldwide to the many countries also eager to exit the illegitimate ISDS regime.
The new NAFTA is not a template for future agreements; rather, it sets the floor from which we will fight for good trade policies that put working people and the planet first.
Source: https://www.citizen.org/news/broad-bipartisan-congressional-votes-on-revised-nafta-cement-new-floor-for-trade-pacts-pharma-giveaways-extreme-investor-rights-in-past-pacts-are-out-better-labor-and-environmental-terms-in-after/
Excerpts from Remarks of Commissioner Rebecca Kelly Slaughter As Prepared for Delivery at FTC Workshop on Non-Compete Clauses in the Workplace Washington, DC January 9, 2020
https://www.ftc.gov/system/files/documents/public_statements/1561475/slaughter_-_noncompete_clauses_workshop_remarks_1-9-20.pdf
Addressing Non-Competes and Other Labor Competition Issues
A handful of states have exhibited great leadership in enforcing against unjust non-compete restrictions and legislating to limit their usage and enforcement. This is significant and important work, but it is still only a patchwork solution to a problem that is rampant throughout much of the country. Proposed federal legislation, particularly the bill introduced by Senators Murphy and Young, is a positive development, but we need not wait for legislation to tackle this issue head-on.
The workshop we are having today is a valuable mechanism for the FTC to gather information and learn more about the impact non-compete provisions have on firms, workers, and the economy. But information gathering should not be the end of this exercise; we should also take action. Without prejudging the outcome of a rulemaking proceeding on non-competes, I strongly support the FTC’s undertaking such an endeavor. And I want to acknowledge and express gratitude to Commissioner Chopra for his white-paper calling for the FTC to take advantage of our statutory authority to engage in rulemaking on unfair methods of competition. I also want to credit the many advocacy groups who came together to petition the Commission to undertake a non-compete rulemaking specifically.
* * *
Surveys have estimated that 16 to 18 percent of all U.S. workers are currently covered by a noncompete provision, meaning that they have restrictions on where they can work after they leave, lose, or are let go from their current job. This includes 12 percent of workers who earn less than $20,000 per year and 15 percent of those who make $20,000 to $40,000 per year.5 Sandwich makers at Jimmy John’s sandwich shops were prevented for a period of two years from working at competing businesses that earn 10 percent of their revenue from selling sandwiches.
One Jimmy John’s assistant manager left her job and transitioned to a completely different industry, where she did not make as much money as she could have in the restaurant business, out of fear that Jimmy John’s would sue her over the non-compete.6 Illinois Attorney General Madigan sued and obtained a settlement where Jimmy John’s agreed to eliminate this indefensible non-compete provision in its employment contracts, which notably applied not only to the three mile radius around the Jimmy John’s where the worker was employed but also to any sandwich business located within three miles of any Jimmy John’s shop anywhere in the country.
https://www.ftc.gov/system/files/documents/public_statements/1561475/slaughter_-_noncompete_clauses_workshop_remarks_1-9-20.pdf
Addressing Non-Competes and Other Labor Competition Issues
A handful of states have exhibited great leadership in enforcing against unjust non-compete restrictions and legislating to limit their usage and enforcement. This is significant and important work, but it is still only a patchwork solution to a problem that is rampant throughout much of the country. Proposed federal legislation, particularly the bill introduced by Senators Murphy and Young, is a positive development, but we need not wait for legislation to tackle this issue head-on.
The workshop we are having today is a valuable mechanism for the FTC to gather information and learn more about the impact non-compete provisions have on firms, workers, and the economy. But information gathering should not be the end of this exercise; we should also take action. Without prejudging the outcome of a rulemaking proceeding on non-competes, I strongly support the FTC’s undertaking such an endeavor. And I want to acknowledge and express gratitude to Commissioner Chopra for his white-paper calling for the FTC to take advantage of our statutory authority to engage in rulemaking on unfair methods of competition. I also want to credit the many advocacy groups who came together to petition the Commission to undertake a non-compete rulemaking specifically.
* * *
Surveys have estimated that 16 to 18 percent of all U.S. workers are currently covered by a noncompete provision, meaning that they have restrictions on where they can work after they leave, lose, or are let go from their current job. This includes 12 percent of workers who earn less than $20,000 per year and 15 percent of those who make $20,000 to $40,000 per year.5 Sandwich makers at Jimmy John’s sandwich shops were prevented for a period of two years from working at competing businesses that earn 10 percent of their revenue from selling sandwiches.
One Jimmy John’s assistant manager left her job and transitioned to a completely different industry, where she did not make as much money as she could have in the restaurant business, out of fear that Jimmy John’s would sue her over the non-compete.6 Illinois Attorney General Madigan sued and obtained a settlement where Jimmy John’s agreed to eliminate this indefensible non-compete provision in its employment contracts, which notably applied not only to the three mile radius around the Jimmy John’s where the worker was employed but also to any sandwich business located within three miles of any Jimmy John’s shop anywhere in the country.
NYT: Big banks having a ball
JPMorgan Chase, the country’s largest bank, reported record profits on Tuesday, and Citigroup posted its best results since before the 2008 financial crisis.
Chase earned $36.4 billion last year, up from $32.5 billion in 2018. It earned $8.5 billion in the final three months of last year, also a record. Citi could not quite match that performance, but its $19.4 billion profit for 2019 beat the previous year, and its $5 billion result for the year’s final quarter surpassed the profit it earned in the same period in 2018.
One reason for their success: the 2019 turnaround in the financial markets. The end of 2018 seemed to portend a reckoning as investors fretted over the trade war and the Federal Reserve’s plans to drain cash from the financial system. But rate cuts by the Fed last year helped markets creep steadily to new highs.
JPMorgan’s fixed-income trading revenues in the final quarter of 2019, for example, were 86 percent higher than in the same period a year earlier.
From: https://www.nytimes.com/2020/01/14/business/jpmorgan-citigroup-wells-fargo-earnings.html
JPMorgan Chase, the country’s largest bank, reported record profits on Tuesday, and Citigroup posted its best results since before the 2008 financial crisis.
Chase earned $36.4 billion last year, up from $32.5 billion in 2018. It earned $8.5 billion in the final three months of last year, also a record. Citi could not quite match that performance, but its $19.4 billion profit for 2019 beat the previous year, and its $5 billion result for the year’s final quarter surpassed the profit it earned in the same period in 2018.
One reason for their success: the 2019 turnaround in the financial markets. The end of 2018 seemed to portend a reckoning as investors fretted over the trade war and the Federal Reserve’s plans to drain cash from the financial system. But rate cuts by the Fed last year helped markets creep steadily to new highs.
JPMorgan’s fixed-income trading revenues in the final quarter of 2019, for example, were 86 percent higher than in the same period a year earlier.
From: https://www.nytimes.com/2020/01/14/business/jpmorgan-citigroup-wells-fargo-earnings.html
Reuters: Product liability case secrecy hurts consumers
Excerpt:
As Reuters has documented in earlier articles in this series, a thick blanket of secrecy covers product-liability litigation in the United States. In just a handful of cases over the past several decades, hundreds of thousands of people were killed or injured by defective products – cars, drugs, guns – while information about the risks was hidden from consumers and regulators, sometimes for years, behind broad protective orders.
These orders, though meant to protect specific information such as medical records and trade secrets, often give companies wide latitude to designate as confidential material exchanged between litigants in the pretrial discovery process – internal emails, data, research, meeting minutes, sworn depositions and the like. The secrecy typically persists for the life of the case, and long after, though court documents are, by law, presumed to be public.
In an analysis of some of the largest mass defective-product cases consolidated in federal courts over the past 20 years, Reuters found 55 in which judges sealed information concerning public health and safety. And among those, only three had protective orders containing language specifically allowing information exchanged by the litigants to be shared with regulators.
https://www.reuters.com/investigates/special-report/usa-courts-secrecy-regulators/
Excerpt:
As Reuters has documented in earlier articles in this series, a thick blanket of secrecy covers product-liability litigation in the United States. In just a handful of cases over the past several decades, hundreds of thousands of people were killed or injured by defective products – cars, drugs, guns – while information about the risks was hidden from consumers and regulators, sometimes for years, behind broad protective orders.
These orders, though meant to protect specific information such as medical records and trade secrets, often give companies wide latitude to designate as confidential material exchanged between litigants in the pretrial discovery process – internal emails, data, research, meeting minutes, sworn depositions and the like. The secrecy typically persists for the life of the case, and long after, though court documents are, by law, presumed to be public.
In an analysis of some of the largest mass defective-product cases consolidated in federal courts over the past 20 years, Reuters found 55 in which judges sealed information concerning public health and safety. And among those, only three had protective orders containing language specifically allowing information exchanged by the litigants to be shared with regulators.
https://www.reuters.com/investigates/special-report/usa-courts-secrecy-regulators/
DMN: Major Radio Broadcasters Lambast the DOJ for Siding with Irving Azoff’s GMR
In response to the Department of Justice (DOJ) filing an amicus brief in support of Irving Azoff and his long-standing legal battle with the Radio Music License Committee (RMLC), the National Association of Broadcasters (NAB) has filed a motion to issue their own amicus brief, which criticizes the DOJ’s brief.
The story continues here. https://www.digitalmusicnews.com/2020/01/16/radio-broadcasters-lambaste-doj-siding-irving-azoff/
In response to the Department of Justice (DOJ) filing an amicus brief in support of Irving Azoff and his long-standing legal battle with the Radio Music License Committee (RMLC), the National Association of Broadcasters (NAB) has filed a motion to issue their own amicus brief, which criticizes the DOJ’s brief.
The story continues here. https://www.digitalmusicnews.com/2020/01/16/radio-broadcasters-lambaste-doj-siding-irving-azoff/
Two views on proposed antitrust exemption for newspapers
H.R.2054 – The “Journalism Competition and Preservation Act of 2019” has the goal of providing “a temporary safe harbor for the publishers of online content to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed.” See https://www.congress.gov/bill/116th-congress/house-bill/2054/text?q=%7B%22search%22%3A%5B%22Hr+2054%22%5D%7D&r=1
Opinion is divided, even among journalists, about whether the legislation is a good idea of bad.
Politico editorializes against, at https://www.politico.com/magazine/story/2019/06/10/newspapers-embarrassing-lobbying-campaign-227100.
Here is an excerpt:
The newspaper industry has crawled up Capitol Hill once again to beg for an antitrust exemption it thinks it needs in its fight with Google and Facebook for advertising dollars.
Currently, Google and Facebook collect 73 percent of all digital advertising. Members of the news industry believe that the two tech giants have exploited their dominance of the web to unfairly collect digital dollars that rightfully belong to the news organizations. The Journalism Competition and Preservation Act of 2019, introduced in the House in April, and its Senate version, would allow print and online news companies to cartelize into a united front against Google and Facebook. Washington Post media columnist Margaret Sullivan cheered the bill last week and other newspapers (Chicago Tribune, Cleveland Plain Dealer, Columbus Dispatch, and others) have editorialized in favor of the exemption. Under the new law, which would sunset in four years, the cartel could collectively withhold content from Google, Facebook and other sites and negotiate the terms under which the two tech giants could use their work. Anti-trust law currently prohibits such industrywide collusion.
This proposed antitrust exemption—being pushed by the 2,000-plus member News Media Alliance trade group—is misguided on several levels. For one thing, it would be wrong to pass a law that would prop up one media sector by selectively bestowing special competitive privileges on it. The bill would not allow broadcasters to join the new cartel. The bill’s supporters also falsely blame Google and Facebook for the newspaper industry’s decay when circulation declines—especially when measured per capita—predate the emergence of the web.
Margaret Sullivan of the Washington Post disagrees, at https://www.washingtonpost.com/lifestyle/style/google-and-facebook-sucked-profits-from-newspapers-publishers-are-finally-resisting/2019/06/04/d5fa2aaa-86de-11e9-98c1-e945ae5db8fb_story.html. Here is an excerpt:
But a temporary waiver — while newspapers try to right themselves at a critical time — is more than a good idea. It’s essential.
When local newspapers fail, all kinds of bad things happen. Various studies have shown that civic engagement falls off, government spending goes up, and unreliable or made-up stories get a stronger foothold. We lose our village squares, our ways of making sense of the world with shared facts, and our ability to hold public officials to account.
Before more of the remaining papers turn into “toast,” as Buffett prophesied, they need some serious, immediate help.
As for Google and Facebook, if fewer ad dollars go their way in the service of local journalism’s survival, I’m confident they will manage somehow.
H.R.2054 – The “Journalism Competition and Preservation Act of 2019” has the goal of providing “a temporary safe harbor for the publishers of online content to collectively negotiate with dominant online platforms regarding the terms on which their content may be distributed.” See https://www.congress.gov/bill/116th-congress/house-bill/2054/text?q=%7B%22search%22%3A%5B%22Hr+2054%22%5D%7D&r=1
Opinion is divided, even among journalists, about whether the legislation is a good idea of bad.
Politico editorializes against, at https://www.politico.com/magazine/story/2019/06/10/newspapers-embarrassing-lobbying-campaign-227100.
Here is an excerpt:
The newspaper industry has crawled up Capitol Hill once again to beg for an antitrust exemption it thinks it needs in its fight with Google and Facebook for advertising dollars.
Currently, Google and Facebook collect 73 percent of all digital advertising. Members of the news industry believe that the two tech giants have exploited their dominance of the web to unfairly collect digital dollars that rightfully belong to the news organizations. The Journalism Competition and Preservation Act of 2019, introduced in the House in April, and its Senate version, would allow print and online news companies to cartelize into a united front against Google and Facebook. Washington Post media columnist Margaret Sullivan cheered the bill last week and other newspapers (Chicago Tribune, Cleveland Plain Dealer, Columbus Dispatch, and others) have editorialized in favor of the exemption. Under the new law, which would sunset in four years, the cartel could collectively withhold content from Google, Facebook and other sites and negotiate the terms under which the two tech giants could use their work. Anti-trust law currently prohibits such industrywide collusion.
This proposed antitrust exemption—being pushed by the 2,000-plus member News Media Alliance trade group—is misguided on several levels. For one thing, it would be wrong to pass a law that would prop up one media sector by selectively bestowing special competitive privileges on it. The bill would not allow broadcasters to join the new cartel. The bill’s supporters also falsely blame Google and Facebook for the newspaper industry’s decay when circulation declines—especially when measured per capita—predate the emergence of the web.
Margaret Sullivan of the Washington Post disagrees, at https://www.washingtonpost.com/lifestyle/style/google-and-facebook-sucked-profits-from-newspapers-publishers-are-finally-resisting/2019/06/04/d5fa2aaa-86de-11e9-98c1-e945ae5db8fb_story.html. Here is an excerpt:
But a temporary waiver — while newspapers try to right themselves at a critical time — is more than a good idea. It’s essential.
When local newspapers fail, all kinds of bad things happen. Various studies have shown that civic engagement falls off, government spending goes up, and unreliable or made-up stories get a stronger foothold. We lose our village squares, our ways of making sense of the world with shared facts, and our ability to hold public officials to account.
Before more of the remaining papers turn into “toast,” as Buffett prophesied, they need some serious, immediate help.
As for Google and Facebook, if fewer ad dollars go their way in the service of local journalism’s survival, I’m confident they will manage somehow.
Gottshall on sewer service in DC Landlord-Tenant Court
"Years have passed since the first day that I observed “roll call” in the District of Columbia Landlord and Tenant Branch, and I no longer wonder why some tenants in default fail to appear. I unequivocally know that service practices are unreliable and unfair. There are systemic due process violations occurring in the form of improper and ineffective service of process. Most troubling is that many defendants do not appear for court simply because they do not know about their case. Unreliable and unfair service practices are a national problem. They are not unique to the District of Columbia. At least three jurisdictions have recently attempted to address sewer service through litigation, resulting in multimillion dollar settlements for victims."
From: January 2018 Solving Sewer Service: Fighting Fraud with Technology Adrian Gottshall University of the District of Columbia , https://scholarworks.uark.edu/cgi/viewcontent.cgi?article=1034&context=alr
PBS NewsHour on new state laws going into effect across the country.
From NCAA athlete reimbursement, legalization of sports betting, legalization of marijuana and criminal justice reform to raising minimum wage and the cost of electric cars, state legislatures are having a major impact on the nation’s laws. The Hill’s Reid Wilson joins Lisa Desjardins to discuss specific changes as well as three broader trends to watch going forward.
https://www.youtube.com/watch?v=LAtFe9RnXgM
From NCAA athlete reimbursement, legalization of sports betting, legalization of marijuana and criminal justice reform to raising minimum wage and the cost of electric cars, state legislatures are having a major impact on the nation’s laws. The Hill’s Reid Wilson joins Lisa Desjardins to discuss specific changes as well as three broader trends to watch going forward.
https://www.youtube.com/watch?v=LAtFe9RnXgM
NYT on the travails for Huawei
Huawei is the world’s leading maker of equipment that powers cellphone networks and a champion of Beijing’s ambitions to build new, cutting-edge technology companies. Officials in the United States have long been worried that China’s government could use Huawei’s products to gather intelligence, an accusation the company has repeatedly denied.
Huawei’s year went from bad to worse when the United States added the company to an export blacklist in May. The move effectively restricted its ability to purchase American products crucial to its smartphones and telecom gear, weighing on revenue growth.
The blocks, though, have proven somewhat porous. The Trump administration has permitted sales to Huawei that are used to maintain existing mobile networks. Some of its American suppliers determined they could lawfully continue selling nonsensitive products to the company. In October, the Trump administration said it would issue export licenses to certain United States companies selling to Huawei, further easing pressures on its supply chain.
Even so, Mr. Xu indicated that the confrontation with the United States would continue to dampen growth and said he expected Huawei to remain on the blacklist in 2020.
“Difficulty is the prelude to greater success, and adversity the whetstone of an iron-willed team. The U.S. government’s campaign against Huawei is strategic and long-term,” he wrote.
Huawei, he said, will “need to go all out” to develop software and services that work with its smartphones. Analysts have worried about whether the company’s smartphones would remain competitive since it was blocked from working with Google. Huawei had to release its latest flagship smartphone, the Mate 30 series, without regular access to Google’s apps.
Mr. Xu said the company shipped a total of 240 million smartphones in 2019, an increase of almost 17 percent over the 206 million units it sold in 2018.
From https://www.nytimes.com/2019/12/30/business/huawei-revenue-growth.html
Huawei is the world’s leading maker of equipment that powers cellphone networks and a champion of Beijing’s ambitions to build new, cutting-edge technology companies. Officials in the United States have long been worried that China’s government could use Huawei’s products to gather intelligence, an accusation the company has repeatedly denied.
Huawei’s year went from bad to worse when the United States added the company to an export blacklist in May. The move effectively restricted its ability to purchase American products crucial to its smartphones and telecom gear, weighing on revenue growth.
The blocks, though, have proven somewhat porous. The Trump administration has permitted sales to Huawei that are used to maintain existing mobile networks. Some of its American suppliers determined they could lawfully continue selling nonsensitive products to the company. In October, the Trump administration said it would issue export licenses to certain United States companies selling to Huawei, further easing pressures on its supply chain.
Even so, Mr. Xu indicated that the confrontation with the United States would continue to dampen growth and said he expected Huawei to remain on the blacklist in 2020.
“Difficulty is the prelude to greater success, and adversity the whetstone of an iron-willed team. The U.S. government’s campaign against Huawei is strategic and long-term,” he wrote.
Huawei, he said, will “need to go all out” to develop software and services that work with its smartphones. Analysts have worried about whether the company’s smartphones would remain competitive since it was blocked from working with Google. Huawei had to release its latest flagship smartphone, the Mate 30 series, without regular access to Google’s apps.
Mr. Xu said the company shipped a total of 240 million smartphones in 2019, an increase of almost 17 percent over the 206 million units it sold in 2018.
From https://www.nytimes.com/2019/12/30/business/huawei-revenue-growth.html
Free representation for low income tenants facing eviction
Just two years ago, New York City became the first city in the nation to guarantee free representation to low-income residents facing eviction. Now, six other cities have followed suit, and several more jurisdictions, including the state of Massachusetts, have versions of such a law under consideration. This month alone, headlines in the Wall Street Journal, Next City, and CityLab tell the story:
These pieces amplify and give national context to the significant local coverage emanating from cities where this civil justice solution has been adopted. This fall, Philadelphia and Cleveland became the two most recent examples.
As Jared Brey wrote for Next City, “The laws are meant to correct a common imbalance in landlord-tenant courts, where the vast majority of landlords benefit from legal representation while tenants are left on their own to figure out what rights they have in trying to avoid being evicted.”
John Pollock of the National Coalition for a Civil Right to Counsel (NCCRC), and a source in the piece, cited the litany of common problems: “The eviction mill problem, the unfairness of the results, and most importantly the dire circumstances people face…You can lose virtually everything if you lose your house: Your kids, your job, you could wind up in jail. It just keeps going.”
To learn more about the civil right to counsel movement, including links to additional media coverage and a map showing the status of the movement by-issue and by-state, visit the NCCRC website.
Just two years ago, New York City became the first city in the nation to guarantee free representation to low-income residents facing eviction. Now, six other cities have followed suit, and several more jurisdictions, including the state of Massachusetts, have versions of such a law under consideration. This month alone, headlines in the Wall Street Journal, Next City, and CityLab tell the story:
- Is Tenants’ Right to Counsel On Its Way to Becoming Standard Practice?, Jared Brey in Next City, December 10, 2019.
- The Right to Eviction Counsel Is Gaining Momentum, Kriston Capps in CityLab, December 13, 2019.
- As Rents Rise, Cities Strengthen Tenants’ Ability to Fight Eviction, Laura Kusisto in The Wall Street Journal, December 26, 2019.
These pieces amplify and give national context to the significant local coverage emanating from cities where this civil justice solution has been adopted. This fall, Philadelphia and Cleveland became the two most recent examples.
As Jared Brey wrote for Next City, “The laws are meant to correct a common imbalance in landlord-tenant courts, where the vast majority of landlords benefit from legal representation while tenants are left on their own to figure out what rights they have in trying to avoid being evicted.”
John Pollock of the National Coalition for a Civil Right to Counsel (NCCRC), and a source in the piece, cited the litany of common problems: “The eviction mill problem, the unfairness of the results, and most importantly the dire circumstances people face…You can lose virtually everything if you lose your house: Your kids, your job, you could wind up in jail. It just keeps going.”
To learn more about the civil right to counsel movement, including links to additional media coverage and a map showing the status of the movement by-issue and by-state, visit the NCCRC website.
Amazon's Ring sued over 'lax security standards' leading to hacks
BY EMILY BIRNBAUM
Amazon and its home security subsidiary Ring are facing a federal lawsuit in California over allegations that its "lax security standards" led to a series of invasive and frightening hacks over the past year.
Read the full story here
Amazon's Ring sued over 'lax security standards' leading to hacks
BY EMILY BIRNBAUM
Amazon and its home security subsidiary Ring are facing a federal lawsuit in California over allegations that its "lax security standards" led to a series of invasive and frightening hacks over the past year.
Read the full story here
President Trump's tariffs on imports led to job losses and higher prices, a new study from the Federal Reserve has found.
See https://www.marketwatch.com/story/fed-study-finds-trump-tariffs-backfired-2019-12-27
"We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices," the report by Fed economists Aaron Flaaen and Justin Pierce reads.
MarketWatch first reported the study, noting that 10 primary industries were hit by retaliatory tariffs and higher prices, including producers of magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
See https://www.marketwatch.com/story/fed-study-finds-trump-tariffs-backfired-2019-12-27
"We find that tariff increases enacted in 2018 are associated with relative reductions in manufacturing employment and relative increases in producer prices," the report by Fed economists Aaron Flaaen and Justin Pierce reads.
MarketWatch first reported the study, noting that 10 primary industries were hit by retaliatory tariffs and higher prices, including producers of magnetic and optical media, leather goods, aluminum sheet, iron and steel, motor vehicles, household appliances, sawmills, audio and video equipment, pesticide, and computer equipment.
William Greider died recently at age 83.
The following essay, originally published in 1981, is widely considered his most famous piece of writing. It caused a firestorm of controversy when it first appeared. David A. Stockman, the budget director for the incoming Reagan administration, spoke too freely with Greider about his doubts over Reagan’s supply-side theory of economics. Stockman was then, in his words, “taken to the woodshed” by the president.
The essay is here: https://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760/
The following essay, originally published in 1981, is widely considered his most famous piece of writing. It caused a firestorm of controversy when it first appeared. David A. Stockman, the budget director for the incoming Reagan administration, spoke too freely with Greider about his doubts over Reagan’s supply-side theory of economics. Stockman was then, in his words, “taken to the woodshed” by the president.
The essay is here: https://www.theatlantic.com/magazine/archive/1981/12/the-education-of-david-stockman/305760/
Housing Trust Funds and affordable housing in Virginia and Maryland
Housing advocates hope for larger cash infusions to the Virginia Housing Trust Fund, a low-interest loan program designed to create or preserve new affordable housing around the state.
Since lawmakers created it in 2013, they’ve generally only seeded it with a few million dollars each year. The latest biennial budget allocates about $9 million annually.
Activists have considered that insufficient to meet needs around the entire state, especially considering that some Northern Virginia localities manage much larger loan programs on their own. And Virginia lags behind many other states, including neighboring Maryland, where the “Rental Housing Works” program regularly approaches $20 million annually.
From: https://www.bizjournals.com/washington/news/2019/11/19/affordable-housing-hopes-abound-in-northern-va-as.html?ana=e_wash_bn_editorschoice&j=90400451&t=Breaking%20News&mkt_tok=eyJpIjoiWkdWbE5UQTROR000T0RVNCIsInQiOiJTaWNNT05ocXlZWWtSNko5VXZiSXgzZExkTG9vMmhyaHpkTEhDbGoyTE1xOE1tdlZ3SStQNGVVZlpUdDJSNTRqM2toWlwvb2JYZVliM3RZZnN0Q1A5MHhNWHpBYUVoUHpqXC9aOTlqUUlXVmdKNUd1dmg5NnBoeEY2cWozVkhVTVBXQU1KWk9QUmEwTDlmQnVPaDNjRmF0Zz09In0%3D
Housing advocates hope for larger cash infusions to the Virginia Housing Trust Fund, a low-interest loan program designed to create or preserve new affordable housing around the state.
Since lawmakers created it in 2013, they’ve generally only seeded it with a few million dollars each year. The latest biennial budget allocates about $9 million annually.
Activists have considered that insufficient to meet needs around the entire state, especially considering that some Northern Virginia localities manage much larger loan programs on their own. And Virginia lags behind many other states, including neighboring Maryland, where the “Rental Housing Works” program regularly approaches $20 million annually.
From: https://www.bizjournals.com/washington/news/2019/11/19/affordable-housing-hopes-abound-in-northern-va-as.html?ana=e_wash_bn_editorschoice&j=90400451&t=Breaking%20News&mkt_tok=eyJpIjoiWkdWbE5UQTROR000T0RVNCIsInQiOiJTaWNNT05ocXlZWWtSNko5VXZiSXgzZExkTG9vMmhyaHpkTEhDbGoyTE1xOE1tdlZ3SStQNGVVZlpUdDJSNTRqM2toWlwvb2JYZVliM3RZZnN0Q1A5MHhNWHpBYUVoUHpqXC9aOTlqUUlXVmdKNUd1dmg5NnBoeEY2cWozVkhVTVBXQU1KWk9QUmEwTDlmQnVPaDNjRmF0Zz09In0%3D
COMMENTARY
Gig Worker Law: Not as Simple as ABC
By Eve Wagner
AB 5, the bill whose purported mission was to restore protections to workers such as ride-share drivers and freelance writers, is now being decried by some as a job-killer.
Read More https://link.law.com/click/18979364.13524/aHR0cHM6Ly93d3cubGF3LmNvbS90aGVyZWNvcmRlci8yMDE5LzEyLzIzL2dpZy13b3JrZXItbGF3LW5vdC1hcy1zaW1wbGUtYXMtYWJjLz9rdz1HaWclMjBXb3JrZXIlMjBMYXc6JTIwTm90JTIwYXMlMjBTaW1wbGUlMjBhcyUyMEFCQyZ1dG1fc291cmNlPWVtYWlsJnV0bV9tZWRpdW09ZW5sJnV0bV9jYW1wYWlnbj1pbnByYWN0aWNlYWxlcnQmdXRtX2NvbnRlbnQ9MjAxOTEyMjYmdXRtX3Rlcm09Y2E/593aad6e24b2d66c428b4da1De9aa56f8
Gig Worker Law: Not as Simple as ABC
By Eve Wagner
AB 5, the bill whose purported mission was to restore protections to workers such as ride-share drivers and freelance writers, is now being decried by some as a job-killer.
Read More https://link.law.com/click/18979364.13524/aHR0cHM6Ly93d3cubGF3LmNvbS90aGVyZWNvcmRlci8yMDE5LzEyLzIzL2dpZy13b3JrZXItbGF3LW5vdC1hcy1zaW1wbGUtYXMtYWJjLz9rdz1HaWclMjBXb3JrZXIlMjBMYXc6JTIwTm90JTIwYXMlMjBTaW1wbGUlMjBhcyUyMEFCQyZ1dG1fc291cmNlPWVtYWlsJnV0bV9tZWRpdW09ZW5sJnV0bV9jYW1wYWlnbj1pbnByYWN0aWNlYWxlcnQmdXRtX2NvbnRlbnQ9MjAxOTEyMjYmdXRtX3Rlcm09Y2E/593aad6e24b2d66c428b4da1De9aa56f8
At a time when germs are growing more resistant to common antibiotics, many companies that are developing new versions of the drugs are hemorrhaging money and going out of business, gravely undermining efforts to contain the spread of deadly, drug-resistant bacteria.
Antibiotic start-ups like Achaogen and Aradigm have gone belly up in recent months, pharmaceutical behemoths like Novartis and Allergan have abandoned the sector and many of the remaining American antibiotic companies are teetering toward insolvency. One of the biggest developers of antibiotics, Melinta Therapeutics, recently warned regulators it was running out of cash.
Experts say the grim financial outlook for the few companies still committed to antibiotic research is driving away investors and threatening to strangle the development of new lifesaving drugs at a time when they are urgently needed.
From: https://www.nytimes.com/2019/12/25/health/antibiotics-new-resistance.html
Antibiotic start-ups like Achaogen and Aradigm have gone belly up in recent months, pharmaceutical behemoths like Novartis and Allergan have abandoned the sector and many of the remaining American antibiotic companies are teetering toward insolvency. One of the biggest developers of antibiotics, Melinta Therapeutics, recently warned regulators it was running out of cash.
Experts say the grim financial outlook for the few companies still committed to antibiotic research is driving away investors and threatening to strangle the development of new lifesaving drugs at a time when they are urgently needed.
From: https://www.nytimes.com/2019/12/25/health/antibiotics-new-resistance.html
Re: Air B&B:
The Third Court of Appeals found the City of Austin’s Short Term Rental Ordinance unconstitutional for retroactively banning Type II “non-owner occupied vacation rentals” and by violating the fundamental right to assembly guaranteed under the Texas Constitution.
To read the Third Court of Appeals opinion in full, please visit:
https://files.texaspolicy.com/uploads/2019/11/27091358/STR-Opinion.pdf
The Third Court of Appeals found the City of Austin’s Short Term Rental Ordinance unconstitutional for retroactively banning Type II “non-owner occupied vacation rentals” and by violating the fundamental right to assembly guaranteed under the Texas Constitution.
To read the Third Court of Appeals opinion in full, please visit:
https://files.texaspolicy.com/uploads/2019/11/27091358/STR-Opinion.pdf
Lawsuit alleges turkey companies conspired to keep prices high
By Leah Douglas, December 19, 2019
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A new class-action lawsuit brought by two food distributors alleges that the country’s top turkey companies conspired for most of the past decade to raise turkey prices. The allegations mirror those brought in recent years against beef, pork, and chicken companies, and all revolve around the use of reports on industry production and pricing made by a secretive data company called Agri Stats.
This latest complaint, filed Wednesday in U.S. District Court in the Northern District of Illinois, alleges that between 2010 and 2017, the country’s largest turkey companies conspired to artificially raise turkey prices by coordinating production cuts. As a result, turkey prices reached an “unprecedented level.”
The suit was brought by Olean Wholesale Grocery Cooperative and John Gross and Company, two food distributors and wholesalers based in New York and Pennsylvania, respectively, who bought turkey from the defendants during the time period covered by the suit.
The defendants in the case control approximately 80 percent of the market for turkeys, and the top four — Cargill, Hormel, Butterball, and Farbest — control more than half the market, according to the complaint. Other defendants include Agri Stats, Foster Farms, Kraft Heinz, Hormel Foods, and Tyson Foods.
According to the complaint, the companies coordinated to raise prices at industry conventions, through public discussion of production cuts, and by analyzing competitor data contained in Agri Stats reports. Those reports, which are available only on a subscription basis to industry insiders, can contain proprietary information about sales, production levels and capacity, and wages paid to farmers.
From https://thefern.org/ag_insider/lawsuit-alleges-turkey-companies-conspired-to-keep-prices-high/
By Leah Douglas, December 19, 2019
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A new class-action lawsuit brought by two food distributors alleges that the country’s top turkey companies conspired for most of the past decade to raise turkey prices. The allegations mirror those brought in recent years against beef, pork, and chicken companies, and all revolve around the use of reports on industry production and pricing made by a secretive data company called Agri Stats.
This latest complaint, filed Wednesday in U.S. District Court in the Northern District of Illinois, alleges that between 2010 and 2017, the country’s largest turkey companies conspired to artificially raise turkey prices by coordinating production cuts. As a result, turkey prices reached an “unprecedented level.”
The suit was brought by Olean Wholesale Grocery Cooperative and John Gross and Company, two food distributors and wholesalers based in New York and Pennsylvania, respectively, who bought turkey from the defendants during the time period covered by the suit.
The defendants in the case control approximately 80 percent of the market for turkeys, and the top four — Cargill, Hormel, Butterball, and Farbest — control more than half the market, according to the complaint. Other defendants include Agri Stats, Foster Farms, Kraft Heinz, Hormel Foods, and Tyson Foods.
According to the complaint, the companies coordinated to raise prices at industry conventions, through public discussion of production cuts, and by analyzing competitor data contained in Agri Stats reports. Those reports, which are available only on a subscription basis to industry insiders, can contain proprietary information about sales, production levels and capacity, and wages paid to farmers.
From https://thefern.org/ag_insider/lawsuit-alleges-turkey-companies-conspired-to-keep-prices-high/
As States open the door to sports betting, the betting market has grown, and DraftKings Inc. has an agreement that would take the sports-betting company public
Best known for its fantasy-sports games, DraftKings said Monday it will merge with Diamond Eagle Acquisition Corp., which trades on the Nasdaq and is backed by former MGM movie studio Chief Executive Harry Sloan. Diamond Eagle is what is known as a blank-check company, formed in part to find another company that it would combine with or acquire.
DraftKings also struck a deal to merge with gambling-technology provider SBTech. Both combinations are expected to be completed in the first half of next year, the company said.
Several investors, including funds managed by Capital Research & Management Co., Wellington Management Co. and Franklin Templeton, have agreed to invest $304 million in a class of the combined company’s stock.
DraftKings expects the combined company to have a market value of $3.3 billion at closing and said it would have more than $500 million in unrestricted cash on hand.
A number of states have moved to authorize wagers on sports after a Supreme Court decision last year opened the door to those bets. Twenty states and the District of Columbia have legalized sports betting.
DraftKings estimates the size of the market for online sports betting and other games, such as those typically found in casinos, could reach about $40 billion in the U.S., according to a recent investor presentation. It expects a potential revenue opportunity from online gambling of $2.9 billion to $4.7 billion, the presentation showed.
From: https://www.wsj.com/articles/draftkings-to-go-public-following-merger-with-diamond-eagle-sbtech-11577109747?mod=business_lead_pos13
Best known for its fantasy-sports games, DraftKings said Monday it will merge with Diamond Eagle Acquisition Corp., which trades on the Nasdaq and is backed by former MGM movie studio Chief Executive Harry Sloan. Diamond Eagle is what is known as a blank-check company, formed in part to find another company that it would combine with or acquire.
DraftKings also struck a deal to merge with gambling-technology provider SBTech. Both combinations are expected to be completed in the first half of next year, the company said.
Several investors, including funds managed by Capital Research & Management Co., Wellington Management Co. and Franklin Templeton, have agreed to invest $304 million in a class of the combined company’s stock.
DraftKings expects the combined company to have a market value of $3.3 billion at closing and said it would have more than $500 million in unrestricted cash on hand.
A number of states have moved to authorize wagers on sports after a Supreme Court decision last year opened the door to those bets. Twenty states and the District of Columbia have legalized sports betting.
DraftKings estimates the size of the market for online sports betting and other games, such as those typically found in casinos, could reach about $40 billion in the U.S., according to a recent investor presentation. It expects a potential revenue opportunity from online gambling of $2.9 billion to $4.7 billion, the presentation showed.
From: https://www.wsj.com/articles/draftkings-to-go-public-following-merger-with-diamond-eagle-sbtech-11577109747?mod=business_lead_pos13
WSJ investigation says Huawei Staff Help Uganda Government Spy on People
Could Huawei similarly aid malign forces in the U.S.?
WSJ reporters on the ground in Uganda uncover how Chinese telecom giant Huawei is providing surveillance tools that African governments use to stifle dissent. Techniques include street cameras, cell phone hacking, and encryption breaking, all involving support from Huawei staff. The implication is that Huawei could similarly help malign forces in the U.S. In the U.S. the malign force could be China itself. DAR
The WSJ video is here: https://www.wsj.com/video/wsj-investigation-huawei-staff-help-governments-to-spy-on-people/0CE986A8-9975-4CB6-BB9C-031A24540E93.html
Could Huawei similarly aid malign forces in the U.S.?
WSJ reporters on the ground in Uganda uncover how Chinese telecom giant Huawei is providing surveillance tools that African governments use to stifle dissent. Techniques include street cameras, cell phone hacking, and encryption breaking, all involving support from Huawei staff. The implication is that Huawei could similarly help malign forces in the U.S. In the U.S. the malign force could be China itself. DAR
The WSJ video is here: https://www.wsj.com/video/wsj-investigation-huawei-staff-help-governments-to-spy-on-people/0CE986A8-9975-4CB6-BB9C-031A24540E93.html
NY Times editorial critique of USDOJ Antitrust Division's Delrahim:
Why Is the Justice Department Treating T-Mobile Like a Client?
Antitrust officials are supposed to prevent problematic corporate mergers. Instead, they’re helping shepherd deals.
By The Editorial Board https://www.nytimes.com/2019/12/20/opinion/justice-department-antitrust-sprint-tmobile.html?searchResultPosition=3
From the editorial:
The Times reported on Thursday that Mr. Delrahim worked assiduously this past summer to clear the way for the merger of two rival mobile phone companies, T-Mobile and Sprint, by helping to arrange for the two companies to sell some assets to a third company, Dish. Mr. Delrahim behaved like a man who wanted to make a deal. In text messages, which were disclosed as part of a related court case, he repeatedly coaxed and cajoled executives at the three companies, as well as federal officials who had the ability to block the merger.
Mr. Delrahim has cast his actions as a defense of the public interest. In announcing that the Justice Department had approved the merger in July, he said that he had been prepared to go to court to block the merger had Dish not participated in the agreement. The asset sales are intended to allow Dish to emerge as a viable new mobile phone company, filling the void when Sprint departs the marketplace.
But Mr. Delrahim was negotiating with himself. His campaign to secure Dish’s participation amounted to a concerted effort to satisfy his own objections to the proposed deal. Rather than defending the public interest, he was working to defend T-Mobile’s interests.
And the deeper problem is that Mr. Delrahim’s behavior was not exceptional.
FCC quizzed over Sprint, T-Mobile merger approval
CPI
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December 17, 2019The Democratic chairmen of two key House committees are questioning whether the government flouted “appropriate” procedures when it recently approved the $26 billion merger between T-Mobile and Sprint, green-lighting one of the largest telecom deals in recent history.
House Energy and Commerce Committee Chairman Frank Pallone Jr. (D-N.J.) and Judiciary Committee Chairman Jerold Nadler (D-N.Y.) on Monday accused the Federal Communications Commission (FCC) of engaging in shady and potentially rule-breaking behavior ahead of its decision to approve the merger along party lines earlier this year.
“We have serious concerns regarding the troubling lack of transparency and an apparent lack of appropriate process leading up to the Federal Communications Commission’s approval of T-Mobile U.S., Inc.’s purchase of Sprint Corporation,” Pallone and Nadler said in a letter to FCC Chairman Ajit Pai, a Republican.
Several critics, including Democratic FCC Commissioner Jessica Rosenworcel and a coalition of advocacy groups, have claimed the FCC should have opened up the deal to public comment before voting for it 3-2 in October, a few months after the Department of Justice (DOJ) approved of the merger under an array of new conditions. And the Democrats, citing Rosenworcel, are accusing the agency of replacing initial evidence with analysis that “downplay[ed] the competitive harms of the merger” at the last minute.
“To the extent that changes were made to the draft decision based on data supplied by the parties after the draft was first circulated to the Commissioners, we are concerned that there was insufficient notice and opportunity for public review and comment,” Pallone and Nadler wrote.
Industry watchers have said the FCC’s process around approving the T-Mobile-Sprint merger was abnormal, with the Republicans offering their blessing even before any public proposal had been circulated.
Pallone and Nadler wrote that the FCC should have opened up their proposal to review after DOJ had substantially changed the terms of the deal. But the Republican-controlled agency did not seek any additional comment.
They’re further accusing the FCC of failing to disclose details about conversations during that period of time between T-Mobile representatives and FCC commissioners.
T-Mobile representatives met with FCC commissioners 25 times between July and October, but the agency has not offered a detailed account of what was discussed in those “ex-parte” meetings, according to the letter.
The Democrats are asking the FCC to produce documents about a potential public comment period and questioning whether the agency is investigating T-Mobile’s compliance with its “ex-parte” rules.
Full Content: The Hill https://thehill.com/policy/technology/474776-key-house-dems-question-whether-t-mobile-sprint-merger-went-through
DAR Comment: USDOJ policy published in 2004 on "fix-it-first" merger remedies
From https://www.justice.gov/atr/page/file/1175136/download [footnotes not included]
A Fix-It-First Remedy Is Acceptable if It Eliminates the Competitive Harm
A fix-it-first remedy is a structural remedy that the parties implement and the Division accepts before a merger is consummated.36 A fix-it-first remedy eliminates the Division’s antitrust concerns and therefore the need to file a case.37
The Division does not discourage acceptable fix-it-first remedies. If parties express an interest in pursuing a fix-it-first remedy that satisfies the conditions discussed below, the Division will consider the proposal. Indeed, in certain circumstances, a fix-it-first remedy may restore competition to the market more quickly and effectively than would a decree. This would be particularly important, for example, where a rapid divestiture would prevent asset dissipation or ensure the resolution of competitive concerns before an upcoming bid.
If an acceptable fix-it-first remedy can be implemented, the Division will exercise its Executive Branch prerogative to forego filing a case and conclude its investigation without imposing additional obligations on the parties.
A fix-it-first remedy restores premerger competition, removes the need for litigation, allows the Division to use its resources more efficiently, and saves society from incurring real costs. Moreover, a fix-it-first remedy may provide more flexibility in fashioning the appropriate divestiture.
Because different purchasers may require different sets of assets to be competitive, a fix-it-first remedy allows the assets to be tailored to a specific proposed purchaser. A consent decree, in contrast, must identify all of the assets necessary for effective competition by any potentially acceptable purchaser.
The Division will accept a fix-it-first remedy when it eliminates the competitive harm otherwise arising from the proposed merger. The same internal review is given to fix-it-first remedies as is given to consent decrees. Before exercising its prerogative not to file a case, the Division must be satisfied that the fix-it-first remedy will protect the market from any adverse competitive effects attributable to the proposed transaction.
A fix-it-first remedy will not eliminate the Division’s concerns unless the Division is confident that the proposed fix will indeed preserve the premerger level of competition. In addition, Antitrust Division attorneys reviewing fix-it-first remedies should carefully screen the proposed divestiture for any relationships between the seller and the purchaser, since the parties have, in essence, self selected the purchaser.
An acceptable fix-it-first remedy should contain no less substantive relief than would be sought if a case were filed.38 The Division, therefore, needs to conduct an investigation sufficient to determine both the nature and extent of the likely competitive harm and whether the proposed fix-it-first remedy will resolve it.39
The ACLU on the FISA Court, circa 2013
[T]he record suggests that the government has felt free to make bolder, less-supportable arguments before the secret FISA Court than it’s willing to make before real courts that are open to the public.
It has often been pointed out that the FISA Court is not a normal court, a big reason being that all of its proceedings are ex parte (that is, there is no adversarial proceeding, the court only hears from one side) and that it operates within an ocean of secrecy and compartmentalization.
From: https://www.aclu.org/blog/national-security/privacy-and-surveillance/fisa-courts-problems-run-deep-and-more-tinkering
(November, 2013)
[T]he record suggests that the government has felt free to make bolder, less-supportable arguments before the secret FISA Court than it’s willing to make before real courts that are open to the public.
It has often been pointed out that the FISA Court is not a normal court, a big reason being that all of its proceedings are ex parte (that is, there is no adversarial proceeding, the court only hears from one side) and that it operates within an ocean of secrecy and compartmentalization.
From: https://www.aclu.org/blog/national-security/privacy-and-surveillance/fisa-courts-problems-run-deep-and-more-tinkering
(November, 2013)
Government tax policies that help small business? Two views:
US Senate Passes 1-Year Extension of Excise Tax Relief for craft brewers, Legislation Advances to President Trump
The U.S. Senate today passed a tax extender package that includes a one-year extension of the tax relief in the Craft Beverage Modernization and Tax Reform Act (CMBTRA) that was slated to expire at the end of 2019.
Passage through the Senate comes a couple of days after the tax package passed the House of Representatives and in the final hours of the legislative year. The legislation now awaits President Donald Trump to sign it into law.
“We are pleased Congress has come together to prevent a $130 million tax increase on our nation’s thriving beer industry, which supports more than 2.1 million good-paying jobs,” Jim McGreevy, president and CEO of the Beer Institute, wrote in an email to the trade group’s members. “As we enter 2020, we will continue fighting for excise tax relief permanency with the popular bipartisan, bicameral Craft Beverage Modernization and Tax Relief Act.”
The extension of CBMTRA — which was passed into law in 2017 as part of the Tax Cuts and Jobs Act but scheduled to sunset at the end of 2019 — had been a priority for alcohol industry trade groups such as the BI, Brewers Association (BA), Distilled Spirits Council of the United States (DISCUS), the American Craft Spirits Association, Wine America, the Wine Institute, and the U.S. Association of Cider Makers.
If signed by President Trump, the extender would keep in place through December 31, 2020, an excise tax rate of $3.50 per barrel (a reduction from $7 per barrel) on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually.
The legislation also sets the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and beer importers, while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.
The savings can be significant, especially for companies who are struggling with slowing growth. For example, a beer company making 20,000 barrels annually, its federal excise tax bill would be cut in half from $140,000 to $70,000.
From: https://www.brewbound.com/news/us-senate-passes-1-year-extension-of-excise-tax-relief-legislation-advances-to-president-trump
US Senate Passes 1-Year Extension of Excise Tax Relief for craft brewers, Legislation Advances to President Trump
- Justin Kendall
- Dec. 19, 2019 at 3:04 PM
The U.S. Senate today passed a tax extender package that includes a one-year extension of the tax relief in the Craft Beverage Modernization and Tax Reform Act (CMBTRA) that was slated to expire at the end of 2019.
Passage through the Senate comes a couple of days after the tax package passed the House of Representatives and in the final hours of the legislative year. The legislation now awaits President Donald Trump to sign it into law.
“We are pleased Congress has come together to prevent a $130 million tax increase on our nation’s thriving beer industry, which supports more than 2.1 million good-paying jobs,” Jim McGreevy, president and CEO of the Beer Institute, wrote in an email to the trade group’s members. “As we enter 2020, we will continue fighting for excise tax relief permanency with the popular bipartisan, bicameral Craft Beverage Modernization and Tax Relief Act.”
The extension of CBMTRA — which was passed into law in 2017 as part of the Tax Cuts and Jobs Act but scheduled to sunset at the end of 2019 — had been a priority for alcohol industry trade groups such as the BI, Brewers Association (BA), Distilled Spirits Council of the United States (DISCUS), the American Craft Spirits Association, Wine America, the Wine Institute, and the U.S. Association of Cider Makers.
If signed by President Trump, the extender would keep in place through December 31, 2020, an excise tax rate of $3.50 per barrel (a reduction from $7 per barrel) on the first 60,000 barrels for domestic brewers producing fewer than 2 million barrels annually.
The legislation also sets the federal excise tax to $16 per barrel on the first 6 million barrels for all other brewers and beer importers, while maintaining the $18 per barrel excise tax for brewers producing more than 6 million barrels.
The savings can be significant, especially for companies who are struggling with slowing growth. For example, a beer company making 20,000 barrels annually, its federal excise tax bill would be cut in half from $140,000 to $70,000.
From: https://www.brewbound.com/news/us-senate-passes-1-year-extension-of-excise-tax-relief-legislation-advances-to-president-trump
Brookings opinion: Who benefits from the “craft beverage” tax cuts? Mostly foreign and industrial producers.Adam LooneyWednesday, January 3, 2018
Adam LooneyJoseph A. Pechman Senior Fellow - Economic Studies, Urban-Brookings Tax Policy Center
The Republican tax bill includes deep cuts to alcohol excise taxes that are widely described as benefiting small “craft” brewers and distillers. In fact, most of the tax cuts go not to the little guys, but to big producers.
According to the Joint Committee on Taxation, these tax cuts, which are rolled up in a part of the bill called the “Craft Beverage Modernization and Tax Reform Act,” reduce total alcohol revenues by $4.2 billion over the two years they are in effect, a cut equal to about 20 percent of total alcohol excise tax revenues in those years.
The frequent assertion that the tax cut is for craft brewers and distillers is misleading.
The new law reduces the excise tax rate on the first 60,000 barrels of beer by 50 percent (from $7 to $3.50) no matter how small or large the brewer. It cuts the tax on the first 100,000 proof gallons of distilled spirits by 80 percent (from $13.50 to $2.70), and by 40 percent on the first 30,000 gallons of most wine (from $0.17 to $0.07 after the increased wine credit). Because these small producers are targeted with the biggest cuts, they must represent most of the revenue, right? Not true.
Small brewers (those producing less than 60,000 barrels) only produced 4.6 percent of all U.S.-made beer in 2016 (about 8 million barrels). And because they already benefited from a lower $7 per barrel tax, while most beer was taxed at $18/barrel, they accounted for only about $56 million in taxes or 1.5 percent of total beer tax revenues (including imports).[1] Cutting their taxes in half should only cost about $28 million.
The story is similar for distilled spirits. Small producers that make less than 100,000 proof gallons per year represent only 1.5 percent of all domestic taxable distilled spirits production. Collectively, they paid about 1 percent of all taxes on distilled spirits in 2016—or about $61 million in excise taxes.[2] Even with an 80 percent tax cut, that’s only $49 million.
https://www.brookings.edu/research/who-benefits-from-the-craft-beverage-tax-cuts-mostly-foreign-and-industrial-producers/
Adam LooneyJoseph A. Pechman Senior Fellow - Economic Studies, Urban-Brookings Tax Policy Center
The Republican tax bill includes deep cuts to alcohol excise taxes that are widely described as benefiting small “craft” brewers and distillers. In fact, most of the tax cuts go not to the little guys, but to big producers.
According to the Joint Committee on Taxation, these tax cuts, which are rolled up in a part of the bill called the “Craft Beverage Modernization and Tax Reform Act,” reduce total alcohol revenues by $4.2 billion over the two years they are in effect, a cut equal to about 20 percent of total alcohol excise tax revenues in those years.
The frequent assertion that the tax cut is for craft brewers and distillers is misleading.
- For every $20 of alcohol tax cuts in the legislation, only about $1 actually goes to the true craft brewers or small distillers.
- Most of the revenue—the other $19—goes to larger producers and to importers. This is largely because of new or expanded opportunities to evade or avoid the limits on what qualifies for the lowest tax rates. For instance, it’s plausible that a third to one half of all distilled spirits sold in the U.S. will qualify for the reduced rate.
- By allowing alcohol from foreign and large domestic producers to be passed off as “craft,” certain parts of the legislation may put America’s real small brewers and distillers at a competitive disadvantage.
The new law reduces the excise tax rate on the first 60,000 barrels of beer by 50 percent (from $7 to $3.50) no matter how small or large the brewer. It cuts the tax on the first 100,000 proof gallons of distilled spirits by 80 percent (from $13.50 to $2.70), and by 40 percent on the first 30,000 gallons of most wine (from $0.17 to $0.07 after the increased wine credit). Because these small producers are targeted with the biggest cuts, they must represent most of the revenue, right? Not true.
Small brewers (those producing less than 60,000 barrels) only produced 4.6 percent of all U.S.-made beer in 2016 (about 8 million barrels). And because they already benefited from a lower $7 per barrel tax, while most beer was taxed at $18/barrel, they accounted for only about $56 million in taxes or 1.5 percent of total beer tax revenues (including imports).[1] Cutting their taxes in half should only cost about $28 million.
The story is similar for distilled spirits. Small producers that make less than 100,000 proof gallons per year represent only 1.5 percent of all domestic taxable distilled spirits production. Collectively, they paid about 1 percent of all taxes on distilled spirits in 2016—or about $61 million in excise taxes.[2] Even with an 80 percent tax cut, that’s only $49 million.
https://www.brookings.edu/research/who-benefits-from-the-craft-beverage-tax-cuts-mostly-foreign-and-industrial-producers/
FOR IMMEDIATE RELEASE
Thursday, December 19, 2019
Justice Department Will Move to Significantly Modify and Extend Consent Decree with Live Nation/Ticketmaster
Justice Department and Live Nation Agree to a Number of Significant Changes, To Extend by Five and Half Years the 2010 Live Nation/Ticketmaster Final Judgment; Live Nation to Pay Costs and Fees to Taxpayers for EnforcementThe Department of Justice’s Antitrust Division will file a petition asking the court to clarify and extend by five and a half years the Final Judgment entered by the Court in United States v. Ticketmaster Entertainment, Inc., et al., Case No. 1:10-cv-00139-RMC (July 30, 2010). This is the most significant enforcement action of an existing antitrust decree by the Department in 20 years.
The 2010 Final Judgment permitted Live Nation to merge with Ticketmaster but prohibited the company from retaliating against concert venues for using another ticketing company, threatening concert venues, or undertaking other specified actions against concert venues for ten years.
Despite the prohibitions in the Final Judgment, Live Nation repeatedly and over the course of several years engaged in conduct that, in the Department’s view, violated the Final Judgment. To put a stop to this conduct and to remove any doubt about defendants’ obligations under the Final Judgment going forward, the Department and Live Nation have agreed to modify the Final Judgment to make clear that such conduct is prohibited. In addition, Live Nation has agreed to extend the term of the Final Judgment by five and a half years, which will allow concert venues and American consumers to get the benefit of the relief the Department bargained for in the original settlement. The proposed modifications to the Final Judgment will also help deter additional violations and allow for easier detection and enforcement if future violations occur.
“When Live Nation and Ticketmaster merged in 2010, the Department of Justice and the federal court imposed conditions on the company in order to preserve and promote ticketing competition.” said Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division. “Today’s enforcement action including the addition of language on retaliation and conditioning will ensure that American consumers get the benefit of the bargain that the United States and Live Nation agreed to in 2010. Merging parties will be held to their promises and the Department will not tolerate transgressions that hurt the American consumer.”
The Department today filed a motion in the U..S. District Court for the District of Columbia to reopen the docket in the underlying action, a necessary step towards filing the petition to clarify and extend the Final Judgment. The Department will file that petition once leave is granted by the court.
The clarifications to the Final Judgment the parties will seek include provisions that:
- Live Nation may not threaten to withhold concerts from a venue if the venue chooses a ticketer other than Ticketmaster;
- A threat by Live Nation to withhold any concerts because a venue chooses another ticketer is a violation of the Final Judgment;
- Withholding any concerts in response to a venue choosing a ticketer other than Ticketmaster is a violation by Live Nation of the Final Judgment;
- The Antitrust Division will appoint an independent monitor to investigate and report on Live Nation’s compliance with the Final Judgment;
- Live Nation will appoint an internal antitrust compliance officer and conduct regular internal training to ensure its employees fully comply with the Final Judgment;
- Live Nation will provide notice to current or potential venue customers of its ticketing services of the clarified and extended Final Judgment; and
- Live Nation is subject to an automatic penalty of $1,000,000 for each violation of the Final Judgment.
- Live Nation will pay costs and fees for the Department’s investigation and enforcement.
Along with the provisions described above, the proposed modifications to the Final Judgment, if approved by the court, include additional safeguards to ensure Live Nation does not punish venues that want to work with competing ticketers, and importantly, extends the term of the Final Judgment for five and half years.
Live Nation Entertainment Inc. is a Delaware corporation headquartered in Beverly Hills, California. It claims to be the largest live entertainment company in the world, active in three principal segments: concert promotion, ticketing services, and sponsorship & advertising. In 2018, Live Nation’s revenues were approximately $10..8 billion.
DAR comment: There has been a lot of expert comment criticizing the USDOJ actions as insufficient.
Feel free to use gaslight or incandescent bulbs:
From the NYT:
The Trump administration announced that it would block a rule designed to phase out older incandescent bulbs and require Americans to use energy-efficient light bulbs.
In announcing the move, the secretary of energy, Dan Brouillette, who is a former auto lobbyist, said the administration had chosen “to protect consumer choice by ensuring that the American people do not pay the price for unnecessary overregulation from the federal government.” The new rule was unnecessary, he said, because innovation and technology are already “increasing the efficiency and affordability of light bulbs without federal government intervention.”
The rule, which would have gone into effect on Jan. 1, was required under a law passed in 2007 during the administration of President George W. Bush.
https://www.nytimes.com/2019/12/20/climate/trump-light-bulb-rollback.html?action=click&module=Latest&pgtype=Homepage
From the NYT:
The Trump administration announced that it would block a rule designed to phase out older incandescent bulbs and require Americans to use energy-efficient light bulbs.
In announcing the move, the secretary of energy, Dan Brouillette, who is a former auto lobbyist, said the administration had chosen “to protect consumer choice by ensuring that the American people do not pay the price for unnecessary overregulation from the federal government.” The new rule was unnecessary, he said, because innovation and technology are already “increasing the efficiency and affordability of light bulbs without federal government intervention.”
The rule, which would have gone into effect on Jan. 1, was required under a law passed in 2007 during the administration of President George W. Bush.
https://www.nytimes.com/2019/12/20/climate/trump-light-bulb-rollback.html?action=click&module=Latest&pgtype=Homepage
Modern Healthcase opinion:
December 19, 2019 05:06 PM UPDATED 15 HOURS AGO
ACA's continued uncertain fate seen as a Republican win
opinion by SHELBY LIVINGSTON
The 5th Circuit Court of Appeals' reluctance to decide the fate of the Affordable Care Act cuts a break for the Republican lawmakers who sought to topple it while sowing uncertainty into healthcare markets that only recently found their footing.
The 5th Circuit ruled 2-1 on Wednesday that the already toothless individual mandate is unconstitutional but remanded the case back to a federal judge in Texas to determine how much of the landmark healthcare law must fall along with it. U.S. District Judge Reed O'Connor previously struck down the ACA in entirety.
What some observers saw as the appellate court's unwillingness to get its hands dirty ensures that the lawsuit, known as Texas v. U.S., will drag on beyond the 2020 presidential election. While the ACA remains the law of the land, the uncertainty around its future could once again wreak havoc on the individual health insurance exchanges.
"That means more uncertainty in the healthcare markets about the ACA's future, and it also means that it will be less evident to the voters what's going on, which will make the voters less able to hold the administration accountable at the polls for its efforts to undermine the law," said Abbe Gluck, a Yale University law professor.
What happens next is up in the air. California Attorney General Xavier Becerra said Wednesday that his state is prepared to appeal to the Supreme Court, but Thursday suggested the coalition of 20 Democratic states that defended the ACA in the face of the Republican state challenge would decide next steps as a team.
Some legal experts doubt that the high court would take the case right away. If the Supreme Court decided to hear the case before Judge O'Connor gets another swing at it, it's unlikely the justices would hold arguments before October. A decision would come down in 2021 in that situation, multiple experts said.
David Coale, a Texas-based appellate attorney at law firm Lynn Pinker Cox & Hurst, said it's more likely that the Supreme Court would want the
5th Circuit to first hear the case en banc. The Republicans, Democrats or individual plaintiffs in the lawsuit could ask for a hearing before all of the 5th Circuit judges, or one of the appellate judges themselves could move for one, he said.
If the case instead returns to the district court in Texas, it could be another year before Judge O'Connor issues a second decision. The 5th Circuit tasked him to "to employ a finer-toothed comb on remand" as he analyzes what ACA provisions could be severed from the individual mandate. Once he decides, the case would be appealed to the 5th Circuit again.
In the meantime, health insurers, hospitals and patients are stuck in limbo. Risk-averse health insurers could hike premiums or leave the individual market, as they did previously when the ACA's status was uncertain.
"When (insurers) get nervous they want to charge more because of the uncertainty and the risk they perceive of being in the market," Washington Insurance Commissioner Mike Kreidler said during a press conference on Thursday. "We have a competitive market, but at the same time they are not going to throw good money after bad if they think the risk has increased or is getting worse. That's what this court decision has done. It has raised the temperature right now."
Average ACA exchange premiums decreased for the first time in 2019, as insurers who left the market came crawling back.
Even though the 5th Circuit left the bulk of the healthcare law standing for now, most ACA supporters viewed the decision as a loss by sending the case back to a judge who already moved once to axe the law.
"The court sent the case to an extreme right-wing judge who has already made his intentions clear: to strike down as much of the ACA as possible," said Topher Spiro, vice president of health policy at the liberal Center for American Progress.
But there are bright spots for ACA supporters in the 5th Circuit's decision. Conservative and left-leaning legal experts alike had complained that Judge O'Connor did not apply a settled legal doctrine called "severability" correctly when he ruled the ACA invalid in December 2018. That doctrine holds the decision to scrap a piece of a law or destroy the whole thing rests on what Congress would have wanted.
U.S Circuit Judge Jennifer Elrod, a Republican appointee who wrote the majority opinion, noted that the lower court paid too much attention to the 2010 Congress's description of the mandate as "essential" and not enough to the 2017 Congress' intent when it got rid of the mandate but left the rest of the law on the books.
"It effectively told the district court: the test here is what the 2017 Congress wanted to do," Gluck said.
Many legal experts, including Gluck, have argued there's no question of what the 2017 Congress would have wanted because it's clear what it did: it zeroed out the individual mandate and chose to keep the rest of the ACA. Whether the lower court changes its mind based on that legal test is unclear. "I'm not optimistic," she said.
The 5th Circuit's decision to remand to the lower court also suggests that it doesn't believe the entire ACA must fall. While the court wrote that Judge O'Connor "cogently explains" why some major provisions, such as the protections for patients with pre-existing conditions, are linked to the individual mandate, he didn't explain how other provisions concerning restaurant menu guidelines and healthcare fraud were intended to work with the individual mandate.
"The basis of the decision suggests that, yes, they think some things are inseverable," said Katie Keith, a Georgetown University law professor. "But clearly they are open to some things being severed alongside the ACA. It's not entirely clear what, but they give us a couple of hints."
https://www.modernhealthcare.com/legal/acas-continued-uncertain-fate-seen-republican-win?_ptid=%7Bjcx%7DH4sIAAAAAAAAAI2QW2-CQBCF_8s-u2YvXHZ9s4ZaUwnFGquPy7LAGgRkQa1N_3uB1DYmfei8zXznTGbOBxA6BhPQLLUx4fG4isEIVCJVG63Oi54QhDnEBBIEEYM2gYhARhzoWcF1S1kSui7ZlaEPBbcj4mJO7RjbHNkqoVxZDpJcJIkro26xulSq1qqQaljtbS0WPPPF-pXv7qh3UbJtdFkMMhxZqD4wJBhEXZG6ojqLZE5jvmfSZLQoE3Pnn8ofs8nK81odqlw0auaHvodesb1CK8w6RybMjYFJU7dqBJrvfjAH68cXlz75wWxOwS_biFqLouklRZvnIyDFoRI6LcxtcNJGDxyc4J8BUgQduazf52nFr2_bh2B__E-AuurzQGxM8ZjYaEyGN1qj6mmqiqaD8Vn2lzY5mGDbdTh1KMGfXyWrCzLnAQAA&CSAuthResp=1%3A%3A303359%3A0%3A24%3Asuccess%3A8C031B8D453364BB9FE68E7A071730EB
December 19, 2019 05:06 PM UPDATED 15 HOURS AGO
ACA's continued uncertain fate seen as a Republican win
opinion by SHELBY LIVINGSTON
The 5th Circuit Court of Appeals' reluctance to decide the fate of the Affordable Care Act cuts a break for the Republican lawmakers who sought to topple it while sowing uncertainty into healthcare markets that only recently found their footing.
The 5th Circuit ruled 2-1 on Wednesday that the already toothless individual mandate is unconstitutional but remanded the case back to a federal judge in Texas to determine how much of the landmark healthcare law must fall along with it. U.S. District Judge Reed O'Connor previously struck down the ACA in entirety.
What some observers saw as the appellate court's unwillingness to get its hands dirty ensures that the lawsuit, known as Texas v. U.S., will drag on beyond the 2020 presidential election. While the ACA remains the law of the land, the uncertainty around its future could once again wreak havoc on the individual health insurance exchanges.
"That means more uncertainty in the healthcare markets about the ACA's future, and it also means that it will be less evident to the voters what's going on, which will make the voters less able to hold the administration accountable at the polls for its efforts to undermine the law," said Abbe Gluck, a Yale University law professor.
What happens next is up in the air. California Attorney General Xavier Becerra said Wednesday that his state is prepared to appeal to the Supreme Court, but Thursday suggested the coalition of 20 Democratic states that defended the ACA in the face of the Republican state challenge would decide next steps as a team.
Some legal experts doubt that the high court would take the case right away. If the Supreme Court decided to hear the case before Judge O'Connor gets another swing at it, it's unlikely the justices would hold arguments before October. A decision would come down in 2021 in that situation, multiple experts said.
David Coale, a Texas-based appellate attorney at law firm Lynn Pinker Cox & Hurst, said it's more likely that the Supreme Court would want the
5th Circuit to first hear the case en banc. The Republicans, Democrats or individual plaintiffs in the lawsuit could ask for a hearing before all of the 5th Circuit judges, or one of the appellate judges themselves could move for one, he said.
If the case instead returns to the district court in Texas, it could be another year before Judge O'Connor issues a second decision. The 5th Circuit tasked him to "to employ a finer-toothed comb on remand" as he analyzes what ACA provisions could be severed from the individual mandate. Once he decides, the case would be appealed to the 5th Circuit again.
In the meantime, health insurers, hospitals and patients are stuck in limbo. Risk-averse health insurers could hike premiums or leave the individual market, as they did previously when the ACA's status was uncertain.
"When (insurers) get nervous they want to charge more because of the uncertainty and the risk they perceive of being in the market," Washington Insurance Commissioner Mike Kreidler said during a press conference on Thursday. "We have a competitive market, but at the same time they are not going to throw good money after bad if they think the risk has increased or is getting worse. That's what this court decision has done. It has raised the temperature right now."
Average ACA exchange premiums decreased for the first time in 2019, as insurers who left the market came crawling back.
Even though the 5th Circuit left the bulk of the healthcare law standing for now, most ACA supporters viewed the decision as a loss by sending the case back to a judge who already moved once to axe the law.
"The court sent the case to an extreme right-wing judge who has already made his intentions clear: to strike down as much of the ACA as possible," said Topher Spiro, vice president of health policy at the liberal Center for American Progress.
But there are bright spots for ACA supporters in the 5th Circuit's decision. Conservative and left-leaning legal experts alike had complained that Judge O'Connor did not apply a settled legal doctrine called "severability" correctly when he ruled the ACA invalid in December 2018. That doctrine holds the decision to scrap a piece of a law or destroy the whole thing rests on what Congress would have wanted.
U.S Circuit Judge Jennifer Elrod, a Republican appointee who wrote the majority opinion, noted that the lower court paid too much attention to the 2010 Congress's description of the mandate as "essential" and not enough to the 2017 Congress' intent when it got rid of the mandate but left the rest of the law on the books.
"It effectively told the district court: the test here is what the 2017 Congress wanted to do," Gluck said.
Many legal experts, including Gluck, have argued there's no question of what the 2017 Congress would have wanted because it's clear what it did: it zeroed out the individual mandate and chose to keep the rest of the ACA. Whether the lower court changes its mind based on that legal test is unclear. "I'm not optimistic," she said.
The 5th Circuit's decision to remand to the lower court also suggests that it doesn't believe the entire ACA must fall. While the court wrote that Judge O'Connor "cogently explains" why some major provisions, such as the protections for patients with pre-existing conditions, are linked to the individual mandate, he didn't explain how other provisions concerning restaurant menu guidelines and healthcare fraud were intended to work with the individual mandate.
"The basis of the decision suggests that, yes, they think some things are inseverable," said Katie Keith, a Georgetown University law professor. "But clearly they are open to some things being severed alongside the ACA. It's not entirely clear what, but they give us a couple of hints."
https://www.modernhealthcare.com/legal/acas-continued-uncertain-fate-seen-republican-win?_ptid=%7Bjcx%7DH4sIAAAAAAAAAI2QW2-CQBCF_8s-u2YvXHZ9s4ZaUwnFGquPy7LAGgRkQa1N_3uB1DYmfei8zXznTGbOBxA6BhPQLLUx4fG4isEIVCJVG63Oi54QhDnEBBIEEYM2gYhARhzoWcF1S1kSui7ZlaEPBbcj4mJO7RjbHNkqoVxZDpJcJIkro26xulSq1qqQaljtbS0WPPPF-pXv7qh3UbJtdFkMMhxZqD4wJBhEXZG6ojqLZE5jvmfSZLQoE3Pnn8ofs8nK81odqlw0auaHvodesb1CK8w6RybMjYFJU7dqBJrvfjAH68cXlz75wWxOwS_biFqLouklRZvnIyDFoRI6LcxtcNJGDxyc4J8BUgQduazf52nFr2_bh2B__E-AuurzQGxM8ZjYaEyGN1qj6mmqiqaD8Vn2lzY5mGDbdTh1KMGfXyWrCzLnAQAA&CSAuthResp=1%3A%3A303359%3A0%3A24%3Asuccess%3A8C031B8D453364BB9FE68E7A071730EB
From the Obamacare 5th Circuit appellate ruling striking down mandate provisions; URL for the decision
[T]he individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs,by increasing their costs of complying with the reporting requirements that accompany the individual mandate. . . . .[T]he individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. . . . [O]n the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.
Excerpt from https://int.nyt.com/data/documenthelper/6610-obamacare-ruling/a6560c9831a0af845a00/optimized/full.pdf#page=1
[T]he individual mandate injures both the individual plaintiffs, by requiring them to buy insurance that they do not want, and the state plaintiffs,by increasing their costs of complying with the reporting requirements that accompany the individual mandate. . . . .[T]he individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power. . . . [O]n the severability question, we remand to the district court to provide additional analysis of the provisions of the ACA as they currently exist.
Excerpt from https://int.nyt.com/data/documenthelper/6610-obamacare-ruling/a6560c9831a0af845a00/optimized/full.pdf#page=1
From the Food and Power advocacy group:
Booker Bill Would Phase Out Factory Farms and Revive the Packers and Stockyards Act
Presidential candidate Sen. Cory Booker introduced a bill on Monday to radically reform an animal agriculture system that currently puts independent producers, rural communities, and consumers at risk.
The Farm System Reform Act would halt construction of new concentrated animal feeding operations (CAFOs) and phase out all large CAFOs by 2040, while also holding corporate meatpackers more accountable for environmental degradation and farmer exploitation.
“Our independent family farmers and ranchers are continuing to be squeezed by large, multinational corporations that, because of their buying power and size, run roughshod over the marketplace,” said Booker in a press release. “We need to fix the broken system – that means protecting family farmers and ranchers and holding corporate integrators responsible for the harm they are causing.”
While the vast majority of meat in the U.S. today comes from large-scale animal farms, this wasn’t always the case. Antitrust enforcement during the past four decades enabled meatpackers to corner livestock markets, while broader agricultural policies both directly and indirectly subsidized critical operation costs for industrial livestock operations, namely feed and manure management. Shifts to highly consolidated and contract agriculture drove 70 percent of hog farms out of business between 1992 and 2007 and doubled the number of dairy cows on factory farms between 1997 and 2012, among other changes.
These large farms introduce high concentrations of manure that pollute ground and surface water, diminish air quality, and release greenhouse gases. Many rural communities have organized to oppose new CAFO construction, and nearly two-thirds of Iowa voters support greater oversight of industrial animal agriculture, according to a new national poll by the Johns Hopkins Center for a Livable Future. About 43 percent of respondents support a ban on new CAFOs.
Booker Bill Would Phase Out Factory Farms and Revive the Packers and Stockyards Act
Presidential candidate Sen. Cory Booker introduced a bill on Monday to radically reform an animal agriculture system that currently puts independent producers, rural communities, and consumers at risk.
The Farm System Reform Act would halt construction of new concentrated animal feeding operations (CAFOs) and phase out all large CAFOs by 2040, while also holding corporate meatpackers more accountable for environmental degradation and farmer exploitation.
“Our independent family farmers and ranchers are continuing to be squeezed by large, multinational corporations that, because of their buying power and size, run roughshod over the marketplace,” said Booker in a press release. “We need to fix the broken system – that means protecting family farmers and ranchers and holding corporate integrators responsible for the harm they are causing.”
While the vast majority of meat in the U.S. today comes from large-scale animal farms, this wasn’t always the case. Antitrust enforcement during the past four decades enabled meatpackers to corner livestock markets, while broader agricultural policies both directly and indirectly subsidized critical operation costs for industrial livestock operations, namely feed and manure management. Shifts to highly consolidated and contract agriculture drove 70 percent of hog farms out of business between 1992 and 2007 and doubled the number of dairy cows on factory farms between 1997 and 2012, among other changes.
These large farms introduce high concentrations of manure that pollute ground and surface water, diminish air quality, and release greenhouse gases. Many rural communities have organized to oppose new CAFO construction, and nearly two-thirds of Iowa voters support greater oversight of industrial animal agriculture, according to a new national poll by the Johns Hopkins Center for a Livable Future. About 43 percent of respondents support a ban on new CAFOs.
The Food and Drug Administration issued a proposed rule that would allow states to pursue pilot programs to import drugs from Canada and a draft guidance that would allow drugmakers to import their own products and sell them under different drug codes.
Several states are already preparing importation program applications, and Florida and Vermont have already submitted concept papers to HHS. Florida's Republican Gov. Ron DeSantis has been a key figure in pushing President Donald Trump to allow drug importation, and he signed a state law creating an importation program in June.
Vermont, Colorado and Maine have also passed drug importation laws, and HHS officials said they worked with New Hampshire's governor on the regulatory action.
It could be years before patients would actually see imported drugs even if all steps of the plan proceed, but HHS Secretary Alex Azar said the administration is moving as quickly as possible to finalize the regulatory actions.
States wouldn't be allowed to import biologics including insulin.
From: https://www.modernhealthcare.com/law-regulation/hhs-moves-forward-prescription-drug-import-plan?utm_source=modern-healthcare-alert&utm_medium=email&utm_campaign=20191218&utm_content=hero-readmore
Several states are already preparing importation program applications, and Florida and Vermont have already submitted concept papers to HHS. Florida's Republican Gov. Ron DeSantis has been a key figure in pushing President Donald Trump to allow drug importation, and he signed a state law creating an importation program in June.
Vermont, Colorado and Maine have also passed drug importation laws, and HHS officials said they worked with New Hampshire's governor on the regulatory action.
It could be years before patients would actually see imported drugs even if all steps of the plan proceed, but HHS Secretary Alex Azar said the administration is moving as quickly as possible to finalize the regulatory actions.
States wouldn't be allowed to import biologics including insulin.
From: https://www.modernhealthcare.com/law-regulation/hhs-moves-forward-prescription-drug-import-plan?utm_source=modern-healthcare-alert&utm_medium=email&utm_campaign=20191218&utm_content=hero-readmore
Small Business and the Fight for $15: A new study shows how a rising minimum wage hurts little companies.
Wall Street Journal ^ | December 15, 2019
Here’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”
That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?
Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.
These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”
By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment
(Excerpt) Read more at wsj.com ...
Editor note: This article is included because it is interesting, not because it reflects an editorial judgment favoring a low minimum wage. DAR
Wall Street Journal ^ | December 15, 2019
Here’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”
That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?
Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.
These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”
By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment
(Excerpt) Read more at wsj.com ...
Editor note: This article is included because it is interesting, not because it reflects an editorial judgment favoring a low minimum wage. DAR
JUSTICE NEWS Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, November 20, 2019
Former Trader for Major Multinational Bank Convicted for Price Fixing and Bid Rigging in FX Market
A former currency trader was convicted today in New York for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today.
Following a three-week trial in the U.S. District Court for the Southern District of New York, a jury convicted Akshay Aiyer (former Executive Director at a major multinational bank) of conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern and African (CEEMEA) currencies, which were generally traded against the U.S. dollar and the euro, from at least October 2010 through at least January 2013.
Full release: https://www.justice.gov/opa/pr/former-trader-major-multinational-bank-convicted-price-fixing-and-bid-rigging-fx-market
Office of Public Affairs
FOR IMMEDIATE RELEASE
Wednesday, November 20, 2019
Former Trader for Major Multinational Bank Convicted for Price Fixing and Bid Rigging in FX Market
A former currency trader was convicted today in New York for his participation in an antitrust conspiracy to manipulate prices for emerging market currencies in the global foreign currency exchange (FX) market, the Justice Department announced today.
Following a three-week trial in the U.S. District Court for the Southern District of New York, a jury convicted Akshay Aiyer (former Executive Director at a major multinational bank) of conspiring to fix prices and rig bids in Central and Eastern European, Middle Eastern and African (CEEMEA) currencies, which were generally traded against the U.S. dollar and the euro, from at least October 2010 through at least January 2013.
Full release: https://www.justice.gov/opa/pr/former-trader-major-multinational-bank-convicted-price-fixing-and-bid-rigging-fx-market
CVS subsidiary accused by USDOJ of fraudulent billing
The federal government has joined a lawsuit alleging that Omnicare, a subsidiary of CVS Health, fraudulently billed Medicare, TRICARE and Medicaid for thousands of drugs.
https://www.fiercehealthcare.com/payer/doj-accuses-cvs-subsidiary-omnicare-fraudulent-billing?mkt_tok=eyJpIjoiT0RabU1qRXpabUV5WWpBNCIsInQiOiJHa1wvSk93bkEzVkdIOVgyd1lOcHE1dDEyRUU3cFpwTVJrdjl4ekxNNWNwTTViU2F0Z2Q0XC9Bdzl1SUx3MnI1dXcySCtGc2tXZU1ZNmcwM0o2R1wvNWNEODZQbFUwcytYQ2M5SFlNYnF0aG54anduVElQZ2ZaMHY1K1M4MGFEVEhYZyJ9&mrkid=730008
The federal government has joined a lawsuit alleging that Omnicare, a subsidiary of CVS Health, fraudulently billed Medicare, TRICARE and Medicaid for thousands of drugs.
https://www.fiercehealthcare.com/payer/doj-accuses-cvs-subsidiary-omnicare-fraudulent-billing?mkt_tok=eyJpIjoiT0RabU1qRXpabUV5WWpBNCIsInQiOiJHa1wvSk93bkEzVkdIOVgyd1lOcHE1dDEyRUU3cFpwTVJrdjl4ekxNNWNwTTViU2F0Z2Q0XC9Bdzl1SUx3MnI1dXcySCtGc2tXZU1ZNmcwM0o2R1wvNWNEODZQbFUwcytYQ2M5SFlNYnF0aG54anduVElQZ2ZaMHY1K1M4MGFEVEhYZyJ9&mrkid=730008
Tech companies file appeal over net neutrality ruling
Tech companies Etsy and Mozilla, along with 22 state governments and some other entities, are appealing a federal court decision upholding the Federal Communications Commission's repeal of the Obama-era open-internet rules. "[W]e look forward to continuing the fight to preserve net neutrality as a fundamental digital right," says Amy Keating, Mozilla's chief legal officer.
CNET (12/13), ZDNet (12/13)
Robin Hood companies use donations to buy up uncollected medical debt for pennies on the dollar, and then can tell the debtors they no longer have the debt
By Don Allen Resnikoff
PBS Newshour recently reported on an unusual company’s effort to relieve the burden of medical debt for those in need. See https://www.pbs.org/video/making-sense-rip-medical-debt-1576194798/
PBS focused on RIP Medical Debt, a group that functions as a Robin Hood debt buyer, negotiating cheap rates on large portfolios of anonymous consumer debt, and using donated money to pay the discounted price. Once they purchase the debt, they send letters to every account holder informing them that their debt has been wiped clean.
The Robin Hood idea works because most debt collectors are secondary debt-buying companies that have purchased the consumer's debt for pennies on the dollar. The largest debt-buying companies buy huge portfolios of such debt with millions of individual accounts. These same companies can turn around and collect the full amount from consumers, often through aggressive and even illegal tactics.
The Robin Hood companies buy accounts that the secondary debt-buying companies consider virtually worthless – like debts where a year of collection efforts have been unavailing. The Robin Hood companies can buy up such indebtedness for a penny or two on the dollar.
RIP Medical Debt was a struggling venture until it was the subject of a TV feature by John Oliver, who the PBS program describes as a “comedian advocate.” (It is meant as a compliment as applied to him.) Oliver popularized the Robin Hood debt collection idea when he televised his purchase of $15 million of medical debt owed by 9,000 Americans and forgave it on national television. Oliver and his "Last Week Tonight" producers paid less than $60,000 to buy a portfolio containing millions of dollars of consumer debt. You can see Oliver’s debt collection show at https://youtu.be/hxUAntt1z2c
But can the Robin Hood idea work for the individual consumer as it works for RIP Medical Debt? Not likely, according to an article at https://money.howstuffworks.com/can-you-buy-your-own-debt-pennies-the-dollar.htm Following is part of what the article says:
Unfortunately, individual consumers don't have the same access to deeply discounted debt as debt buyers purchasing thousands of accounts, explains April Kuehnhoff, staff attorney at the National Consumer Law Center. No one would sell just one uncollected debt to a person.
"Even if consumers could afford to purchase whole portfolios of debt, they wouldn't know which portfolios contain their individual account," says Kuehnhoff. "Consumer can certainly call up the original creditor or debt collector and try to negotiate a better rate or a payment plan. But they are unlikely to accept pennies on the dollar as payment for the debt."
Once debt has been resold to a debt buyer, it's almost impossible to track. Even debt-buying companies don't know the details of the accounts they're buying — names, individual debt amounts, types of debt — until they've bought them. And often the information associated with the accounts is outdated or incorrect.
Further, the type of very cheap debt that you hear about is generally old (no payment has been made on it for at least a year) and has been sold at least a couple of times. Credit.com points out that the benefits of buying your own debt (like not reporting yourself to a credit agency or adding interest to the amount owed) could also be had by trying to negotiate with your creditors at the earliest stages of debt collection.
By Don Allen Resnikoff
PBS Newshour recently reported on an unusual company’s effort to relieve the burden of medical debt for those in need. See https://www.pbs.org/video/making-sense-rip-medical-debt-1576194798/
PBS focused on RIP Medical Debt, a group that functions as a Robin Hood debt buyer, negotiating cheap rates on large portfolios of anonymous consumer debt, and using donated money to pay the discounted price. Once they purchase the debt, they send letters to every account holder informing them that their debt has been wiped clean.
The Robin Hood idea works because most debt collectors are secondary debt-buying companies that have purchased the consumer's debt for pennies on the dollar. The largest debt-buying companies buy huge portfolios of such debt with millions of individual accounts. These same companies can turn around and collect the full amount from consumers, often through aggressive and even illegal tactics.
The Robin Hood companies buy accounts that the secondary debt-buying companies consider virtually worthless – like debts where a year of collection efforts have been unavailing. The Robin Hood companies can buy up such indebtedness for a penny or two on the dollar.
RIP Medical Debt was a struggling venture until it was the subject of a TV feature by John Oliver, who the PBS program describes as a “comedian advocate.” (It is meant as a compliment as applied to him.) Oliver popularized the Robin Hood debt collection idea when he televised his purchase of $15 million of medical debt owed by 9,000 Americans and forgave it on national television. Oliver and his "Last Week Tonight" producers paid less than $60,000 to buy a portfolio containing millions of dollars of consumer debt. You can see Oliver’s debt collection show at https://youtu.be/hxUAntt1z2c
But can the Robin Hood idea work for the individual consumer as it works for RIP Medical Debt? Not likely, according to an article at https://money.howstuffworks.com/can-you-buy-your-own-debt-pennies-the-dollar.htm Following is part of what the article says:
Unfortunately, individual consumers don't have the same access to deeply discounted debt as debt buyers purchasing thousands of accounts, explains April Kuehnhoff, staff attorney at the National Consumer Law Center. No one would sell just one uncollected debt to a person.
"Even if consumers could afford to purchase whole portfolios of debt, they wouldn't know which portfolios contain their individual account," says Kuehnhoff. "Consumer can certainly call up the original creditor or debt collector and try to negotiate a better rate or a payment plan. But they are unlikely to accept pennies on the dollar as payment for the debt."
Once debt has been resold to a debt buyer, it's almost impossible to track. Even debt-buying companies don't know the details of the accounts they're buying — names, individual debt amounts, types of debt — until they've bought them. And often the information associated with the accounts is outdated or incorrect.
Further, the type of very cheap debt that you hear about is generally old (no payment has been made on it for at least a year) and has been sold at least a couple of times. Credit.com points out that the benefits of buying your own debt (like not reporting yourself to a credit agency or adding interest to the amount owed) could also be had by trying to negotiate with your creditors at the earliest stages of debt collection.