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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.
Gov. Gavin Newsom rejects PG&E Corp. plan to pay Northern California wildfire victims and exit bankruptcy.
In a letter to PG&E Chief Executive Bill Johnson, the governor declared that the company’s proposal doesn’t go far enough to make it “positioned to provide safe, reliable and affordable service.”
“The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable,” he wrote. Among other things, he demanded an entirely new slate of directors who are subject to state approval, and a structure that would allow PG&E’s operating license to be transferred “to the state or a third-party when circumstances warrant.”
Just a week ago, PG&E announced what it believed was a breakthrough that would ease its way out of bankruptcy: a $13.5 billion settlement agreement with lawyers for more than 70,000 wildfire victims.
But the utility wasn’t home free after all. It still needed Newsom’s approval of its bankruptcy plan. Now it will have to overhaul the proposal, and quickly.
According to AB 1054, which creates a $21 billion insurance pool to help utilities pay for damages from future wildfires, PG&E needs to exit Chapter 11 by June 30 in order to participate in the fund..
AB 1054 says PG&E’s bankruptcy plan, besides compensating fire victims, must include a ramped-up program for preventing new fires, as well as other changes in how it does business. Newsom said PG&E’s proposals “do not comply with AB 1054.”
Responding to Newsom’s rejection, PG&E insisted its plan “is the best course forward for all stakeholders. We’ve welcomed feedback from all stakeholders ... and will continue to work diligently in the coming days to resolve any issues that may arise.”
Excerpt from https://www.sacbee.com/news/california/fires/article238350708.html
Some background to the California situation is in this excerpt from a PBS presentation on electricity company regulaton:
In 1992 Congress passed President Bush's Energy Policy Act (EPACT), which opened access to transmission networks to non-utility generators. EPACT further facilitated the development of a competitive market by creating another category of qualifying facilities known as exempt wholesale generators (EWGs), which were exempted from regulations faced by the traditional utilities. To assist in the implementation of PURPA and EPACT, FERC issued Order No. 888 and Order No. 889 in April 1996. The two orders provided guidelines on how to open electricity transmission networks on a nondiscriminatory basis in interstate commerce.
The passage of EPACT led states which had historically high electricity prices, such as California, to investigate whether competitive deregulated markets would benefit their consumers. In 1996, both California and Rhode Island passed deregulation legislation, giving the consumer the right to choose his electricity supplier. As of May 2001, 24 states and the District of Columbia either have passed legislation or issued a comprehensive order to restructure their electric power industry. Eighteen states currently are investigating deregulation. View the Department of Energy map depicting the status of state electricity industry restructuring activity.
As a result of the deregulation movement of the 1990s, the electric power industry is changing from a structure of regulated, local, vertically-integrated monopolies, to one in which competitive companies generate electricity, while the utilities maintain transmission and distribution networks. In the face of increased competition, investor-owned utilities (IOUs) have sought to make themselves more competitive through mergers, acquisitions and asset divestitures, leading to the industry becoming much more concentrated. By 1998, the ten largest IOUs owned almost 40% of IOU-held electricity generation-capacity.[6] Increased competition has also led to the rise of two new participants in the electric power marketplace, who buy and sell electricity without owning or operating transmission or distribution operations: power marketers, which are considered to be utilities and therefore regulated by FERC, and power brokers, which are unregulated.
From https://www.pbs.org/wgbh/pages/frontline/shows/blackout/regulation/timeline.html
In a letter to PG&E Chief Executive Bill Johnson, the governor declared that the company’s proposal doesn’t go far enough to make it “positioned to provide safe, reliable and affordable service.”
“The resolution of this bankruptcy must yield a radically restructured and transformed utility that is responsible and accountable,” he wrote. Among other things, he demanded an entirely new slate of directors who are subject to state approval, and a structure that would allow PG&E’s operating license to be transferred “to the state or a third-party when circumstances warrant.”
Just a week ago, PG&E announced what it believed was a breakthrough that would ease its way out of bankruptcy: a $13.5 billion settlement agreement with lawyers for more than 70,000 wildfire victims.
But the utility wasn’t home free after all. It still needed Newsom’s approval of its bankruptcy plan. Now it will have to overhaul the proposal, and quickly.
According to AB 1054, which creates a $21 billion insurance pool to help utilities pay for damages from future wildfires, PG&E needs to exit Chapter 11 by June 30 in order to participate in the fund..
AB 1054 says PG&E’s bankruptcy plan, besides compensating fire victims, must include a ramped-up program for preventing new fires, as well as other changes in how it does business. Newsom said PG&E’s proposals “do not comply with AB 1054.”
Responding to Newsom’s rejection, PG&E insisted its plan “is the best course forward for all stakeholders. We’ve welcomed feedback from all stakeholders ... and will continue to work diligently in the coming days to resolve any issues that may arise.”
Excerpt from https://www.sacbee.com/news/california/fires/article238350708.html
Some background to the California situation is in this excerpt from a PBS presentation on electricity company regulaton:
In 1992 Congress passed President Bush's Energy Policy Act (EPACT), which opened access to transmission networks to non-utility generators. EPACT further facilitated the development of a competitive market by creating another category of qualifying facilities known as exempt wholesale generators (EWGs), which were exempted from regulations faced by the traditional utilities. To assist in the implementation of PURPA and EPACT, FERC issued Order No. 888 and Order No. 889 in April 1996. The two orders provided guidelines on how to open electricity transmission networks on a nondiscriminatory basis in interstate commerce.
The passage of EPACT led states which had historically high electricity prices, such as California, to investigate whether competitive deregulated markets would benefit their consumers. In 1996, both California and Rhode Island passed deregulation legislation, giving the consumer the right to choose his electricity supplier. As of May 2001, 24 states and the District of Columbia either have passed legislation or issued a comprehensive order to restructure their electric power industry. Eighteen states currently are investigating deregulation. View the Department of Energy map depicting the status of state electricity industry restructuring activity.
As a result of the deregulation movement of the 1990s, the electric power industry is changing from a structure of regulated, local, vertically-integrated monopolies, to one in which competitive companies generate electricity, while the utilities maintain transmission and distribution networks. In the face of increased competition, investor-owned utilities (IOUs) have sought to make themselves more competitive through mergers, acquisitions and asset divestitures, leading to the industry becoming much more concentrated. By 1998, the ten largest IOUs owned almost 40% of IOU-held electricity generation-capacity.[6] Increased competition has also led to the rise of two new participants in the electric power marketplace, who buy and sell electricity without owning or operating transmission or distribution operations: power marketers, which are considered to be utilities and therefore regulated by FERC, and power brokers, which are unregulated.
From https://www.pbs.org/wgbh/pages/frontline/shows/blackout/regulation/timeline.html
NYT's Bradsher's opinion on China/US trade war:
President Trump’s initial retreat from his trade-war threats has handed hard-liners in China a victory
A longer, pricklier trade war and stiff Chinese resistance to economic reforms could result.
Mr. Trump on Friday outlined a partial trade deal that deferred new tariffs on $160 billion a year in Chinese-made goods, a move that would have had him taxing virtually everything China sells to the United States. He also agreed for the first time to broadly reduce tariffs he had already imposed on Chinese goods, halving tariffs on more than $100 billion a year worth of products like clothing and lawn mowers — a striking about-face for a protectionist president who last year described himself as a “tariff man.”
The White House called the deal a win. It said China had agreed to buy large quantities of American agricultural goods, giving farmers hit by the trade war some needed relief. It also means the United States economy will not suffer from new tariffs threatened for Sunday on Chinese-made goods that Americans love to buy, like toys and smartphones.
But the deal may be seen by Xi Jinping, China’s top leader, and his hard-line supporters as vindication of the intransigent stance they have taken since the spring, when a previous pact struck by Chinese moderates fell apart. Since then, China has asked that even a partial deal include tariff rollbacks. American officials resisted, debated, then relented.
In essence, a year and a half into the trade war, China seems to have hit on a winning strategy: Stay tough and let the Trump administration negotiate with itself.
From https://www.nytimes.com/2019/12/14/business/china-trade-hardliners.html
President Trump’s initial retreat from his trade-war threats has handed hard-liners in China a victory
A longer, pricklier trade war and stiff Chinese resistance to economic reforms could result.
Mr. Trump on Friday outlined a partial trade deal that deferred new tariffs on $160 billion a year in Chinese-made goods, a move that would have had him taxing virtually everything China sells to the United States. He also agreed for the first time to broadly reduce tariffs he had already imposed on Chinese goods, halving tariffs on more than $100 billion a year worth of products like clothing and lawn mowers — a striking about-face for a protectionist president who last year described himself as a “tariff man.”
The White House called the deal a win. It said China had agreed to buy large quantities of American agricultural goods, giving farmers hit by the trade war some needed relief. It also means the United States economy will not suffer from new tariffs threatened for Sunday on Chinese-made goods that Americans love to buy, like toys and smartphones.
But the deal may be seen by Xi Jinping, China’s top leader, and his hard-line supporters as vindication of the intransigent stance they have taken since the spring, when a previous pact struck by Chinese moderates fell apart. Since then, China has asked that even a partial deal include tariff rollbacks. American officials resisted, debated, then relented.
In essence, a year and a half into the trade war, China seems to have hit on a winning strategy: Stay tough and let the Trump administration negotiate with itself.
From https://www.nytimes.com/2019/12/14/business/china-trade-hardliners.html
Open Markets press release:
White Paper: The Role of Monopoly in America’s Prescription Drug Crisis
Bipartisan reform efforts to combat high drug prices often fail to recognize how pharmaceutical corporations suppress fair market competition through various forms of monopoly. In a newly published white paper by the Open Markets Institute, The Role of Monopoly in America’s Prescription Drug Crisis, we detail how increasing corporate concentration in the pharmaceutical industry, and the monopoly markets for individual drugs created by a deeply flawed and increasingly abused patent and regulatory system, are the root causes of the problem.
Drug manufacturers engage in a variety of anti-competitive practices, such as abusing the patent system, various FDA regulations, filing sham citizen petitions with the FDA, and tactics to eliminate competition. These practices are used to extend and protect monopolies and to stifle competition—and they wind up needlessly costing consumers millions of dollars each year.
These practices ultimately drive up drug prices, decrease innovation, and cause shortages and disruptions of the supply of many key drugs. They also imperil drug safety.
Brand drug manufacturers also stifle competition and gain monopoly profits by offering substantial rebates or discounts to large-scale buyers—but only if the purchasers refuse to buy a competing generic drug that might erode the brand drug’s market dominance.
Many of these problems can be solved or ameliorated through better competition policy, which can involve the application and enforcement of our antitrust laws. Other policy solutions include the forced licensing of patents, cash prizes for innovation, or price regulation, among other recommendations.
In each instance, we are looking for public policies that will reset the terms of competition and the balances of power in drug markets so that they serve the public good. Read our entire report here. https://openmarketsinstitute.org/releases/open-markets-releases-new-policy-paper-role-monopoly-americas-prescription-drug-crisis/
White Paper: The Role of Monopoly in America’s Prescription Drug Crisis
Bipartisan reform efforts to combat high drug prices often fail to recognize how pharmaceutical corporations suppress fair market competition through various forms of monopoly. In a newly published white paper by the Open Markets Institute, The Role of Monopoly in America’s Prescription Drug Crisis, we detail how increasing corporate concentration in the pharmaceutical industry, and the monopoly markets for individual drugs created by a deeply flawed and increasingly abused patent and regulatory system, are the root causes of the problem.
Drug manufacturers engage in a variety of anti-competitive practices, such as abusing the patent system, various FDA regulations, filing sham citizen petitions with the FDA, and tactics to eliminate competition. These practices are used to extend and protect monopolies and to stifle competition—and they wind up needlessly costing consumers millions of dollars each year.
These practices ultimately drive up drug prices, decrease innovation, and cause shortages and disruptions of the supply of many key drugs. They also imperil drug safety.
Brand drug manufacturers also stifle competition and gain monopoly profits by offering substantial rebates or discounts to large-scale buyers—but only if the purchasers refuse to buy a competing generic drug that might erode the brand drug’s market dominance.
Many of these problems can be solved or ameliorated through better competition policy, which can involve the application and enforcement of our antitrust laws. Other policy solutions include the forced licensing of patents, cash prizes for innovation, or price regulation, among other recommendations.
In each instance, we are looking for public policies that will reset the terms of competition and the balances of power in drug markets so that they serve the public good. Read our entire report here. https://openmarketsinstitute.org/releases/open-markets-releases-new-policy-paper-role-monopoly-americas-prescription-drug-crisis/
The NFL predicament: is there such a thing as a helmet that actually protects the brain?
A NYT article discusses the possibly futile scientific effort to create a better helmet
From the NYT: These are strange and contentious times for football. It remains America’s most popular sport. The National Football League remains a mint, pumping out revenues that have reached $15 billion annually. At the same time, youth and high school football participation has fallen steadily,[https://www.nytimes.com/interactive/2019/11/08/sports/falling-football-participation-in-america.html] driven, in part, by broad parental concern about the brutal damage wreaked by hits that shake and rattle the gray mass of mystery that is the human brain.Their worry is based in fact. When a 310-pound man who runs a 40-yard dash in five seconds flat slams into a running back, that runner’s neck and head accelerate, and the brain and its fibers twist and stretch and tear. A particularly rough hit could jar open the blood-brain barrier, the semipermeable wall that prevents bacterial pathogens from entering the brain.
The full article: https://www.nytimes.com/2019/12/12/sports/concussions-football-helmet.html
A NYT article discusses the possibly futile scientific effort to create a better helmet
From the NYT: These are strange and contentious times for football. It remains America’s most popular sport. The National Football League remains a mint, pumping out revenues that have reached $15 billion annually. At the same time, youth and high school football participation has fallen steadily,[https://www.nytimes.com/interactive/2019/11/08/sports/falling-football-participation-in-america.html] driven, in part, by broad parental concern about the brutal damage wreaked by hits that shake and rattle the gray mass of mystery that is the human brain.Their worry is based in fact. When a 310-pound man who runs a 40-yard dash in five seconds flat slams into a running back, that runner’s neck and head accelerate, and the brain and its fibers twist and stretch and tear. A particularly rough hit could jar open the blood-brain barrier, the semipermeable wall that prevents bacterial pathogens from entering the brain.
The full article: https://www.nytimes.com/2019/12/12/sports/concussions-football-helmet.html
Paul Volcker's parting shot: preserve Fed independence, and faith in U.S. institutions
Excerpt from Volcker article at https://www.ft.com/content/2389d7ec-1b3c-11ea-97df-cc63de1d73f4
Increasingly, by design or not, there appears to be a movement to undermine Americans’ faith in our government and its policies and institutions. We’ve moved well beyond former president Ronald Reagan’s credo that “government is the problem”, with its aim of reversing decades of federal expansion. Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself. . . .
Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks. I trust that the members of the Federal Reserve Board itself, the members of Congress responsible for Fed oversight, and indeed the public at large, will maintain the Fed’s ability to act in the nation’s interest, free of partisan political purposes. Monetary policy is important, but it cannot by itself sustain global leadership. We need open markets and strong allies to support economic growth and the prospects for peace.
Those constructive American policies have been a large part of my life. Instead, confidence in the US is under siege.
Excerpt from Volcker article at https://www.ft.com/content/2389d7ec-1b3c-11ea-97df-cc63de1d73f4
Increasingly, by design or not, there appears to be a movement to undermine Americans’ faith in our government and its policies and institutions. We’ve moved well beyond former president Ronald Reagan’s credo that “government is the problem”, with its aim of reversing decades of federal expansion. Today we see something very different and far more sinister. Nihilistic forces are dismantling policies to protect our air, water, and climate. And they seek to discredit the pillars of our democracy: voting rights and fair elections, the rule of law, the free press, the separation of powers, the belief in science, and the concept of truth itself. . . .
Not since just after the second world war have we seen a president so openly seek to dictate policy to the Fed. That is a matter of great concern, given that the central bank is one of our key governmental institutions, carefully designed to be free of purely partisan attacks. I trust that the members of the Federal Reserve Board itself, the members of Congress responsible for Fed oversight, and indeed the public at large, will maintain the Fed’s ability to act in the nation’s interest, free of partisan political purposes. Monetary policy is important, but it cannot by itself sustain global leadership. We need open markets and strong allies to support economic growth and the prospects for peace.
Those constructive American policies have been a large part of my life. Instead, confidence in the US is under siege.
America’s Dairy Farmers Are Hurting. A Giant Merger Could Make Things Worse.The largest dairy co-op in the United States is in talks to acquire Dean Foods, a milk processing company that sought bankruptcy protection last month.
AAmerica’s Dairy Farmers Are Hurting. A Giant Merger Could Make Things Worse. dairy co-op in the United States is in talks tThe largest dairy co-op in the United States is in talks to acquire Dean Foods, a milk processing company that sought bankruptcy protection last month.
See https://www.nytimes.com/2019/12/11/business/dean-foods-dairy-farmers-antitrust.html
See https://www.nytimes.com/2019/12/11/business/dean-foods-dairy-farmers-antitrust.html
New York Court finds that New York AG has failed to establish by a preponderance of the evidence that ExxonMobil violated the law in connection with its public disclosures concerning how ExxonMobil accounted for past, present and future climate change risks.
INDEX NO . 452044 / 2018
NYSCEF DOC. NO . 567 RECEIVED NYSCEF : 12 / 10/ 2019
SUPREME COURTOF THE STATE OF NEW YORK
NEW YORK COUNTY
PEOPLE OF THE STATE OF NEW YORK, BY LETITIA
JAMES, ATTORNEYGENERAL OF THE STATEOF NEW
YORK
Plaintiff,
- V
EXXONMOBIL CORPORATION,
Defendant.
DECISION AFTER TRIAL
OSTRAGER, J.
Following twelve days of trial and testimony from eighteen witnesses, the Court finds
that the Office of the Attorney General has failed to establish by a preponderance of the evidence
that ExxonMobil either violated the Martin Act or Executive Law 63( 12 ) in connection with its
public disclosures concerning how ExxonMobil accounted for past, present and future climate
change risks.
full opinion:
https://int.nyt.com/data/documenthelper/6569-new-york-vs-exxonmobil/eb27e49cb4cdbb4add80/optimized/full.pdf#page=1
INDEX NO . 452044 / 2018
NYSCEF DOC. NO . 567 RECEIVED NYSCEF : 12 / 10/ 2019
SUPREME COURTOF THE STATE OF NEW YORK
NEW YORK COUNTY
PEOPLE OF THE STATE OF NEW YORK, BY LETITIA
JAMES, ATTORNEYGENERAL OF THE STATEOF NEW
YORK
Plaintiff,
- V
EXXONMOBIL CORPORATION,
Defendant.
DECISION AFTER TRIAL
OSTRAGER, J.
Following twelve days of trial and testimony from eighteen witnesses, the Court finds
that the Office of the Attorney General has failed to establish by a preponderance of the evidence
that ExxonMobil either violated the Martin Act or Executive Law 63( 12 ) in connection with its
public disclosures concerning how ExxonMobil accounted for past, present and future climate
change risks.
full opinion:
https://int.nyt.com/data/documenthelper/6569-new-york-vs-exxonmobil/eb27e49cb4cdbb4add80/optimized/full.pdf#page=1
Representative García and Senator Warren Announce Introduction of the Bank Merger Review Modernization Act
The Press Release appears below, after comment by DAR
DAR Comment:
It can be argued that one reason that the Antitrust Division has enabled consolidation in banking is too much focus on narrowly defined
and local geographic and product markets. Arguably the USDOJ has not focused enough on broader national and international markets.
For example, two merging giants may have few competing retail branches in a particular locality, suggesting no competitive problem for retail banking in the locality.
But a big competition problem remains if the banks are the two most important players in a national or international market in investment banking.
It is hard to say whether the Warren press release really means to focus on the importance of local rather than broader markets, but the press release does say that the Warren legislation "requires regulators to examine how the merger would impact market concentration for individual banking products, such as commercial deposits, home mortgage lending, and small business lending rather than just the general availability of banking products in local markets."
Moving from this particular local v. broader market competition question:
As you may know, the procedure that now applies to bank mergers is that the acquiring bank first files an application with the Federal Reserve
(or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review.
The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division.
There is a strong argument that there is already sufficient flexibility in existing
antitrust law and regulators' "public interest" jurisdiction on which to base efforts by the USDOJ, the Federal Reserve Board (Fed), and other U.S.
government agencies to address merger enforcement more aggressively.
The great policy question raised by the Warren proposals is whether it is better to simply strengthen existing bank merger enforcement mechanisms, which take advantage of a large body of case law, or to more drastically revise the regulatory framework. My guess is that
many experienced antitrust enforcers will pick the more cautious approach.
I agree with the thoughts in the American Antitrust Institute's discussion at
https://www.antitrustinstitute.org/wp-content/uploads/2018/08/Banking-and-Financial-Services.7.22.16.pdf
Some of the thoughts there include giving the USDOJ Antitrust Division a stronger role in bank merger review, and encouraging
the Antitrust Division to be more aggressive in challenging bank mergers.
Don Allen Resnikoff
Press Release
Bicameral legislation would require bank regulators to seriously consider how the merger affects consumers and communities and whether it presents risks to financial stability
Washington, DC - Congressman Jesús "Chuy" García (D-Ill.), member of the House of Representatives Committee on Financial Services and United States Senator Elizabeth Warren (D-Mass.), member of the Senate Banking, Housing, and Urban Affairs Committee, today announced the introduction of the Bank Merger Review Modernization Act. The legislation would restrict harmful consolidation in the banking industry and protect consumers and the financial system from "Too Big to Fail" institutions, like those that caused the 2008 financial crisis. The upcoming merger between SunTrust Banks, Inc. (SunTrust) and BB&T Corporation (BB&T) will create the sixth-largest U.S. bank and first new Too Big to Fail bank since the financial crisis. Representatives Jan Schakowsky (D-Ill.) and Rashida Tlaib (D-Mich.) are original House cosponsors of the bill.
"When big banks get bigger, consumers and taxpayers usually lose. We must protect our financial system by slowing down bank consolidation. This bill will help address this, taking the Fed and FDIC off autopilot and giving consumers a voice in reviewing bank mergers," said Congressman García.
"Nearly two years ago, Chairman Powell confirmed my worst suspicions that the Fed has not declined a single merger request since before the financial crisis," said Senator Warren. "The bill Congressman García and I are announcing today would ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need, reward banks that cheat or discriminate against their customers, and risk another financial crisis.
Before banks merge, they need approval from regulators, including the Federal Reserve ("Fed"), the Federal Deposit Insurance Corporation (FDIC), or the Office of the Comptroller of the Currency (OCC), but the review process for bank mergers is fundamentally broken. Voluntary bank mergers have driven a rapid decline in the number of banks since the financial crisis. Studies show that bank mergers can result in higher costs to consumers and decreased access to financial products, especially in rural areas. And when two large banks merge, it has even greater risks, potentially creating a bank that's too big to manage effectively or creating a new Too Big to Fail bank that could threaten financial stability.
When regulators consider a merger they are supposed to evaluate a number of factors, including: (1) whether the merger will create local monopolies for banking services; (2) whether the merged bank will be well managed; (3) whether the new bank creates risk to the financial system; and (4) the merger's effects on the public, including consumers. In practice, financial agencies almost exclusively focus their analyses on the impact of the merger on competitiveness and often pre-review the merger in secret with banks before they announce it publicly. As a result, the merger review practice lacks analytical rigor, and regulators serve as rubber stamps. Of the 3,819 bank merger applications the Fed received between 2006 and 2017, it did not decline a single one.
The Bank Merger Review Modernization Act strengthens and modernizes the statutory standards under which federal regulators analyze bank merger applications by:
https://chuygarcia.house.gov/media/press-releases/representative-garc-and-senator-warren-announce-introduction-bank-merger-review
The Press Release appears below, after comment by DAR
DAR Comment:
It can be argued that one reason that the Antitrust Division has enabled consolidation in banking is too much focus on narrowly defined
and local geographic and product markets. Arguably the USDOJ has not focused enough on broader national and international markets.
For example, two merging giants may have few competing retail branches in a particular locality, suggesting no competitive problem for retail banking in the locality.
But a big competition problem remains if the banks are the two most important players in a national or international market in investment banking.
It is hard to say whether the Warren press release really means to focus on the importance of local rather than broader markets, but the press release does say that the Warren legislation "requires regulators to examine how the merger would impact market concentration for individual banking products, such as commercial deposits, home mortgage lending, and small business lending rather than just the general availability of banking products in local markets."
Moving from this particular local v. broader market competition question:
As you may know, the procedure that now applies to bank mergers is that the acquiring bank first files an application with the Federal Reserve
(or one of the other regulatory agencies, as applicable), which will then pass the application on to the Antitrust Division for review.
The Federal Reserve or other regulatory agency then reviews the application concurrently with the Antitrust Division.
There is a strong argument that there is already sufficient flexibility in existing
antitrust law and regulators' "public interest" jurisdiction on which to base efforts by the USDOJ, the Federal Reserve Board (Fed), and other U.S.
government agencies to address merger enforcement more aggressively.
The great policy question raised by the Warren proposals is whether it is better to simply strengthen existing bank merger enforcement mechanisms, which take advantage of a large body of case law, or to more drastically revise the regulatory framework. My guess is that
many experienced antitrust enforcers will pick the more cautious approach.
I agree with the thoughts in the American Antitrust Institute's discussion at
https://www.antitrustinstitute.org/wp-content/uploads/2018/08/Banking-and-Financial-Services.7.22.16.pdf
Some of the thoughts there include giving the USDOJ Antitrust Division a stronger role in bank merger review, and encouraging
the Antitrust Division to be more aggressive in challenging bank mergers.
Don Allen Resnikoff
Press Release
Bicameral legislation would require bank regulators to seriously consider how the merger affects consumers and communities and whether it presents risks to financial stability
Washington, DC - Congressman Jesús "Chuy" García (D-Ill.), member of the House of Representatives Committee on Financial Services and United States Senator Elizabeth Warren (D-Mass.), member of the Senate Banking, Housing, and Urban Affairs Committee, today announced the introduction of the Bank Merger Review Modernization Act. The legislation would restrict harmful consolidation in the banking industry and protect consumers and the financial system from "Too Big to Fail" institutions, like those that caused the 2008 financial crisis. The upcoming merger between SunTrust Banks, Inc. (SunTrust) and BB&T Corporation (BB&T) will create the sixth-largest U.S. bank and first new Too Big to Fail bank since the financial crisis. Representatives Jan Schakowsky (D-Ill.) and Rashida Tlaib (D-Mich.) are original House cosponsors of the bill.
"When big banks get bigger, consumers and taxpayers usually lose. We must protect our financial system by slowing down bank consolidation. This bill will help address this, taking the Fed and FDIC off autopilot and giving consumers a voice in reviewing bank mergers," said Congressman García.
"Nearly two years ago, Chairman Powell confirmed my worst suspicions that the Fed has not declined a single merger request since before the financial crisis," said Senator Warren. "The bill Congressman García and I are announcing today would ensure that regulators do their jobs by stopping mergers that deprive communities of the banking services they need, reward banks that cheat or discriminate against their customers, and risk another financial crisis.
Before banks merge, they need approval from regulators, including the Federal Reserve ("Fed"), the Federal Deposit Insurance Corporation (FDIC), or the Office of the Comptroller of the Currency (OCC), but the review process for bank mergers is fundamentally broken. Voluntary bank mergers have driven a rapid decline in the number of banks since the financial crisis. Studies show that bank mergers can result in higher costs to consumers and decreased access to financial products, especially in rural areas. And when two large banks merge, it has even greater risks, potentially creating a bank that's too big to manage effectively or creating a new Too Big to Fail bank that could threaten financial stability.
When regulators consider a merger they are supposed to evaluate a number of factors, including: (1) whether the merger will create local monopolies for banking services; (2) whether the merged bank will be well managed; (3) whether the new bank creates risk to the financial system; and (4) the merger's effects on the public, including consumers. In practice, financial agencies almost exclusively focus their analyses on the impact of the merger on competitiveness and often pre-review the merger in secret with banks before they announce it publicly. As a result, the merger review practice lacks analytical rigor, and regulators serve as rubber stamps. Of the 3,819 bank merger applications the Fed received between 2006 and 2017, it did not decline a single one.
The Bank Merger Review Modernization Act strengthens and modernizes the statutory standards under which federal regulators analyze bank merger applications by:
- Guaranteeing that the Merger is in the Public Interest. The legislation clarifies and strengthens the public interest aspect of the merger review by:
- Requiring Consumer Financial Protection Bureau approval when at least one applicant offers consumer financial products;
- Strengthening the Community Reinvestment Act (CRA) by only allowing institutions with the highest rating in two out of three of their last CRA exams to merge; and
- Requiring transparent disclosure of discussions between the institutions and regulators before the merger application is filed.
- Safeguarding the Stability of the Financial System. The legislation requires regulators to use a quantifiable metric developed by the Basel Committee on Banking Supervision to evaluate systemic risk. The score is based on the size, interconnectedness, substitutability, complexity, and cross-jurisdictional activity of the institution.
- Requiring that Regulators Examine the Anticompetitive Effects on Individual Banking Products. The legislation requires regulators to examine how the merger would impact market concentration for individual banking products, such as commercial deposits, home mortgage lending, and small business lending rather than just the general availability of banking products in local markets.
- Ensuring that the Merged Bank has Adequate Financial and Managerial Resources. The legislation requires regulators to review the leadership of the merged institution to ensure that the selected individuals have strong records with respect to risk management. Larger institutions would also have their balance sheets examined to ensure that they will be on solid financial footing.
https://chuygarcia.house.gov/media/press-releases/representative-garc-and-senator-warren-announce-introduction-bank-merger-review
Huawei sues FCC over “unconstitutional” ban on the use of federal subsidies to buy its equipment
Catherine Shu@catherineshu / 1:15 am EST • December 5, 2019
Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.
The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.
Small carriers buy equipment from Huawei and ZTE because it is dependable and cheap. According to a Reuters report, some carriers are considering Nokia and Ericsson for replacements, but their equipment is priced less competitively.
During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.
Huawei chief legal officer Song Liuping claims that FCC chairman and Ajit Pai and other commissioners did not present evidence to back its claim that Huawei is a security threat.
“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”
In March, Huawei also cited the Constitution in another lawsuit filed against the U.S. government arguing that a ban on the use of its products by federal agencies and contractors violate due process.
From: https://techcrunch.com/2019/12/04/huawei-sues-fcc-over-unconstitutional-ban-the-use-of-federal-subsidies-to-buy-its-equipment/
Catherine Shu@catherineshu / 1:15 am EST • December 5, 2019
Huawei said today it is suing the Federal Communications Commission, asking to overturn a ban on carriers from using money from the Universal Service Fund (USF) to buy equipment from Huawei and ZTE.
The $8.5 billion USF supports the purchase of equipment to build communications infrastructure, especially in rural communities. Huawei is asking the United States Court of Appeals for the Fifth Circuit to overrule the FCC’s order, passed on Nov. 22.
Small carriers buy equipment from Huawei and ZTE because it is dependable and cheap. According to a Reuters report, some carriers are considering Nokia and Ericsson for replacements, but their equipment is priced less competitively.
During a press conference in Shenzhen today, Glen Nager, Huawei’s lead counsel for the lawsuit, claimed the ban goes beyond the FCC’s authority and violates the constitution. “The order fails to give Huawei constitutionally required due process before stigmatizing it as a national security threat, such as an opportunity to confront supposed evidence and witnesses, and a fair and neutral hearing process,” he said.
Huawei chief legal officer Song Liuping claims that FCC chairman and Ajit Pai and other commissioners did not present evidence to back its claim that Huawei is a security threat.
“This is a common trend in Washington these days. ‘Huawei is a Chinese company.’ That’s his only excuse,” Song said. He also claimed that the FCC ignored 21 rounds of “detailed comments” submitted by Huawei to explain how the order would harm businesses in rural areas, adding “This decision, just like the Entity List decision in May, is based on politics, not security.”
In March, Huawei also cited the Constitution in another lawsuit filed against the U.S. government arguing that a ban on the use of its products by federal agencies and contractors violate due process.
From: https://techcrunch.com/2019/12/04/huawei-sues-fcc-over-unconstitutional-ban-the-use-of-federal-subsidies-to-buy-its-equipment/
NFL Heads to the Supreme Court In TV Rights Case
A significant antitrust battle could upset how the league sells game telecasts for billions of dollars and usher in an era when teams would compete for licensing deals. ... NFL teams currently pool telecast rights to all live games and collectively negotiate licensing packages.
https://www.hollywoodreporter.com/thr-esq/nfl-tv-rights-why-league-aims-a-block-an-upheaval-1258901
The case of Boise v. Martin, a decade-old lawsuit, is examining whether it’s a crime for someone to sleep outside when they have nowhere else to go.
The case is now a step away from the Supreme Court.
The suit arose when a half-dozen homeless people claimed that local rules prohibiting camping on public property violated the Eighth Amendment protection against cruel and unusual punishment. The plaintiffs prevailed at the appellate level last year, putting the city at the center of a national debate on how to tackle homelessness. Now Boise — after hiring a powerhouse legal team that includes Theodore B. Olson and Theane Evangelis of Gibson, Dunn & Crutcher — has asked the Supreme Court to take the case, a decision that could come within days.
https://www.nytimes.com/2019/12/03/business/homeless-boise.html
In Utah (and perhaps some other places), high interest, small dollar loans are a big part of local small claims court matters
In Utah, payday lenders and similar companies that offer high-interest, small-dollar loans dominate small claims court. Loans for Less, for example, filed 95% of the small claims cases in South Ogden, a suburban city of 17,000 about a half-hour north of Salt Lake City on the interstate, in fiscal year 2018, according to state data.
Across Utah, high-interest lenders filed 66% of all small claims cases heard between September 2017 and September 2018, according to a new analysis of court records conducted by a team led by Christopher Peterson, a law professor at the University of Utah and the financial services director at the Consumer Federation of America, and David McNeill, a legal data consultant and CEO of Docket Reminder.
Companies can sue for up to $11,000 in Utah’s small claims courts, which are stripped of certain formalities: There are rarely lawyers, judges are not always legally trained and the rules of evidence don’t apply.
from: https://www.propublica.org/article/they-loan-you-money-then-they-get-a-warrant-for-your-arrest
In Utah, payday lenders and similar companies that offer high-interest, small-dollar loans dominate small claims court. Loans for Less, for example, filed 95% of the small claims cases in South Ogden, a suburban city of 17,000 about a half-hour north of Salt Lake City on the interstate, in fiscal year 2018, according to state data.
Across Utah, high-interest lenders filed 66% of all small claims cases heard between September 2017 and September 2018, according to a new analysis of court records conducted by a team led by Christopher Peterson, a law professor at the University of Utah and the financial services director at the Consumer Federation of America, and David McNeill, a legal data consultant and CEO of Docket Reminder.
Companies can sue for up to $11,000 in Utah’s small claims courts, which are stripped of certain formalities: There are rarely lawyers, judges are not always legally trained and the rules of evidence don’t apply.
from: https://www.propublica.org/article/they-loan-you-money-then-they-get-a-warrant-for-your-arrest
Bernie Sanders Slams MLB Over Minor League Contraction
by Kevin Reichard on November 26, 2019
DAR comment: Some media outlets are treating Bernie Sanders' comments on Major League Baseball as random fuming of an old guy from Brooklyn. Some people, like Senator Cruz, simply disagree with him. In fact, Sanders is commenting on the controversial issue of the great and sometimes misused power over employees that derives from government granted or sanctioned monopoly power of sports entities like MLB, the NFL, and the NCAA. Sanders suggests re-examining government policy on sports and antitrust.
The back story on the minor league contraction is that minor league player litigants won a significant procedural victory this past August in their litigation against Major League Baseball. That litigation alleged that illegally low wages were being paid to minor league players. See the article at https://ballparkdigest.com/2019/08/19/appeals-court-expands-scope-of-class-action-milb-player-wage-lawsuit/ The reaction from MLB apparently is to take away minor league balls and bats and partially close the minor league fields. The 11-26-2019 Kevin Reichard article, excerpts of which appear below, tells the story.
Presidential candidate and U.S. Senator Bernie Sanders (I-VT) took to Twitter to oppose Major League Baseball’s proposal to contract 42 Minor League Baseball teams, saying the move would “destroy thousands of jobs and devastate local economies.”
In negotiations for the next Professional Baseball Agreement (PBA) between Major League Baseball and Minor League Baseball, set to replace the current PBA that expires at the end of the 2020 season, MLB has put forth a series of proposals culminating in a current plan to eliminate 42 teams, restructure specific leagues, move the player draft back by two months and delay the first year of player signings by a season, and upgrade player facilities. In our coverage, we’ve outlined the proposals as well as the teams targeted for contraction, documented early political opposition to the proposal, and outlined what Minor League Baseball can do to address MLB concerns.
The arguments here are related to the economic impact of eliminating 42 teams and how local communities past the MiLB operators will be affected, along with the need to pay MiLB players a living wage. All true enough. But the real power in Sanders’ letter isn’t economic justice: it’s in the threats to examine the anti-trust exemption and revise exemptions for MLB that avoid overtime:
In other words, instead of paying Minor League Baseball players a living wage, it appears that the multi-millionaire and billionaire owners of Major League Baseball would rather throw them out on the street no matter how many fans, communities and workers get hurt in the process. If this is the type of attitude that Major League Baseball and its owners have then I think it’s time for Congress and the executive branch to seriously rethink and reconsider all the benefits it has bestowed to the league including, but not limited to, its anti-trust exemption.
The Sanders tweet and letter can be viewed here: https://twitter.com/BernieSanders/status/1199027511604260870
The 11-26-2019 Richards article is at https://ballparkdigest.com/2019/11/26/sanders-slams-mlb-over-contraction-everything-to-do-with-greed/
by Kevin Reichard on November 26, 2019
DAR comment: Some media outlets are treating Bernie Sanders' comments on Major League Baseball as random fuming of an old guy from Brooklyn. Some people, like Senator Cruz, simply disagree with him. In fact, Sanders is commenting on the controversial issue of the great and sometimes misused power over employees that derives from government granted or sanctioned monopoly power of sports entities like MLB, the NFL, and the NCAA. Sanders suggests re-examining government policy on sports and antitrust.
The back story on the minor league contraction is that minor league player litigants won a significant procedural victory this past August in their litigation against Major League Baseball. That litigation alleged that illegally low wages were being paid to minor league players. See the article at https://ballparkdigest.com/2019/08/19/appeals-court-expands-scope-of-class-action-milb-player-wage-lawsuit/ The reaction from MLB apparently is to take away minor league balls and bats and partially close the minor league fields. The 11-26-2019 Kevin Reichard article, excerpts of which appear below, tells the story.
Presidential candidate and U.S. Senator Bernie Sanders (I-VT) took to Twitter to oppose Major League Baseball’s proposal to contract 42 Minor League Baseball teams, saying the move would “destroy thousands of jobs and devastate local economies.”
In negotiations for the next Professional Baseball Agreement (PBA) between Major League Baseball and Minor League Baseball, set to replace the current PBA that expires at the end of the 2020 season, MLB has put forth a series of proposals culminating in a current plan to eliminate 42 teams, restructure specific leagues, move the player draft back by two months and delay the first year of player signings by a season, and upgrade player facilities. In our coverage, we’ve outlined the proposals as well as the teams targeted for contraction, documented early political opposition to the proposal, and outlined what Minor League Baseball can do to address MLB concerns.
The arguments here are related to the economic impact of eliminating 42 teams and how local communities past the MiLB operators will be affected, along with the need to pay MiLB players a living wage. All true enough. But the real power in Sanders’ letter isn’t economic justice: it’s in the threats to examine the anti-trust exemption and revise exemptions for MLB that avoid overtime:
In other words, instead of paying Minor League Baseball players a living wage, it appears that the multi-millionaire and billionaire owners of Major League Baseball would rather throw them out on the street no matter how many fans, communities and workers get hurt in the process. If this is the type of attitude that Major League Baseball and its owners have then I think it’s time for Congress and the executive branch to seriously rethink and reconsider all the benefits it has bestowed to the league including, but not limited to, its anti-trust exemption.
The Sanders tweet and letter can be viewed here: https://twitter.com/BernieSanders/status/1199027511604260870
The 11-26-2019 Richards article is at https://ballparkdigest.com/2019/11/26/sanders-slams-mlb-over-contraction-everything-to-do-with-greed/
Delrahim says Big Tech probe focused on abuse of dataI
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November 26, 2019
The Department of Justice’s investigation into online platforms is focused on the possibility that tech firms could use data they’ve gathered from customers to block competitors from markets they manage, according to the agency’s top antitrust official.
“If we found that they had market power in a specific, you know, in a defined market, and they have data that they could use to prevent a competitor from challenging that market? Then that could be a violation, yes, absolutely,” Assistant Attorney General Makan Delrahim told the Washington Examiner, referring to big tech corporations such as Facebook and Google.
The “defined markets” in question, Delrahim said, could be the search industry or social media. “Our investigation is focused on” the potential abuse of data by online platforms, he said.
Delrahim also noted that the DOJ was “trying to identify what other [harmful] conduct could go on in any of these, by any of these companies.”
The investigation on the use of data could put increased scrutiny on big tech companies that are already under significant pressure from Congress, regulatory agencies, and the public at large.
“This definitely seems like a trend emerging, of a focus by [Delrahim] and others on zero-price markets and the value of data,” said John Newman, a DOJ antitrust lawyer during the Obama administration and an associate professor of law at the University of Miami. “I think it’s a good sign, and I hope to see future development.”
Full Content: Washington Examiner https://www.washingtonexaminer.com/policy/economy/big-tech-investigation-focused-on-abuse-of-data-doj-antitrust-chief-says
Apple, Square Apply Early for Tariff Exemptions as List 4A Process Opens
Sounce: http://www.ftz9.org/wp-content/uploads/2019/11/TRADE-NEWS-WEEKLY-2019-November-4-November-8.pdf
DAR Comment: The 67% success rate reported for Apple suggests that Apple is doing well in exempting Chinese made components from tariffs; we lack information about whether Apple rivals are doing equally well.
The U.S. government has opened the process to request exemptions from “List 4A” tariffs on Chinese exports that were applied in September. As of November 3, 148 exemptions had been filed – on the basis of List 3 applications that could eventually reach 16,000. Given only 7.1% of List 3 filings have been assessed, List 4A applicants could be waiting a long time for a decision.
Among early List 4A filers is Apple, with 11 applications covering its iMac, Apple Watch and Airpod ranges. Apple had a 67% success rate in its List 3 applications.
Other filers in the electronics sector for List 4A include Square and Specialty Technologies. The bulk of List 4A filings by number so far though are in the leisure sector including shipments by Sea Eagle Boats which has had a 38.9% success rate in List 3 requests.
Sounce: http://www.ftz9.org/wp-content/uploads/2019/11/TRADE-NEWS-WEEKLY-2019-November-4-November-8.pdf
DAR Comment: The 67% success rate reported for Apple suggests that Apple is doing well in exempting Chinese made components from tariffs; we lack information about whether Apple rivals are doing equally well.
The U.S. government has opened the process to request exemptions from “List 4A” tariffs on Chinese exports that were applied in September. As of November 3, 148 exemptions had been filed – on the basis of List 3 applications that could eventually reach 16,000. Given only 7.1% of List 3 filings have been assessed, List 4A applicants could be waiting a long time for a decision.
Among early List 4A filers is Apple, with 11 applications covering its iMac, Apple Watch and Airpod ranges. Apple had a 67% success rate in its List 3 applications.
Other filers in the electronics sector for List 4A include Square and Specialty Technologies. The bulk of List 4A filings by number so far though are in the leisure sector including shipments by Sea Eagle Boats which has had a 38.9% success rate in List 3 requests.
WIlliam Morris Endeavor v. Writers Guild of America
The lawsuit was filed this past summer by William Morris Endeavor, Creative Artists Agency, and United Talent Agency, who argue that the guild is participating in an “illegal boycott” by having thousands of its writers terminate their representation in order to pressure the agencies to eliminate packaging fees. The WGA argues that antitrust laws preventing illegal boycotts do not apply to them, citing labor laws that allow for unions to improve their working conditions through self-organizing.
But in a legal brief filed Tuesday, November 26, the USDOJ argued that use of labor exemptions in this case is “not so facile” as the WGA membership’s mass termination of agency representation included TV showrunners who can hold other roles on a project, most commonly as a producer.
“While any construction of the labor exemptions must allow unions to restrict competition in labor markets in pursuit of legitimate labor law goals, courts must also be careful to circumscribe the application of these exemptions lest unions be ‘giv[en] free rein to extend their substantial economic power into markets for goods and services other than labor.’”
Full Content: The Wrap, Forbes https://www.forbes.com/sites/jillgoldsmith/2019/11/27/doj-antitrust-chief-boosts-talent-agencies-in-court-battle-with-wga/#353d81594f81
The lawsuit was filed this past summer by William Morris Endeavor, Creative Artists Agency, and United Talent Agency, who argue that the guild is participating in an “illegal boycott” by having thousands of its writers terminate their representation in order to pressure the agencies to eliminate packaging fees. The WGA argues that antitrust laws preventing illegal boycotts do not apply to them, citing labor laws that allow for unions to improve their working conditions through self-organizing.
But in a legal brief filed Tuesday, November 26, the USDOJ argued that use of labor exemptions in this case is “not so facile” as the WGA membership’s mass termination of agency representation included TV showrunners who can hold other roles on a project, most commonly as a producer.
“While any construction of the labor exemptions must allow unions to restrict competition in labor markets in pursuit of legitimate labor law goals, courts must also be careful to circumscribe the application of these exemptions lest unions be ‘giv[en] free rein to extend their substantial economic power into markets for goods and services other than labor.’”
Full Content: The Wrap, Forbes https://www.forbes.com/sites/jillgoldsmith/2019/11/27/doj-antitrust-chief-boosts-talent-agencies-in-court-battle-with-wga/#353d81594f81
Dentists’ Group joins antitrust suits against Delta Dental
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November 28, 2019
The American Dental Association accused Delta Dental Insurance of monopolizing dental insurance, entering a dispute in Chicago federal court that began with a wave of lawsuits filed by dental practices last month.
The antitrust suits target Delta and its independent affiliates, which form a nationwide insurance network analogous to the Blue Cross Blue Shield Association led by Anthem.
The Delta entities are accused of undermining competition by illegally dividing the country into 39 separate geographic markets, according to the proposed class actions filed in the US District Court for the Northern District of Illinois.
Full Content: Law 360
-
November 28, 2019
The American Dental Association accused Delta Dental Insurance of monopolizing dental insurance, entering a dispute in Chicago federal court that began with a wave of lawsuits filed by dental practices last month.
The antitrust suits target Delta and its independent affiliates, which form a nationwide insurance network analogous to the Blue Cross Blue Shield Association led by Anthem.
The Delta entities are accused of undermining competition by illegally dividing the country into 39 separate geographic markets, according to the proposed class actions filed in the US District Court for the Northern District of Illinois.
Full Content: Law 360
The Maryland Consumer Rights Coalition Guide to Buying a Used Car
The MCRC offers a booklet of value to consumers interested in buying a used car. It's value extends beyond Maryland borders.
For lawyers who are interested in reaching out to lay people and offering consumer buying guidance, the booklet is a good teaching tool that could be used in community settings like libraries or churches.
The booklet can be found here: http://www.marylandconsumers.org/penn_station/folders/issues/auto/new__used/How_to_Buy_a_Used_Car.pdf?eType=EmailBlastContent&eId=2c326cc9-d3c7-4af3-894f-ba7202928d0b
The MCRC offers a booklet of value to consumers interested in buying a used car. It's value extends beyond Maryland borders.
For lawyers who are interested in reaching out to lay people and offering consumer buying guidance, the booklet is a good teaching tool that could be used in community settings like libraries or churches.
The booklet can be found here: http://www.marylandconsumers.org/penn_station/folders/issues/auto/new__used/How_to_Buy_a_Used_Car.pdf?eType=EmailBlastContent&eId=2c326cc9-d3c7-4af3-894f-ba7202928d0b
From PBS: Reveal investigation suggests that Indiana government may have side-tracked investigation of Amazon management's role in death of employee injured by a fork lift in an Amazon warehouse
"One particular incident in Indiana raises questions about how regulators and government officials deal with potential safety violations at the global company. Will Evans of Reveal from The Center for Investigative Reporting reports."
From the PBS Newshour program transcript:
https://www.pbs.org/newshour/show/investigation-raises-alarm-about-handling-of-worker-fatality-at-indiana-amazon-facility
"One particular incident in Indiana raises questions about how regulators and government officials deal with potential safety violations at the global company. Will Evans of Reveal from The Center for Investigative Reporting reports."
From the PBS Newshour program transcript:
- Reporter Will Evans:
[Former Indiana investigator] Stallone believes the way regulators bent over backwards to help Amazon just makes accidents more likely to happen in the future. - John Stallone:
You are gambling with people's lives every day. And that doesn't seem like you should get a pass. You have to hold people's feet to the fire. You have to be accountable for what they did or didn't provide.
https://www.pbs.org/newshour/show/investigation-raises-alarm-about-handling-of-worker-fatality-at-indiana-amazon-facility
Amazon admits to Congress that it uses ‘aggregated’ data from third-party sellers to come up with its own products
CNBC – In newly released answers to a House panel investigating four Big Tech firms, Amazon maintained it does not use data from individual third-party sellers to come up with its own products. But it does use “aggregated data” to inform its private label brands, the company said.
http://maestro.abanet.org/trk/click?ref=z11aidwdq5_0-3e8e4x3e6f10x0249&
The NFL monopoly v. Kaepernick
Recently, TMZ Sports reported that Rep. Hank Johnson (Democrat from Georgia says he believes Kaepernick is the "victim" ... because the NFL orchestrated a league-wide ban on the QB because he "exercised his 1st Amendment right."
"It's possible that Congress can do something," Johnson says . . . "Congress oversees the anti-trust exemption that we gave the NFL. The NFL is doing quite well with that anti-trust exemption, maybe it's time for us to take a fresh look at it."
The anti-trust exemption is the law President Kennedy signed back in the day which allows the individual teams to work together as a monopoly to negotiate more lucrative broadcasting deals.
See https://www.tmz.com/2019/11/19/hank-johnson-nfl-congress-anti-trust-exemption-colin-kaepernick/
NBC Sports columnist Mike Florio believes that the NFL flexed its monopolist’s muscle when it arranged a display work-out for Kaepernick to which team scouts were invited. Florio argues that the waiver the NFL wanted Kaepernick to sign, and that Kaepernick refused, was prejudicial to Kaepernick. Florio writes:
In their statement from Saturday afternoon, Kaepernick’s representatives said that “the NFL has demanded that as a precondition to the workout, Mr. Kaepernick sign an unusual liability waiver that addresses employment-related issues and rejected the standard liability waiver from physical injury proposed by Mr. Kaepernick’s representatives.” Based on the language of the waiver, that’s an overstatement of its specific contents.
That said, there’s enough language in the waiver to give a prudent, careful lawyer legitimate concern that an aggressive litigator would later argue that signing the document defeats all potential employment claims that Kaepernick could have made.
Are Johnson and Florio right? Here’s a link to the proposed waiver. You decide: https://nbcprofootballtalk.files.wordpress.com/2019/11/nov-16-workout-release-and-waiver.pdf
Posting by Don Allen Resnikoff, who is responsible for the content
Recently, TMZ Sports reported that Rep. Hank Johnson (Democrat from Georgia says he believes Kaepernick is the "victim" ... because the NFL orchestrated a league-wide ban on the QB because he "exercised his 1st Amendment right."
"It's possible that Congress can do something," Johnson says . . . "Congress oversees the anti-trust exemption that we gave the NFL. The NFL is doing quite well with that anti-trust exemption, maybe it's time for us to take a fresh look at it."
The anti-trust exemption is the law President Kennedy signed back in the day which allows the individual teams to work together as a monopoly to negotiate more lucrative broadcasting deals.
See https://www.tmz.com/2019/11/19/hank-johnson-nfl-congress-anti-trust-exemption-colin-kaepernick/
NBC Sports columnist Mike Florio believes that the NFL flexed its monopolist’s muscle when it arranged a display work-out for Kaepernick to which team scouts were invited. Florio argues that the waiver the NFL wanted Kaepernick to sign, and that Kaepernick refused, was prejudicial to Kaepernick. Florio writes:
In their statement from Saturday afternoon, Kaepernick’s representatives said that “the NFL has demanded that as a precondition to the workout, Mr. Kaepernick sign an unusual liability waiver that addresses employment-related issues and rejected the standard liability waiver from physical injury proposed by Mr. Kaepernick’s representatives.” Based on the language of the waiver, that’s an overstatement of its specific contents.
That said, there’s enough language in the waiver to give a prudent, careful lawyer legitimate concern that an aggressive litigator would later argue that signing the document defeats all potential employment claims that Kaepernick could have made.
Are Johnson and Florio right? Here’s a link to the proposed waiver. You decide: https://nbcprofootballtalk.files.wordpress.com/2019/11/nov-16-workout-release-and-waiver.pdf
Posting by Don Allen Resnikoff, who is responsible for the content
Warren vows to conduct antitrust investigation of electronic health records (EHR) market
-
November 19, 2019As part of her healthcare plan for the first 100 days in office, Democratic presidential hopeful Sen. Elizabeth Warren of Massachusetts zeroed in on the electronic health records (EHR) industry for its lack of interoperability and competition, she reported on her website. [https://elizabethwarren.com/plans/m4a-transition]
“Congress spent $36 billion to get every doctor in America using EHRs, but we still do not have adequate digital information flow in healthcare — in part because two big companies make up about 85 percent of the market for medical records at big hospitals,” she wrote in her healthcare transition plan.
Ms. Warren pledged to go after health systems and IT companies that engage in information blocking. She also said she will launch an antitrust probe of the EHR market, led by the Federal Trade Commission and the Department of Justice.
Full Content: Elizabeth Warrenhttps://www.pymnts.com/antitrust/2019/big-tech-antitrust-examination-by-ags-gathers-steam/
-
November 19, 2019As part of her healthcare plan for the first 100 days in office, Democratic presidential hopeful Sen. Elizabeth Warren of Massachusetts zeroed in on the electronic health records (EHR) industry for its lack of interoperability and competition, she reported on her website. [https://elizabethwarren.com/plans/m4a-transition]
“Congress spent $36 billion to get every doctor in America using EHRs, but we still do not have adequate digital information flow in healthcare — in part because two big companies make up about 85 percent of the market for medical records at big hospitals,” she wrote in her healthcare transition plan.
Ms. Warren pledged to go after health systems and IT companies that engage in information blocking. She also said she will launch an antitrust probe of the EHR market, led by the Federal Trade Commission and the Department of Justice.
Full Content: Elizabeth Warrenhttps://www.pymnts.com/antitrust/2019/big-tech-antitrust-examination-by-ags-gathers-steam/
Norwegian salmon giants receive US subpoenas in price-fixing probe
By
CPI
-
November 17, 2019
The US Department of Justice (DOJ) will subpoena Mowi as part of a criminal investigation into alleged price-fixing of Atlantic salmon markets, the company disclosed.
Fellow salmon farmers Grieg Seafood and its sales arm Ocean Quality, which is co-owned with Bremnes Seashore, another Norwegian farmer, also received subpoenas, those companies stated. SalMar also confirmed a subpoena, but Leroy Seafood Group has not yet.
According to a press release, Mowi was informed it will receive a subpoena from the DOJ’s Antitrust Division “in the USA where they are opening a criminal investigation involving allegations of similar conduct,” reported Yahoo.
The news follows a previous investigation opened by the European Commission and related civil lawsuits alleging price-fixing from US consumers.
From:https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
By
CPI
-
November 17, 2019
The US Department of Justice (DOJ) will subpoena Mowi as part of a criminal investigation into alleged price-fixing of Atlantic salmon markets, the company disclosed.
Fellow salmon farmers Grieg Seafood and its sales arm Ocean Quality, which is co-owned with Bremnes Seashore, another Norwegian farmer, also received subpoenas, those companies stated. SalMar also confirmed a subpoena, but Leroy Seafood Group has not yet.
According to a press release, Mowi was informed it will receive a subpoena from the DOJ’s Antitrust Division “in the USA where they are opening a criminal investigation involving allegations of similar conduct,” reported Yahoo.
The news follows a previous investigation opened by the European Commission and related civil lawsuits alleging price-fixing from US consumers.
From:https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
New Bill to Shine a Light on the Hidden Causes of Foodborne Illness Outbreaks
Consumer Groups Applaud Effort to Give Food Safety Regulators Critically Needed Authority to Collect Microbiological Samples
November 22, 2019 | Press Release
Washington D.C. — Senator Kirsten Gillibrand yesterday introduced a bill that would give federal investigators at the U.S. Food and Drug Administration (FDA) a new tool to solve foodborne illness outbreaks. Members of the Safe Food Coalition say the bill is more important than ever in light of yet another outbreak linked to romaine lettuce, which today led FDA to advise consumers not to eat, and retailers not to sell, any romaine lettuce harvested from the Salinas, California growing region.
Titled the Expanded Food Safety Investigation Act of 2019, the bill would give FDA the authority to conduct microbiological sampling on concentrated animal feeding operations (CAFOs) so that foodborne illness outbreak investigators can trace back the source of pathogens like the E. coli O157:H7 bacteria linked to Romaine lettuce produced in the Yuma growing region, which killed five people last year. Congresswoman DeLauro, chair of the Congressional Food Safety Caucus, is expected to introduce a companion bill in the House later this year.
Members of the Safe Food Coalition welcomed the introduction of the bill. Under current law, federal authorities need permission to enter the premises of a CAFO to conduct sampling in connection with a foodborne illness outbreak investigation. This limitation came to the forefront during last year’s Yuma Romaine lettuce E. coli O157:H7 outbreak. Samples taken from canal water in the area suggested that the source of the outbreak may have been a large concentrated animal feeding operation in the area. Investigators were permitted to take only limited samples on the operation and were not able to identify the outbreak strain among these.
from https://consumerfed.org/press_release/new-bill-to-shine-a-light-on-the-hidden-causes-of-foodborne-illness-outbreaks/
Consumer Groups Applaud Effort to Give Food Safety Regulators Critically Needed Authority to Collect Microbiological Samples
November 22, 2019 | Press Release
Washington D.C. — Senator Kirsten Gillibrand yesterday introduced a bill that would give federal investigators at the U.S. Food and Drug Administration (FDA) a new tool to solve foodborne illness outbreaks. Members of the Safe Food Coalition say the bill is more important than ever in light of yet another outbreak linked to romaine lettuce, which today led FDA to advise consumers not to eat, and retailers not to sell, any romaine lettuce harvested from the Salinas, California growing region.
Titled the Expanded Food Safety Investigation Act of 2019, the bill would give FDA the authority to conduct microbiological sampling on concentrated animal feeding operations (CAFOs) so that foodborne illness outbreak investigators can trace back the source of pathogens like the E. coli O157:H7 bacteria linked to Romaine lettuce produced in the Yuma growing region, which killed five people last year. Congresswoman DeLauro, chair of the Congressional Food Safety Caucus, is expected to introduce a companion bill in the House later this year.
Members of the Safe Food Coalition welcomed the introduction of the bill. Under current law, federal authorities need permission to enter the premises of a CAFO to conduct sampling in connection with a foodborne illness outbreak investigation. This limitation came to the forefront during last year’s Yuma Romaine lettuce E. coli O157:H7 outbreak. Samples taken from canal water in the area suggested that the source of the outbreak may have been a large concentrated animal feeding operation in the area. Investigators were permitted to take only limited samples on the operation and were not able to identify the outbreak strain among these.
from https://consumerfed.org/press_release/new-bill-to-shine-a-light-on-the-hidden-causes-of-foodborne-illness-outbreaks/
From DMN:There’s Hope for Radio Reform, After All — Congress Introduces the ‘AM-FM Act’ to Overhaul Terrestrial Copyright Laws
US-based terrestrial radio stations don’t pay royalties on the broadcast of recordings. The newly-introduced ‘AM-FM Act’ is aiming to change that.
The story continues here. https://www.digitalmusicnews.com/2019/11/21/am-fm-act-terrestrial-radio/
US-based terrestrial radio stations don’t pay royalties on the broadcast of recordings. The newly-introduced ‘AM-FM Act’ is aiming to change that.
The story continues here. https://www.digitalmusicnews.com/2019/11/21/am-fm-act-terrestrial-radio/
Amid National Dairy Crisis, Milk Monopolists Discuss Fire-Sale Merger
Dean Foods, America’s largest dairy processor, filed for Chapter 11 bankruptcy last week, citing declining milk consumption. The producer of Dairy Pure, TruMoo, Land O’ Lakes, and more than 50 other brands also announced that it is in advanced talks to sell to Dairy Farmers of America (DFA), a cooperative that handles roughly 30 percent of all raw milk in the United States.
The merger raises concerns for dairy farmers, who have brought several class-action antitrust suits against DFA for its monopolistic control over raw milk markets and for collusion… with Dean Foods.
A Dean Foods-DFA merger would expand DFA’s control over raw milk markets and put the co-op in a dominant position to raise milk prices for consumers and lower prices paid to farmers, at a time when dairy farms are going under at a historic clip.
Read Claire Kelloway’s full story in the Washington Monthly here.https://openmarketsinstitute.cmail20.com/t/j-l-ctykylk-jldufuylr-h/
Dean Foods, America’s largest dairy processor, filed for Chapter 11 bankruptcy last week, citing declining milk consumption. The producer of Dairy Pure, TruMoo, Land O’ Lakes, and more than 50 other brands also announced that it is in advanced talks to sell to Dairy Farmers of America (DFA), a cooperative that handles roughly 30 percent of all raw milk in the United States.
The merger raises concerns for dairy farmers, who have brought several class-action antitrust suits against DFA for its monopolistic control over raw milk markets and for collusion… with Dean Foods.
A Dean Foods-DFA merger would expand DFA’s control over raw milk markets and put the co-op in a dominant position to raise milk prices for consumers and lower prices paid to farmers, at a time when dairy farms are going under at a historic clip.
Read Claire Kelloway’s full story in the Washington Monthly here.https://openmarketsinstitute.cmail20.com/t/j-l-ctykylk-jldufuylr-h/
Federal attorneys do pro bono work
A brief excerpt from an article in the November/December Washington Lawyer Magazine
By Sarah Kellogg
Pro bono service is deeply embedded in the legal profession in the UnitedStates, from Big Law to solo prac tices to federa l agencies. The work is more passion than occu pat ion, an inclination toward public service, whether
an attorney coun sels a nonprofit organizat ion, a fledgling small business, or a vulnerable individual in need of legal help.
Today, some 50 federal departments and agencies are part of the Federal Government Pro Bono Program, which operates out of the Justic e Department and administers govern ment-wide pro bone activities not only in Washington, D.C., but also in Chicago, New York City, San Francisco, Denver, and Dallas. In most agencies, a pro bono coordinator works with
a committee to oversee the processand recruit volunteers.
That this human resource went untapped - or severely underu tilized- for many years is
unfortunate.
http://washingtonlawyer.dcbar.org/november2019/index.php#/4
A brief excerpt from an article in the November/December Washington Lawyer Magazine
By Sarah Kellogg
Pro bono service is deeply embedded in the legal profession in the UnitedStates, from Big Law to solo prac tices to federa l agencies. The work is more passion than occu pat ion, an inclination toward public service, whether
an attorney coun sels a nonprofit organizat ion, a fledgling small business, or a vulnerable individual in need of legal help.
Today, some 50 federal departments and agencies are part of the Federal Government Pro Bono Program, which operates out of the Justic e Department and administers govern ment-wide pro bone activities not only in Washington, D.C., but also in Chicago, New York City, San Francisco, Denver, and Dallas. In most agencies, a pro bono coordinator works with
a committee to oversee the processand recruit volunteers.
That this human resource went untapped - or severely underu tilized- for many years is
unfortunate.
http://washingtonlawyer.dcbar.org/november2019/index.php#/4
Tim Wu's Antitrust Revival Reading List
by Tim Wu
Nov 18 · 3 min read
The following are books, articles and study that make up the antitrust revival. I include here work both belonging to the so-called New Brandeis school, and also the Neo-Arnoldian, or Post-Chicago schools.
This list is a work in progress and certainly not meant to be definitive. If there’s something missing, please email me and I’ll add it.
Books in Print
The Curse of Bigness, Tim Wu
Goliath, Matt Stoller
The Antitrust Paradigm, Restoring a Competitive Economy, Jonathan B. Baker
Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Eric Posner, Glen Weyl
People, Power, and Profits: Progressive Capitalism for an Age of Discontent, Joseph E. Stiglitz
The Myth of Capitalism: Monopolies and the Death of Competition, Jonathan Tepper, Denise Hearn
Big Data and Competition Policy, Maurice Stucke & Allen Grunes
Cornered: The New Monopoly Capitalism and the Economics of Destruction, Barry Lynn
Coming Soon
Competition Overdose: How Free Market Mythology Transformed Us from Citizen Kings to Market Servants, Ariel Ezrachi, Maurice E. Stucke
Break ’Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money, Zephyr Teachout
Articles, Studies & Symposia
Amazon’s Antitrust Paradox, Lina Khan
The Separation of Platforms and Commerce, Lina Khan
Are U.S. Industries Becoming More Concentrated?, Gustavo Grullon, Yelena Larkin, Roni Michaely
Antitrust’s Democracy Deficit, Harry First & Spencer Weber Waller
Reassessing the Chicago School of Antitrust Symposium, forthcoming 2020, Pennsylvania Law Review.
Unlocking Antitrust Enforcement, Symposium, Yale Law Journal
The Profound Nonsense of Consumer Welfare Antitrust, Sandeep Vaheesan
Market Power & Inequality, Lina Khan & Sandeep Vaheesan
The Ideological Roots of America’s Market Power Problem, Lina Khan
The New Brandeis Movement, Lina Khan
The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust, Mark Glick
American Gothic: How Chicago School Economics Distorts ‘Consumer Welfare’ in Antitrust, Mark Glick
Does the Rule of Reason Violate the Rule of Law?, Maurice Stucke
The Battle for the Soul of Antitrust, Eleanor Fox
Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, Robert Lande
After Consumer Welfare, Now What?, Tim Wu
Blind Spot: The Attention Economy and the Law, Tim Wu
The New Utilities: Private Power, Social Infrastructure, and the Revival of the Public Utility Concept, K Sabeel Rahman
Horizontal Shareholding, Einer Elhauge
Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, Einer Elhaughe
Horizontal Shareholding and Antitrust Policy, Fiona Morton Scott, Herbert Hovenkamp
A Proposal to Limit the Anti-Competitive Power of Institutional Investors, Eric Posner, Fiona Morton Scott, E. Glen Weyl
Powerless, Marshall Steinbaum, Eric Bernstein, John Sturm
Concentration in US Labor Markets, José Azar, Ioana Marinescu, Marshall Steinbaum, Bledi Taska
Accommodating Capital and Policing Labor: Antitrust in the Two Gilded Ages, Sandeep Vaheesan
Predatory Pricing and Recoupment, Christopher R. Leslie
The Effective Competition Standard, Marshall Steinbaum, Maurice E. Stucke
Artificial Intelligence & Collusion: When Computers Inhibit Competition, Maurice Stucke
Reconsidering Competition, Maurice Stucke
America’s Concentration Crisis, Open Markets Institute
The Worst Opinion in Living Memory: AT&T/Time Warner and America’s Broken Merger Law, Chris Sagers
Market Structure and Political Law: A Taxonomy of Power, Zephyr Teachout, Lina Khan
Corporate Rules and Political Rules: Antitrust as Campaign Finance Reform, Zephyr Teachout
Antitrust Remedies for Labor Market Power, Suresh Naidu, Eric Posner, E. Glen Weyl
The Antitrust Consumer Welfare Paradox, Barak Orbach
Antitrust Populism, Barak Orbach
Antitrust As Allocator of Coordination Rights, Sanjukta Paul
by Tim Wu
Nov 18 · 3 min read
The following are books, articles and study that make up the antitrust revival. I include here work both belonging to the so-called New Brandeis school, and also the Neo-Arnoldian, or Post-Chicago schools.
This list is a work in progress and certainly not meant to be definitive. If there’s something missing, please email me and I’ll add it.
Books in Print
The Curse of Bigness, Tim Wu
Goliath, Matt Stoller
The Antitrust Paradigm, Restoring a Competitive Economy, Jonathan B. Baker
Radical Markets: Uprooting Capitalism and Democracy for a Just Society, Eric Posner, Glen Weyl
People, Power, and Profits: Progressive Capitalism for an Age of Discontent, Joseph E. Stiglitz
The Myth of Capitalism: Monopolies and the Death of Competition, Jonathan Tepper, Denise Hearn
Big Data and Competition Policy, Maurice Stucke & Allen Grunes
Cornered: The New Monopoly Capitalism and the Economics of Destruction, Barry Lynn
Coming Soon
Competition Overdose: How Free Market Mythology Transformed Us from Citizen Kings to Market Servants, Ariel Ezrachi, Maurice E. Stucke
Break ’Em Up: Recovering Our Freedom from Big Ag, Big Tech, and Big Money, Zephyr Teachout
Articles, Studies & Symposia
Amazon’s Antitrust Paradox, Lina Khan
The Separation of Platforms and Commerce, Lina Khan
Are U.S. Industries Becoming More Concentrated?, Gustavo Grullon, Yelena Larkin, Roni Michaely
Antitrust’s Democracy Deficit, Harry First & Spencer Weber Waller
Reassessing the Chicago School of Antitrust Symposium, forthcoming 2020, Pennsylvania Law Review.
Unlocking Antitrust Enforcement, Symposium, Yale Law Journal
The Profound Nonsense of Consumer Welfare Antitrust, Sandeep Vaheesan
Market Power & Inequality, Lina Khan & Sandeep Vaheesan
The Ideological Roots of America’s Market Power Problem, Lina Khan
The New Brandeis Movement, Lina Khan
The Unsound Theory Behind the Consumer (and Total) Welfare Goal in Antitrust, Mark Glick
American Gothic: How Chicago School Economics Distorts ‘Consumer Welfare’ in Antitrust, Mark Glick
Does the Rule of Reason Violate the Rule of Law?, Maurice Stucke
The Battle for the Soul of Antitrust, Eleanor Fox
Wealth Transfers as the Original and Primary Concern of Antitrust: The Efficiency Interpretation Challenged, Robert Lande
After Consumer Welfare, Now What?, Tim Wu
Blind Spot: The Attention Economy and the Law, Tim Wu
The New Utilities: Private Power, Social Infrastructure, and the Revival of the Public Utility Concept, K Sabeel Rahman
Horizontal Shareholding, Einer Elhauge
Tying, Bundled Discounts, and the Death of the Single Monopoly Profit Theory, Einer Elhaughe
Horizontal Shareholding and Antitrust Policy, Fiona Morton Scott, Herbert Hovenkamp
A Proposal to Limit the Anti-Competitive Power of Institutional Investors, Eric Posner, Fiona Morton Scott, E. Glen Weyl
Powerless, Marshall Steinbaum, Eric Bernstein, John Sturm
Concentration in US Labor Markets, José Azar, Ioana Marinescu, Marshall Steinbaum, Bledi Taska
Accommodating Capital and Policing Labor: Antitrust in the Two Gilded Ages, Sandeep Vaheesan
Predatory Pricing and Recoupment, Christopher R. Leslie
The Effective Competition Standard, Marshall Steinbaum, Maurice E. Stucke
Artificial Intelligence & Collusion: When Computers Inhibit Competition, Maurice Stucke
Reconsidering Competition, Maurice Stucke
America’s Concentration Crisis, Open Markets Institute
The Worst Opinion in Living Memory: AT&T/Time Warner and America’s Broken Merger Law, Chris Sagers
Market Structure and Political Law: A Taxonomy of Power, Zephyr Teachout, Lina Khan
Corporate Rules and Political Rules: Antitrust as Campaign Finance Reform, Zephyr Teachout
Antitrust Remedies for Labor Market Power, Suresh Naidu, Eric Posner, E. Glen Weyl
The Antitrust Consumer Welfare Paradox, Barak Orbach
Antitrust Populism, Barak Orbach
Antitrust As Allocator of Coordination Rights, Sanjukta Paul
UN leads bid for cheaper insulin, expanding access for diabetics worldwide
13 November 2019
Health
Overly expensive insulin could be a thing of the past – and life-changing news – for millions of diabetics under a plan launched by the World Health Organization (WHO) on Wednesday to diversify production globally, just ahead of World Diabetes Day.
Announcing the initiative in Geneva, the UN agency said that it had already had informal expressions of interest from pharmaceutical companies looking to produce insulin and have WHO assess whether it is safe for people to use.
“The simple fact is, that the prevalence of diabetes is growing, the amount of insulin available to treat diabetes is too low, the prices are too high, so we need to do something,” said Emer Cooke, Director of Regulation of Medicines and other Health Technologies at WHO.
Coinciding with the project launch, which comes ahead of World Diabetes Day marked each 14 November, UN Secretary-General António Guterres highlighted the impact of “catastrophic” medical expenses on sufferers.
“Diabetes damages health and undermines educational and employment aspirations for many, affecting communities and forcing families into economic hardship”, he said, particularly in low and middle-income countries.
The WHO’s two-year pilot project, unveiled on Wednesday, involves the evaluation of insulin developed by manufacturers to ensure their quality, safety, efficacy and affordability.
Room for expansion of diabetic care
Assuming there is enough interest from manufacturers and, crucially, more insulin available for diabetics, the scheme could be expanded more widely.
“We’re going to look at the number of companies that will apply, we’re going to look at how long it takes, we’re going to look at the outcomes and we’re going to see whether this makes sense and it really is increasing access”, Ms. Cooke said.
The procedure is known as prequalification and WHO has done it in the past for non-brand vaccines, including those used to treat TB, malaria and HIV.
This had resulted in massive savings for sufferers around the world, with 80 per cent of HIV patients now relying on generic products, Ms. Cooke said.
She noted too that some companies had already committed to lowering prices.
HIV drug price plunge led the way
“When (HIV) anti-retrovirals were first produced, the cost per patient per year was $10,000,” she said. “Once we opened prequalification for generic HIV products, the price went down to $300 per year.”
She added: “We’re also confident that competition will bring prices down. That way, countries will have a greater choice of products that are more affordable.”
Today, three manufacturers control most of the global market for insulin, which was discovered as a treatment for diabetes in 1921.
The medicine works by lowering blood glucose levels, a task that is usually carried out by natural insulin, which is produced by the pancreas whenever we eat.
The quadrupling in the number of people with diabetes since 1980 – to around 420 million today, mostly in low and middle-income countries - is widely attributed to poor diet and a lack of exercise.
Those with type one diabetes – around 20 million people - need insulin injections to survive, while only around half of the 65 million type-two sufferers who need insulin are able to get it, WHO said.
Diabetics forced to ration insulin
In some countries, prices are so prohibitive that some people are forced to ration their insulin.
This leaves them susceptible to heart attacks, stroke, kidney failure, blindness and lower limb amputations.
And while diabetes was the seventh leading cause of death globally in 2016, the finding is only worrying because the disease kills people prematurely, said Dr Gojka Roglic, WHO medical officer and diabetes expert.
“We all have to die of something and why not of diabetes - but (only) after celebrating our 90th birthday,” she joked. “The problem with diabetes is that it accounts for a large proportion of premature diabetes – almost half of them occur before 70.”
In low and middle-income countries, the percentage rises to around 60 per cent, Dr Roglic added.
Data collected by WHO from 24 countries on four continents showed that human insulin was available only in 61 per cent of health facilities.
The data from 2016-2019 also showed that a month’s supply of insulin costs a worker in Accra, Ghana, more than a fifth of their take-home pay.
https://news.un.org/en/story/2019/11/1051241
13 November 2019
Health
Overly expensive insulin could be a thing of the past – and life-changing news – for millions of diabetics under a plan launched by the World Health Organization (WHO) on Wednesday to diversify production globally, just ahead of World Diabetes Day.
Announcing the initiative in Geneva, the UN agency said that it had already had informal expressions of interest from pharmaceutical companies looking to produce insulin and have WHO assess whether it is safe for people to use.
“The simple fact is, that the prevalence of diabetes is growing, the amount of insulin available to treat diabetes is too low, the prices are too high, so we need to do something,” said Emer Cooke, Director of Regulation of Medicines and other Health Technologies at WHO.
Coinciding with the project launch, which comes ahead of World Diabetes Day marked each 14 November, UN Secretary-General António Guterres highlighted the impact of “catastrophic” medical expenses on sufferers.
“Diabetes damages health and undermines educational and employment aspirations for many, affecting communities and forcing families into economic hardship”, he said, particularly in low and middle-income countries.
The WHO’s two-year pilot project, unveiled on Wednesday, involves the evaluation of insulin developed by manufacturers to ensure their quality, safety, efficacy and affordability.
Room for expansion of diabetic care
Assuming there is enough interest from manufacturers and, crucially, more insulin available for diabetics, the scheme could be expanded more widely.
“We’re going to look at the number of companies that will apply, we’re going to look at how long it takes, we’re going to look at the outcomes and we’re going to see whether this makes sense and it really is increasing access”, Ms. Cooke said.
The procedure is known as prequalification and WHO has done it in the past for non-brand vaccines, including those used to treat TB, malaria and HIV.
This had resulted in massive savings for sufferers around the world, with 80 per cent of HIV patients now relying on generic products, Ms. Cooke said.
She noted too that some companies had already committed to lowering prices.
HIV drug price plunge led the way
“When (HIV) anti-retrovirals were first produced, the cost per patient per year was $10,000,” she said. “Once we opened prequalification for generic HIV products, the price went down to $300 per year.”
She added: “We’re also confident that competition will bring prices down. That way, countries will have a greater choice of products that are more affordable.”
Today, three manufacturers control most of the global market for insulin, which was discovered as a treatment for diabetes in 1921.
The medicine works by lowering blood glucose levels, a task that is usually carried out by natural insulin, which is produced by the pancreas whenever we eat.
The quadrupling in the number of people with diabetes since 1980 – to around 420 million today, mostly in low and middle-income countries - is widely attributed to poor diet and a lack of exercise.
Those with type one diabetes – around 20 million people - need insulin injections to survive, while only around half of the 65 million type-two sufferers who need insulin are able to get it, WHO said.
Diabetics forced to ration insulin
In some countries, prices are so prohibitive that some people are forced to ration their insulin.
This leaves them susceptible to heart attacks, stroke, kidney failure, blindness and lower limb amputations.
And while diabetes was the seventh leading cause of death globally in 2016, the finding is only worrying because the disease kills people prematurely, said Dr Gojka Roglic, WHO medical officer and diabetes expert.
“We all have to die of something and why not of diabetes - but (only) after celebrating our 90th birthday,” she joked. “The problem with diabetes is that it accounts for a large proportion of premature diabetes – almost half of them occur before 70.”
In low and middle-income countries, the percentage rises to around 60 per cent, Dr Roglic added.
Data collected by WHO from 24 countries on four continents showed that human insulin was available only in 61 per cent of health facilities.
The data from 2016-2019 also showed that a month’s supply of insulin costs a worker in Accra, Ghana, more than a fifth of their take-home pay.
https://news.un.org/en/story/2019/11/1051241
Uber Fined $649 Million for Saying Drivers Aren’t Employees
The move by New Jersey could reverberate across the gig economy.
New Jersey’s move against Uber reflects an intensifying national debate over how app-based companies treat their work force.
New Jersey has demanded that Uber pay $649 million for years of unpaid employment taxes for its drivers, arguing that the ride-hailing company has misclassified the workers as independent contractors and not as employees.
The state’s Department of Labor and Workforce Development issued the request this week to Uber and a subsidiary, Raiser, after an audit uncovered $530 million in back taxes that had not been paid for unemployment and disability insurance from 2014 to 2018.
Because of the nonpayment, the state is seeking another $119 million in interest.
The case represents a major escalation in how states nationwide view the employment practices at the core of many app-based companies, and the first time that a local government has sought back payroll taxes from Uber, which has hundreds of thousands of drivers in the United States.
A spokeswoman at Uber said the company disputed the state’s findings.
Excerpt from https://www.nytimes.com/2019/11/14/nyregion/uber-new-jersey-drivers.html
DC AG Racine takes lead in challenging perceived arbitration abuses
D.C. Attorney General Karl Racine, along with the AGs of 11 other states, has written a hard hitting letter to the arbitration providers asking them to provide detailed information on practices perceived as abusive, and pressuring them to stop the abuses. Here’s a link to their letter: https://oag.dc.gov/release/ag-racine-leads-12-state-coalition-ensure-workers
A press release explains: “Employees are entitled to a fair process to vindicate their workplace rights, including when they are required to do so through arbitration,” said AG Racine. “We are concerned about reports that workers in the District have encountered high costs and prolonged delays in arbitration that have prevented them from reaching resolutions. That’s why our coalition of Attorneys General has requested data from the leading arbitration firms to better understand how we can protect workers and ensure they have a fair shot at resolving disputes.”
D.C. Attorney General Karl Racine, along with the AGs of 11 other states, has written a hard hitting letter to the arbitration providers asking them to provide detailed information on practices perceived as abusive, and pressuring them to stop the abuses. Here’s a link to their letter: https://oag.dc.gov/release/ag-racine-leads-12-state-coalition-ensure-workers
A press release explains: “Employees are entitled to a fair process to vindicate their workplace rights, including when they are required to do so through arbitration,” said AG Racine. “We are concerned about reports that workers in the District have encountered high costs and prolonged delays in arbitration that have prevented them from reaching resolutions. That’s why our coalition of Attorneys General has requested data from the leading arbitration firms to better understand how we can protect workers and ensure they have a fair shot at resolving disputes.”
Mowi, SalMar ASA and Grieg Seafood ASA, three of Norway's biggest farmed salmon producers, said in separate statements on Thursday that they had either received or would get a subpoena from the U.S. Department of Justice’s Antitrust Division and that investigations would be opened.
The development in the U.S. follows raids by the European Commission in February in member states against those companies’ sites. The Commission said at the time it had concerns that they had violated EU antitrust rules prohibiting price fixing cartels and restrictive business practices. The companies were also among salmon farmers cited in a class-action lawsuit in the U.S. in April.
From: https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
Note: Norwegian salmon farmers have previously received public attention because the food pellets used for the fish cause the fish to have elevated levels of PCBs, which some experts believe to be healthy. DR
The development in the U.S. follows raids by the European Commission in February in member states against those companies’ sites. The Commission said at the time it had concerns that they had violated EU antitrust rules prohibiting price fixing cartels and restrictive business practices. The companies were also among salmon farmers cited in a class-action lawsuit in the U.S. in April.
From: https://finance.yahoo.com/news/u-joins-antitrust-push-against-065644141.html
Note: Norwegian salmon farmers have previously received public attention because the food pellets used for the fish cause the fish to have elevated levels of PCBs, which some experts believe to be healthy. DR
Why Aren’t We All Buying Houses on the Internet?
Because the one thing startups can’t disrupt is the real estate agent.By HENRY GRABAR
JUNE 07, 20185:51 AM
____
DAR comment: Real estate sales enabled by web technology seems like a fertile area for disruptive business innovation. But the recent travails of the Compass real estate company and its Softbank financial sponsor suggest that the disruptions are slow in coming. The author Henry Graber suggests why -- customers like old style real estate brokering, even if it is costly. Time will tell whether Mr. Graber is right.
___________________
Between the housing crash, the subsequent housing crisis, and the unshakeable ascent of real estate reality TV, the past decade has so fundamentally changed the way Americans think about buying and selling homes that it’s easy to forget that the way we actually buy and sell homes is the same as it ever was.
For sellers: hire an agent, do a little renovation, list, and wait. For buyers: hire an agent, traverse open houses, make an offer, and wait. If you’re selling, expect to pay at least a 5 percent commission on one of the biggest financial transactions of your life.
Nearly 9 in 10 Americans use an agent to buy and sell their homes. Last year, residential commission revenue was somewhere in the range of $75 billion. And the market remains fragmented, with even the biggest brokerages managing just a tiny fraction of transactions—at least for now. “Wall Street and Silicon Valley are infatuated with the idea there isn’t an industry in the world they can’t blow to shreds with money and technology,” says Steve Murray, the president of real estate analysis firm Real Trends. There are signs that real estate’s time has come. “We’re going to see an infinite variety of changes to the way people buy and sell homes.”
According to PitchBook, an analysis firm owned by Morningstar, the amount of venture capital invested in real estate technology companies was up to $1.2 billion in 2017 from just $31 million in 2012. In May, Zillow, the online listings behemoth that also owns Trulia and StreetEasy, announced it would start buying and selling homes. Newer startups will buy houses sight unseen, or with a lifelong contract that allows the seller to remain living there until death.
There’s a general sense that the internet should do more than entertain window shoppers and generate leads for agents. It should actually make it easier and cheaper to sell a house. There’s just one issue: No one has figured out how to bypass the flesh-and-blood real estate agent.
“The old idea that real estate is never going to change, that we’re going to pay 6 percent, is completely untrue,” argues Glenn Kelman, the CEO of Seattle-based Redfin, a publicly traded brokerage whose calling card is lower commissions. For Kelman, the rush of cash into real estate startups feels like vindication for a corporate model that investors have regarded with skepticism. Redfin’s low-fee model relies on an army of in-house agents who trade typical commissions for the volume that’s possible with internet-generated leads. A Redfin world isn’t a world without real estate agents, but it is one where fewer agents do more. The nation’s 1.4 million working real estate agents do not particularly like Redfin.
Zillow has a different approach. The company hasn’t disrupted the traditional agent model; on the contrary, it’s dependent on it. In the first quarter of 2018, Zillow raked in $300 million in revenue (Redfin’s revenue for all of 2017 was $370 million); more than 70 percent of that came from the company’s “Premier Agents,” who pay for prime placement on the site to generate leads. In becoming an iBuyer (the industry’s term of art, short for “instant buyer”), the company won’t bite the real estate–brokering hand that feeds it. If anything, the pivot provides a lucrative opportunity for local agents to cement their relationships with a company that is trying to become an industrial-scale homebuyer.
You’ll wind up banking less from Zillow than you would have from a traditional sale through a local real estate agent. But the company believes there’s a big tranche of sellers who will take convenience in exchange for a smaller sum for their house. “That’s not what most consumers care about,” surmises Jeremy Wacksman, the company’s chief marketing officer. “What they care about is pushing the button and making magic happen.” Magic, in this case, means selling your house in a matter of days, even at a small discount.
Zillow aims to finish the year with 300 to 1,000 houses in its inventory. In the long term, the company imagines using its extensive reach to make it possible for families to easily coordinate sales and purchases, even across cities, eliminating the uncertainty that accompanies a move. If a new job at Disney World draws your family from Las Vegas to Orlando, Zillow might help you on both ends of the move, making sure there’s just a few days downtime between sale and purchase.
There’s another trend that explains Zillow’s logic—and that of a handful of other startups willing to engage (and able to secure funding) in the capital-intensive business of buying houses. Driven by a national, yearlong homebuilding shortage, home prices have recovered and surpassed their pre-recession value, while the homeownership rate remains just ticks above a 50-year low—a housing recovery without homeowners. This gives investors confidence in the market: There really aren’t enough places for Americans to live. Relatedly, it has created a new and prominent force in homebuying, the single-family home investor, which can be a good partner for startups looking to make quick transactions. Before Zillow announced its big push into flipping this spring, it ran a trial program called “instant offers” in Las Vegas and Orlando, working exclusively to sell houses to investor-buyers like Invitation Homes, one of the country’s largest single-family landlords.
Zillow also isn’t the first company to try acting as a middleman. San Francisco–based Opendoor has made tens of thousands of offers on homes, mostly in Sun Belt cities like Phoenix and Dallas. These places are an easier market than New York or San Francisco: The housing stock is newer, cheaper, and more suburban—which is to say, self-similar. Transactions taxes tend to be lower. The company sees itself as competing against seller uncertainty. “[Zillow] keep[s] the agents at the center of the transaction, which is in line with their business model,” says Cristin Culver, head of communications for Opendoor. “And we keep the customer at the center, which is really our North Star, and that’s the difference.” The company’s rapid appraisals make it possible for sellers to skip agents on the first transaction, and after doing some small renovations (paint, HVAC, basic repairs), Opendoor’s “All Day Open House” allows buyers to find and unlock the house themselves with a smartphone. Easy, right?
And yet most of them come with an agent, and the company says it’s one of the biggest payers of commissions in its markets today.*
Why hasn’t the internet cut out the agent, even as houses sell to internet companies with the click of a button? In part because consumers aren’t really trying to inject any startup pizzazz into the largest (and most complex) transaction of their lives. Local knowledge remains invaluable. That, and it’s hard to develop regular clients. This isn’t Seamless. In real estate, a satisfied customer isn’t coming back anytime soon.
https://slate.com/technology/2018/06/redfin-zillow-and-opendoor-cant-disrupt-real-estate-agents-and-may-not-want-to.html
Because the one thing startups can’t disrupt is the real estate agent.By HENRY GRABAR
JUNE 07, 20185:51 AM
____
DAR comment: Real estate sales enabled by web technology seems like a fertile area for disruptive business innovation. But the recent travails of the Compass real estate company and its Softbank financial sponsor suggest that the disruptions are slow in coming. The author Henry Graber suggests why -- customers like old style real estate brokering, even if it is costly. Time will tell whether Mr. Graber is right.
___________________
Between the housing crash, the subsequent housing crisis, and the unshakeable ascent of real estate reality TV, the past decade has so fundamentally changed the way Americans think about buying and selling homes that it’s easy to forget that the way we actually buy and sell homes is the same as it ever was.
For sellers: hire an agent, do a little renovation, list, and wait. For buyers: hire an agent, traverse open houses, make an offer, and wait. If you’re selling, expect to pay at least a 5 percent commission on one of the biggest financial transactions of your life.
Nearly 9 in 10 Americans use an agent to buy and sell their homes. Last year, residential commission revenue was somewhere in the range of $75 billion. And the market remains fragmented, with even the biggest brokerages managing just a tiny fraction of transactions—at least for now. “Wall Street and Silicon Valley are infatuated with the idea there isn’t an industry in the world they can’t blow to shreds with money and technology,” says Steve Murray, the president of real estate analysis firm Real Trends. There are signs that real estate’s time has come. “We’re going to see an infinite variety of changes to the way people buy and sell homes.”
According to PitchBook, an analysis firm owned by Morningstar, the amount of venture capital invested in real estate technology companies was up to $1.2 billion in 2017 from just $31 million in 2012. In May, Zillow, the online listings behemoth that also owns Trulia and StreetEasy, announced it would start buying and selling homes. Newer startups will buy houses sight unseen, or with a lifelong contract that allows the seller to remain living there until death.
There’s a general sense that the internet should do more than entertain window shoppers and generate leads for agents. It should actually make it easier and cheaper to sell a house. There’s just one issue: No one has figured out how to bypass the flesh-and-blood real estate agent.
“The old idea that real estate is never going to change, that we’re going to pay 6 percent, is completely untrue,” argues Glenn Kelman, the CEO of Seattle-based Redfin, a publicly traded brokerage whose calling card is lower commissions. For Kelman, the rush of cash into real estate startups feels like vindication for a corporate model that investors have regarded with skepticism. Redfin’s low-fee model relies on an army of in-house agents who trade typical commissions for the volume that’s possible with internet-generated leads. A Redfin world isn’t a world without real estate agents, but it is one where fewer agents do more. The nation’s 1.4 million working real estate agents do not particularly like Redfin.
Zillow has a different approach. The company hasn’t disrupted the traditional agent model; on the contrary, it’s dependent on it. In the first quarter of 2018, Zillow raked in $300 million in revenue (Redfin’s revenue for all of 2017 was $370 million); more than 70 percent of that came from the company’s “Premier Agents,” who pay for prime placement on the site to generate leads. In becoming an iBuyer (the industry’s term of art, short for “instant buyer”), the company won’t bite the real estate–brokering hand that feeds it. If anything, the pivot provides a lucrative opportunity for local agents to cement their relationships with a company that is trying to become an industrial-scale homebuyer.
You’ll wind up banking less from Zillow than you would have from a traditional sale through a local real estate agent. But the company believes there’s a big tranche of sellers who will take convenience in exchange for a smaller sum for their house. “That’s not what most consumers care about,” surmises Jeremy Wacksman, the company’s chief marketing officer. “What they care about is pushing the button and making magic happen.” Magic, in this case, means selling your house in a matter of days, even at a small discount.
Zillow aims to finish the year with 300 to 1,000 houses in its inventory. In the long term, the company imagines using its extensive reach to make it possible for families to easily coordinate sales and purchases, even across cities, eliminating the uncertainty that accompanies a move. If a new job at Disney World draws your family from Las Vegas to Orlando, Zillow might help you on both ends of the move, making sure there’s just a few days downtime between sale and purchase.
There’s another trend that explains Zillow’s logic—and that of a handful of other startups willing to engage (and able to secure funding) in the capital-intensive business of buying houses. Driven by a national, yearlong homebuilding shortage, home prices have recovered and surpassed their pre-recession value, while the homeownership rate remains just ticks above a 50-year low—a housing recovery without homeowners. This gives investors confidence in the market: There really aren’t enough places for Americans to live. Relatedly, it has created a new and prominent force in homebuying, the single-family home investor, which can be a good partner for startups looking to make quick transactions. Before Zillow announced its big push into flipping this spring, it ran a trial program called “instant offers” in Las Vegas and Orlando, working exclusively to sell houses to investor-buyers like Invitation Homes, one of the country’s largest single-family landlords.
Zillow also isn’t the first company to try acting as a middleman. San Francisco–based Opendoor has made tens of thousands of offers on homes, mostly in Sun Belt cities like Phoenix and Dallas. These places are an easier market than New York or San Francisco: The housing stock is newer, cheaper, and more suburban—which is to say, self-similar. Transactions taxes tend to be lower. The company sees itself as competing against seller uncertainty. “[Zillow] keep[s] the agents at the center of the transaction, which is in line with their business model,” says Cristin Culver, head of communications for Opendoor. “And we keep the customer at the center, which is really our North Star, and that’s the difference.” The company’s rapid appraisals make it possible for sellers to skip agents on the first transaction, and after doing some small renovations (paint, HVAC, basic repairs), Opendoor’s “All Day Open House” allows buyers to find and unlock the house themselves with a smartphone. Easy, right?
And yet most of them come with an agent, and the company says it’s one of the biggest payers of commissions in its markets today.*
Why hasn’t the internet cut out the agent, even as houses sell to internet companies with the click of a button? In part because consumers aren’t really trying to inject any startup pizzazz into the largest (and most complex) transaction of their lives. Local knowledge remains invaluable. That, and it’s hard to develop regular clients. This isn’t Seamless. In real estate, a satisfied customer isn’t coming back anytime soon.
https://slate.com/technology/2018/06/redfin-zillow-and-opendoor-cant-disrupt-real-estate-agents-and-may-not-want-to.html
AGs meet in Colorado to discuss Google antitrust probe
By CPI
-
November 12, 2019
State officials investigating Alphabet’s Google met Monday, November 11, to dive into competition issues surrounding the search giant as they press forward with an investigation into whether the company is violating antitrust laws, Reuters reported.
The officials met privately in Denver with outside experts with the goal of gaining a deeper understanding of Google’s businesses and the dynamics of the markets it operates in, including digital advertising.
The gathering comes two months after all but two states opened an antitrust investigation into Google with an initial focus on its advertising. Perhaps about a dozen states sent representatives to the meeting, Reuters reported.
The gathering was similar to one held in New York in October, where state and federal enforcers from the Justice Department and Federal Trade Commission discussed their probe of Facebook.
The probe of Google, a unit of Alphabet, is being led by the Texas attorney general’s office. Google had no comment about the meeting in Colorado, but pointed to a blog post from September in which an executive, Kent Walker, said that the company has “always worked constructively with regulators and will continue to do so.”
Texas sent the search and advertising giant a subpoena on September 9 asking for information about its online digital advertising business, which generates most of Google’s revenue and where Google is a dominant player.
Full Content: Reuters
By CPI
-
November 12, 2019
State officials investigating Alphabet’s Google met Monday, November 11, to dive into competition issues surrounding the search giant as they press forward with an investigation into whether the company is violating antitrust laws, Reuters reported.
The officials met privately in Denver with outside experts with the goal of gaining a deeper understanding of Google’s businesses and the dynamics of the markets it operates in, including digital advertising.
The gathering comes two months after all but two states opened an antitrust investigation into Google with an initial focus on its advertising. Perhaps about a dozen states sent representatives to the meeting, Reuters reported.
The gathering was similar to one held in New York in October, where state and federal enforcers from the Justice Department and Federal Trade Commission discussed their probe of Facebook.
The probe of Google, a unit of Alphabet, is being led by the Texas attorney general’s office. Google had no comment about the meeting in Colorado, but pointed to a blog post from September in which an executive, Kent Walker, said that the company has “always worked constructively with regulators and will continue to do so.”
Texas sent the search and advertising giant a subpoena on September 9 asking for information about its online digital advertising business, which generates most of Google’s revenue and where Google is a dominant player.
Full Content: Reuters
Assistant Attorney General Makan Delrahim addresses an antitrust conference at Harvard Law School, November 8, 2019
The headline news for the media is that the antitrust chief warned big tech companies that the government could pursue them for anticompetitive behavior related to their troves of data about users, including for cutting off data access to competitors.
As the New York Times reports, Delrahim said that "Antitrust enforcers cannot turn a blind eye to the serious competition questions that digital markets have raised." Also, he discussed "the ways market power can manifest in industries where data plays a key role," particularly when large amounts of data are amassed that are "quite personal and unique in nature" and offers insight into "the most intimate aspects of human choice and behavior, including personal health, emotional well-being, civic engagement and financial fitness. That, said Delrahim, can create "avenues for abuse."
Further, Delrahim explained that the acquisition of such data is especially valuable for companies in the business of selling predictions about human behavior, he said. That's how Google and Facebook — which dominate global search and social media — attract targeted advertising.
He cited Harvard Business School professor emerita Shoshana Zuboff's theory of "surveillance capitalism," which holds that the "behavioral data" those companies acquire through their nominally free services is a wholly new kind of product. Zuboff considers it massively invasive and exploitative.
Delrahim said that "although privacy fits primarily within the realm of consumer protection law, it would be a grave mistake to believe that privacy concerns can never play a role in antitrust analysis."
Delrahim said that USDOJ staff would expand to deal with high tech antitrust issues.
I was in the audience for the Delrahim talk, and I heard not just a warning to high tech businesses, but caution about the permissible scope of antitrust action. Delrahim has made similar cautious comments in the past, including in Delrahim’s address at the University of Chicago's Antitrust and Competition Conference in April of 2018.
At the earlier conference, as at the recent November 8, 2019 conference, Delrahim was respectful of what he called “evidence-based enforcement.” That is, enforcement built on credible evidence that a practice harms competition and the American consumer, or in the case of merger enforcement, that it creates an unacceptable risk of doing so.
In 2018 Delrahim explained that “Outside the realm of naked horizontal restraints such as price fixing, bid rigging, and market allocation, antitrust demands evidence of harm or likely harm to competition, often weighed against efficiencies or procompetitive justifications.”
He also said in 2018: “Taking an evidence-based approach to antitrust law should not be mistaken for an unwillingness to bring enforcement actions. In fact, where there is clear evidence of harm to competition, it is the duty of enforcers to promptly and vigorously prosecute the antitrust laws, and to refuse to settle for ineffective behavioral band-aids that fall short of curing the underlying threat to competition and consumers. . . . Evidence-based enforcement also requires a readiness to adapt our existing antitrust framework and tools to new or emerging threats to competition. It is an approach of openness to persuasion, and is adaptable to new business models and emerging technologies that create novel threats to competition and consumer welfare.”
So, where do Delrahim’s comments leave us with regard to expectations of USDOJ antitrust enforcement against big tech companies, and particularly Google, Facebook, and Amazon. It is hard to say, particularly given political forces at play that Delrahim did not address. It does seem clear that cautious and evidence based antitrust enforcement is a key part of Delrahim’s thinking. It is unlikely that Makan Delrahim and antitrust reform advocates like Tim Wu and Lina Khan are in perfect agreement.
Sources: https://www.nytimes.com/aponline/2019/11/08/business/bc-us-justice-department-antitrust-speech.html?action=click&module=editorContent&pgtype=Article®ion=CompanionColumn&contentCollection=Trending#after-pp_edpick
file:///F:/Expansion%20Drive/Antitrust%20schoarship/Assistant%20Attorney%20General%20Makan%20Delrahim%20Delivers%20Keynote%20Address%20at%20the%20University%20of%20Chicago's%20Antitrust%20and%20Competition%20Conference%20_%20OPA%20_%20Department%20of%20Justice.html
THIS POSTING IS BY DON ALLEN RESNIKOFF, WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENT
Addendum, 11-14-19: A transcript of the AAG's talk is now available: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-harvard-law-school-competition
The headline news for the media is that the antitrust chief warned big tech companies that the government could pursue them for anticompetitive behavior related to their troves of data about users, including for cutting off data access to competitors.
As the New York Times reports, Delrahim said that "Antitrust enforcers cannot turn a blind eye to the serious competition questions that digital markets have raised." Also, he discussed "the ways market power can manifest in industries where data plays a key role," particularly when large amounts of data are amassed that are "quite personal and unique in nature" and offers insight into "the most intimate aspects of human choice and behavior, including personal health, emotional well-being, civic engagement and financial fitness. That, said Delrahim, can create "avenues for abuse."
Further, Delrahim explained that the acquisition of such data is especially valuable for companies in the business of selling predictions about human behavior, he said. That's how Google and Facebook — which dominate global search and social media — attract targeted advertising.
He cited Harvard Business School professor emerita Shoshana Zuboff's theory of "surveillance capitalism," which holds that the "behavioral data" those companies acquire through their nominally free services is a wholly new kind of product. Zuboff considers it massively invasive and exploitative.
Delrahim said that "although privacy fits primarily within the realm of consumer protection law, it would be a grave mistake to believe that privacy concerns can never play a role in antitrust analysis."
Delrahim said that USDOJ staff would expand to deal with high tech antitrust issues.
I was in the audience for the Delrahim talk, and I heard not just a warning to high tech businesses, but caution about the permissible scope of antitrust action. Delrahim has made similar cautious comments in the past, including in Delrahim’s address at the University of Chicago's Antitrust and Competition Conference in April of 2018.
At the earlier conference, as at the recent November 8, 2019 conference, Delrahim was respectful of what he called “evidence-based enforcement.” That is, enforcement built on credible evidence that a practice harms competition and the American consumer, or in the case of merger enforcement, that it creates an unacceptable risk of doing so.
In 2018 Delrahim explained that “Outside the realm of naked horizontal restraints such as price fixing, bid rigging, and market allocation, antitrust demands evidence of harm or likely harm to competition, often weighed against efficiencies or procompetitive justifications.”
He also said in 2018: “Taking an evidence-based approach to antitrust law should not be mistaken for an unwillingness to bring enforcement actions. In fact, where there is clear evidence of harm to competition, it is the duty of enforcers to promptly and vigorously prosecute the antitrust laws, and to refuse to settle for ineffective behavioral band-aids that fall short of curing the underlying threat to competition and consumers. . . . Evidence-based enforcement also requires a readiness to adapt our existing antitrust framework and tools to new or emerging threats to competition. It is an approach of openness to persuasion, and is adaptable to new business models and emerging technologies that create novel threats to competition and consumer welfare.”
So, where do Delrahim’s comments leave us with regard to expectations of USDOJ antitrust enforcement against big tech companies, and particularly Google, Facebook, and Amazon. It is hard to say, particularly given political forces at play that Delrahim did not address. It does seem clear that cautious and evidence based antitrust enforcement is a key part of Delrahim’s thinking. It is unlikely that Makan Delrahim and antitrust reform advocates like Tim Wu and Lina Khan are in perfect agreement.
Sources: https://www.nytimes.com/aponline/2019/11/08/business/bc-us-justice-department-antitrust-speech.html?action=click&module=editorContent&pgtype=Article®ion=CompanionColumn&contentCollection=Trending#after-pp_edpick
file:///F:/Expansion%20Drive/Antitrust%20schoarship/Assistant%20Attorney%20General%20Makan%20Delrahim%20Delivers%20Keynote%20Address%20at%20the%20University%20of%20Chicago's%20Antitrust%20and%20Competition%20Conference%20_%20OPA%20_%20Department%20of%20Justice.html
THIS POSTING IS BY DON ALLEN RESNIKOFF, WHO TAKES FULL RESPONSIBILITY FOR ITS CONTENT
Addendum, 11-14-19: A transcript of the AAG's talk is now available: https://www.justice.gov/opa/speech/assistant-attorney-general-makan-delrahim-delivers-remarks-harvard-law-school-competition
From the NY Times: https://www.nytimes.com/2019/11/10/opinion/big-business-consumer-prices.html#after-story-ad-1
A new book, “The Great Reversal: How America Gave Up on Free Markets.”
In one industry after another, Thomas Phillipon writes, a few companies have grown so large that they have the power to keep prices high and wages low. It’s great for those corporations — and bad for almost everyone else.
Many Americans have a choice between only two internet providers. The airline industry is dominated by four large carriers. Amazon, Apple, Facebook and Google are growing ever larger. One or two hospital systems control many local markets. Home Depot and Lowe’s have displaced local hardware stores. Regional pharmacy chains like Eckerd and Happy Harry’s have been swallowed by national giants.
Other researchers have also documented rising corporate concentration. Philippon’s biggest contribution is to explain that it isn’t some natural result of globalization and technological innovation. If it were, the trends would be similar around the world. But they’re not. Big companies have become only slightly larger in Europe this century — rather than much larger, as in the United States.
What explains the difference? Politics.
The European economy certainly has its problems, but antitrust policy isn’t one of them. The European Union has kept competition alive by blocking mergers and insisting that established companies make room for new entrants. In telecommunications, smaller companies often have the right to use infrastructure built by the giants. That’s why Philippon’s parents can choose among five internet providers, including a low-cost company that brought down prices for everyone.
In air travel, European discount carriers like easyJet have received better access to the gate slots they need to operate. The largest four European airlines control only about 40 percent of the market. In the United States, that share is 80 percent, and, as you’d expect, airfares are higher. Even Southwest Airlines has begun to behave less like a low-fare carrier.
The irony is that Europe is implementing market-based ideas — like telecommunications deregulation and low-cost airlines — that Americans helped pioneer. “E.U. consumers are better off than American consumers today,” Philippon writes, “because the E.U. has adopted the U.S. playbook, which the U.S. itself has abandoned.”
A new book, “The Great Reversal: How America Gave Up on Free Markets.”
In one industry after another, Thomas Phillipon writes, a few companies have grown so large that they have the power to keep prices high and wages low. It’s great for those corporations — and bad for almost everyone else.
Many Americans have a choice between only two internet providers. The airline industry is dominated by four large carriers. Amazon, Apple, Facebook and Google are growing ever larger. One or two hospital systems control many local markets. Home Depot and Lowe’s have displaced local hardware stores. Regional pharmacy chains like Eckerd and Happy Harry’s have been swallowed by national giants.
Other researchers have also documented rising corporate concentration. Philippon’s biggest contribution is to explain that it isn’t some natural result of globalization and technological innovation. If it were, the trends would be similar around the world. But they’re not. Big companies have become only slightly larger in Europe this century — rather than much larger, as in the United States.
What explains the difference? Politics.
The European economy certainly has its problems, but antitrust policy isn’t one of them. The European Union has kept competition alive by blocking mergers and insisting that established companies make room for new entrants. In telecommunications, smaller companies often have the right to use infrastructure built by the giants. That’s why Philippon’s parents can choose among five internet providers, including a low-cost company that brought down prices for everyone.
In air travel, European discount carriers like easyJet have received better access to the gate slots they need to operate. The largest four European airlines control only about 40 percent of the market. In the United States, that share is 80 percent, and, as you’d expect, airfares are higher. Even Southwest Airlines has begun to behave less like a low-fare carrier.
The irony is that Europe is implementing market-based ideas — like telecommunications deregulation and low-cost airlines — that Americans helped pioneer. “E.U. consumers are better off than American consumers today,” Philippon writes, “because the E.U. has adopted the U.S. playbook, which the U.S. itself has abandoned.”
Class Actions 101 for the year 2019: If you are an attorney wondering whether it is a good idea to bring a class action against Juul, dozens of other attorneys have gotten ahead of you. Maybe hundreds. DAR
Judge Orrick Picks Team of 4 as Interim Leaders in Juul MDL
By Ross Todd | November 08, 2019 at 08:04 PM
Interim leadership includes Sarah London, of Lieff Cabraser, Dena Sharp of Girard Sharp, Ellen Relkin of Weitz & Luxenberg, and Dean Kawamoto of Keller Rohrback, but the appointment doesn’t necessarily cement their place in the final leadership structure.
The federal judge overseeing a batch of cases against e-cigarette maker Juul has chosen four plaintiffs lawyers to lead the case in its early stages.
At the end of a marathon hearing Friday where more than 40 lawyers gave two-minute pitches for leadership positions in the multidistrict litigation, U.S. District Judge William Orrick III appointed four lawyers to handle preliminary matters for plaintiffs: Sarah London, a partner at San Francisco’s Lieff Cabraser Heimann & Bernstein, Dena Sharp, of Girard Sharp in San Francisco, Ellen Relkin of Weitz & Luxenberg in New York, and Dean Kawamoto of Keller Rohrback in Seattle.
Orrick indicated in an order issued in the run-up to Friday’s initial case management conference that he wanted to have an interim team in place to handle logistics until he can complete an “initial census” of the cases before him in the multidistrict litigation. An “initial census” refers to the idea, increasingly floated by the defense bar, that judges should vet cases early on in multidistrict litigation in order to weed out meritless claims and to determine the different sorts of plaintiffs and claims within a particular MDL.
“I feel a great sense of urgency to deal with the issues in this case because of the seriousness of the allegations and the need for us to be collectively involved to search for truth and resolution in this matter,” Orrick told a packed courtroom at the top of Friday’s hearing.
Orrick has called on Jaime Dodge, the founding director of Emory University School of Law’s Institute for Complex Litigation and Mass Claims, for help with the initial census.
Orrick indicated in his pre-hearing order that appointment to the initial team would not be a guarantee of inclusion on the final leadership structure of the cases, which focus on Juul’s marketing, particularly to children, and alleged injuries caused by its products—including addiction, pulmonary disease, and seizures. Juul faces a mix of personal injury and addiction cases as well as proposed class actions brought on behalf of consumers, school districts and state and local governments, as well as cases seeking medical monitoring for Juul users going forward.
A line of lawyers trailed outside the courtroom door ahead of the hearing.
Orrick allowed most attorneys only two minutes to express why they or their firm should be chosen for leadership and to pitch ways to expedite a resolution to the case. Lieff Cabraser’s London, whom Orrick had previously tapped to coordinate some preliminary issues with defendants, spoke first and was allowed about five minutes to outline the universe of 163 cases in the MDL so far.
London encouraged the judge to ultimately pick a slate of 22 lawyers on a proposed leadership team that pitches alongside proposed co-lead counsel at San Francisco’s Gutride Safier and New York’s Douglas & London.
“We need a sizable group of lawyers who can work well together,” said London, whose group had proposed that class actions, personal injury cases, and the municipal cases proceed together, rather than on separate tracks. London said that plaintiffs needed to be able to adapt to developing circumstances.
Friday’s hearing came as Juul in October agreed to stop selling fruit-flavored e-cigarettes. The company also reached a legal settlement with California’s Center for Environmental Health that limits how the company can market its product to minors.
“We need be able to take our formation and direct it in the direction to get the job done,” London said.
Girard Sharp name partner Dena Sharp, who had backed a rival leadership structure advocating for separate tracks for different types of cases, said Friday that it was obvious that there “was not a whole lot of difference” between the groups and that everyone on the plaintiffs side of the room had a shared interest.
“It surely is if nothing else a public health emergency at this point,” Sharp said. She said that the proposal for different tracks was directed at giving clients and the court someone specific they could call on and hold accountable.
Orrick indicated in his pre-hearing order that the group chosen Friday would “address preliminary discovery issues, such as the Protective Order, ESI Protocol, selection of necessary vendors, and discovery planning that can occur before the final leadership team is in place.”
Orrick said Friday that he wanted to make sure to get the structure of the case right and to get the results of the case census would help him do that.
“I want this case to move forward in a speedy and collaborative and efficient way,” Orrick said.
Source: https://www.law.com/therecorder/2019/11/08/judge-orrick-picks-team-of-4-as-interim-leaders-in-juul-mdl/?kw=Judge%20Orrick%20Picks%20Team%20of%204%20as%20Interim%20Leaders%20in%20Juul%20MDL&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20191108&utm_term=ca&slreturn=20191010220052
Judge Orrick Picks Team of 4 as Interim Leaders in Juul MDL
By Ross Todd | November 08, 2019 at 08:04 PM
Interim leadership includes Sarah London, of Lieff Cabraser, Dena Sharp of Girard Sharp, Ellen Relkin of Weitz & Luxenberg, and Dean Kawamoto of Keller Rohrback, but the appointment doesn’t necessarily cement their place in the final leadership structure.
The federal judge overseeing a batch of cases against e-cigarette maker Juul has chosen four plaintiffs lawyers to lead the case in its early stages.
At the end of a marathon hearing Friday where more than 40 lawyers gave two-minute pitches for leadership positions in the multidistrict litigation, U.S. District Judge William Orrick III appointed four lawyers to handle preliminary matters for plaintiffs: Sarah London, a partner at San Francisco’s Lieff Cabraser Heimann & Bernstein, Dena Sharp, of Girard Sharp in San Francisco, Ellen Relkin of Weitz & Luxenberg in New York, and Dean Kawamoto of Keller Rohrback in Seattle.
Orrick indicated in an order issued in the run-up to Friday’s initial case management conference that he wanted to have an interim team in place to handle logistics until he can complete an “initial census” of the cases before him in the multidistrict litigation. An “initial census” refers to the idea, increasingly floated by the defense bar, that judges should vet cases early on in multidistrict litigation in order to weed out meritless claims and to determine the different sorts of plaintiffs and claims within a particular MDL.
“I feel a great sense of urgency to deal with the issues in this case because of the seriousness of the allegations and the need for us to be collectively involved to search for truth and resolution in this matter,” Orrick told a packed courtroom at the top of Friday’s hearing.
Orrick has called on Jaime Dodge, the founding director of Emory University School of Law’s Institute for Complex Litigation and Mass Claims, for help with the initial census.
Orrick indicated in his pre-hearing order that appointment to the initial team would not be a guarantee of inclusion on the final leadership structure of the cases, which focus on Juul’s marketing, particularly to children, and alleged injuries caused by its products—including addiction, pulmonary disease, and seizures. Juul faces a mix of personal injury and addiction cases as well as proposed class actions brought on behalf of consumers, school districts and state and local governments, as well as cases seeking medical monitoring for Juul users going forward.
A line of lawyers trailed outside the courtroom door ahead of the hearing.
Orrick allowed most attorneys only two minutes to express why they or their firm should be chosen for leadership and to pitch ways to expedite a resolution to the case. Lieff Cabraser’s London, whom Orrick had previously tapped to coordinate some preliminary issues with defendants, spoke first and was allowed about five minutes to outline the universe of 163 cases in the MDL so far.
London encouraged the judge to ultimately pick a slate of 22 lawyers on a proposed leadership team that pitches alongside proposed co-lead counsel at San Francisco’s Gutride Safier and New York’s Douglas & London.
“We need a sizable group of lawyers who can work well together,” said London, whose group had proposed that class actions, personal injury cases, and the municipal cases proceed together, rather than on separate tracks. London said that plaintiffs needed to be able to adapt to developing circumstances.
Friday’s hearing came as Juul in October agreed to stop selling fruit-flavored e-cigarettes. The company also reached a legal settlement with California’s Center for Environmental Health that limits how the company can market its product to minors.
“We need be able to take our formation and direct it in the direction to get the job done,” London said.
Girard Sharp name partner Dena Sharp, who had backed a rival leadership structure advocating for separate tracks for different types of cases, said Friday that it was obvious that there “was not a whole lot of difference” between the groups and that everyone on the plaintiffs side of the room had a shared interest.
“It surely is if nothing else a public health emergency at this point,” Sharp said. She said that the proposal for different tracks was directed at giving clients and the court someone specific they could call on and hold accountable.
Orrick indicated in his pre-hearing order that the group chosen Friday would “address preliminary discovery issues, such as the Protective Order, ESI Protocol, selection of necessary vendors, and discovery planning that can occur before the final leadership team is in place.”
Orrick said Friday that he wanted to make sure to get the structure of the case right and to get the results of the case census would help him do that.
“I want this case to move forward in a speedy and collaborative and efficient way,” Orrick said.
Source: https://www.law.com/therecorder/2019/11/08/judge-orrick-picks-team-of-4-as-interim-leaders-in-juul-mdl/?kw=Judge%20Orrick%20Picks%20Team%20of%204%20as%20Interim%20Leaders%20in%20Juul%20MDL&utm_source=email&utm_medium=enl&utm_campaign=newsroomupdate&utm_content=20191108&utm_term=ca&slreturn=20191010220052
Amazon’s China business is bigger than ever.
That is because it has aggressively recruited Chinese manufacturers and merchants to sell to consumers outside the country. And these sellers, in turn, represent a high proportion of problem listings found on the site, according to a Wall Street Journal investigation.
The Journal earlier this year uncovered 10,870 items for sale between May and August that have been declared unsafe by federal agencies, are deceptively labeled, lacked federally-required warnings, or are banned by federal regulators. Amazon said it investigated the items, and some listings were taken down after the Journal’s reporting.
Of 1,934 sellers whose addresses could be determined, 54% were based in China, according to a Journal analysis of data from research firm Marketplace Pulse.
Amazon’s China recruiting is one reason why its platform increasingly resembles an unruly online flea market. A new product listing is uploaded to Amazon from China every 1/50th of a second, according to slides its officials showed a December conference in the industrial port city of Ningbo.
Chinese factories are squeezing profit margins for middlemen who sell on Amazon’s third-party platform. Some U.S. sellers fear the next step will be to cut them out entirely.
Excert from https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-sellers-puts-consumers-at-risk-11573489075 [paywall]
________________________
That is because it has aggressively recruited Chinese manufacturers and merchants to sell to consumers outside the country. And these sellers, in turn, represent a high proportion of problem listings found on the site, according to a Wall Street Journal investigation.
The Journal earlier this year uncovered 10,870 items for sale between May and August that have been declared unsafe by federal agencies, are deceptively labeled, lacked federally-required warnings, or are banned by federal regulators. Amazon said it investigated the items, and some listings were taken down after the Journal’s reporting.
Of 1,934 sellers whose addresses could be determined, 54% were based in China, according to a Journal analysis of data from research firm Marketplace Pulse.
Amazon’s China recruiting is one reason why its platform increasingly resembles an unruly online flea market. A new product listing is uploaded to Amazon from China every 1/50th of a second, according to slides its officials showed a December conference in the industrial port city of Ningbo.
Chinese factories are squeezing profit margins for middlemen who sell on Amazon’s third-party platform. Some U.S. sellers fear the next step will be to cut them out entirely.
Excert from https://www.wsj.com/articles/amazons-heavy-recruitment-of-chinese-sellers-puts-consumers-at-risk-11573489075 [paywall]
________________________
Mark Steinbach has provided an article from the Daily Record (a newspaper covering Baltimore's legal, real estate and business communities). It described a program in which pro bono and Legal Aid lawyers provide pro bono advice to people at multiple library branches once a week for a couple of hours.
Here's a link to info on Maryland's program: https://www.prattlibrary.org/lawyer/
Here's the article from the Daily Record:
Lawyer in the Library program offers free aid in city neighborhoods
By: Louis Krauss November 5, 2019
When Shantelle Middleton walked into the Enoch Pratt Free Library on Pennsylvania Avenue Tuesday, she didn’t expect to discover lawyers ready to provide information to help with her longstanding divorce and tax issues.
“I was actually coming to get my son some PlayStation games, and the lady informed me at the door about this program, so I figured why not kill two birds with one stone,” Middleton said.
Each Tuesday, Maryland Legal Aid sends a team of lawyers to the library as part of its Lawyer in the Library program. The program started with just one lawyer in 2015, immediately after the riots following Freddie Gray’s death in police custody.
This week, six attorneys were on hand at the Pennsylvania Avenue branch, each at a booth in the library’s basement. Half were Maryland Legal Aid staff attorneys, while the rest were lawyers working pro bono. Three of the booths were devoted to consultations about expunging criminal records and the rest focused on matters related to housing assistance, family law and public benefits.
Middleton, who waited for her consultation along with her elementary school-aged son, said she was surprised at how many attorneys were on hand to offer help.
“I was kind of shocked, given the type of urban community we’re in,” Middleton said. “I didn’t know we had so much at our disposal. It was a big relief.”
After hearing each client’s case, the attorneys confer with other Legal Aid staff before deciding if — and how — they can help or whether they should direct the client to other pro bono services.
Following the 2015 riots, which took place near the Pennsylvania Avenue branch of the library, Legal Aid attorney Todd Cagwin said the organization decided to start the free legal consultation service knowing it would help city residents, particularly those looking to expunge their records of minor offenses.
Since then the service has expanded and now operates in six city library branches, according to the Maryland Legal Aid website. Cagwin said the organization recently hired a lawyer to offer legal services in city public schools.
In recent weeks, the library also has added free wellness checks, administered by a Johns Hopkins doctor.
With the Legal Aid program running only from 1 to 3 p.m. on Tuesdays, there’s often a long line of people waiting for legal help. On Tuesday, about a dozen people waited to meet with a lawyer.
Wendy Thomas Wolock, a volunteer attorney for the Maryland Legal Aid program, said she came out of retirement to help review expungement cases. She said it’s more fun to practice law when she doesn’t have to do it for a living.
“Kids make stupid mistakes, some more so than others,” Wolock said, explaining what motivated her to help with expungements. “Everyone deserves a second chance, and so I wanted to help facilitate this.”
More information about the Lawyer in the Library program can be found here.https://www.prattlibrary.org/lawyer/
-----
Here's a link to info on Maryland's program: https://www.prattlibrary.org/lawyer/
Here's the article from the Daily Record:
Lawyer in the Library program offers free aid in city neighborhoods
By: Louis Krauss November 5, 2019
When Shantelle Middleton walked into the Enoch Pratt Free Library on Pennsylvania Avenue Tuesday, she didn’t expect to discover lawyers ready to provide information to help with her longstanding divorce and tax issues.
“I was actually coming to get my son some PlayStation games, and the lady informed me at the door about this program, so I figured why not kill two birds with one stone,” Middleton said.
Each Tuesday, Maryland Legal Aid sends a team of lawyers to the library as part of its Lawyer in the Library program. The program started with just one lawyer in 2015, immediately after the riots following Freddie Gray’s death in police custody.
This week, six attorneys were on hand at the Pennsylvania Avenue branch, each at a booth in the library’s basement. Half were Maryland Legal Aid staff attorneys, while the rest were lawyers working pro bono. Three of the booths were devoted to consultations about expunging criminal records and the rest focused on matters related to housing assistance, family law and public benefits.
Middleton, who waited for her consultation along with her elementary school-aged son, said she was surprised at how many attorneys were on hand to offer help.
“I was kind of shocked, given the type of urban community we’re in,” Middleton said. “I didn’t know we had so much at our disposal. It was a big relief.”
After hearing each client’s case, the attorneys confer with other Legal Aid staff before deciding if — and how — they can help or whether they should direct the client to other pro bono services.
Following the 2015 riots, which took place near the Pennsylvania Avenue branch of the library, Legal Aid attorney Todd Cagwin said the organization decided to start the free legal consultation service knowing it would help city residents, particularly those looking to expunge their records of minor offenses.
Since then the service has expanded and now operates in six city library branches, according to the Maryland Legal Aid website. Cagwin said the organization recently hired a lawyer to offer legal services in city public schools.
In recent weeks, the library also has added free wellness checks, administered by a Johns Hopkins doctor.
With the Legal Aid program running only from 1 to 3 p.m. on Tuesdays, there’s often a long line of people waiting for legal help. On Tuesday, about a dozen people waited to meet with a lawyer.
Wendy Thomas Wolock, a volunteer attorney for the Maryland Legal Aid program, said she came out of retirement to help review expungement cases. She said it’s more fun to practice law when she doesn’t have to do it for a living.
“Kids make stupid mistakes, some more so than others,” Wolock said, explaining what motivated her to help with expungements. “Everyone deserves a second chance, and so I wanted to help facilitate this.”
More information about the Lawyer in the Library program can be found here.https://www.prattlibrary.org/lawyer/
-----
From DMN
After Receiving Just $98 in Soundtrack Royalties, the Creators of Spinal Tap Settle Their $400 Million Lawsuit Against Vivendi Marsha Silva
November 5, 2019
The creators of the legendary rock mockumentary This Is Spinal Tap have settled their dispute with Universal Music Group (UMG) parent Vivendi relating to the soundtrack of the film and related recordings.The film’s creators include Harry Shearer, Christopher Guest, Michael McKean and Rob Reiner.
Under the terms of the agreement, UMG will continue to distribute recordings relating to This Is Spinal Tap. Though eventually these rights will return to the creators. Previously, it was reported that, between 1989 and 2006, they received only $98 in royalties from the soundtrack.
In 2016, the four filed a broader $400 million lawsuit against UMG’s parent Vivendi, alleging breach of contract, fraud and anti-competitive business practices against Studio Canal, which is another subsidiary of Vivendi. This suit related to all intellectual properties related to the film, including merchandising, and would seem to be only partially resolved by the settlement.
Like with music royalties, the creators of the film have received little in terms of merchandising royalty: $81 since 1984.Made with little budget, This Is Spinal Tap spawned the mockumentary genre and has been included in many lists of the greatest movies of all time. This includes the New York Times Guide to the Best 1,000 Movies Ever Made, Entertainment Weekly’s 100 Greatest Movies of All Time and Total Film’s the 100 Greatest Movies of All Time.
In the decades after the film’s release, hundreds of thousands of Spinal Tap recordings have sold around the world, and they are still available in both physical and digital formats.
In response to the settlement, Harry Shearer said, “I must admit, from the moment we first began mediation with them to now, I’ve been impressed by UMG’s respect for creatives and their distinctive desire to seek a prompt and equitable solution to the issues.”ly' to Pay Nearly $10 Million Owed to Artists, Bank-Appointed Administrator Says
Christopher Guest also commented on the agreement. He said, “It was refreshing to be treated so constructively and with such courtesy by UMG and I’m pleased we have been able to resolve this.
https://www.digitalmusicnews.com/2019/10/23/pledgemusic-unlikely-to-pay-artists/
Editorial comment by DAR: Linking this article to broader issues, a 52 second video of a legendary and brilliant Spinal Tap drummer spontaneously exploding is here: https://www.youtube.com/watch?v=TW6W9iOjTKM
After Receiving Just $98 in Soundtrack Royalties, the Creators of Spinal Tap Settle Their $400 Million Lawsuit Against Vivendi Marsha Silva
November 5, 2019
The creators of the legendary rock mockumentary This Is Spinal Tap have settled their dispute with Universal Music Group (UMG) parent Vivendi relating to the soundtrack of the film and related recordings.The film’s creators include Harry Shearer, Christopher Guest, Michael McKean and Rob Reiner.
Under the terms of the agreement, UMG will continue to distribute recordings relating to This Is Spinal Tap. Though eventually these rights will return to the creators. Previously, it was reported that, between 1989 and 2006, they received only $98 in royalties from the soundtrack.
In 2016, the four filed a broader $400 million lawsuit against UMG’s parent Vivendi, alleging breach of contract, fraud and anti-competitive business practices against Studio Canal, which is another subsidiary of Vivendi. This suit related to all intellectual properties related to the film, including merchandising, and would seem to be only partially resolved by the settlement.
Like with music royalties, the creators of the film have received little in terms of merchandising royalty: $81 since 1984.Made with little budget, This Is Spinal Tap spawned the mockumentary genre and has been included in many lists of the greatest movies of all time. This includes the New York Times Guide to the Best 1,000 Movies Ever Made, Entertainment Weekly’s 100 Greatest Movies of All Time and Total Film’s the 100 Greatest Movies of All Time.
In the decades after the film’s release, hundreds of thousands of Spinal Tap recordings have sold around the world, and they are still available in both physical and digital formats.
In response to the settlement, Harry Shearer said, “I must admit, from the moment we first began mediation with them to now, I’ve been impressed by UMG’s respect for creatives and their distinctive desire to seek a prompt and equitable solution to the issues.”ly' to Pay Nearly $10 Million Owed to Artists, Bank-Appointed Administrator Says
Christopher Guest also commented on the agreement. He said, “It was refreshing to be treated so constructively and with such courtesy by UMG and I’m pleased we have been able to resolve this.
https://www.digitalmusicnews.com/2019/10/23/pledgemusic-unlikely-to-pay-artists/
Editorial comment by DAR: Linking this article to broader issues, a 52 second video of a legendary and brilliant Spinal Tap drummer spontaneously exploding is here: https://www.youtube.com/watch?v=TW6W9iOjTKM
CMS may not have power to make hospitals disclose negotiated prices
The Trump administration wants hospitals to tell the public how much they get paid for healthcare services, but many experts don't think the CMS has the authority to force those disclosures.
READ MORE >https://www.modernhealthcare.com/law-regulation/cms-may-not-have-power-make-hospitals-disclose-negotiated-prices?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20191105&utm_content=article1-readmore
The Trump administration wants hospitals to tell the public how much they get paid for healthcare services, but many experts don't think the CMS has the authority to force those disclosures.
READ MORE >https://www.modernhealthcare.com/law-regulation/cms-may-not-have-power-make-hospitals-disclose-negotiated-prices?utm_source=modern-healthcare-am-wednesday&utm_medium=email&utm_campaign=20191105&utm_content=article1-readmore
Hacked voting machines and registration rolls
A few months ago Senate Intelligence Committee released a 67-page report [https://www.intelligence.senate.gov/sites/default/files/documents/Report_Volume1.pdf] concluding that, leading up to the 2016 election, Russians hacked voting machines and registration rolls in all 50 states, and they are likely still doing so.
From a Slate article:
J. Alex Halderman, a computer scientist who has tested vulnerabilities for more than a decade, testified to the Senate committee that he and his team “created attacks that can spread from machine to machine, like a computer virus, and silently change election outcomes.” They studied touch-screen and optical-scan systems, and “in every single case,” he said, “we found ways for attackers to sabotage machines and steal votes.”
Another way to throw an election might be to attack systems that manage voter-registration lists, which the hackers also did in some states. Remove people from the lists—focusing on areas dominated by members of the party that the hacker wants to lose—and they won’t be able to vote.
One former senior intelligence official told me, “If I was going to hack such a system, I’d leave the records alone and corrupt the tally software”—the programs that count the votes and transmit results to a central headquarters. The transmission is done through a network, which is vulnerable to hackers. Some data are transmitted from the voting machines via USB ports, which are also easy to hack.
In the past decade, many states have installed voting machines with paper backups. (One of the measures blocked in the Senate this week would have required them.) But the Senate report notes that 19 states do not conduct complete postelection audits to compare these ballots to the electronic results; five of them do not audit at all. Paper backups mean little if nobody looks at them.
Computerized voting might be inherently vulnerable. Matt Blaze, who holds the McDevitt Chair of Computer Science at Georgetown Law, said at a hacking conference in Washington earlier this year, “Voting security is by far the hardest problem I have ever encountered.”
The American system compounds the difficulties. The voting process must be transparent but also secret. Every vote must be counted, but no one should be able to trace a specific ballot back to a specific person—thus making verification impossible. More daunting, states, counties, and even local election districts set and enforce their own rules and standards. The Senate report notes that when President Barack Obama tried to declare elections to be “critical infrastructure,” which would have allowed intelligence and law enforcement agencies to offer technical assistance on security, many states resisted, fearing a “federal takeover.”
Finally, even if someone found a solution to the problem and convinced every election district to comply, some hacker might find a way around it. The offense-defense race in cyberspace will probably never end.
However, there is a solution to this problem, and it’s maddeningly simple: Take presidential elections out of cyberspace. In other words, go back to the paper ballot.
From: slate.com/news-and-politics/2019/07/elections-hacking-russia-senate-intelligence-committee.html
Google’s $2.1 billion acquisition of Fitbit Inc.
The acquisition means that means two of the largest technology companies will now dominate the U.S. market for fitness tracking devices and data, and the purchase is already coming under fire from U.S. lawmakers.
Google and Fitbit expect the deal to face protracted regulatory review in light of the current political focus on competition and privacy issues in the tech industry, a person familiar with the transaction said.
And two of the company’s major critics in Congress urged regulators to conduct just such a thorough review.
“Why should Google be permitted to acquire even more companies while they’re under DOJ antitrust investigation?” Josh Hawley, a Republican U.S. senator from Missouri, said on Twitter referring to the Justice Department. Representative David Cicilline, who heads the House antitrust investigation into the big tech companies, also criticized the deal.
“Google is signaling that it will continue to flex and expand its power in spite of this immense scrutiny,” said Cicilline, a Democrat from Rhode Island. “Google’s proposed acquisition of Fitbit would also give the company deep insights into Americans’ most sensitive information -- such as their health and location data -- threatening to further entrench its market power online.”
Excerpt from https://www.bloomberg.com/news/articles/2019-11-01/google-s-fitbit-acquisition-likely-to-face-antitrust-scrutiny
The acquisition means that means two of the largest technology companies will now dominate the U.S. market for fitness tracking devices and data, and the purchase is already coming under fire from U.S. lawmakers.
Google and Fitbit expect the deal to face protracted regulatory review in light of the current political focus on competition and privacy issues in the tech industry, a person familiar with the transaction said.
And two of the company’s major critics in Congress urged regulators to conduct just such a thorough review.
“Why should Google be permitted to acquire even more companies while they’re under DOJ antitrust investigation?” Josh Hawley, a Republican U.S. senator from Missouri, said on Twitter referring to the Justice Department. Representative David Cicilline, who heads the House antitrust investigation into the big tech companies, also criticized the deal.
“Google is signaling that it will continue to flex and expand its power in spite of this immense scrutiny,” said Cicilline, a Democrat from Rhode Island. “Google’s proposed acquisition of Fitbit would also give the company deep insights into Americans’ most sensitive information -- such as their health and location data -- threatening to further entrench its market power online.”
Excerpt from https://www.bloomberg.com/news/articles/2019-11-01/google-s-fitbit-acquisition-likely-to-face-antitrust-scrutiny
John Feinstein's cynical take on NCAA allowing student athletes to be paid
"They were like the robber coming out of a bank who is surrounded by the police. And they held up their hands and said, we give up. . . .Yes, I'm really sorry. And now let's negotiate."
The full interview of Feinstein is here: https://www.pbs.org/newshour/show/after-ncaa-announcement-is-allowing-compensation-for-student-athletes-inevitable
"They were like the robber coming out of a bank who is surrounded by the police. And they held up their hands and said, we give up. . . .Yes, I'm really sorry. And now let's negotiate."
The full interview of Feinstein is here: https://www.pbs.org/newshour/show/after-ncaa-announcement-is-allowing-compensation-for-student-athletes-inevitable
NBCWashington
Washington DC and e-scooter safety
By Jodie Fleischer, Rick Yarborough and Steve Jones
A man riding this e-scooter at was struck and killed by an SUV at Dupont Circle Sept. 18, 2018.
The News4 I-Team found at least 16 people around the country have died using rented e-scooters since September 2018.
And despite city leaders efforts to get a handle on this growing trend, the I-Team found the decision-makers often have little hard data to consider.
"I need data of all kinds," D.C. Councilmember Mary Cheh told the I-Team.ties Trying to Curb E-Scooter Injuries
She oversees the District's committee on transportation and says she's researching how other cities have curbed their scooter situation.
For example, Portland, Oregon, requires all riders to wear helmets. In Nashville, e-scooter riders must be 18 and have a driver's license. Atlanta banned scooter-riding on sidewalks. Beverly Hills, California, banned e-scooters all together.
"I'm not interested in banning them, but I do think we need to have some better regulation," Cheh said.
She's hosting a public hearing Monday 11-4-2019 to get input from scooter riders as well as pedestrians and drivers who've been impacted. Cheh has proposed halting scooter use overnight when it's harder to see riders, but she's open to many ideas.
Excerpt from https://www.nbcwashington.com/investigations/Cities-Look-for-Ways-to-Curb-E-Scooter-Injuries-564127151.html
NYT: TikTok v. Silicon Valley
TikTok, which is run by a seven-year-old company in Beijing called ByteDance, allows people to create short, snappy videos and share them around the world. That simple concept has fueled its rise to quickly become one of the world’s largest social networks and to mount the most direct incursion yet by a Chinese company into Silicon Valley’s turf.
Now the American internet companies are pushing back. Through knockoffs, potential acquisitions and not-so-subtle references to Chinese censorship, TikTok’s competitors have been trying to protect their home turf from the service’s advancement. They haven’t had much luck so far.
Over the past 12 months, TikTok’s app has been downloaded more than 750 million times, compared with 715 million for Facebook, 450 million for Instagram, 300 million for YouTube and 275 million for Snapchat, according to the research firm Sensor Tower.
But TikTok’s American competitors could still get some help from their government. The Committee on Foreign Investment in the United States, a federal panel that reviews foreign acquisitions of American firms, is now reviewing ByteDance’s two-year-old acquisition of Musical.ly, the American company that became TikTok, The New York Times and Reuters reported on Friday. Members of Congress had asked for a review last month.
From: https://www.nytimes.com/2019/11/03/technology/tiktok-facebook-youtube.html?action=click&auth=login-email&login=email&module=News&pgtype=Homepage
TikTok, which is run by a seven-year-old company in Beijing called ByteDance, allows people to create short, snappy videos and share them around the world. That simple concept has fueled its rise to quickly become one of the world’s largest social networks and to mount the most direct incursion yet by a Chinese company into Silicon Valley’s turf.
Now the American internet companies are pushing back. Through knockoffs, potential acquisitions and not-so-subtle references to Chinese censorship, TikTok’s competitors have been trying to protect their home turf from the service’s advancement. They haven’t had much luck so far.
Over the past 12 months, TikTok’s app has been downloaded more than 750 million times, compared with 715 million for Facebook, 450 million for Instagram, 300 million for YouTube and 275 million for Snapchat, according to the research firm Sensor Tower.
But TikTok’s American competitors could still get some help from their government. The Committee on Foreign Investment in the United States, a federal panel that reviews foreign acquisitions of American firms, is now reviewing ByteDance’s two-year-old acquisition of Musical.ly, the American company that became TikTok, The New York Times and Reuters reported on Friday. Members of Congress had asked for a review last month.
From: https://www.nytimes.com/2019/11/03/technology/tiktok-facebook-youtube.html?action=click&auth=login-email&login=email&module=News&pgtype=Homepage
Australia Says Google Misled Consumers Over Location Tracking
The company did not disclose the need to disable two different Android settings to stop data collection, regulators said in a lawsuit.
Isabella Kwai
SYDNEY, Australia — Australian regulators on Tuesday accused Google of misleading consumers about its collection of their personal location information through its Android mobile operating system, the latest government action against a tech company over its handling of vast quantities of user data.
The Australian Competition and Consumer Commission alleged in a lawsuit that Google falsely led users to believe that disabling the “Location History” setting on Android phones would stop the company from collecting their location data. But users were actually required to also turn off a second setting, “Web and App Activity,” that was enabled by default.
Excerpt from https://www.nytimes.com/2019/10/29/world/australia/australia-google-location.html
The company did not disclose the need to disable two different Android settings to stop data collection, regulators said in a lawsuit.
Isabella Kwai
SYDNEY, Australia — Australian regulators on Tuesday accused Google of misleading consumers about its collection of their personal location information through its Android mobile operating system, the latest government action against a tech company over its handling of vast quantities of user data.
The Australian Competition and Consumer Commission alleged in a lawsuit that Google falsely led users to believe that disabling the “Location History” setting on Android phones would stop the company from collecting their location data. But users were actually required to also turn off a second setting, “Web and App Activity,” that was enabled by default.
Excerpt from https://www.nytimes.com/2019/10/29/world/australia/australia-google-location.html
DMN: U.S. Appeals Court Revives Taylor Swift ‘Shake It Off’ Copyright Infringement Lawsuit
A federal court has reversed a lower court decision to dismiss a lawsuit against superstar Taylor Swift, which accuses her of plagiarizing the chorus from her song “Shake It Off.”
The story continues here.
A federal court has reversed a lower court decision to dismiss a lawsuit against superstar Taylor Swift, which accuses her of plagiarizing the chorus from her song “Shake It Off.”
The story continues here.
WSJ: Credit rating company conflicts of interest unresolved
After the financial crisis, Washington focused on the credit-ratings firms and the conflict of interest that made them “essential cogs in the wheel of financial destruction,” according to the federal government’s report on the crisis.
But the government didn’t eliminate the conflict, where the firms are paid by the entities whose bonds they rate. Instead, the Securities and Exchange Commission decided that enabling ratings firms to publish unsolicited ratings on securities they weren’t hired to analyze would be the best solution. The agency crafted a rule to give them access to deal data to publish such ratings.
A decade later, the verdict on that plan is in: The program was a failure.
Since the plan’s enactment in 2010, there is little evidence of any unsolicited ratings being published under the program, according to the ratings firms, a trade association, the SEC and a committee of bond investors advising the agency.
The SEC declined to answer questions about the program, but said in response to a public records request that, after a “thorough search” of its records, it “did not locate or identify” any examples of unsolicited ratings published by ratings firms under the program.
Moody’s, S&P Global, Fitch Ratings and Kroll Bond Rating Agency all said their respective firms haven’t produced any unsolicited ratings under the SEC’s rule. DBRS and Morningstar, which recently merged, said they didn’t produce any unsolicited ratings in 2019 and aren’t expecting to do so in the future.
The reason is simple: Ratings firms don’t get paid for unsolicited grades. And if they do issue them, they run the risk of upsetting issuers who don’t want lower ratings assigned to their deals.
For a longer version of this story online, click here.
After the financial crisis, Washington focused on the credit-ratings firms and the conflict of interest that made them “essential cogs in the wheel of financial destruction,” according to the federal government’s report on the crisis.
But the government didn’t eliminate the conflict, where the firms are paid by the entities whose bonds they rate. Instead, the Securities and Exchange Commission decided that enabling ratings firms to publish unsolicited ratings on securities they weren’t hired to analyze would be the best solution. The agency crafted a rule to give them access to deal data to publish such ratings.
A decade later, the verdict on that plan is in: The program was a failure.
Since the plan’s enactment in 2010, there is little evidence of any unsolicited ratings being published under the program, according to the ratings firms, a trade association, the SEC and a committee of bond investors advising the agency.
The SEC declined to answer questions about the program, but said in response to a public records request that, after a “thorough search” of its records, it “did not locate or identify” any examples of unsolicited ratings published by ratings firms under the program.
Moody’s, S&P Global, Fitch Ratings and Kroll Bond Rating Agency all said their respective firms haven’t produced any unsolicited ratings under the SEC’s rule. DBRS and Morningstar, which recently merged, said they didn’t produce any unsolicited ratings in 2019 and aren’t expecting to do so in the future.
The reason is simple: Ratings firms don’t get paid for unsolicited grades. And if they do issue them, they run the risk of upsetting issuers who don’t want lower ratings assigned to their deals.
For a longer version of this story online, click here.
State AGs, experts mull legal grounds for building Facebook case
By
CPI
-
October 22, 2019
State attorneys general and federal investigators gathered Monday with public policy and antitrust experts to explore the legal grounds on which they could build an antitrust case against social media giant Facebook Inc., according to people familiar with the matter.
New York Attorney General Letitia James, who has emerged as a lead figure in investigations of Facebook by more than 40 attorneys general, organized the event at her office. A spokesman for Ms. James declined to discuss it with The Wall Street Journal.
Representatives of at least 10 state attorneys general attended the meeting, according to a person familiar with it. Current and former Justice Department and Federal Trade Commission staffers, as well as academics, were also present, according to a meeting agenda viewed by the Journal. There is no formal working relationship between the attorneys general and the speakers who were at the meeting.
Full Content: Wall Street Journal
By
CPI
-
October 22, 2019
State attorneys general and federal investigators gathered Monday with public policy and antitrust experts to explore the legal grounds on which they could build an antitrust case against social media giant Facebook Inc., according to people familiar with the matter.
New York Attorney General Letitia James, who has emerged as a lead figure in investigations of Facebook by more than 40 attorneys general, organized the event at her office. A spokesman for Ms. James declined to discuss it with The Wall Street Journal.
Representatives of at least 10 state attorneys general attended the meeting, according to a person familiar with it. Current and former Justice Department and Federal Trade Commission staffers, as well as academics, were also present, according to a meeting agenda viewed by the Journal. There is no formal working relationship between the attorneys general and the speakers who were at the meeting.
Full Content: Wall Street Journal
ExxonMobil went on trial Tuesday in New York, where the oil giant stands accused by the NY AG of defrauding investors by misleading them about the risks it faces from future climate regulations.
The civil case is the first major climate change lawsuit to reach trial in the United States, and it is the culmination of four years of investigation by the New York state attorney general's office.
The central allegation is that Exxon fraudulently used two sets of books to estimate the risks it faces as governments take steps to cut greenhouse gas emissions: one that was shared with investors and another that was used only internally. The public estimate was higher, suggesting a future with stricter limits on emissions, while the internal figures were lower, reflecting more lenient regulations.
Lawyers for Attorney General Letitia James, who took office this year, a few months after the lawsuit was filed, have argued that this practice exposed investors to greater risks than Exxon had disclosed and inflated the company's value.
Excerpt from https://insideclimatenews.org/news/22102019/exxon-climate-fraud-trial-starts-new-york-letitia-james-tar-sands
The civil case is the first major climate change lawsuit to reach trial in the United States, and it is the culmination of four years of investigation by the New York state attorney general's office.
The central allegation is that Exxon fraudulently used two sets of books to estimate the risks it faces as governments take steps to cut greenhouse gas emissions: one that was shared with investors and another that was used only internally. The public estimate was higher, suggesting a future with stricter limits on emissions, while the internal figures were lower, reflecting more lenient regulations.
Lawyers for Attorney General Letitia James, who took office this year, a few months after the lawsuit was filed, have argued that this practice exposed investors to greater risks than Exxon had disclosed and inflated the company's value.
Excerpt from https://insideclimatenews.org/news/22102019/exxon-climate-fraud-trial-starts-new-york-letitia-james-tar-sands
TikTok app poses potential national security risk, says senior DemocratChuck Schumer and Tom Cotton urged inquiry, noting app reportedly censors material such as Hong Kong protest content
@adamgabbattThu 24 Oct 2019 13.18 EDTLast modified on Thu 24 Oct 2019 13.49 EDT
Chuck Schumer, the most senior Democrat in the Senate, has urged the government to investigate TikTok, describing the China-owned social media app as “a potential counter-intelligence threat we cannot ignore” and warning it could be used to interfere in US elections.TikTok, which allows users to share short videos online, has enjoyed wild success since it launched in 2017, and has been downloaded more than 1bn times.
Schumer and Tom Cotton, the Republican senator from Arkansas, co-wrote a letter to the acting director of national intelligence on Wednesday. The pair said they were writing “to express our concerns about TikTok … and the national security risks posed by its growing use in the United States”.
They wrote: “TikTok reportedly censors materials deemed politically sensitive to the Chinese Communist party, including content related to the recent Hong Kong protests, as well as references to Tiananmen Square, Tibetan and Taiwanese independence, and the treatment of the Uighurs.
The platform is also a potential target of foreign influence campaigns like those carried out during the 2016 election on US-based social media platforms.”
Credit: The Guardian
The letter is here:
NYT: Pentagon and the tech industry are collaborating on secure supply chains for essential components and software
DAR editorial comment: US military coordination with US tech companies is not new. But collaboration between the US military and US tech companies has taken on heightened significance as tensions between the US and China increase. Those tensions raise security issues with regard to certain electronic components and software. In addition, US-China rivalry drives government interest in supporting US companies as they compete with rival Chinese companies.
Without denigrating the policy arguments for US military support and collaboration with domestic tech companies, those arguments can run counter to ordinary competition practices. If security concerns and international commercial rivalries can be put to one side, the vendor with the best and cheapest product ordinarily wins the purchase order.
It is, however, unlikely that security concerns and international commercial rivalries can be put to one side. That being the case, it seems that for a number of products and services the usual competition practices that would otherwise apply will not apply. As a consequence, usual competition enforcement policies will be affected. Enforcement may be reduced. Merger enforcement agencies is an example. See https://www.nytimes.com/2018/03/12/technology/trump-broadcom-qualcomm-merger.html
Excerpt follows from NYT article at https://www.nytimes.com/2019/10/25/technology/pentagon-taiwan-tsmc-chipmaker.html?login=email&auth=login-email#after-story-ad-2
Federal agencies are grappling with a deep-rooted technology conundrum. The United States has long fielded the most advanced weaponry by exploiting electronic components once exclusively produced in the country. Chips help tanks, aircraft, rockets and ships navigate, communicate with one another and engage enemy targets.
But domestic production lines of many chips have long since moved overseas, raising questions about supply interruptions in the event of political or military crises abroad. Those fears have been exacerbated by the increasing importance of particular components — such as programmable chips that figure prominently in the F-35 fighter jet, which are designed by the Silicon Valley company Xilinx and mainly fabricated in Taiwan.
Some chips, such as the wireless baseband processors needed for new 5G communications abilities that Pentagon officials covet, require advanced manufacturing technology that has become a key selling point of TSMC.
“We in the Defense Department cannot afford to be shut out of all of those capabilities,” said Lisa Porter, deputy under secretary for research and engineering, in remarks at an event in July that were later widely circulated among chip makers.
Dr. Porter, at a technology event in Los Angeles on Wednesday, said secure supply chains for both essential components and software were a “macro” issue that the Pentagon and the tech industry had to collaborate on. She declined to discuss specific efforts to bolster American chip production. A Defense Department spokesman also declined to comment.
It is all up to when we can close the cost gap,” said Mark Liu, the chairman of TSMC.
In another sign of action, Skywater Technology, a Minnesota chip manufacturing service, said this week that the Defense Department would invest up to $170 million to increase its production and enhance technologies, such as the ability to produce chips that can withstand radiation in space.
The Skywater investment illustrates how the Pentagon is also wrestling with how to upgrade aging technology at domestic companies that make small volumes of classified chips tailored for the military. Such “trusted” factories, as they are called, operate under Pentagon rules aimed at preventing sabotage or data theft.
DAR editorial comment: US military coordination with US tech companies is not new. But collaboration between the US military and US tech companies has taken on heightened significance as tensions between the US and China increase. Those tensions raise security issues with regard to certain electronic components and software. In addition, US-China rivalry drives government interest in supporting US companies as they compete with rival Chinese companies.
Without denigrating the policy arguments for US military support and collaboration with domestic tech companies, those arguments can run counter to ordinary competition practices. If security concerns and international commercial rivalries can be put to one side, the vendor with the best and cheapest product ordinarily wins the purchase order.
It is, however, unlikely that security concerns and international commercial rivalries can be put to one side. That being the case, it seems that for a number of products and services the usual competition practices that would otherwise apply will not apply. As a consequence, usual competition enforcement policies will be affected. Enforcement may be reduced. Merger enforcement agencies is an example. See https://www.nytimes.com/2018/03/12/technology/trump-broadcom-qualcomm-merger.html
Excerpt follows from NYT article at https://www.nytimes.com/2019/10/25/technology/pentagon-taiwan-tsmc-chipmaker.html?login=email&auth=login-email#after-story-ad-2
Federal agencies are grappling with a deep-rooted technology conundrum. The United States has long fielded the most advanced weaponry by exploiting electronic components once exclusively produced in the country. Chips help tanks, aircraft, rockets and ships navigate, communicate with one another and engage enemy targets.
But domestic production lines of many chips have long since moved overseas, raising questions about supply interruptions in the event of political or military crises abroad. Those fears have been exacerbated by the increasing importance of particular components — such as programmable chips that figure prominently in the F-35 fighter jet, which are designed by the Silicon Valley company Xilinx and mainly fabricated in Taiwan.
Some chips, such as the wireless baseband processors needed for new 5G communications abilities that Pentagon officials covet, require advanced manufacturing technology that has become a key selling point of TSMC.
“We in the Defense Department cannot afford to be shut out of all of those capabilities,” said Lisa Porter, deputy under secretary for research and engineering, in remarks at an event in July that were later widely circulated among chip makers.
Dr. Porter, at a technology event in Los Angeles on Wednesday, said secure supply chains for both essential components and software were a “macro” issue that the Pentagon and the tech industry had to collaborate on. She declined to discuss specific efforts to bolster American chip production. A Defense Department spokesman also declined to comment.
It is all up to when we can close the cost gap,” said Mark Liu, the chairman of TSMC.
In another sign of action, Skywater Technology, a Minnesota chip manufacturing service, said this week that the Defense Department would invest up to $170 million to increase its production and enhance technologies, such as the ability to produce chips that can withstand radiation in space.
The Skywater investment illustrates how the Pentagon is also wrestling with how to upgrade aging technology at domestic companies that make small volumes of classified chips tailored for the military. Such “trusted” factories, as they are called, operate under Pentagon rules aimed at preventing sabotage or data theft.
Is the market for real estate agents broken?
A recent study suggests it is. The study is “Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry,” by the economists Chang-Tai Hsieh, a professor at the University of Chicago, and Enrico Moretti, a professor at the University of California, Berkeley. https://faculty.chicagobooth.edu/chang-tai.hsieh/research/jpe%20real%20estate.pdf
As explained in a recent NYT article, the authors point out that the total in commissions paid for selling a home — as much as 6 percent, when agents for both sellers and buyers are taken into account — appears to be stuck at a high rate.
That’s said to be because the house seller typically sets and pays the commission that goes to the buyer’s agent. This arrangement appears to have neutered competition over commission rates. It ensures that relatively few individual sellers deviate from the norm of paying high commission rates, because if they did, buyers’ agents might respond by steering clients toward someone else’s house. So while sellers would like to cut commission rates, it’s generally not in an individual’s interests to be the first to do so.
Some homeowners opt out of the whole system and sell their homes without agents, but most stick with the high-commission norm. As a result, competition has done little to reduce real estate commissions.
But the high commissions haven’t made most real estate agents rich: The median agent earned $48,690 in 2018, according to the Bureau of Labor Statistics.
Instead, the commissions have created a bloated and unproductive sector. That’s because the possibility of earning enormous commissions is so powerful an incentive that it has led thousands of people to become real estate agents.
When lots of agents chase a limited number of deals, many of them end up underemployed, working on only a handful of deals annually.
Credit: https://www.nytimes.com/2019/10/24/business/real-estate-fee-for-service.html?login=email&auth=login-email&login=google&auth=login-google
A recent study suggests it is. The study is “Can Free Entry Be Inefficient? Fixed Commissions and Social Waste in the Real Estate Industry,” by the economists Chang-Tai Hsieh, a professor at the University of Chicago, and Enrico Moretti, a professor at the University of California, Berkeley. https://faculty.chicagobooth.edu/chang-tai.hsieh/research/jpe%20real%20estate.pdf
As explained in a recent NYT article, the authors point out that the total in commissions paid for selling a home — as much as 6 percent, when agents for both sellers and buyers are taken into account — appears to be stuck at a high rate.
That’s said to be because the house seller typically sets and pays the commission that goes to the buyer’s agent. This arrangement appears to have neutered competition over commission rates. It ensures that relatively few individual sellers deviate from the norm of paying high commission rates, because if they did, buyers’ agents might respond by steering clients toward someone else’s house. So while sellers would like to cut commission rates, it’s generally not in an individual’s interests to be the first to do so.
Some homeowners opt out of the whole system and sell their homes without agents, but most stick with the high-commission norm. As a result, competition has done little to reduce real estate commissions.
But the high commissions haven’t made most real estate agents rich: The median agent earned $48,690 in 2018, according to the Bureau of Labor Statistics.
Instead, the commissions have created a bloated and unproductive sector. That’s because the possibility of earning enormous commissions is so powerful an incentive that it has led thousands of people to become real estate agents.
When lots of agents chase a limited number of deals, many of them end up underemployed, working on only a handful of deals annually.
Credit: https://www.nytimes.com/2019/10/24/business/real-estate-fee-for-service.html?login=email&auth=login-email&login=google&auth=login-google
The actress Rose McGowan has sued Harvey Weinstein and the lawyers David Boies and Lisa Bloom, accusing them of directing a campaign of covert and illegal measures meant to discredit her and prevent her from going public with her rape accusation against him
The lawsuit includes Ms. McGowan’s account of attempts to interfere with her plan to publish a memoir, “Brave,” including sending an undercover agent to befriend her and then steal a copy of the manuscript. It also describes efforts to derail the reporting by The New York Times and The New Yorker that ultimately exposed decades of accusations against Mr. Weinstein and helped ignite the #MeToo movement.
The lawsuit, filed in Federal District Court in Los Angeles, said that Mr. Weinstein tapped into a team of professionals whose goal was to “ensure that Ms. McGowan’s story never saw the light of day, and — if it did — that no one would believe her.”
Besides Mr. Weinstein, Mr. Boies and Ms. Bloom, the lawsuit names the lawyers’ firms as defendants, as well as Black Cube, a private intelligence firm that used undercover agents to approach women who had accused Mr. Weinstein of sexual misconduct.
See https://www.nytimes.com/2019/10/23/arts/rose-mcgowan-harvey-weinstein-lawsuit.html
A copy of the federal court Complaint ROSE MCGOWAN, Plaintiff, vs. HARVEY WEINSTEIN, DAVID BOIES, BOIES SCHILLER FLEXNER LLP, LISA BLOOM, THE BLOOM FIRM, B.C. STRATEGIES LTD. D/B/A BLACK CUBE, Defendants. is here: https://www.scribd.com/document/431737010/McGowan-v-Weinstein#fullscreen&from_embed
The lawsuit includes Ms. McGowan’s account of attempts to interfere with her plan to publish a memoir, “Brave,” including sending an undercover agent to befriend her and then steal a copy of the manuscript. It also describes efforts to derail the reporting by The New York Times and The New Yorker that ultimately exposed decades of accusations against Mr. Weinstein and helped ignite the #MeToo movement.
The lawsuit, filed in Federal District Court in Los Angeles, said that Mr. Weinstein tapped into a team of professionals whose goal was to “ensure that Ms. McGowan’s story never saw the light of day, and — if it did — that no one would believe her.”
Besides Mr. Weinstein, Mr. Boies and Ms. Bloom, the lawsuit names the lawyers’ firms as defendants, as well as Black Cube, a private intelligence firm that used undercover agents to approach women who had accused Mr. Weinstein of sexual misconduct.
See https://www.nytimes.com/2019/10/23/arts/rose-mcgowan-harvey-weinstein-lawsuit.html
A copy of the federal court Complaint ROSE MCGOWAN, Plaintiff, vs. HARVEY WEINSTEIN, DAVID BOIES, BOIES SCHILLER FLEXNER LLP, LISA BLOOM, THE BLOOM FIRM, B.C. STRATEGIES LTD. D/B/A BLACK CUBE, Defendants. is here: https://www.scribd.com/document/431737010/McGowan-v-Weinstein#fullscreen&from_embed
More on Attorney David Boies and Private Espionage for clients
David Boies Pleads Not Guilty
The superlawyer in such cases as Bush v. Gore and the fight for gay marriage rights makes no apologies for representing Harvey Weinstein and Theranos with zeal.
https://www.nytimes.com/2018/09/21/business/david-boies-pleads-not-guilty.html
Techdirt doesn't buy it
Shut Up David Boies . . . . by Mike Masnick (8-23-19)
NPR has an incredible story about the media and Jeffrey Epstein. You should read the whole damn thing, because no summary here will do it justice. It covers multiple attempts by various large media organizations, including Vanity Fair, the NY Times and ABC to report on Jeffrey Epstein over the years, and how Epstein, intimidated, coaxed and even potentially bought off reporters to get more favorable coverage, or to kill stories outright. It's horrific and awful and everything along those lines. Go read it.
But, I'm going to focus on the fact that NPR quotes David Boies throughout the piece, acting horrified at how the media fell down on this. He's 100% correct about that, but he's the wrong fucking messenger given his own long history doing pretty much exactly what Epstein is reported to have done regarding the media in this particular piece. Boies is defending some of Epstein's victims, and good on him to be a strong advocate for his clients and against Epstein. But this quote is not one David Boies should be making:
"We count on the press to uncover problems, not merely to report on when problems have been prosecuted and when people have been indicted, but to uncover problems before they reach that stage," says David Boies, an attorney for several of Epstein's accusers. "And here you had a terrible problem. A horrific series of abuses."
Shall we review some of the record on David Boies and his attempts to intimidate and silence the press when they tried to "uncover problems before they reach that stage"? As you may recall, one of David Boies' big clients was... Harvey Weinstein. And, as Ronan Farrow at the New Yorker reported in great detail, Boies and his firm seemed to work very, very hard to stop anyone from revealing Weinstein's problems with multiple women.
Excerpt from https://www.techdirt.com/articles/20190822/23204542844/shut-up-david-boies-you-hypocritical-censorial-oaf.shtml
David Boies and Alan Dershowitz
As the Washington Post put it, "as they reach an age when other esteemed elder statesmen of the bar might be basking in acclaim for their life’s work, the 78-year-old Boies and the 80-year-old Dershowitz are brutally yoked in a subplot of the Jeffrey Epstein sex trafficking case." The melodrama that has played out between the men includes a Florida Bar complaint filed by Dershpwiz.
See: https://www.washingtonpost.com/lifestyle/style/its-alan-dershowitz-vs-david-boies-again-and-again/2019/08/13/925bcb60-b798-11e9-a091-6a96e67d9cce_story.html
David Boies Pleads Not Guilty
The superlawyer in such cases as Bush v. Gore and the fight for gay marriage rights makes no apologies for representing Harvey Weinstein and Theranos with zeal.
https://www.nytimes.com/2018/09/21/business/david-boies-pleads-not-guilty.html
Techdirt doesn't buy it
Shut Up David Boies . . . . by Mike Masnick (8-23-19)
NPR has an incredible story about the media and Jeffrey Epstein. You should read the whole damn thing, because no summary here will do it justice. It covers multiple attempts by various large media organizations, including Vanity Fair, the NY Times and ABC to report on Jeffrey Epstein over the years, and how Epstein, intimidated, coaxed and even potentially bought off reporters to get more favorable coverage, or to kill stories outright. It's horrific and awful and everything along those lines. Go read it.
But, I'm going to focus on the fact that NPR quotes David Boies throughout the piece, acting horrified at how the media fell down on this. He's 100% correct about that, but he's the wrong fucking messenger given his own long history doing pretty much exactly what Epstein is reported to have done regarding the media in this particular piece. Boies is defending some of Epstein's victims, and good on him to be a strong advocate for his clients and against Epstein. But this quote is not one David Boies should be making:
"We count on the press to uncover problems, not merely to report on when problems have been prosecuted and when people have been indicted, but to uncover problems before they reach that stage," says David Boies, an attorney for several of Epstein's accusers. "And here you had a terrible problem. A horrific series of abuses."
Shall we review some of the record on David Boies and his attempts to intimidate and silence the press when they tried to "uncover problems before they reach that stage"? As you may recall, one of David Boies' big clients was... Harvey Weinstein. And, as Ronan Farrow at the New Yorker reported in great detail, Boies and his firm seemed to work very, very hard to stop anyone from revealing Weinstein's problems with multiple women.
Excerpt from https://www.techdirt.com/articles/20190822/23204542844/shut-up-david-boies-you-hypocritical-censorial-oaf.shtml
David Boies and Alan Dershowitz
As the Washington Post put it, "as they reach an age when other esteemed elder statesmen of the bar might be basking in acclaim for their life’s work, the 78-year-old Boies and the 80-year-old Dershowitz are brutally yoked in a subplot of the Jeffrey Epstein sex trafficking case." The melodrama that has played out between the men includes a Florida Bar complaint filed by Dershpwiz.
See: https://www.washingtonpost.com/lifestyle/style/its-alan-dershowitz-vs-david-boies-again-and-again/2019/08/13/925bcb60-b798-11e9-a091-6a96e67d9cce_story.html
Ronan Farrow on attorney David Boies and private espionage
In his new book Catch and Kill, Ronan Farrow reports that accused sexual predator Harvey Weinstein engaged David Boies as his attorney. Boies is a liberal icon who represented Al Gore in Bush v Gore. Farrow reports that Boies signed off on a contract with a private espionage company, Black Cube. Black Cube then tracked complainants in an effort to discourage efforts to bring Weinstein to account. Black Cube’s private espionage included a successful effort by a female Black Cube spy to befriend a complainant, Rose McGowan, and pump her for information.
One of Weinstein’s goals was to stop publication of a story in the New York Times that was unfavorable to Weinstein — even though Boies’ law firm represented the Times.
Like John Careyrou, the author of the book Bad Blood, which tells the story of fraud by promoters of a medical blood testing device, Farrow expresses strong disapproval of the Boies firm’s behavior. (See my earlier discussion of the Careyrou book.) But, like Careyrou, Farrow is careful not to suggest illegal or actionably unethical behavior. There is an apparent reason. The private espionage activities of the operatives engaged by the Boies firm are not too different from the sort of investigative activity that routinely occurs in divorce cases where an aggrieved spouse seeks evidence of bad behavior by the other. But both authors Farrow and Careyrou think that further discussion is warranted about the appropriate bounds for private espionage.
Farrow put a fine point on his concerns when he recently appeared on the PBS Newshour:
But there is a point at which when sophisticated lawyers, in this case, Harvey Weinstein's attorney, David Boies, something of a liberal hero, hired some of these former Mossad agents, who in turn hired subcontractors who were chasing me, chasing other reporters, staking us out.
There were multiple secret agents with false identities following accusers, following reporters. The question is, as you say, where's the line? And I think that, correctly, there's a conversation happening now in response to this reporting in this book about maybe a need for more accountability.
See https://www.pbs.org/newshour/show/what-ronan-farrow-discovered-about-the-systems-that-cover-up-sexual-misconduct
For readers interested in more detail, excerpts from Catch and Kill that focus on Black Cube espionage can be located at https://www.newyorker.com/news/annals-of-espionage/the-black-cube-chronicles-the-double-agent
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
In his new book Catch and Kill, Ronan Farrow reports that accused sexual predator Harvey Weinstein engaged David Boies as his attorney. Boies is a liberal icon who represented Al Gore in Bush v Gore. Farrow reports that Boies signed off on a contract with a private espionage company, Black Cube. Black Cube then tracked complainants in an effort to discourage efforts to bring Weinstein to account. Black Cube’s private espionage included a successful effort by a female Black Cube spy to befriend a complainant, Rose McGowan, and pump her for information.
One of Weinstein’s goals was to stop publication of a story in the New York Times that was unfavorable to Weinstein — even though Boies’ law firm represented the Times.
Like John Careyrou, the author of the book Bad Blood, which tells the story of fraud by promoters of a medical blood testing device, Farrow expresses strong disapproval of the Boies firm’s behavior. (See my earlier discussion of the Careyrou book.) But, like Careyrou, Farrow is careful not to suggest illegal or actionably unethical behavior. There is an apparent reason. The private espionage activities of the operatives engaged by the Boies firm are not too different from the sort of investigative activity that routinely occurs in divorce cases where an aggrieved spouse seeks evidence of bad behavior by the other. But both authors Farrow and Careyrou think that further discussion is warranted about the appropriate bounds for private espionage.
Farrow put a fine point on his concerns when he recently appeared on the PBS Newshour:
But there is a point at which when sophisticated lawyers, in this case, Harvey Weinstein's attorney, David Boies, something of a liberal hero, hired some of these former Mossad agents, who in turn hired subcontractors who were chasing me, chasing other reporters, staking us out.
There were multiple secret agents with false identities following accusers, following reporters. The question is, as you say, where's the line? And I think that, correctly, there's a conversation happening now in response to this reporting in this book about maybe a need for more accountability.
See https://www.pbs.org/newshour/show/what-ronan-farrow-discovered-about-the-systems-that-cover-up-sexual-misconduct
For readers interested in more detail, excerpts from Catch and Kill that focus on Black Cube espionage can be located at https://www.newyorker.com/news/annals-of-espionage/the-black-cube-chronicles-the-double-agent
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
FROM DMN:
House of Representatives Passes Small Claims Copyright Bill for Infringements Under $30,000
There’s big news on the copyright front — for small infractions.
The story continues here. https://www.digitalmusicnews.com/2019/10/23/small-claims-copyright-bill-house/
House of Representatives Passes Small Claims Copyright Bill for Infringements Under $30,000
There’s big news on the copyright front — for small infractions.
The story continues here. https://www.digitalmusicnews.com/2019/10/23/small-claims-copyright-bill-house/
NY AG on multistate investigation of Facebook
“After continued bipartisan conversations with attorneys general from around the country, today I am announcing that we have vastly expanded the list of states, districts, and territories investigating Facebook for potential antitrust violations. . . . Our investigation now has the support of 47 attorneys general from around the nation, who are all concerned that Facebook may have put consumer data at risk, reduced the quality of consumers’ choices, and increased the price of advertising. As we continue our investigation, we will use every investigative tool at our disposal to determine whether Facebook’s actions stifled competition and put users at risk.”
https://ag.ny.gov/press-release/2019/attorney-general-james-gives-update-facebook-antitrust-investigation
Low energy FTC enforcement?
NYT:
The popular skin care brand Sunday Riley has agreed to settle complaints filed by the Federal Trade Commission that the company posted fake reviews of its products online.
The settlement, which was announced on Monday, does not provide consumers with refunds, and it does not force Sunday Riley to admit any wrongdoing: The company simply agreed not to break the law in the future.
https://www.nytimes.com/2019/10/22/us/sunday-riley-fake-reviews.html
NYT:
The popular skin care brand Sunday Riley has agreed to settle complaints filed by the Federal Trade Commission that the company posted fake reviews of its products online.
The settlement, which was announced on Monday, does not provide consumers with refunds, and it does not force Sunday Riley to admit any wrongdoing: The company simply agreed not to break the law in the future.
https://www.nytimes.com/2019/10/22/us/sunday-riley-fake-reviews.html
NYT: Deed theft fraud in Brooklyn
A booming real estate market in Brooklyn is fueling a crime that law enforcement authorities say has taken hold in largely African-American neighborhoods that are being gentrified — deed theft, which involves deceiving or sometimes coercing a homeowner into signing forms that transfer ownership of a property.
In many cases, a homeowner is made to believe the documents involve some type of financial assistance, but in fact turn out to be the property deed.
Bedford-Stuyvesant and Crown Heights, both known for their collection of largely intact townhouses that cost a fraction of what similar homes sell for in Manhattan, have become hotbeds for deed theft, according to law enforcement authorities. Homeowners in Prospect Heights, Brownsville and East New York have also been targeted.
Of the nearly 3,000 deed fraud complaints recorded by the city since 2014, 1,350 — about 45 percent — have come from Brooklyn, according to data compiled by the city’s Department of Finance. (The borough accounts for roughly 30 percent of the city’s housing units.)
The authorities believe the problem may be more widespread since homeowners may not realize right away that they have been victimized.
“It’s just a drop in the bucket,” Eric Gonzalez, the Brooklyn district attorney, said at a recent town hall meeting in Bedford-Stuyvesant. “It’s really hot in the real estate market in Brooklyn. People want to steal our homes.”
Excerpt from https://www.nytimes.com/2019/10/21/nyregion/deed-theft-brooklyn.html?action=click&module=Top%20Stories&pgtype=Homepage
A booming real estate market in Brooklyn is fueling a crime that law enforcement authorities say has taken hold in largely African-American neighborhoods that are being gentrified — deed theft, which involves deceiving or sometimes coercing a homeowner into signing forms that transfer ownership of a property.
In many cases, a homeowner is made to believe the documents involve some type of financial assistance, but in fact turn out to be the property deed.
Bedford-Stuyvesant and Crown Heights, both known for their collection of largely intact townhouses that cost a fraction of what similar homes sell for in Manhattan, have become hotbeds for deed theft, according to law enforcement authorities. Homeowners in Prospect Heights, Brownsville and East New York have also been targeted.
Of the nearly 3,000 deed fraud complaints recorded by the city since 2014, 1,350 — about 45 percent — have come from Brooklyn, according to data compiled by the city’s Department of Finance. (The borough accounts for roughly 30 percent of the city’s housing units.)
The authorities believe the problem may be more widespread since homeowners may not realize right away that they have been victimized.
“It’s just a drop in the bucket,” Eric Gonzalez, the Brooklyn district attorney, said at a recent town hall meeting in Bedford-Stuyvesant. “It’s really hot in the real estate market in Brooklyn. People want to steal our homes.”
Excerpt from https://www.nytimes.com/2019/10/21/nyregion/deed-theft-brooklyn.html?action=click&module=Top%20Stories&pgtype=Homepage
From the SF Fed: Healthy Aging: A Conceptual Model of Community-based Solutions in the Face of Climate Change and Global Demographic Changes
Climate change and shifting demographic patterns require innovative ideas about how to build and adapt community infrastructure that helps older individuals thrive. Urban planners, and community investors will need to consider aging populations as they think about how the built environment can promote healthy local communities in the face of a changing climate that has acute and unique consequences for individuals aged 65 and over.
Seciah Aquino, Josefina Flores Morales, Max Aung, Mary Keovisai, and Jennifer K. McGee-Avila
The article is here:
https://www.frbsf.org/community-development/publications/community-development-investment-review/2019/october/healthy-aging-a-conceptual-model-of-community-based-solutions-in-the-face-of-climate-change-and-global-demographic-changes/
Climate change and shifting demographic patterns require innovative ideas about how to build and adapt community infrastructure that helps older individuals thrive. Urban planners, and community investors will need to consider aging populations as they think about how the built environment can promote healthy local communities in the face of a changing climate that has acute and unique consequences for individuals aged 65 and over.
Seciah Aquino, Josefina Flores Morales, Max Aung, Mary Keovisai, and Jennifer K. McGee-Avila
The article is here:
https://www.frbsf.org/community-development/publications/community-development-investment-review/2019/october/healthy-aging-a-conceptual-model-of-community-based-solutions-in-the-face-of-climate-change-and-global-demographic-changes/
Mississippi exits AGs' T-Mobile Suit
The coalition of 18 state attorneys general suing to block the Sprint-T-Mobile merger lost Mississippi, which departed the lawsuit. Mississippi struck a settlement deal securing additional mobile coverage commitments in return for support for the merger.
The coalition of 18 state attorneys general suing to block the Sprint-T-Mobile merger lost Mississippi, which departed the lawsuit. Mississippi struck a settlement deal securing additional mobile coverage commitments in return for support for the merger.
Pay to Delay’ Generic Drug Arrangements Banned in California (1)
Oct. 7, 2019,
California is the first U.S. state to ban drugmakers from brokering agreements that delay generic drugs from reaching the market with a bill signed by Gov. Gavin Newsom (D).
“California will use our market power and our moral power to take on big drug companies and prevent them from keeping affordable generic drugs out of the hands of people who need them,” Newsom said. “Competition in the pharmaceutical industry helps lower prices for Californians who rely on life-saving treatments.”
California Attorney General Xavier Becerra (D) backed the measure, A.B. 824, [https://src.bna.com/LKm] to target settlements in drug patent infringement lawsuits between brand-name and generic drug companies.
Excerpt Credit: Bloomberg (paywall)
Oct. 7, 2019,
California is the first U.S. state to ban drugmakers from brokering agreements that delay generic drugs from reaching the market with a bill signed by Gov. Gavin Newsom (D).
“California will use our market power and our moral power to take on big drug companies and prevent them from keeping affordable generic drugs out of the hands of people who need them,” Newsom said. “Competition in the pharmaceutical industry helps lower prices for Californians who rely on life-saving treatments.”
California Attorney General Xavier Becerra (D) backed the measure, A.B. 824, [https://src.bna.com/LKm] to target settlements in drug patent infringement lawsuits between brand-name and generic drug companies.
Excerpt Credit: Bloomberg (paywall)
Pacific Gas and Electric Co. bondholders and wildfire victims have joined forces and proposed their own reorganization plan as they try to wrest control of the bankrupt company from its stockholders.
The two groups told PG&E’s bankruptcy judge Thursday their proposal would include a $24 billion settlement to pay everyone owed money because of fires started by the company’s power lines in recent years, the San Francisco Chronicle reported.
PG&E has offered to pay individual victims from a trust capped at $8.4 billion and reached settlements with insurers and local governments of $11 billion and $1 billion, respectively.
The bondholders’ proposal would invest $28.4 billion in exchange for a 58.8% stake in the utility’s parent PG&E Corp., diluting the firms who currently own shares of the company. The investment would fund creation of a $24 billion trust, in cash and stock, to pay claims from various fires in which the company was involved.
The trust would be acceptable to wildfire victims because they would designate someone to “manage the process,” attorneys for the committees of wildfire victims and bondholders involved in the PG&E case said in their joint filing.
https://www.sfchronicle.com/business/article/PG-E-fire-victims-bondholders-team-up-in-attempt-14453810.php
The two groups told PG&E’s bankruptcy judge Thursday their proposal would include a $24 billion settlement to pay everyone owed money because of fires started by the company’s power lines in recent years, the San Francisco Chronicle reported.
PG&E has offered to pay individual victims from a trust capped at $8.4 billion and reached settlements with insurers and local governments of $11 billion and $1 billion, respectively.
The bondholders’ proposal would invest $28.4 billion in exchange for a 58.8% stake in the utility’s parent PG&E Corp., diluting the firms who currently own shares of the company. The investment would fund creation of a $24 billion trust, in cash and stock, to pay claims from various fires in which the company was involved.
The trust would be acceptable to wildfire victims because they would designate someone to “manage the process,” attorneys for the committees of wildfire victims and bondholders involved in the PG&E case said in their joint filing.
https://www.sfchronicle.com/business/article/PG-E-fire-victims-bondholders-team-up-in-attempt-14453810.php
Washington is adding 28 Chinese companies, government offices and security bureaus to a United States blacklist over their alleged role in facilitating human rights abuses in China's Xinjiang region.
Monday's announcement targets some of China's top artificial intelligence companies in a similar way to the US move against smartphone giant Huawei earlier this year, and comes just days before crucial trade talks between the two sides.
In a statement, the US Commerce Department said "these entities have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in [Xinjiang].
"https://www.cnn.com/2019/10/08/business/us-china-xinjiang-black-list-intl-hnk/index.html
Monday's announcement targets some of China's top artificial intelligence companies in a similar way to the US move against smartphone giant Huawei earlier this year, and comes just days before crucial trade talks between the two sides.
In a statement, the US Commerce Department said "these entities have been implicated in human rights violations and abuses in the implementation of China's campaign of repression, mass arbitrary detention, and high-technology surveillance against Uyghurs, Kazakhs, and other members of Muslim minority groups in [Xinjiang].
"https://www.cnn.com/2019/10/08/business/us-china-xinjiang-black-list-intl-hnk/index.html
Playing Both Sides: Branded Sales, Generic Drugs, and Antitrust Policy
CPI
-
October 7, 2019By Michael A. Carrier (Rutgers Law School),Mark A. Lemley (Stanford Law School) & Shawn P. Miller(University of San Diego)
The issue of high drug prices has recently exploded into public consciousness. And while many potential explanations have been offered, one has avoided scrutiny. Why has the growth in generic drugs not resulted in lower drug prices?
In this article, we explore a phenomenon we call “playing both sides”: companies that participate in pharmaceutical markets as both brand owners and generics. We hypothesize that companies that earn a significant amount of their revenue from patented drugs may have less incentive to aggressively pursue a generic agenda, since patented drugs generate far more revenue for firms than generic drugs do.
To investigate this phenomenon, we built a comprehensive database of all major pharmaceutical companies, evaluating where their revenue comes from, how that has changed over time, and how it relates to their behavior in court. Despite broad industry trends toward specialization, about one third of the firms we study have opted for a mixed business model over time. And those firms behave differently than pure generic firms. Our data show that when companies with significant generic sales play both sides, they behave differently than firms with a purer generic revenue stream. Dollar for dollar, the pure generic firms in our study challenged more patents as invalid or not infringed than the mixed firms. Further, “mixed generic” companies with growing brand sales (or a growing share of their revenue from brand sales) are more likely to settle the patent challenges they bring; companies with growing generic share are less likely to settle and more likely to take those cases to judgment. And when they do go to judgment, patent challengers with a greater generic share are more likely to win those challenges while companies with higher brand sales are less likely to win.
In short, we find evidence to support the hypothesis that generic companies that make more of their revenue from patented drugs are less likely to pursue challenges to judgment and less likely to win when they do. Playing both sides may reduce the incentive of generic challengers to fight as hard as possible to win the case before them. That may be especially true of the sorts of challenges that affect not just the patent in the instant case but might change legal doctrines that may ultimately hurt the generic challenger’s brand business.
Our article’s findings suggest a more nuanced antitrust analysis of mergers involving generic companies and patent settlements in which generics delay entering the market. In challenging more patents, settling fewer cases by agreeing to delay entry, and winning more of the cases they do bring, pure generic companies promise to unleash the generic competition that they were intended to. In the wide-ranging effort to lower drug prices, we must pay attention not only to whether a drug is patented but also to who is, or is not, challenging that patent and why.
Continue Reading… https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3350629
CPI
-
October 7, 2019By Michael A. Carrier (Rutgers Law School),Mark A. Lemley (Stanford Law School) & Shawn P. Miller(University of San Diego)
The issue of high drug prices has recently exploded into public consciousness. And while many potential explanations have been offered, one has avoided scrutiny. Why has the growth in generic drugs not resulted in lower drug prices?
In this article, we explore a phenomenon we call “playing both sides”: companies that participate in pharmaceutical markets as both brand owners and generics. We hypothesize that companies that earn a significant amount of their revenue from patented drugs may have less incentive to aggressively pursue a generic agenda, since patented drugs generate far more revenue for firms than generic drugs do.
To investigate this phenomenon, we built a comprehensive database of all major pharmaceutical companies, evaluating where their revenue comes from, how that has changed over time, and how it relates to their behavior in court. Despite broad industry trends toward specialization, about one third of the firms we study have opted for a mixed business model over time. And those firms behave differently than pure generic firms. Our data show that when companies with significant generic sales play both sides, they behave differently than firms with a purer generic revenue stream. Dollar for dollar, the pure generic firms in our study challenged more patents as invalid or not infringed than the mixed firms. Further, “mixed generic” companies with growing brand sales (or a growing share of their revenue from brand sales) are more likely to settle the patent challenges they bring; companies with growing generic share are less likely to settle and more likely to take those cases to judgment. And when they do go to judgment, patent challengers with a greater generic share are more likely to win those challenges while companies with higher brand sales are less likely to win.
In short, we find evidence to support the hypothesis that generic companies that make more of their revenue from patented drugs are less likely to pursue challenges to judgment and less likely to win when they do. Playing both sides may reduce the incentive of generic challengers to fight as hard as possible to win the case before them. That may be especially true of the sorts of challenges that affect not just the patent in the instant case but might change legal doctrines that may ultimately hurt the generic challenger’s brand business.
Our article’s findings suggest a more nuanced antitrust analysis of mergers involving generic companies and patent settlements in which generics delay entering the market. In challenging more patents, settling fewer cases by agreeing to delay entry, and winning more of the cases they do bring, pure generic companies promise to unleash the generic competition that they were intended to. In the wide-ranging effort to lower drug prices, we must pay attention not only to whether a drug is patented but also to who is, or is not, challenging that patent and why.
Continue Reading… https://papers.ssrn.com/sol3/Papers.cfm?abstract_id=3350629
The Trump administration has begun inserting legal protections into recent trade agreements that shield online platforms like Facebook, Twitter and YouTube from lawsuits,
a move that could help lock in America’s tech-friendly regulations around the world even as they are being newly questioned at home.
The protections, which stem from a 1990s law, have already been tucked into the administration’s two biggest trade deals — the United States-Mexico-Canada Agreement and a pact with Japan that President Trump signed on Monday. American negotiators have proposed including the language in other prospective deals, including with the European Union, Britain and members of the World Trade Organization.
From: https://www.nytimes.com/2019/10/07/business/tech-shield-trade-deals.html?action=click&module=Top%20Stories&pgtype=Homepage
a move that could help lock in America’s tech-friendly regulations around the world even as they are being newly questioned at home.
The protections, which stem from a 1990s law, have already been tucked into the administration’s two biggest trade deals — the United States-Mexico-Canada Agreement and a pact with Japan that President Trump signed on Monday. American negotiators have proposed including the language in other prospective deals, including with the European Union, Britain and members of the World Trade Organization.
From: https://www.nytimes.com/2019/10/07/business/tech-shield-trade-deals.html?action=click&module=Top%20Stories&pgtype=Homepage
Sellers and former employees familiar with Amazon’s internal strategy say the company is increasingly focused on boosting its profits on the backs of its sellers — often without any clear upside for customers.
The services include charging sellers thousands of dollars to speak to account managers, as well as making it necessary to purchase ads to guarantee the top spot on a search page. Plus, Amazon is aggressively pushing its own brands — something that may be cheaper for consumers in the short run, but demonstrates its overall power over pricing and merchandise on the site. That gives it an advantage over rival products and sellers who rely on Amazon for their livelihood and have few alternatives if they want to thrive selling online.
Amazon says its success is dependent on those sellers and insists it always prioritizes shoppers.
From:
https://www.washingtonpost.com/technology/2019/10/01/amazon-sellers-say-online-retail-giant-is-trying-help-itself-not-consumers/?arc404=true
The services include charging sellers thousands of dollars to speak to account managers, as well as making it necessary to purchase ads to guarantee the top spot on a search page. Plus, Amazon is aggressively pushing its own brands — something that may be cheaper for consumers in the short run, but demonstrates its overall power over pricing and merchandise on the site. That gives it an advantage over rival products and sellers who rely on Amazon for their livelihood and have few alternatives if they want to thrive selling online.
Amazon says its success is dependent on those sellers and insists it always prioritizes shoppers.
From:
https://www.washingtonpost.com/technology/2019/10/01/amazon-sellers-say-online-retail-giant-is-trying-help-itself-not-consumers/?arc404=true
The NY AG's Complaint against a New York student loan servicer
https://ag.ny.gov/sites/default/files/pheaa_complaint_with_file_stamp.pdf
Excerpt:
7. PHEAA, operating under the name FedLoan Servicing (“FedLoan”), services loans held by the U.S. Department of Education originated under the federal Direct Loan program, including those of New Yorkers, and those Federal Family Education Loan Program (“FFEL”) loans owned by the federal government. PHEAA also services privately-owned FFEL loans and private student loans for tens of thousands of borrowers in New York and nationwide.4
8. FedLoan also has an exclusive contract with the U.S. Department of Education to service the accounts of borrowers seeking PSLF. 5 2 153 Cong. Rec. 9540 (2007) (statement of Sen. Harkin), https://www.congress.gov/crec/2007/07/19/CREC-2007- 07-19-pt1-PgS9534.pdf. 3 Bayliss Fiddiman et al., Student Debt: An Overlooked Barrier to Increasing Teacher Diversity 3, 9 (2019), https://www.americanprogress.org/issues/education-postsecondary/reports/2019/07/09/471850/student-debtoverlooked-barrier-increasing-teacher-diversity/. 4 PHEAA conducts its student loan servicing business both as American Education Services (“AES”) and FedLoan Servicing (“FedLoan”) (collectively referred to as “PHEAA”). AES services private (non-federally guaranteed) loans and federally-guaranteed loans originated under the (now-discontinued) Federal Family Education Loan Program (“FFEL”) that are owned by private companies. FedLoan services Direct loans (loans made directly by the federal government under the current program) and FFEL loans that are owned by the federal government. The majority of the NYAG’s claims relate to PHEAA’s conduct under the FedLoan name. To the extent that this Complaint refers to conduct by the company under both names, it will refer to the company as PHEAA. 5 This includes all borrowers who file a form indicating an intention to participate in PSLF and meet certain initial eligibility requirements, even if they later decide not to pursue PSLF. Case 1:19-cv-09155 Document 1 Filed 10/03/19 Page 5 of 70 3
9. Because FedLoan is the exclusive servicer of PSLF, borrowers have no choice but to rely on FedLoan to administer PSLF fairly and correctly.
10. FedLoan has, however, failed miserably in its administration of PSLF.
11. FedLoan has proven itself unwilling or unable to perform its most fundamental task as exclusive PSLF servicer—accurately counting the qualifying payments borrowers make towards the 120 required for forgiveness. FedLoan’s failure to accurately count eligible payments drives up the cost of borrowers’ loans, extends the time that they are in repayment, and leads to improper denials when borrowers apply for loan forgiveness.
12. To add insult to injury, borrowers who attempt to question FedLoan’s counts are left waiting for months to over a year for an explanation.
13. Furthermore, FedLoan places the burden of identifying and correcting its multitude of errors on the borrowers themselves; fails to apply policies consistently; and fails to inform borrowers of options to seek appeals or “overrides” to fix FedLoan’s mistakes or undo their consequences.
14. FedLoan’s failure to properly administer the program is a significant contributor to the shockingly high rate of rejection of PSLF forgiveness applications—more than 98% of all PSLF applications have been rejected as ineligible for forgiveness. Fewer than 900 out of more than 90,000 applicants have had loan discharges processed as of June 2019.
15. FedLoan promises borrowers that it has “one goal: to help you successfully repay your loans” and that “[w]e are here to help you with every step of the [PSLF] process.”
16. But, in fact, one of the biggest obstacles borrowers face in obtaining the forgiveness they have earned is FedLoan itself. Case 1:19-cv-09155 Document 1 Filed 10/03/19 Page 6 of 70 4
17. PHEAA also fails to fairly and correctly administer income-driven repayment (“IDR”) plans, which are intended to help struggling borrowers avoid delinquency and default by limiting monthly payments based on income and household size. Among other issues, FedLoan fails to timely process IDR applications and fails to accurately calculate monthly payments.6 These delays and mistakes harm struggling borrowers and drive up the cost of their loans.
18. PHEAA’s deceptive, unfair, and abusive practices (as both FedLoan and AES) also include steering borrowers to less beneficial repayment options such as forbearance or consolidation instead of IDR plans and making false statements to borrowers with cancer about their eligibility for a special deferment.
19. PHEAA has consistently demonstrated that it is unwilling to devote the resources required to carry out its servicing obligations in a timely and competent way.
20. Student loan borrowers have no choice of servicer. PHEAA borrowers are thus trapped with a company that disregards its responsibilities and leaves them stuck with the consequences of its errors—often thousands of dollars’ worth.
21. Ultimately, PHEAA’s cavalier approach to its responsibilities has meant it has deprived borrowers of benefits which they have earned and which Congress intended them to have. Faced with PHEAA’s incompetent and indifferent servicing, borrowers report simply giving up on their hopes of ever achieving loan forgiveness or other benefits. One borrower struggling with PHEAA’s errors echoed many other complaints when she lamented, “I feel that I have no recourse in dealing with this situation since [FedLoan] is the exclusive servicer for PSLF and that [FedLoan] can do whatever they want on whatever timetable they want.”
Judge prolongs order blocking D.C.'s online sports betting contract
The District of Columbia's plan to allow online sports betting remains on hold after a D.C. Superior Court judge extended his restraining order against the awarding of a $215 million contract to Intralot, a Greek company. Judge John Campbell says he plans to rule soon on a lawsuit that claims the District's awarding of a no-bid contract runs afoul of federal law.
The Washington Post (tiered subscription model) (10/1)
The District of Columbia's plan to allow online sports betting remains on hold after a D.C. Superior Court judge extended his restraining order against the awarding of a $215 million contract to Intralot, a Greek company. Judge John Campbell says he plans to rule soon on a lawsuit that claims the District's awarding of a no-bid contract runs afoul of federal law.
The Washington Post (tiered subscription model) (10/1)
Should the public get free access to published State laws and annotations?
Georgia is suing Public.Resource.Org for disseminating the state’s Official Code of Georgia Annotated for free on the Internet. Georgia argues that while its laws can’t be copyrighted, the same isn’t true for annotations—such as the summaries of judicial interpretations of the laws—which are prepared by a private contractor. The Eleventh Circuit opinion putting them in the public domain “threatens to upend the longstanding arrangements of Georgia and numerous other states,” counsel of record Joshua Johnson of Vinson & Elkins argues in Georgia v. Public.Resource.Org.
The U.S. Government, Matthew Bender & Co. and The Software and Information Industry Association argue that only government edicts that carry the force of law should be exempt from copyright.
Public.Resource.Org is a nonprofit dedicated to improving public access to all sources of the law. It hasn’t filed its merits brief yet, but at the cert stage it acknowledged the uncertain state of the government edict doctrine and invited the court to take the case. It argues that the Georgia General Assembly “is the driving force behind the annotations’ creation” and that the Georgia Code Revision Commission “directly supervises and controls” their preparation.
Excerpt from https://www.law.com/therecorder/2019/09/27/scotus-2019-ip-cases-wont-be-boring-law-professors-say/?kw=SCOTUS%27%202019%20IP%20Cases%20Won%27t%20Be%20Boring%2C%20Law%20Professors%20Say&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190930&utm_term=ca
Georgia is suing Public.Resource.Org for disseminating the state’s Official Code of Georgia Annotated for free on the Internet. Georgia argues that while its laws can’t be copyrighted, the same isn’t true for annotations—such as the summaries of judicial interpretations of the laws—which are prepared by a private contractor. The Eleventh Circuit opinion putting them in the public domain “threatens to upend the longstanding arrangements of Georgia and numerous other states,” counsel of record Joshua Johnson of Vinson & Elkins argues in Georgia v. Public.Resource.Org.
The U.S. Government, Matthew Bender & Co. and The Software and Information Industry Association argue that only government edicts that carry the force of law should be exempt from copyright.
Public.Resource.Org is a nonprofit dedicated to improving public access to all sources of the law. It hasn’t filed its merits brief yet, but at the cert stage it acknowledged the uncertain state of the government edict doctrine and invited the court to take the case. It argues that the Georgia General Assembly “is the driving force behind the annotations’ creation” and that the Georgia Code Revision Commission “directly supervises and controls” their preparation.
Excerpt from https://www.law.com/therecorder/2019/09/27/scotus-2019-ip-cases-wont-be-boring-law-professors-say/?kw=SCOTUS%27%202019%20IP%20Cases%20Won%27t%20Be%20Boring%2C%20Law%20Professors%20Say&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190930&utm_term=ca
Resnikoff review of Chris Sagers' new book in DC Bar magazine
Commentary by Don Resnikoff
Please see my review of Chris SAgers' book at http://washingtonlawyer.dcbar.org/october2019/index.php#/38
The book is
United States v. Apple: Competition in America
Publisher: Harvard University Press
Publication date: September, 2019
In my brief commentary I suggest that there is great wisdom in Chris’s decision to look at antitrust history and policy from the perspective of a particular antitrust case that has generated a lot of public discussion. One great benefit is that his writing is likely to be accessible to nonexpert readers.
The book is well timed, coming at a moment of great uncertainty about the goals of antitrust law. Political figures like Elizabeth Warren and Bernie Sanders argue for bigger and bolder antitrust enforcement against large companies with the goal of reducing their political influence. And looming trade disputes with China appear to encourage US government engagement in industry planning and protection of non-Chinese companies engaged in product areas like 5G telecom. Daniel Sokol and others have pointed out that such industry planning undermines traditional open competition goals.
Chris seems to regret the uncertainties of current antitrust thinking: For reasons he explains in his book, he is a strong supporter of the traditional antitrust rationale that drove the prosecutors who challenged the price-fixing behavior of the book publishers and Apple’s connivance with them.
Posted by Don Allen Resnikoff, who is responsible for the content
Commentary by Don Resnikoff
Please see my review of Chris SAgers' book at http://washingtonlawyer.dcbar.org/october2019/index.php#/38
The book is
United States v. Apple: Competition in America
Publisher: Harvard University Press
Publication date: September, 2019
In my brief commentary I suggest that there is great wisdom in Chris’s decision to look at antitrust history and policy from the perspective of a particular antitrust case that has generated a lot of public discussion. One great benefit is that his writing is likely to be accessible to nonexpert readers.
The book is well timed, coming at a moment of great uncertainty about the goals of antitrust law. Political figures like Elizabeth Warren and Bernie Sanders argue for bigger and bolder antitrust enforcement against large companies with the goal of reducing their political influence. And looming trade disputes with China appear to encourage US government engagement in industry planning and protection of non-Chinese companies engaged in product areas like 5G telecom. Daniel Sokol and others have pointed out that such industry planning undermines traditional open competition goals.
Chris seems to regret the uncertainties of current antitrust thinking: For reasons he explains in his book, he is a strong supporter of the traditional antitrust rationale that drove the prosecutors who challenged the price-fixing behavior of the book publishers and Apple’s connivance with them.
Posted by Don Allen Resnikoff, who is responsible for the content
Maryland gas station becomes first in U.S. to ditch oil for 100% EV charging
By John Elkin September 27, 2019 4:54PM PST
RS Automotive of Takoma Park, a suburb of Washington, D.C., opened as a local gas station in 1958.
Depeswar Doley, owner of the station since 1997, said he was already unhappy with the way oil and gasoline companies structure contracts. They can limit the use of multiple suppliers, includ clauses that extend contracts when a certain volume of sales is not met, and limit maintenance support. These business factors were pushing him to consider other options.
A public works manager for the city of Takoma Park, Maryland, first suggested to Doley a conversation with the Electric Vehicle Institute (EVI).
With help from the institute and the Maryland Energy Administration, Doley secured a $786,000 grant to convert the station. There are more than 20,700 registered EVs in Maryland, and the area also has an electric taxi service in need of more chargers for their business.
Matthew Wade, EVI CEO, said the area has had issues with the supply of charging stations not meeting the demand of EVs. Takoma Park had just two chargers, one in a community center parking lot and the other at a street location.
“They were fully utilized throughout the day; people were lining up,” Wade said. “The city was happy they were being used, but then they said, ‘Wait, no one can get in this parking lot, because these taxis are using these chargers.” Wade says the gas station layout, which is designed for traffic flow, will help alleviate that problem.
The station will feature four dispensers that connect to a high-powered, 200-kilowatt system. The system will allow four vehicles to charge simultaneously and reach 80% battery charge in 20 to 30 minutes. Drivers can go inside and sit in an automated convenience store with screens that allow drivers to track their vehicle’s charging progress.
Doley stated: “You notice there are not too many electric vehicles on the road,” he said. “So it’s not something that I expect to become rich overnight or something like that, but it’s a good cause [and] good for the environment.
https://www.digitaltrends.com/cars/maryland-gas-station-eschews-fossil-fuel-or-electric-charging/
Controvery: California Bar Proposals for Fee-Sharing, Nonattorney Ownership
"This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice?" one Big Law partner said in a letter to the California bar. Here's a snapshot of some of the other comments.
By Cheryl Miller | September 23, 2019 at 10:25 PM
Hundreds of responses received over the last two months about various California bar proposals that could alter fee-sharing and open a door to nonattorney ownership of firms reveal a common thread: Most of those who shared their thoughts don’t support a wholesale reshaping of how legal clients are served in the Golden State.
The bar asked for opinions on 16 concepts under consideration by the Task Force on Access Through Innovation of Legal Services, a panel charged with proposing ways to increase the availability of legal help. The concepts under consideration range from promoting greater use of technology to allowing different forms of fee-sharing.
Many of the respondents are solo practitioners or lawyers at small firms, although several Big Law names responded, too. The deadline for submitting comments on the state bar committee’s ideas for restructuring legal services in California ended Monday.
“This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice? There are attorneys admitted to the bar of this state who are barely competent and provide questionable advice. They also commit ethical malfeasance,” Los Angeles-based Alston & Bird partner Elizabeth Sperling said in a letter. “How much worse will it be for people who are not even attorneys?”
The task force is expected to send its final recommendations to the bar’s board of trustees in January. Changes will need the approval of the California Supreme Court and possibly the Legislature.
Excerpt from: https://www.law.com/therecorder/2019/09/23/california-lawyers-slam-bar-proposals-for-fee-sharing-non-attorney-ownership/?kw=California%20Lawyers%20Slam%20Bar%20Proposals%20for%20Fee-Sharing%2C%20Non-Attorney%20Ownership&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190924&utm_term=ca
"This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice?" one Big Law partner said in a letter to the California bar. Here's a snapshot of some of the other comments.
By Cheryl Miller | September 23, 2019 at 10:25 PM
Hundreds of responses received over the last two months about various California bar proposals that could alter fee-sharing and open a door to nonattorney ownership of firms reveal a common thread: Most of those who shared their thoughts don’t support a wholesale reshaping of how legal clients are served in the Golden State.
The bar asked for opinions on 16 concepts under consideration by the Task Force on Access Through Innovation of Legal Services, a panel charged with proposing ways to increase the availability of legal help. The concepts under consideration range from promoting greater use of technology to allowing different forms of fee-sharing.
Many of the respondents are solo practitioners or lawyers at small firms, although several Big Law names responded, too. The deadline for submitting comments on the state bar committee’s ideas for restructuring legal services in California ended Monday.
“This is madness. Why are we even contemplating allowing non-attorneys to practice law and provide legal advice? There are attorneys admitted to the bar of this state who are barely competent and provide questionable advice. They also commit ethical malfeasance,” Los Angeles-based Alston & Bird partner Elizabeth Sperling said in a letter. “How much worse will it be for people who are not even attorneys?”
The task force is expected to send its final recommendations to the bar’s board of trustees in January. Changes will need the approval of the California Supreme Court and possibly the Legislature.
Excerpt from: https://www.law.com/therecorder/2019/09/23/california-lawyers-slam-bar-proposals-for-fee-sharing-non-attorney-ownership/?kw=California%20Lawyers%20Slam%20Bar%20Proposals%20for%20Fee-Sharing%2C%20Non-Attorney%20Ownership&utm_source=email&utm_medium=enl&utm_campaign=newsupdate&utm_content=20190924&utm_term=ca
FROM DMN:
U.S. Judiciary Committee Urges the Removal of DMCA-Style Safe Harbor Provisions from Global Trade Treaties
Marsha Silva
September 23, 2019
On September 23rd the U.S. House Judiciary Committee wrote a letter to the U.S. Trade Representative, who is currently negotiating a new free trade agreement between the United States, Mexico and Canada.
The letter expressed concerns about the inclusion of a safe harbor provision that is similar to the one that exists in the Digital Millennium Copyright Act (DMCA).
The safe harbor provision in the DMCA protects internet service providers (ISPs) and user-generated platforms from the copyright infringements of their users — as long as they remove such infringements and take action against those who repeatedly violate the law. The first draft of the new trade agreement includes this provision and the music industry is not happy about it.
“The effects of Section 512 and the appropriate role of a copyright safe harbor have become the subject of much attention in recent years,” the letter declares. “Some have called on Congress to update these very provisions, enacted in the days of a dial-up Internet.”
Mitch Glazier, president of the Recording Industry Association of America (RIAA), said in response to the provision’s inclusion that trade treaties should encourage “more accountability on public platforms” for copyright infringements and not less of it.
The RIAA has been repeatedly lobbying Congress in regards to this issue. That pressure may be the source of the letter, in which the Judiciary Committee specifically pointed out that the safe harbor provision has been a topic of debate. It also mentions that a number of parties would like to see it changed as it relates to U.S. law.
Interestingly, the anti-DMCA move comes amidst a growing backlash against tech giants like Alphabet/Google and Facebook.
Of the pair, Google remains notorious for exploiting DMCA provisions, both on its core search results and YouTube. Across the country, California has already taken steps to clampdown on ‘gig economy’ tech giants Uber and Lyft, though it’s unclear how that spills into broader anti-tech legislation nationwide.
The letter also made note of the fact that the U.S. Government has been reviewing the safe harbor provision for a number of years. Lawmakers are expected to announce policy decisions by the end of this year.
The letter further mentioned the new Copyright Directive issued by the European Union. The Directive has dramatically increased liabilities for service providers and may affect the debate over the provisions in the United States.
While the Judiciary Committee insists that it is not taking an official stand on the safe harbor provision, it believes that adding the provision to new trade treaties would not be wise.
Of course, service providers don’t concur with this sentiment.
Here’s a full copy of the letter. https://www.digitalmusicnews.com/wp-content/uploads/2019/09/Ambassador-Lighthizer-USMCA-letter-9.17.19.pdf
U.S. Judiciary Committee Urges the Removal of DMCA-Style Safe Harbor Provisions from Global Trade Treaties
Marsha Silva
September 23, 2019
On September 23rd the U.S. House Judiciary Committee wrote a letter to the U.S. Trade Representative, who is currently negotiating a new free trade agreement between the United States, Mexico and Canada.
The letter expressed concerns about the inclusion of a safe harbor provision that is similar to the one that exists in the Digital Millennium Copyright Act (DMCA).
The safe harbor provision in the DMCA protects internet service providers (ISPs) and user-generated platforms from the copyright infringements of their users — as long as they remove such infringements and take action against those who repeatedly violate the law. The first draft of the new trade agreement includes this provision and the music industry is not happy about it.
“The effects of Section 512 and the appropriate role of a copyright safe harbor have become the subject of much attention in recent years,” the letter declares. “Some have called on Congress to update these very provisions, enacted in the days of a dial-up Internet.”
Mitch Glazier, president of the Recording Industry Association of America (RIAA), said in response to the provision’s inclusion that trade treaties should encourage “more accountability on public platforms” for copyright infringements and not less of it.
The RIAA has been repeatedly lobbying Congress in regards to this issue. That pressure may be the source of the letter, in which the Judiciary Committee specifically pointed out that the safe harbor provision has been a topic of debate. It also mentions that a number of parties would like to see it changed as it relates to U.S. law.
Interestingly, the anti-DMCA move comes amidst a growing backlash against tech giants like Alphabet/Google and Facebook.
Of the pair, Google remains notorious for exploiting DMCA provisions, both on its core search results and YouTube. Across the country, California has already taken steps to clampdown on ‘gig economy’ tech giants Uber and Lyft, though it’s unclear how that spills into broader anti-tech legislation nationwide.
The letter also made note of the fact that the U.S. Government has been reviewing the safe harbor provision for a number of years. Lawmakers are expected to announce policy decisions by the end of this year.
The letter further mentioned the new Copyright Directive issued by the European Union. The Directive has dramatically increased liabilities for service providers and may affect the debate over the provisions in the United States.
While the Judiciary Committee insists that it is not taking an official stand on the safe harbor provision, it believes that adding the provision to new trade treaties would not be wise.
Of course, service providers don’t concur with this sentiment.
Here’s a full copy of the letter. https://www.digitalmusicnews.com/wp-content/uploads/2019/09/Ambassador-Lighthizer-USMCA-letter-9.17.19.pdf
Boeing US$4.7B Embraer deal faces EU antitrust probe
-
Boeing is set to face an EU antitrust investigation into its bid for a controlling stake in the commercial aircraft arm of Brazil’s Embraer, Reuters reported on Monday, September 23.
According to Reuters, the deal would reshape a global passenger jet duopoly and reinforce Western plane-makers against newcomers from China, Russia, and Japan.
It would give Boeing a foothold in the lower end of the market, enabling it to better compete with the CSeries jets designed by Canada’s Bombardier and backed by European rival Airbus.
The European Commission, which has set an October 4 deadline for its preliminary review of the deal, did not respond to a request for immediate comment.
The EU competition enforcer will launch a full-scale investigation following the end of its review, which could take up to five months and raises pressure on Boeing to offer concessions to address competition concerns.
Full Content: Reuters https://www.reuters.com/article/us-embraer-m-a-boeing-eu-exclusive/exclusive-boeing-bid-for-embraer-unit-faces-eu-antitrust-probe-sources-idUSKBN1W8127
-
Boeing is set to face an EU antitrust investigation into its bid for a controlling stake in the commercial aircraft arm of Brazil’s Embraer, Reuters reported on Monday, September 23.
According to Reuters, the deal would reshape a global passenger jet duopoly and reinforce Western plane-makers against newcomers from China, Russia, and Japan.
It would give Boeing a foothold in the lower end of the market, enabling it to better compete with the CSeries jets designed by Canada’s Bombardier and backed by European rival Airbus.
The European Commission, which has set an October 4 deadline for its preliminary review of the deal, did not respond to a request for immediate comment.
The EU competition enforcer will launch a full-scale investigation following the end of its review, which could take up to five months and raises pressure on Boeing to offer concessions to address competition concerns.
Full Content: Reuters https://www.reuters.com/article/us-embraer-m-a-boeing-eu-exclusive/exclusive-boeing-bid-for-embraer-unit-faces-eu-antitrust-probe-sources-idUSKBN1W8127
California leads two-dozen states and cities suing the Trump administration over blocking of stricter state emissions standards
The lawsuit complaint is here: https://drive.google.com/file/d/1W2MIlMOr9Sc_5WSESoed09tJuvaKEnW9/view
Excerpt:
State Plaintiffs respectfully request that the Preemption Regulation be declared unlawful and set aside because it
exceeds NHTSA’s authority, contravenes Congressional intent, and is arbitrary and capricious,
and because NHTSA has failed to conduct the analysis required under the National
Environmental Policy Act (“NEPA”).
2. The Preemption Regulation declares that the federal Energy Policy and
Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871 (“EPCA”), preempts state laws that
regulate greenhouse gas emissions from new passenger cars and light trucks. The Preemption
Regulation targets by name the greenhouse gas emission and zero-emission vehicle standards
promulgated by the State of California (“the California standards”) and adopted by twelve other
states.
3. California has had emissions standards for light-duty vehicles for 60 years.
And the California standards at issue in this case are longstanding and fundamental parts of
many State Plaintiffs’ efforts to protect public health and welfare in their states, to meet state
goals for the reduction of harmful air pollution including greenhouse gases, and to attain or
maintain federal air quality standards. Indeed, the California standards are one of the most
effective state policies to reduce greenhouse gases and other pollutant emissions from the
transportation sector. The California standards are projected to result in more than 2 million
additional zero-emission vehicles on the road by 2025 and, in the absence of the existing federal
standards, to reduce greenhouse emissions by more than 66 million metric tons per year by 2030,
greater than the amount emitted by all power plants in California.
4. The federal government has repeatedly approved several State Plaintiffs’ use
of the California standards as necessary for a wide variety of purposes. It has granted waivers of
preemption under section 209(b) of the Clean Air Act for both the greenhouse gas (GHG)
standards (which set limits for greenhouse gas emissions from new vehicles) and the zero-
emission vehicle (“ZEV”) standards (which require that a certain percentage of new vehicles be
ZEVs). The federal government has also approved both the GHG standards and ZEV standards
as necessary components of several State Plaintiffs’ plans to attain National Ambient Air Quality
Standards under the Clean Air Act. And it has approved state reliance on the ZEV standards in
determining the pollution impacts of transportation planning decisions. Moreover, for the last
decade, the federal government has harmonized its own greenhouse gas emissions standards and
its fuel economy standards with the California standards.
5. California has been regulating vehicle emissions since 1959. Its authority to do
so has been repeatedly recognized, reaffirmed, and even expanded by Congress. In a series of
statutes and amendments adopted over five decades, including in EPCA itself and bills enacted
both before and after its passage, Congress has preserved California’s authority to adopt vehicle
emissions standards and relied on those standards as a model for the federal government and for
other states.
6. NHTSA’s Preemption Regulation flies in the face of this history. It purports to
declare that both California’s GHG standards and its ZEV standards are expressly preempted
because, in NHTSA’s current view, they are “related to fuel economy standards” within the
meaning of EPCA’s preemption provision, 49 U.S.C. § 32919. The Preemption Regulation also
purports to declare the California standards conflict-preempted under EPCA.
7. The United States Environmental Protection Agency (EPA) expressly relies on
the Preemption Regulation in its separate action withdrawing a waiver of preemption for the
California standards that EPA previously granted under Section 209(b) of the Clean Air Act.
Before this action, neither EPA nor NHTSA had ever taken final action premised on the notion
that EPCA preempts emissions standards for which California has a waiver of preemption under
the Clean Air Act.
8. Nowhere does Congress, in EPCA or any other statute, authorize NHTSA to
issue a regulation declaring that state laws are preempted by EPCA.
9. The Preemption Regulation is not only in excess of NHTSA’s jurisdiction, it is
also wrong as a matter of law. NHTSA’s position that the California standards—which regulate
vehicle emissions, not fuel economy—are preempted by EPCA contravenes EPCA itself, the
Clean Air Act, and various amendments to both statutes. It directly conflicts with the decisions
of the two federal courts that considered this question and held that California’s standards are not
preempted by EPCA. It also contradicts the Supreme Court’s decision in Massachusetts v. EPA,
549 U.S. 497 (2007), which rejected the federal government’s argument that greenhouse gas
emissions standards under the Clean Air Act interfered with NHTSA’s ability to set fuel
economy standards under EPCA.
10. Other flaws with the Preemption Regulation are evident on its face. The
Preemption Regulation declares that California’s GHG standards conflict with federal fuel
economy standards—despite the fact that California’s standards provide that manufacturers may
(and many in fact do) comply by meeting federal GHG standards issued in conjunction with
federal fuel economy standards.
11. The Preemption Regulation also declares that California’s decades-old ZEV
standards are both “related to fuel economy standards” and in conflict with them. Preemption
Regulation, p. 50. But EPCA itself demonstrates the opposite. In EPCA, Congress has not
authorized NHTSA to set fuel economy standards for vehicles, including ZEVs, that run
exclusively on alternative fuels like electricity. And it has prohibited NHTSA from taking the
availability of ZEVs into account when setting federal fuel economy standards, meaning that
ZEVs do not affect fuel economy standards. 49 U.S.C. § 32902(h)(1).
12. In addition, NHTSA has failed to consider the damage the Preemption
Regulation will inflict on the environment and public health and welfare, flouting the
Case 1:19-cv-02826 Document 1 Filed 09/20/19 Page 7 of 51
8
requirements of NEPA, 42 U.S.C. §§ 4321-4347. Remarkably, NHTSA has conducted no
analysis at all of the environmental impacts of a regulation that purports to preempt air pollution
laws in effect in states that represent more than a third of the nation’s automobile market.
13. For all of these and other reasons, State Plaintiffs respectfully request that this
Court declare the Preemption Regulation unlawful, set it aside, and enjoin its implementation.
The lawsuit complaint is here: https://drive.google.com/file/d/1W2MIlMOr9Sc_5WSESoed09tJuvaKEnW9/view
Excerpt:
State Plaintiffs respectfully request that the Preemption Regulation be declared unlawful and set aside because it
exceeds NHTSA’s authority, contravenes Congressional intent, and is arbitrary and capricious,
and because NHTSA has failed to conduct the analysis required under the National
Environmental Policy Act (“NEPA”).
2. The Preemption Regulation declares that the federal Energy Policy and
Conservation Act of 1975, Pub. L. No. 94-163, 89 Stat. 871 (“EPCA”), preempts state laws that
regulate greenhouse gas emissions from new passenger cars and light trucks. The Preemption
Regulation targets by name the greenhouse gas emission and zero-emission vehicle standards
promulgated by the State of California (“the California standards”) and adopted by twelve other
states.
3. California has had emissions standards for light-duty vehicles for 60 years.
And the California standards at issue in this case are longstanding and fundamental parts of
many State Plaintiffs’ efforts to protect public health and welfare in their states, to meet state
goals for the reduction of harmful air pollution including greenhouse gases, and to attain or
maintain federal air quality standards. Indeed, the California standards are one of the most
effective state policies to reduce greenhouse gases and other pollutant emissions from the
transportation sector. The California standards are projected to result in more than 2 million
additional zero-emission vehicles on the road by 2025 and, in the absence of the existing federal
standards, to reduce greenhouse emissions by more than 66 million metric tons per year by 2030,
greater than the amount emitted by all power plants in California.
4. The federal government has repeatedly approved several State Plaintiffs’ use
of the California standards as necessary for a wide variety of purposes. It has granted waivers of
preemption under section 209(b) of the Clean Air Act for both the greenhouse gas (GHG)
standards (which set limits for greenhouse gas emissions from new vehicles) and the zero-
emission vehicle (“ZEV”) standards (which require that a certain percentage of new vehicles be
ZEVs). The federal government has also approved both the GHG standards and ZEV standards
as necessary components of several State Plaintiffs’ plans to attain National Ambient Air Quality
Standards under the Clean Air Act. And it has approved state reliance on the ZEV standards in
determining the pollution impacts of transportation planning decisions. Moreover, for the last
decade, the federal government has harmonized its own greenhouse gas emissions standards and
its fuel economy standards with the California standards.
5. California has been regulating vehicle emissions since 1959. Its authority to do
so has been repeatedly recognized, reaffirmed, and even expanded by Congress. In a series of
statutes and amendments adopted over five decades, including in EPCA itself and bills enacted
both before and after its passage, Congress has preserved California’s authority to adopt vehicle
emissions standards and relied on those standards as a model for the federal government and for
other states.
6. NHTSA’s Preemption Regulation flies in the face of this history. It purports to
declare that both California’s GHG standards and its ZEV standards are expressly preempted
because, in NHTSA’s current view, they are “related to fuel economy standards” within the
meaning of EPCA’s preemption provision, 49 U.S.C. § 32919. The Preemption Regulation also
purports to declare the California standards conflict-preempted under EPCA.
7. The United States Environmental Protection Agency (EPA) expressly relies on
the Preemption Regulation in its separate action withdrawing a waiver of preemption for the
California standards that EPA previously granted under Section 209(b) of the Clean Air Act.
Before this action, neither EPA nor NHTSA had ever taken final action premised on the notion
that EPCA preempts emissions standards for which California has a waiver of preemption under
the Clean Air Act.
8. Nowhere does Congress, in EPCA or any other statute, authorize NHTSA to
issue a regulation declaring that state laws are preempted by EPCA.
9. The Preemption Regulation is not only in excess of NHTSA’s jurisdiction, it is
also wrong as a matter of law. NHTSA’s position that the California standards—which regulate
vehicle emissions, not fuel economy—are preempted by EPCA contravenes EPCA itself, the
Clean Air Act, and various amendments to both statutes. It directly conflicts with the decisions
of the two federal courts that considered this question and held that California’s standards are not
preempted by EPCA. It also contradicts the Supreme Court’s decision in Massachusetts v. EPA,
549 U.S. 497 (2007), which rejected the federal government’s argument that greenhouse gas
emissions standards under the Clean Air Act interfered with NHTSA’s ability to set fuel
economy standards under EPCA.
10. Other flaws with the Preemption Regulation are evident on its face. The
Preemption Regulation declares that California’s GHG standards conflict with federal fuel
economy standards—despite the fact that California’s standards provide that manufacturers may
(and many in fact do) comply by meeting federal GHG standards issued in conjunction with
federal fuel economy standards.
11. The Preemption Regulation also declares that California’s decades-old ZEV
standards are both “related to fuel economy standards” and in conflict with them. Preemption
Regulation, p. 50. But EPCA itself demonstrates the opposite. In EPCA, Congress has not
authorized NHTSA to set fuel economy standards for vehicles, including ZEVs, that run
exclusively on alternative fuels like electricity. And it has prohibited NHTSA from taking the
availability of ZEVs into account when setting federal fuel economy standards, meaning that
ZEVs do not affect fuel economy standards. 49 U.S.C. § 32902(h)(1).
12. In addition, NHTSA has failed to consider the damage the Preemption
Regulation will inflict on the environment and public health and welfare, flouting the
Case 1:19-cv-02826 Document 1 Filed 09/20/19 Page 7 of 51
8
requirements of NEPA, 42 U.S.C. §§ 4321-4347. Remarkably, NHTSA has conducted no
analysis at all of the environmental impacts of a regulation that purports to preempt air pollution
laws in effect in states that represent more than a third of the nation’s automobile market.
13. For all of these and other reasons, State Plaintiffs respectfully request that this
Court declare the Preemption Regulation unlawful, set it aside, and enjoin its implementation.
USDOJ's antitrust chief's defense of antitrust concerns with automaker agreement to adhere to California auto emission policies:
When competitors agree with each other on how to act in the marketplace, antitrust law enforcers have to step in, writes Assistant AG Makan Delrahim.
The loftiest of purported motivations do not excuse anti-competitive collusion among rivals. That’s long-standing antitrust law.
The law recognizes that when companies compete, consumers win. It deems competition to be intrinsically good, because rivalry, particularly in the form of free markets, benefits consumers by offering them both better prices and products. In turn, antitrust law negatively views conduct that harms competition.
Indeed, the Supreme Court has made it clear that in seeking to cultivate competition, antitrust laws should not render judgment on the “moral” aspirations behind the conduct.
While companies are free to make any individual public commitments or set any sales or technical limits for themselves, when competitors agree with each other on how they should act in the marketplace, antitrust law enforcers have stepped in and taken a good, hard look. Anti-competitive agreements among competitors — regardless of the purported beneficial goal — are outlawed because they reduce the incentives for companies to compete vigorously, which in turn can raise prices, reduce innovation and ultimately harm consumers.
Indeed, in multiple instances, the Supreme Court has struck down collective efforts by engineers to enhance “public safety” as well as a collective effort by criminal defense lawyers with the goal of improving quality of representation for “indigent criminal defendants.” Even laudable ends do not justify collusive means in our chosen system of laws.
This is why the nonpartisan nature of antitrust enforcement remains of utmost importance. Antitrust enforcement must prioritize protecting competition. And we do so.
The Antitrust Division’s decisions to look into an industry are based on whether the underlying conduct has the potential to harm competition. It does not look into industries because of political objectives, nor can it refrain from examining possible anti-competitive conduct because it would be politically unpopular.
Nevertheless, media personalities and politicians recently have levied the charge of “politicization” of antitrust in light of enforcement scrutiny that may not align with their political objectives. Fortunately for all Americans, the Department of Justice’s sole consideration is the law.
No goal, well-intentioned or otherwise, is an excuse for collusion or other anti-competitive behavior that runs afoul of the antitrust laws. Those who criticize even the prospect of an antitrust investigation should know that, when it comes to antitrust, politically popular ends should not justify turning a blind eye to the competition laws.
Makan Delrahim is Assistant Attorney General of the Antitrust Division, U.S. Department of Justice.
https://www.usatoday.com/story/opinion/2019/09/12/doj-antitrust-division-popular-ends-dont-justify-collusion-editorials-debates/2306078001/
When competitors agree with each other on how to act in the marketplace, antitrust law enforcers have to step in, writes Assistant AG Makan Delrahim.
The loftiest of purported motivations do not excuse anti-competitive collusion among rivals. That’s long-standing antitrust law.
The law recognizes that when companies compete, consumers win. It deems competition to be intrinsically good, because rivalry, particularly in the form of free markets, benefits consumers by offering them both better prices and products. In turn, antitrust law negatively views conduct that harms competition.
Indeed, the Supreme Court has made it clear that in seeking to cultivate competition, antitrust laws should not render judgment on the “moral” aspirations behind the conduct.
While companies are free to make any individual public commitments or set any sales or technical limits for themselves, when competitors agree with each other on how they should act in the marketplace, antitrust law enforcers have stepped in and taken a good, hard look. Anti-competitive agreements among competitors — regardless of the purported beneficial goal — are outlawed because they reduce the incentives for companies to compete vigorously, which in turn can raise prices, reduce innovation and ultimately harm consumers.
Indeed, in multiple instances, the Supreme Court has struck down collective efforts by engineers to enhance “public safety” as well as a collective effort by criminal defense lawyers with the goal of improving quality of representation for “indigent criminal defendants.” Even laudable ends do not justify collusive means in our chosen system of laws.
This is why the nonpartisan nature of antitrust enforcement remains of utmost importance. Antitrust enforcement must prioritize protecting competition. And we do so.
The Antitrust Division’s decisions to look into an industry are based on whether the underlying conduct has the potential to harm competition. It does not look into industries because of political objectives, nor can it refrain from examining possible anti-competitive conduct because it would be politically unpopular.
Nevertheless, media personalities and politicians recently have levied the charge of “politicization” of antitrust in light of enforcement scrutiny that may not align with their political objectives. Fortunately for all Americans, the Department of Justice’s sole consideration is the law.
No goal, well-intentioned or otherwise, is an excuse for collusion or other anti-competitive behavior that runs afoul of the antitrust laws. Those who criticize even the prospect of an antitrust investigation should know that, when it comes to antitrust, politically popular ends should not justify turning a blind eye to the competition laws.
Makan Delrahim is Assistant Attorney General of the Antitrust Division, U.S. Department of Justice.
https://www.usatoday.com/story/opinion/2019/09/12/doj-antitrust-division-popular-ends-dont-justify-collusion-editorials-debates/2306078001/
Five Years Later, Led Zeppelin’s “Stairway to Heaven” Copyright Lawsuit Is Still Going
Marsha Silva
September 20, 2019
For years, rock legends Led Zeppelin have had to battle in court to fight charges of widespread plagiarism during their illustrious recording career in the 1970s.The latest battle has been over their classic song “Stairway to Heaven,” and amazingly, court proceedings are now in their fifth year. On September 23rd, the battle continues — once again — in federal court.
That’s when the full ‘en banc’ panel of the U.S. Court of Appeals for the Ninth Circuit is scheduled to hear oral arguments in the copyright infringement lawsuit that the descendants of Randy Wolfe initially filed against Led Zeppelin. The descendants insist that the opening cords of “Stairway to Heaven” were stolen from a song that the late guitarist wrote called “Taurus,” which was performed by the band Spirit.
After an initial complaint in 2014, the case went to trial in California, and a jury ultimately found in favor of Led Zeppelin. But the plaintiffs in the case appealed the verdict and a 3-member panel of the Ninth Circuit unanimously overturned the verdict because the judge gave jurors erroneous information about U.S. copyright law.
The lawsuit raises a number of questions relating to what exactly is protected by U.S. copyright law. Many believe that the outcome of the case could affect other pending copyright infringement cases, such as the one pitting Marvin Gaye’s “Let’s Get It On” against Ed Sheeran and his “Thinking Out Loud”. It could also spur other cases if the lawsuit proves successful.
Unlike in previous copyright infringement cases involving Led Zeppelin, the music industry is firmly behind the band.In August, more than 120 music artists filed an amicus brief in support of the band. The artists have said that if the lawsuit against Led Zeppelin succeeds, it could seriously hamper creativity in music. Even more impressively, the U.S. government also filed an amicus brief on behalf of Led Zeppelin, citing the need to “foster innovation and creative expression.”
https://www.digitalmusicnews.com/2019/09/20/led-zeppelin-stairway-to-heaven-copyright-lawsuit-resumes/#comments
Marsha Silva
September 20, 2019
For years, rock legends Led Zeppelin have had to battle in court to fight charges of widespread plagiarism during their illustrious recording career in the 1970s.The latest battle has been over their classic song “Stairway to Heaven,” and amazingly, court proceedings are now in their fifth year. On September 23rd, the battle continues — once again — in federal court.
That’s when the full ‘en banc’ panel of the U.S. Court of Appeals for the Ninth Circuit is scheduled to hear oral arguments in the copyright infringement lawsuit that the descendants of Randy Wolfe initially filed against Led Zeppelin. The descendants insist that the opening cords of “Stairway to Heaven” were stolen from a song that the late guitarist wrote called “Taurus,” which was performed by the band Spirit.
After an initial complaint in 2014, the case went to trial in California, and a jury ultimately found in favor of Led Zeppelin. But the plaintiffs in the case appealed the verdict and a 3-member panel of the Ninth Circuit unanimously overturned the verdict because the judge gave jurors erroneous information about U.S. copyright law.
The lawsuit raises a number of questions relating to what exactly is protected by U.S. copyright law. Many believe that the outcome of the case could affect other pending copyright infringement cases, such as the one pitting Marvin Gaye’s “Let’s Get It On” against Ed Sheeran and his “Thinking Out Loud”. It could also spur other cases if the lawsuit proves successful.
Unlike in previous copyright infringement cases involving Led Zeppelin, the music industry is firmly behind the band.In August, more than 120 music artists filed an amicus brief in support of the band. The artists have said that if the lawsuit against Led Zeppelin succeeds, it could seriously hamper creativity in music. Even more impressively, the U.S. government also filed an amicus brief on behalf of Led Zeppelin, citing the need to “foster innovation and creative expression.”
https://www.digitalmusicnews.com/2019/09/20/led-zeppelin-stairway-to-heaven-copyright-lawsuit-resumes/#comments
DMN: CA statute protecting Uber gig workers hits music industry (and probably others)
California’s AB5 was signed into law this week without any exemptions or concessions for the music industry. So what happened?
California’s AB5 is designed to curtail contractor abuse by tech giants like Uber, Lyft, and GrubHub. But the law generated disastrous implications for a number of other industries reliant upon temporary contractors.
Talk to the Recording Industry Association of America (RIAA), American Association of Independent Musicians (A2IM), and the Music Artists Coalition (MAC), and California’s AB5 has the power to destroy the state’s music industry. Richard Burgess, president of A2IM, told DMN that the bill would single-handedly“gut the music industry” by making it impossible to hire the ad-hoc teams required to produce music and collaborate creatively.
Yet despite aggressive protests and consultations with California lawmakers, the bill was recently signed into law by Governor Gavin Newsom without any music industry exemptions — without even a mention of the industry at all. Meanwhile, a raft of other industries and professionals, including lawyers, fisherman, plumbers, barbers, tutors, and even newspapers won special exemptions and considerations from lawmakers.
So what happened?According to California Assemblywoman Lorena Gonzalez, the lead sponsor of AB5, the music industry simply couldn’t craft a workable set of compromises. Instead, they chose to fight the legislation entirely. “We were hopeful they would reach an agreement, but once language was drafted to chart a path forward… the recording industry preferred no legislation at all,” Gonzalez said.
Excerpt from https://www.digitalmusicnews.com/2019/09/19/music-industry-infighting-ab5/
California’s AB5 was signed into law this week without any exemptions or concessions for the music industry. So what happened?
California’s AB5 is designed to curtail contractor abuse by tech giants like Uber, Lyft, and GrubHub. But the law generated disastrous implications for a number of other industries reliant upon temporary contractors.
Talk to the Recording Industry Association of America (RIAA), American Association of Independent Musicians (A2IM), and the Music Artists Coalition (MAC), and California’s AB5 has the power to destroy the state’s music industry. Richard Burgess, president of A2IM, told DMN that the bill would single-handedly“gut the music industry” by making it impossible to hire the ad-hoc teams required to produce music and collaborate creatively.
Yet despite aggressive protests and consultations with California lawmakers, the bill was recently signed into law by Governor Gavin Newsom without any music industry exemptions — without even a mention of the industry at all. Meanwhile, a raft of other industries and professionals, including lawyers, fisherman, plumbers, barbers, tutors, and even newspapers won special exemptions and considerations from lawmakers.
So what happened?According to California Assemblywoman Lorena Gonzalez, the lead sponsor of AB5, the music industry simply couldn’t craft a workable set of compromises. Instead, they chose to fight the legislation entirely. “We were hopeful they would reach an agreement, but once language was drafted to chart a path forward… the recording industry preferred no legislation at all,” Gonzalez said.
Excerpt from https://www.digitalmusicnews.com/2019/09/19/music-industry-infighting-ab5/
CFPB explains its position that statute provision protecting Director from Removal is unconstitutional:
NCAA response to California Senate Bill 206--Measure would upend level playing field for all student-athletes
The NCAA Board of Governors sent a letter to California Gov. Gavin Newsom, making clear its belief that this bill would wipe out the distinction between college and professional athletics and eliminate the element of fairness that supports all of college sports. Text of the letter follows:
Governor Newsom:
The 1,100 schools that make up the NCAA have always, in everything we do, supported a level playing field for all student-athletes. This core belief extends to each member college and university in every state across the nation.
California Senate Bill 206 would upend that balance. If the bill becomes law and California’s 58 NCAA schools are compelled to allow an unrestricted name, image and likeness scheme, it would erase the critical distinction between college and professional athletics and, because it gives those schools an unfair recruiting advantage, would result in them eventually being unable to compete in NCAA competitions. These outcomes are untenable and would negatively impact more than 24,000 California student-athletes across three divisions.
Right now, nearly half a million student-athletes in all 50 states compete under the same rules. This bill would remove that essential element of fairness and equal treatment that forms the bedrock of college sports.
The NCAA continues to focus on the best interests of all student-athletes nationwide. NCAA member schools already are working on changing rules for all student-athletes to appropriately use their name, image and likeness in accordance with our values — but not pay them to play. The
NCAA has consistently stood by its belief that student-athletes are students first, and they should not be employees of the university.
It isn’t possible to resolve the challenges of today’s college sports environment in this way — by one state taking unilateral action. With more than 1,100 schools and nearly 500,000 student-athletes across the nation, the rules and policies of college sports must be established through the Association’s collaborative governance system. A national model of collegiate sport requires mutually agreed upon rules.
We urge the state of California to reconsider this harmful and, we believe, unconstitutional bill and hope the state will be a constructive partner in our efforts to develop a fair name, image and likeness approach for all 50 states.
Sincerely,
Members of the NCAA Board of Governors
- Stevie Baker-Watson, DePauw University
- M. Grace Calhoun, University of Pennsylvania
- Ken Chenault, General Catalyst
- Mary Sue Coleman, Association of American Universities
- John DeGioia, Georgetown University
- Michael Drake, The Ohio State University
- Philip DiStefano, University of Colorado, Boulder
- Mark Emmert, NCAA
- Sue Henderson, New Jersey City University
- Grant Hill, CBS/Warner and The Atlanta Hawks
- Sandra Jordan, University of South Carolina Aiken
- Renu Khator, University of Houston
- Laura Liesman, Georgian Court University
- Ronald Machtley, Bryant University
- The Rev. James Maher, Niagara University
- Denis McDonough, Former White House Chief of Staff
- Tori Murden McClure, Spalding University
- Gary Olson, Daemen College
- Denise Trauth, Texas State University
- Satish Tripathi, University at Buffalo, the State University of New York
- David Wilson, Morgan State University
- Randy Woodson, North Carolina State University
Media Contact
Stacey
Osburn
NCAA Director of Public and Media Relations
NCAA
317-917-6117
https://mail.yahoo.com/b/folders/1/messages/ABfzRqwJ-TciXYHiMQwZqCqmxA4?.src=ym&reason=myc&folderType=INBOX&showImages=true&offset=0
Competition policy and U.S. efforts to constrain Chinese competition in rail passenger cars*
Congress is soon expected to approve legislation with bipartisan sponsorship that would effectively bar a Chinese company that manufactures railroad passenger cars for subways, CRRC Corporation, from competing for new contracts in the United States. Government entities like the city of Chicago would be denied federal financial support for contracts with the company. The White House has expressed its support for the effort [https://www.whitehouse.gov/wp-content/uploads/2019/09/Letter-to-the-Chairs-and-Ranking-Members-of-the-House-and-Senate-Armed-Services-Committees.pdf].
A New York Times article explains that the rationale for the legislation, an add-on to a military spending bill, is at least partly economic and political: the Chinese government has pumped money into building globally competitive businesses, often creating overcapacity in markets like steel, solar panels and trains.
The Times article explains that Chinese government support for Chinese companies has lowered prices for consumers — including American taxpayers who pay for subway cars. While a subway car has not been manufactured solely by an American company in decades, CRRC’s low prices have raised concerns among American freight train manufacturing companies that the CRRC company could ultimately move into — and demolish — their business.
The Times article says that CRRC has consistently underbid its competitors, winning over urban transit agencies that are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC’s Chicago subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by Bombardier, the Canadian manufacturer. And CRRC also proposed to build a Chicago manufacturing facility and create 170 new jobs.
Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy aims of the Chinese government to dominate key global industries like electric cars, robotics and rail.
“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” said Senator Tammy Baldwin, a Wisconsin Democrat who is a co-sponsor of the legislation. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”
From the perspective of competition policy, bipartisan support for legislation that handicaps particular Chinese competitors and favors non-Chinese competitors is an important development. It is a policy quite different from simply allowing municipal and other consumers to pick products based on price and quality.
The legislation directed at CRRC is not an isolated example of US government interest in industrial policy directed against Chinese companies. For example, Senator Marco Rubio’s recently published study on meeting the challenges of Chinese competition, particularly in the IT sector, endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The bottom line point is that at the moment there is a growing tension between a competition policy that encourages consumers to buy based simply on considerations of price and quality, and an industrial policy based on disadvantaging Chinese companies perceived as competing unfairly.
For the purposes of this brief comment the point is not that industrial policy directed against Chinese companies and favoring other companies is necessarily wrong, or that it is novel to have such an industrial policy. Similar policies have been used by the U.S. government in the past. The point is simply that government efforts to disadvantage Chinese competition are currently increasing, with broadening bipartisan support, increasing the importance of dialogue among advocates who are skeptical of US government industrial policies that limit Chinese competition, and those who advocate for putting constraints on Chinese competitors.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
Additional sources:
https://www.nytimes.com/2019/09/14/business/chinese-train-national-security.html
https://www.congress.gov/bill/116th-congress/house-bill/2500/text#toc-H3A11FD2AB8A744FD8678D9165826EF95 [at Section 896]
"Tensions between Antitrust and Industrial Policy" by D. Daniel ...
https://scholarship.law.ufl.edu › facultypub
by DD Sokol - 2015 - Cited by 22 - Related articles
Sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for privileged groups or industries.
Congress is soon expected to approve legislation with bipartisan sponsorship that would effectively bar a Chinese company that manufactures railroad passenger cars for subways, CRRC Corporation, from competing for new contracts in the United States. Government entities like the city of Chicago would be denied federal financial support for contracts with the company. The White House has expressed its support for the effort [https://www.whitehouse.gov/wp-content/uploads/2019/09/Letter-to-the-Chairs-and-Ranking-Members-of-the-House-and-Senate-Armed-Services-Committees.pdf].
A New York Times article explains that the rationale for the legislation, an add-on to a military spending bill, is at least partly economic and political: the Chinese government has pumped money into building globally competitive businesses, often creating overcapacity in markets like steel, solar panels and trains.
The Times article explains that Chinese government support for Chinese companies has lowered prices for consumers — including American taxpayers who pay for subway cars. While a subway car has not been manufactured solely by an American company in decades, CRRC’s low prices have raised concerns among American freight train manufacturing companies that the CRRC company could ultimately move into — and demolish — their business.
The Times article says that CRRC has consistently underbid its competitors, winning over urban transit agencies that are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC’s Chicago subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by Bombardier, the Canadian manufacturer. And CRRC also proposed to build a Chicago manufacturing facility and create 170 new jobs.
Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy aims of the Chinese government to dominate key global industries like electric cars, robotics and rail.
“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” said Senator Tammy Baldwin, a Wisconsin Democrat who is a co-sponsor of the legislation. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”
From the perspective of competition policy, bipartisan support for legislation that handicaps particular Chinese competitors and favors non-Chinese competitors is an important development. It is a policy quite different from simply allowing municipal and other consumers to pick products based on price and quality.
The legislation directed at CRRC is not an isolated example of US government interest in industrial policy directed against Chinese companies. For example, Senator Marco Rubio’s recently published study on meeting the challenges of Chinese competition, particularly in the IT sector, endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The bottom line point is that at the moment there is a growing tension between a competition policy that encourages consumers to buy based simply on considerations of price and quality, and an industrial policy based on disadvantaging Chinese companies perceived as competing unfairly.
For the purposes of this brief comment the point is not that industrial policy directed against Chinese companies and favoring other companies is necessarily wrong, or that it is novel to have such an industrial policy. Similar policies have been used by the U.S. government in the past. The point is simply that government efforts to disadvantage Chinese competition are currently increasing, with broadening bipartisan support, increasing the importance of dialogue among advocates who are skeptical of US government industrial policies that limit Chinese competition, and those who advocate for putting constraints on Chinese competitors.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
Additional sources:
https://www.nytimes.com/2019/09/14/business/chinese-train-national-security.html
https://www.congress.gov/bill/116th-congress/house-bill/2500/text#toc-H3A11FD2AB8A744FD8678D9165826EF95 [at Section 896]
"Tensions between Antitrust and Industrial Policy" by D. Daniel ...
https://scholarship.law.ufl.edu › facultypub
by DD Sokol - 2015 - Cited by 22 - Related articles
Sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for privileged groups or industries.
DMN:
Small Claims Copyright Court Is Getting Closer to Reality — A Full Congressional Vote On the ‘CASE Act’ Is Next
What if smaller copyright infringement cases could be quickly resolved in the U.S. legal system — just like Small Claims Court? That’s the idea behind the newly-revived CASE Act.
The story continues here. https://www.digitalmusicnews.com/2019/09/11/case-act-small-claims-copyright-court/
Small Claims Copyright Court Is Getting Closer to Reality — A Full Congressional Vote On the ‘CASE Act’ Is Next
What if smaller copyright infringement cases could be quickly resolved in the U.S. legal system — just like Small Claims Court? That’s the idea behind the newly-revived CASE Act.
The story continues here. https://www.digitalmusicnews.com/2019/09/11/case-act-small-claims-copyright-court/
NYT Opinion
A Cruel Parody of Antitrust Enforcement
The Justice Department is roughing up Mr. Trump’s political enemies and threatening the environment.
By The NYT Editorial Board
President Trump’s Justice Department — for it is increasingly clear that the department has been reduced to an arm of the White House — has opened an antitrust investigation of four auto companies that had the temerity to defy the president by voluntarily agreeing to reduce auto emissions below the level required by current federal law.
The investigation is an act of bullying, plain and simple: a nakedly political abuse of authority.
The department is supposed to prevent companies from acting in their own interest at the expense of the public. The four automakers, by contrast, are acting in the public interest.
That the government of the United States would fight to loosen emissions standards in the face of the growing threat posed by climate change also boggles the mind. Not content to fiddle while the planet burns, Mr. Trump is fanning the flames.
Ford, BMW North America, Volkswagen Group of America and Honda struck a deal with the State of California in July. They agreed to reach an average fuel efficiency standard of at least 51 miles per gallon by 2026. That falls short of an Obama administration rule that would have required average fuel efficiency of 54.5 miles per gallon by 2025. But it is certainly better than the goal of 37 miles per gallon favored by the Trump administration.
Mr. Trump reacted to the deal with predictable fury. The administration denounced it as a “P.R. stunt,” and threatened to end California’s longstanding authority to set its own tougher fuel efficiency standards — an attempt that would surely end up in court.
Now the administration has gone further, firing a shot across the bows of the automakers that signed the deal, and of those that might. The Times reported the German government warned Mercedes-Benz not to join the California agreement after learning of the federal investigation.
Antitrust law grants the government broad authority to police anticompetitive practices, and the Justice Department has dressed up its actions with the fig leaf that the companies may have colluded by collectively agreeing to the tougher standards, which could result in higher prices for new cars and light trucks.
The investigation is particularly striking because the department has shown little interest in preventing corporations from engaging in actual anticompetitive behavior.
From https://www.nytimes.com/section/opinion
o o o o o o o o o
LA Times opinion:
Editorial: Trump is trying to bully California and carmakers into giving up on climate change
(Los Angeles Times)
By THE TIMES EDITORIAL BOARD
SEP. 6, 2019
Sometimes it seems like the only consistent policy coming out of the White House these days is vindictiveness.
Case in point: Still seething over California’s end-run around its plan to roll back fuel economy and greenhouse gas emissions targets on new cars, the Trump administration has launched an antitrust investigation into four automakers that reached an agreement with the state to make their cars run cleaner.
The administration also sent a letter to California officials warning darkly of “legal consequences” if the state does not abandon the agreement. And it’s considering revoking California’s long-standing authority to set tougher auto pollution standards than those required by the federal government — an authority Congress has provided at least since 1967 in recognition of the state’s own efforts to clean its dirty air.
This is a blatant attempt to use the power of the federal government to bully companies that disagree with the president. It’s especially galling that the administration would use the threat of a Justice Department investigation to pressure automakers to make cars that are worse for consumers, worse for the environment and worse for a rapidly warming planet.
In July, Gov. Gavin Newsom announced that the four companies — Ford Motor Co., Volkswagen of America, Honda and BMW — had reached a deal with the state in which they agreed to ignore the Trump administration’s plan to relax tailpipe emissions standards. Instead they would continue making their fleets more fuel-efficient and cleaner, albeit at a slightly slower pace than the original Obama-era rules required.
The rationale behind the deal was straightforward and hardly the kind of nefarious backroom dealing suggested by the Trump administration. California has the unique authority under the Clean Air Act to set its own auto emissions standards, no matter the Trump rollback, and other states can then adopt California’s model.
Carmakers plan their fleets years in advance and don’t want to sell different cars to meet different standards state by state. They want one nationwide standard. Automakers pushed the Trump administration to forgo the rollback, saying it would hurt their bottom lines and produce “untenable” instability. They wanted a compromise with California. The administration refused. So a handful of companies volunteered to meet California’s standard.
Sources told the Wall Street Journal that the Justice Department’s antitrust enforcers had acted on their own initiative — really? — out of concern that the four major automakers had conspired to limit competition by agreeing to a tougher California standard. Under the department’s logic, consumers would be harmed by reducing the availability of lower-mileage vehicles in the state.
But it’s routine for regulators to get industry feedback on the rules they’re developing. And antitrust experts say there’s nothing illegal about industry figures banding together to support a public policy, even when members of that industry take opposing positions on what the policy should be. There’s so little legal justification for what the Justice Department is doing, Congress should conduct an inquiry into why it’s happening.
It’s laughable to think that the Justice Department is suddenly worried about cartels. According to the American Antitrust Institute, enforcement of federal antitrust law has taken a nosedive in the last two and a half years. Meanwhile, the administration’s torching of federal regulations has terminated countless pro-competitive policies adopted by its predecessors.
No, the Justice Department’s move fits into a pattern of the Trump administration bringing the hammer down on those who rile the onion-skinned president. Examples include the department’s lawsuit against AT&T’s acquisition of CNN’s owner, Time Warner (the lawsuit failed), its effort to deny local policing grants to states like California that don’t support the administration’s immigration policies, and the president’s threat to withhold disaster aid to California’s fire victims because of the state’s logging rules.
Now the president is mad that car companies don’t want the regulatory relief he’s proposed, and he’s mad that companies chose to side with California. Rather than admit he was wrong and accept defeat, his administration is willing to use its immense power to try to punish dissent.
https://www.latimes.com/opinion/story/2019-09-06/trump-administration-california-carmakers-climate-change
The California agreement language is here:
https://ww2.arb.ca.gov/news/california-and-major-automakers-reach-groundbreaking-framework-agreement-clean-emission
https://ww2.arb.ca.gov/sites/default/files/2019-07/Auto%20Terms%20Signed.pdf
The DOT warning letter follows. There is a letter from USDOJ, but we don't have access to it.
https://ww2.arb.ca.gov/news/california-and-major-automakers-reach-groundbreaking-framework-agreement-clean-emission
https://ww2.arb.ca.gov/sites/default/files/2019-07/Auto%20Terms%20Signed.pdf
The DOT warning letter follows. There is a letter from USDOJ, but we don't have access to it.
Law 360: Experts skeptical about USDOJ investigation of automaker conspiracy to lower emissions
Antitrust experts are skeptical that the DOJ will be able to make a case that the agreement unlawfully restricts competition.
"This is not price-fixing, it's not restriction of output, it's an agreement on stricter emissions standards," Cornell Law School antitrust law professor George Hay said. "At the end of the day, even if you prove the worst of how this agreement came about, there's still an issue of if it translates to an antitrust violation."
Competitors agreeing to a set of technological or legal standards doesn't say anything about how they'll compete with each other, Constantine Cannon LLP antitrust partner Ankur Kapoor said.
"They're not giving any sensitive business information to one another, they're not exchanging price information or cost information, or even information about how they're going to meet these standards," Kapoor said. "I would think that the DOJ will take a look and say, 'OK, we've seen it and there's no issue here.'"
Morrison & Foerster LLP antitrust partner Lisa Phelan said the DOJ could be implying that the automakers are effectively agreeing not to sell certain, higher-polluting cars and that reduces consumer choice.
"But the impact of that on the total number of cars still available is unlikely to be found to be significant to any relevant market," said Phelan, a former chief of the DOJ Antitrust Division's National Criminal Enforcement and Washington Criminal I sections.
Even if the automakers' actions are anti-competitive, experts say they have a pretty strong defense against an antitrust charge. If they're agreeing to comply with California regulations, the state-action immunity doctrine allows states to restrain competition as long as they actively supervise it and it's pursuant to a clearly articulated state policy.
There's also the so-called Noerr-Pennington doctrine, which immunizes private entities from antitrust suits if they're attempting to influence public policy, even if the resulting policy is anti-competitive.
"With those elements in mind, the whole exercise here smacks a little bit of political overreach," said Simpson Thacher & Bartlett LLP partner John Terzaken, a former criminal enforcement director of the Antitrust Division. "I know there was a suggestion that this isn't being driven politically, but you have to look at that with a bit of a jaundiced eye, if you've got two different executive branch agencies now reaching out to California on the very same issue."
New York University School of Law antitrust professor Harry First said the suspicion that DOJ antitrust enforcement is motivated by President Donald Trump's politics has hung over his administration since the litigation unsuccessfully challenging the AT&T-Time Warner merger.
"It's like alarm bells are going off on this," First said.
Read more at: https://www.law360.com/competition/articles/1196186/trump-doj-turn-up-heat-on-calif-car-emissions-deal?copied=1 [pay wall]
Antitrust experts are skeptical that the DOJ will be able to make a case that the agreement unlawfully restricts competition.
"This is not price-fixing, it's not restriction of output, it's an agreement on stricter emissions standards," Cornell Law School antitrust law professor George Hay said. "At the end of the day, even if you prove the worst of how this agreement came about, there's still an issue of if it translates to an antitrust violation."
Competitors agreeing to a set of technological or legal standards doesn't say anything about how they'll compete with each other, Constantine Cannon LLP antitrust partner Ankur Kapoor said.
"They're not giving any sensitive business information to one another, they're not exchanging price information or cost information, or even information about how they're going to meet these standards," Kapoor said. "I would think that the DOJ will take a look and say, 'OK, we've seen it and there's no issue here.'"
Morrison & Foerster LLP antitrust partner Lisa Phelan said the DOJ could be implying that the automakers are effectively agreeing not to sell certain, higher-polluting cars and that reduces consumer choice.
"But the impact of that on the total number of cars still available is unlikely to be found to be significant to any relevant market," said Phelan, a former chief of the DOJ Antitrust Division's National Criminal Enforcement and Washington Criminal I sections.
Even if the automakers' actions are anti-competitive, experts say they have a pretty strong defense against an antitrust charge. If they're agreeing to comply with California regulations, the state-action immunity doctrine allows states to restrain competition as long as they actively supervise it and it's pursuant to a clearly articulated state policy.
There's also the so-called Noerr-Pennington doctrine, which immunizes private entities from antitrust suits if they're attempting to influence public policy, even if the resulting policy is anti-competitive.
"With those elements in mind, the whole exercise here smacks a little bit of political overreach," said Simpson Thacher & Bartlett LLP partner John Terzaken, a former criminal enforcement director of the Antitrust Division. "I know there was a suggestion that this isn't being driven politically, but you have to look at that with a bit of a jaundiced eye, if you've got two different executive branch agencies now reaching out to California on the very same issue."
New York University School of Law antitrust professor Harry First said the suspicion that DOJ antitrust enforcement is motivated by President Donald Trump's politics has hung over his administration since the litigation unsuccessfully challenging the AT&T-Time Warner merger.
"It's like alarm bells are going off on this," First said.
Read more at: https://www.law360.com/competition/articles/1196186/trump-doj-turn-up-heat-on-calif-car-emissions-deal?copied=1 [pay wall]
Editorial comment (DAR): Compare threat to Alabama from Hurricane Dorian; threat to competition and consumers from automaker agreement to adhere to more stringent California emission standards. The answer may not be perfectly clear. Here is one theory of antitrust harm heard around the office Nespresso machine: The automaker/California agreement will harm pollution insensitive consumers wishing to get the lower price that may attach to higher polluting cars. The agreement not to produce cheaper higher emission cars will mean pollution insensitive consumers will be forced to pay more. On the other hand, maybe procompetitive justifications support the automaker actions. See the article below.
o o o o o o
More compare and contrast:
Procompetitive Justifications in Antitrust Law
94 Indiana Law Journal 501 (2019)
University of Memphis Legal Studies Research Paper No. 167
44 Pages Posted: 15 Aug 2017 Last revised: 9 Jun 2019
John M. NewmanUniversity of Miami - School of Law
Abstract
The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating “procompetitive” effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their behavior.
But which of these myriad justifications are valid? To leading jurists and scholars, this remains an “open question," even an “absolute mystery." Examination of the relevant case law reveals a tangle of competing approaches and seemingly irreconcilable opinions. The ongoing lack of clarity in this area is inexcusable: procompetitive-justification analysis is absolutely vital to a properly functioning antitrust enterprise.
In response, this article provides answers and clarity. It identifies the “market failure” approach as doctrinally correct and economically optimal. The leading alternatives pose an unacceptably high risk of error, in the form of both false positives and false negatives. The article concludes by identifying the proper method for assessing procompetitive justifications. This three-step analytical framework increases transparency and minimizes errors, thereby maximizing societal welfare.
Yet More compare and contrast:
Four top Audi employees indicted in Dieselgate scandal19New charges shed more light on how the emissions cheating went down
By Sean O'Kane@sokane1 Jan 17, 2019,
A federal grand jury in Detroit has indicted four former Audi managers for their alleged role in the German automaker’s scheme to cheat US emissions testing on diesel-powered cars, according to a new court document published Thursday. Audi’s malfeasance was part of a larger effort from parent company Volkswagen Group to sell millions of cars with engines that were dirtier than regulations allowed, a scandal that was uncovered in 2015 and has since been dubbed “Dieselgate.”
Richard Bauder, Axel Eiser, Stefan Knirsch, and Carsten Nagel were charged with multiple counts of violating the Clean Air Act, committing wire fraud, and conspiracy to defraud the United States. All of them ran different parts of Audi’s engine development and testing divisions, and worked on the diesel engines that used “defeat devices” to cheat EPA emissions tests. None of the four are in custody, and all are believed to be in Germany, according to Reuters.
13 VOLKSWAGEN EMPLOYEES HAVE NOW BEEN CHARGED, BUT ONLY A FEW ARE IN PRISON
The total number of people who have been charged in the US over alleged involvement in Dieselgate is now 13. Volkswagen Group pled guilty in US court in 2017, and has agreed to pay back more than $20 billion to states, dealers, regulators, and individual owners. Multiple former executives are in prison, and Volkswagen’s CEO at the time — Martin Winterkorn — swiftly resigned when the news broke in 2015.
Ripple effects were still showing up, even before Thursday’s indictments. Audi’s CEO was forced out in October after he was arrested by German authorities. The European Union’s antitrust regulators are also investigating whether Volkswagen, BMW, and Daimler (the parent company of Mercedes-Benz) colluded to slow the rollout of better emissions technology. And Winterkorn has been indicted in the US on charges similar to the ones announced Thursday, though he remains in Germany.
The new indictment offers some of the clearest detail about how Audi’s scheme played out. Bauder and another diesel engine development lead, Zaccheo Giovanni Pamio (who was indicted in 2017), began designing a new 3.0 liter diesel engine in 2006 that was meant to be used in cars that would be marketed as “clean diesel,” according to the indictment. This engine was designed to use a technology that reduced emissions of harmful nitrogen dioxide, or NOx. The tradeoff, though, was that the cleaner the tailpipe emissions got, the worse the engine’s fuel economy became.
AUDI’S INSISTENCE ON LARGE TRUNK SPACE AND HIGH-END AUDIO SYSTEMS CONTRIBUTED TO THE MESS, ACCORDING TO THE INDICTMENT
According to the indictment, Bauder, Pamio, and the co-conspirators realized they “could not calibrate a diesel engine that would meet the strict NOx emissions standards in the United States” while also hitting high fuel economy targets — especially because of specific design constraints imposed by Audi, which called for a “large trunk and a high-end sound system.”
To get around this, prosecutors say that Bauder directed Audi employees to design the defeat device that made it possible to cheat emissions tests. In short, what they came up with was a piece of software that could recognize when a car was going through the EPA’s emissions tests. It would then restrict emissions to a level that complied with the standards. But when the car got back out onto the open road, it would emit up to 40 times as much NOx as was legally allowed.
From https://www.theverge.com/2019/1/17/18187558/audi-charges-dieselgate-scandal-indictment-cheating
Reminder: The editor, Don Resnikoff, is fully responsible for views that may be expressed or implied concerning the automaker/California agreement.
o o o o o o
More compare and contrast:
Procompetitive Justifications in Antitrust Law
94 Indiana Law Journal 501 (2019)
University of Memphis Legal Studies Research Paper No. 167
44 Pages Posted: 15 Aug 2017 Last revised: 9 Jun 2019
John M. NewmanUniversity of Miami - School of Law
Abstract
The Rule of Reason, which has come to dominate modern antitrust law, allows defendants the opportunity to justify their conduct by demonstrating “procompetitive” effects. Seizing the opportunity, defendants have begun offering increasingly numerous and creative explanations for their behavior.
But which of these myriad justifications are valid? To leading jurists and scholars, this remains an “open question," even an “absolute mystery." Examination of the relevant case law reveals a tangle of competing approaches and seemingly irreconcilable opinions. The ongoing lack of clarity in this area is inexcusable: procompetitive-justification analysis is absolutely vital to a properly functioning antitrust enterprise.
In response, this article provides answers and clarity. It identifies the “market failure” approach as doctrinally correct and economically optimal. The leading alternatives pose an unacceptably high risk of error, in the form of both false positives and false negatives. The article concludes by identifying the proper method for assessing procompetitive justifications. This three-step analytical framework increases transparency and minimizes errors, thereby maximizing societal welfare.
Yet More compare and contrast:
Four top Audi employees indicted in Dieselgate scandal19New charges shed more light on how the emissions cheating went down
By Sean O'Kane@sokane1 Jan 17, 2019,
A federal grand jury in Detroit has indicted four former Audi managers for their alleged role in the German automaker’s scheme to cheat US emissions testing on diesel-powered cars, according to a new court document published Thursday. Audi’s malfeasance was part of a larger effort from parent company Volkswagen Group to sell millions of cars with engines that were dirtier than regulations allowed, a scandal that was uncovered in 2015 and has since been dubbed “Dieselgate.”
Richard Bauder, Axel Eiser, Stefan Knirsch, and Carsten Nagel were charged with multiple counts of violating the Clean Air Act, committing wire fraud, and conspiracy to defraud the United States. All of them ran different parts of Audi’s engine development and testing divisions, and worked on the diesel engines that used “defeat devices” to cheat EPA emissions tests. None of the four are in custody, and all are believed to be in Germany, according to Reuters.
13 VOLKSWAGEN EMPLOYEES HAVE NOW BEEN CHARGED, BUT ONLY A FEW ARE IN PRISON
The total number of people who have been charged in the US over alleged involvement in Dieselgate is now 13. Volkswagen Group pled guilty in US court in 2017, and has agreed to pay back more than $20 billion to states, dealers, regulators, and individual owners. Multiple former executives are in prison, and Volkswagen’s CEO at the time — Martin Winterkorn — swiftly resigned when the news broke in 2015.
Ripple effects were still showing up, even before Thursday’s indictments. Audi’s CEO was forced out in October after he was arrested by German authorities. The European Union’s antitrust regulators are also investigating whether Volkswagen, BMW, and Daimler (the parent company of Mercedes-Benz) colluded to slow the rollout of better emissions technology. And Winterkorn has been indicted in the US on charges similar to the ones announced Thursday, though he remains in Germany.
The new indictment offers some of the clearest detail about how Audi’s scheme played out. Bauder and another diesel engine development lead, Zaccheo Giovanni Pamio (who was indicted in 2017), began designing a new 3.0 liter diesel engine in 2006 that was meant to be used in cars that would be marketed as “clean diesel,” according to the indictment. This engine was designed to use a technology that reduced emissions of harmful nitrogen dioxide, or NOx. The tradeoff, though, was that the cleaner the tailpipe emissions got, the worse the engine’s fuel economy became.
AUDI’S INSISTENCE ON LARGE TRUNK SPACE AND HIGH-END AUDIO SYSTEMS CONTRIBUTED TO THE MESS, ACCORDING TO THE INDICTMENT
According to the indictment, Bauder, Pamio, and the co-conspirators realized they “could not calibrate a diesel engine that would meet the strict NOx emissions standards in the United States” while also hitting high fuel economy targets — especially because of specific design constraints imposed by Audi, which called for a “large trunk and a high-end sound system.”
To get around this, prosecutors say that Bauder directed Audi employees to design the defeat device that made it possible to cheat emissions tests. In short, what they came up with was a piece of software that could recognize when a car was going through the EPA’s emissions tests. It would then restrict emissions to a level that complied with the standards. But when the car got back out onto the open road, it would emit up to 40 times as much NOx as was legally allowed.
From https://www.theverge.com/2019/1/17/18187558/audi-charges-dieselgate-scandal-indictment-cheating
Reminder: The editor, Don Resnikoff, is fully responsible for views that may be expressed or implied concerning the automaker/California agreement.
Mercado Little Spain chef Jose Andres blames payroll ‘glitch’ for underpaid staff
By Emily Saul
August 29, 2019 | 5:46pm
Mercado Little Spain chef accused of skimping stafferVictims of the $15 minimum wageJoe Biden’s no anti-racist champ and other commentaryCuomo aide rips de Blasio for touting $15 minimum wage at Dem debateRenowned chef José Andres claims a payroll defect is to blame for underpaid employees at his Hudson Yards eatery Mercado Little Spain — but employees aren’t swallowing it.
“We found a glitch in how we paid some wages in NYC- some underpaid, more overpaid. I apologize to everyone who was underpaid. We’re correcting it today,” Andres tweeted Wednesday, two days after bartender Tina Braunstein filed a suit against him and the restaurant in Manhattan federal court claiming she was paid below minimum wage.
Yet Braunstein’s attorney Maimon Kirschenbaum told The Post Andres’ statement was “farcical” — and said he’s been retained by another employee who was so disgusted with the tony chef’s payment practices that she quit just a few days into her job at the popular Mercado Little Spain.
An amended version of the class action lawsuit naming Cindy Martinez was filed Thursday.
“The violations are serious and far surpass a ‘glitch,'” Kirschenbaum wrote in the new document.
“Service employees were forced to perform hours of menial non-tipped work while being paid the ‘tip credit’ hourly rate of $10, which is less than the full minimum wage of $15,” the papers read. “Defendants’ blatant minimum wage violation has no relation to any alleged software glitch. Rather, Defendants saved money by having tipped employees perform non-tipped setup and breakdown work while illegally paying them as though they were receiving tips for that work.”
https://nypost.com/2019/08/29/mercado-little-spain-chef-jose-andres-blames-payroll-glitch-for-underpaid-staff/
Linda Greenhouse and Tony Picadio on gun rights
and the US Supreme Court
Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency.
Linda Greenhouse, a veteran New York Times journalist, commented a few weeks ago on what she called the “growing impatience of some members of the court for a chance to move the boundaries of the Second Amendment from the home — where its 2008 decision in District of Columbia v. Heller had located the amendment’s protection of the right to bear arms — out to the wider world.”
Recently, the U.S. supreme Court granted certiorari in order to consider the Second Amendment issues in New York State Rifle and Pistol Association, Inc., et al. v. The City of New York, et al. At issue is a New York City regulation that prohibited most licensed handgun owners from taking their guns out of the city, even to a second home or to a shooting range for target practice.
Greenhouse suggests that this New York case is potentially the vehicle that Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh may have been waiting for — a chance to turn the ambiguous and quite narrow Heller decision into a broader constitutional charter for gun rights.
On July 22, New York City filed with the Supreme Court a “suggestion of mootness” and a request to suspend the briefing schedule. The city explained that two interlocking developments had occurred: In the session just ended, the State Legislature had amended the handgun licensing statute to require localities to allow licensed handgun owners to transport their guns to second homes and target ranges outside the city; and the New York City Police Department, which supervises gun licensing, had amended the prior regulation to permit the same activities. The city argued [https://www.supremecourt.gov/DocketPDF/18/18-280/108869/20190722151524926_18-280%20Suggestion%20of%20Mootness.pdf] that since the lawsuit had challenged only the second-home and shooting-range limitations, the plaintiffs now had everything they had asked for and there was nothing left for the Supreme Court to decide.
Greenhouse writes that “The Rifle & Pistol Association has fought back vigorously against mootness, arguing in a 33-page brief [https://www.supremecourt.gov/DocketPDF/18/18-280/110978/20190801121009552_18-280%20NYSRPA%20suggestion%20of%20mootness%20opposition.pdf] that ‘the city has not even tried to hide the fact that its paramount goal is to evade the prospect of a binding unfavorable decision from this court.’” Further, “the new regulation falls ‘far short’ of satisfying the plaintiffs and is ‘plainly designed to provide the bare minimum of what the city believes will suffice to moot this case, and not an inch more.’ . . . ‘The city manifestly has not altered its view that any possession of a handgun outside the home, even when the handgun is unloaded and stored away, is a privilege that the city can micromanage, rather than an individual right.’”
The justices have put the mootness dispute on the agenda for discussion at their first closed-door conference of the new term, on Oct. 1.
Linda Greenhouse’s editorial bottom line is this: if the court rules the way the plaintiffs’ lawyers are urging in the New York case and “adopts ‘strict scrutiny’ as the only valid judicial approach to assessing the constitutionality of any limitation, then the political branches will effectively lose the ability to enact what the emerging political consensus deems to be common-sense regulations.”
With regard to the underlying 2008 decision in District of Columbia v. Heller, attorney Anthony Picadio explained in his article discussing the case that while a 5 to 4 majority of the Supreme Court, in the opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional, it did so only to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
Anthony Picadio’s article criticizes the Heller decision. He 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 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
Mr. Picadio will speak at a luncheon program at the DC Bar on October 15.
Linda Greenhouse’s August 15, 2019 article on the Second Amendment is at https://www.nytimes.com/2019/08/15/opinion/guns-supreme-court.html
The editor, Don Allen Resnikoff, takes full responsibility for the content of this article and any opinions that may be implied.
and the US Supreme Court
Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency.
Linda Greenhouse, a veteran New York Times journalist, commented a few weeks ago on what she called the “growing impatience of some members of the court for a chance to move the boundaries of the Second Amendment from the home — where its 2008 decision in District of Columbia v. Heller had located the amendment’s protection of the right to bear arms — out to the wider world.”
Recently, the U.S. supreme Court granted certiorari in order to consider the Second Amendment issues in New York State Rifle and Pistol Association, Inc., et al. v. The City of New York, et al. At issue is a New York City regulation that prohibited most licensed handgun owners from taking their guns out of the city, even to a second home or to a shooting range for target practice.
Greenhouse suggests that this New York case is potentially the vehicle that Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh may have been waiting for — a chance to turn the ambiguous and quite narrow Heller decision into a broader constitutional charter for gun rights.
On July 22, New York City filed with the Supreme Court a “suggestion of mootness” and a request to suspend the briefing schedule. The city explained that two interlocking developments had occurred: In the session just ended, the State Legislature had amended the handgun licensing statute to require localities to allow licensed handgun owners to transport their guns to second homes and target ranges outside the city; and the New York City Police Department, which supervises gun licensing, had amended the prior regulation to permit the same activities. The city argued [https://www.supremecourt.gov/DocketPDF/18/18-280/108869/20190722151524926_18-280%20Suggestion%20of%20Mootness.pdf] that since the lawsuit had challenged only the second-home and shooting-range limitations, the plaintiffs now had everything they had asked for and there was nothing left for the Supreme Court to decide.
Greenhouse writes that “The Rifle & Pistol Association has fought back vigorously against mootness, arguing in a 33-page brief [https://www.supremecourt.gov/DocketPDF/18/18-280/110978/20190801121009552_18-280%20NYSRPA%20suggestion%20of%20mootness%20opposition.pdf] that ‘the city has not even tried to hide the fact that its paramount goal is to evade the prospect of a binding unfavorable decision from this court.’” Further, “the new regulation falls ‘far short’ of satisfying the plaintiffs and is ‘plainly designed to provide the bare minimum of what the city believes will suffice to moot this case, and not an inch more.’ . . . ‘The city manifestly has not altered its view that any possession of a handgun outside the home, even when the handgun is unloaded and stored away, is a privilege that the city can micromanage, rather than an individual right.’”
The justices have put the mootness dispute on the agenda for discussion at their first closed-door conference of the new term, on Oct. 1.
Linda Greenhouse’s editorial bottom line is this: if the court rules the way the plaintiffs’ lawyers are urging in the New York case and “adopts ‘strict scrutiny’ as the only valid judicial approach to assessing the constitutionality of any limitation, then the political branches will effectively lose the ability to enact what the emerging political consensus deems to be common-sense regulations.”
With regard to the underlying 2008 decision in District of Columbia v. Heller, attorney Anthony Picadio explained in his article discussing the case that while a 5 to 4 majority of the Supreme Court, in the opinion written by Justice Scalia, declared DC’s firearm regulatory scheme unconstitutional, it did so only to the extent that it prohibited possession of an operable handgun in a home for self-defense purposes.
Anthony Picadio’s article criticizes the Heller decision. He 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 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
Mr. Picadio will speak at a luncheon program at the DC Bar on October 15.
Linda Greenhouse’s August 15, 2019 article on the Second Amendment is at https://www.nytimes.com/2019/08/15/opinion/guns-supreme-court.html
The editor, Don Allen Resnikoff, takes full responsibility for the content of this article and any opinions that may be implied.
N.J. Division of Consumer Affairs Brings First Action to Enforce State’s Fantasy Sports Law
Minneapolis-Based “SportsHub” to Pay $30,000 for Unlawfully Operating a Fantasy Sports Site in New Jersey
Consent Order is here: https://www.nj.gov/oag/newsreleases19/SportsHub-Games-Network-Inc_Consent-Order.pdf
NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs (“the Division”) today announced that SportsHub Games Network, Inc. (“SportsHub”) has agreed to pay a $30,000 civil penalty for unlawfully operating an online fantasy sports site in New Jersey without a permit. The Minneapolis-based games provider also agreed to change its business practices to resolve allegations that its conduct violated the state’s consumer protection laws by, among other things, failing to clearly and conspicuously disclose that SportsHub collects personal information from consumers’ social media accounts and that it shares certain personal information with third parties.
SportsHub, which operates “Fanball,” “CDM Sports,” “National Fantasy Football Championships,” “Whatif Sports,” “Leaguesafe,” and other fantasy sports games, is the first operator to be penalized under New Jersey’s Fantasy Sports Act (“FSA”), a 2017 statute legalizing and regulating internet fantasy gaming activities in the state.
“New Jersey’s fantasy sports law offers fans an opportunity to fully immerse themselves in the sports they love, while ensuring a safe and enjoyable experience for all who participate,” said Attorney General Grewal. “As the settlement announced today illustrates, New Jersey enforces the laws in place to ensure transparency and protect consumers from hidden threats to their online privacy.”
https://www.nj.gov/oag/newsreleases19/pr20190827a.html
Minneapolis-Based “SportsHub” to Pay $30,000 for Unlawfully Operating a Fantasy Sports Site in New Jersey
Consent Order is here: https://www.nj.gov/oag/newsreleases19/SportsHub-Games-Network-Inc_Consent-Order.pdf
NEWARK – Attorney General Gurbir S. Grewal and the Division of Consumer Affairs (“the Division”) today announced that SportsHub Games Network, Inc. (“SportsHub”) has agreed to pay a $30,000 civil penalty for unlawfully operating an online fantasy sports site in New Jersey without a permit. The Minneapolis-based games provider also agreed to change its business practices to resolve allegations that its conduct violated the state’s consumer protection laws by, among other things, failing to clearly and conspicuously disclose that SportsHub collects personal information from consumers’ social media accounts and that it shares certain personal information with third parties.
SportsHub, which operates “Fanball,” “CDM Sports,” “National Fantasy Football Championships,” “Whatif Sports,” “Leaguesafe,” and other fantasy sports games, is the first operator to be penalized under New Jersey’s Fantasy Sports Act (“FSA”), a 2017 statute legalizing and regulating internet fantasy gaming activities in the state.
“New Jersey’s fantasy sports law offers fans an opportunity to fully immerse themselves in the sports they love, while ensuring a safe and enjoyable experience for all who participate,” said Attorney General Grewal. “As the settlement announced today illustrates, New Jersey enforces the laws in place to ensure transparency and protect consumers from hidden threats to their online privacy.”
https://www.nj.gov/oag/newsreleases19/pr20190827a.html
NYT: Sacklers vs. States: Settlement Talks Stumble Over Foreign Business
The Sackler family is willing to give up Purdue Pharma to settle all claims related to the opioid crisis, but is resisting a quick sale of its overseas drug company.
By Matthew Goldstein, Danny Hakim and Jan Hoffman
Purdue Pharma’s negotiations to settle thousands of lawsuits over the company’s role in the opioids crisis have turned into a standoff between members of the Sackler family, who own the company, and a group of state attorneys general over how much the family should pay and whether it can continue selling drugs abroad.
The Sacklers are deep in negotiations that, if finalized, would force them to give up ownership of Purdue, the company widely blamed for the onset of the opioid epidemic with its aggressive marketing of the prescription painkiller OxyContin. But they want to keep selling OxyContin and other drugs abroad for as many as seven more years, through another company they own, Mundipharma, based in Cambridge, England.
Some attorneys general, particularly in wealthier states like New York, Massachusetts and Connecticut, are resisting that and other issues related to the foreign business.
“Connecticut demands that the Sacklers and Purdue management be forced completely out of the opioid business, domestically and internationally, and that they never be allowed to return,” said Attorney General William Tong of Connecticut.
https://www.nytimes.com/2019/08/30/health/purdue-sacklers-opioids-settlement.html
The Sackler family is willing to give up Purdue Pharma to settle all claims related to the opioid crisis, but is resisting a quick sale of its overseas drug company.
By Matthew Goldstein, Danny Hakim and Jan Hoffman
Purdue Pharma’s negotiations to settle thousands of lawsuits over the company’s role in the opioids crisis have turned into a standoff between members of the Sackler family, who own the company, and a group of state attorneys general over how much the family should pay and whether it can continue selling drugs abroad.
The Sacklers are deep in negotiations that, if finalized, would force them to give up ownership of Purdue, the company widely blamed for the onset of the opioid epidemic with its aggressive marketing of the prescription painkiller OxyContin. But they want to keep selling OxyContin and other drugs abroad for as many as seven more years, through another company they own, Mundipharma, based in Cambridge, England.
Some attorneys general, particularly in wealthier states like New York, Massachusetts and Connecticut, are resisting that and other issues related to the foreign business.
“Connecticut demands that the Sacklers and Purdue management be forced completely out of the opioid business, domestically and internationally, and that they never be allowed to return,” said Attorney General William Tong of Connecticut.
https://www.nytimes.com/2019/08/30/health/purdue-sacklers-opioids-settlement.html
NYT:Streaming Video Will Soon Look Like the Bad Old Days of TV
As media monoliths bundle their offerings, consumers will once again have to pay for a bunch of shows they don’t want.
By Matthew Ball
https://www.nytimes.com/2019/08/22/opinion/netflix-hulu-cable.html
As media monoliths bundle their offerings, consumers will once again have to pay for a bunch of shows they don’t want.
By Matthew Ball
https://www.nytimes.com/2019/08/22/opinion/netflix-hulu-cable.html
California Authorities Investigating Amazon for Shadow Liquor Store as Prime Now Expands Alcohol Delivery
Last week, a wine industry publication and search engine, Wine-Searcher, claimed that Amazon violated California law to expand its alcohol delivery business.
In order to deliver alcohol in California, retailers need to have a brick-and-mortar store that’s open to the public for at least half as long as their delivery hours. But when Wine-Searcher visited one of Amazon’s alleged liquor stores in Los Angeles they found a warehouse, but no store.
Now the California Department of Alcoholic Beverage Control is investigatingwhether or not Amazon’s LA location meets state qualifications for a liquor store. Amazon has licenses for at least seven other warehouse “liquor stores"in California as it expands alcohol delivery through Prime Now.
Regardless of whether Amazon broke the law, it is apparent that they intend to focus on delivering alcohol, not running liquor stores in business parks. This gives Amazon a competitive advantage over other California alcohol retailers who must pay for staff, stocking, and real estate. The move threatens store owners as well as craft producers, and raises public health concerns about sales to minors.
Amazon offers two-hour delivery of beer, wine, and sometimes spirits in twelve cities through its Prime Now service. Depending on local law, Amazon customers may order booze from Whole Foods, a third-party alcohol retailer, or Amazon’s Prime Now warehouses. All three options are available in Los Angeles.
See http://www.foodandpower.net/2019/08/29/california-beverage-control-investigating-amazon-for-shadow-liquor-store-as-prime-now-expands-alcohol-delivery/
Last week, a wine industry publication and search engine, Wine-Searcher, claimed that Amazon violated California law to expand its alcohol delivery business.
In order to deliver alcohol in California, retailers need to have a brick-and-mortar store that’s open to the public for at least half as long as their delivery hours. But when Wine-Searcher visited one of Amazon’s alleged liquor stores in Los Angeles they found a warehouse, but no store.
Now the California Department of Alcoholic Beverage Control is investigatingwhether or not Amazon’s LA location meets state qualifications for a liquor store. Amazon has licenses for at least seven other warehouse “liquor stores"in California as it expands alcohol delivery through Prime Now.
Regardless of whether Amazon broke the law, it is apparent that they intend to focus on delivering alcohol, not running liquor stores in business parks. This gives Amazon a competitive advantage over other California alcohol retailers who must pay for staff, stocking, and real estate. The move threatens store owners as well as craft producers, and raises public health concerns about sales to minors.
Amazon offers two-hour delivery of beer, wine, and sometimes spirits in twelve cities through its Prime Now service. Depending on local law, Amazon customers may order booze from Whole Foods, a third-party alcohol retailer, or Amazon’s Prime Now warehouses. All three options are available in Los Angeles.
See http://www.foodandpower.net/2019/08/29/california-beverage-control-investigating-amazon-for-shadow-liquor-store-as-prime-now-expands-alcohol-delivery/
Pa. AG Can Bring Parallel Navient Claims, CFPB Tells 3rd Circ.
The Consumer Financial Protection Bureau has told the Third Circuit in an amicus brief that its governing statute allows for parallel enforcement by the agency and state attorneys general.
From DMN: U.S. Department of Justice Urged by Senators to Investigate Live Nation, Ticketmaster
Two Democratic U.S. Senators are asking the Department of Justice’s (DOJ) antitrust division to investigate online ticket markets, which they insist “are not working for American consumers.”
The story continues here.https://www.digitalmusicnews.com/2019/08/28/senate-department-of-justice-live-nation-ticketmaster/
Two Democratic U.S. Senators are asking the Department of Justice’s (DOJ) antitrust division to investigate online ticket markets, which they insist “are not working for American consumers.”
The story continues here.https://www.digitalmusicnews.com/2019/08/28/senate-department-of-justice-live-nation-ticketmaster/
Do mortgage lenders ever engage in bait-and-switch? Here is a story from the past --2014-- that suggests that the answer for some lenders is "yes."
-Amerisave to pay $19 million for alleged bait-and-switch mortgage scheme
By James R. Hood
08/12/2014 | ConsumerAffairs | Finance News
Amerisave.comAmerisave Mortgage Corp. will pay $14.8 million in refunds to consumers taken in by what the Consumer Financial Protection Bureau (CFPB) says was a deceptive bait-and-switch mortgage-lending scheme that harmed tens of thousands of consumers. It will also pay a $4.5 million penalty.
The Bureau will administer the refunds and the amount each eligible consumer will receive will vary based on how much that consumer paid Amerisave. A third-party settlement administrator will be contacting eligible consumers once a restitution process is established.
“Amerisave lured consumers in with deceptive advertising, trapped them with costly upfront fees, and then illegally overcharged them for services from an undisclosed affiliate,” said CFPB Director Richard Cordray. “By the time consumers could have discovered the advertised low rates were too good to be true, they had already committed to pay hundreds of dollars to Amerisave."
Patrick Markert, identified as the owner of both Amerisave and its affiliated Novo Appraisal Management Co., will pay a $1.5 million penalty.
The Bureau found that Amerisave lured consumers by advertising misleading interest rates, locked them in with costly up-front fees, failed to honor its advertised rates, and then illegally overcharged them for affiliated “third-party” services.
Amerisave, which operates in all 50 states, advertised its interest rates and terms heavily over the last several years, using banner ads and searchable rate tables in its Internet ads. But the Bureau charged that Amerisave posted inaccurate rates on these banner ads and rate tables.
When consumers were directed to Amerisave’s own website, Amerisave gave consumers quotes based on an 800 FICO score, even where consumers had previously entered a FICO score below 800 on the third-party website that led them to Amerisave. This resulted in Amerisave offering many consumers misleadingly low quotes.
Amerisave required consumers to order and give payment authorization information for an appraisal before it would provide a Good Faith Estimate (GFE) for the mortgage, and did not tell consumers until later that the appraisal orders were being referred to its own affiliated company, Novo.
At closing, Amerisave also charged consumers for “appraisal validation” reports, without disclosing that the service was provided by its affiliate Novo, which had marked up the fees by as much as 900%.
Penalties outlinedThe CFPB order requires Amerisave, Novo, and Markert to take the following actions:
· Pay $14.8 million in consumer refunds: Amerisave and Novo must provide $14.8 million in refunds to the consumers harmed by the false advertising, impermissible fees, and illegal referrals during the period covered by the order.
· Stop advertising unavailable mortgage rates: The order requires Amerisave to ensure that it will not engage in deceptive mortgage advertising practices. Those practices include, but are not limited to, advertising unavailable rates on third-party searchable rate tables, advertising deceptive rates in its banner ads, and giving consumers mortgage quotes based on an undisclosed 800 credit score.
· No longer charge illegal fees: Amerisave will not charge fees or make referrals to its affiliates before giving consumers the proper disclosure forms.
· Pay $6 million in fines: Amerisave will make a $4.5 million penalty payment, and Patrick Markert will make an additional $1.5 million penalty payment, to the Bureau’s Civil Penalty Fund.
https://www.consumeraffairs.com/news/amerisave-to-pay-19-million-for-bait-and-switch-mortgage-scheme-081214.html
Editor's note: The story was prompted by information about current bad bait and switch experiences by potential mortgage borrowers.
-Amerisave to pay $19 million for alleged bait-and-switch mortgage scheme
By James R. Hood
08/12/2014 | ConsumerAffairs | Finance News
Amerisave.comAmerisave Mortgage Corp. will pay $14.8 million in refunds to consumers taken in by what the Consumer Financial Protection Bureau (CFPB) says was a deceptive bait-and-switch mortgage-lending scheme that harmed tens of thousands of consumers. It will also pay a $4.5 million penalty.
The Bureau will administer the refunds and the amount each eligible consumer will receive will vary based on how much that consumer paid Amerisave. A third-party settlement administrator will be contacting eligible consumers once a restitution process is established.
“Amerisave lured consumers in with deceptive advertising, trapped them with costly upfront fees, and then illegally overcharged them for services from an undisclosed affiliate,” said CFPB Director Richard Cordray. “By the time consumers could have discovered the advertised low rates were too good to be true, they had already committed to pay hundreds of dollars to Amerisave."
Patrick Markert, identified as the owner of both Amerisave and its affiliated Novo Appraisal Management Co., will pay a $1.5 million penalty.
The Bureau found that Amerisave lured consumers by advertising misleading interest rates, locked them in with costly up-front fees, failed to honor its advertised rates, and then illegally overcharged them for affiliated “third-party” services.
Amerisave, which operates in all 50 states, advertised its interest rates and terms heavily over the last several years, using banner ads and searchable rate tables in its Internet ads. But the Bureau charged that Amerisave posted inaccurate rates on these banner ads and rate tables.
When consumers were directed to Amerisave’s own website, Amerisave gave consumers quotes based on an 800 FICO score, even where consumers had previously entered a FICO score below 800 on the third-party website that led them to Amerisave. This resulted in Amerisave offering many consumers misleadingly low quotes.
Amerisave required consumers to order and give payment authorization information for an appraisal before it would provide a Good Faith Estimate (GFE) for the mortgage, and did not tell consumers until later that the appraisal orders were being referred to its own affiliated company, Novo.
At closing, Amerisave also charged consumers for “appraisal validation” reports, without disclosing that the service was provided by its affiliate Novo, which had marked up the fees by as much as 900%.
Penalties outlinedThe CFPB order requires Amerisave, Novo, and Markert to take the following actions:
· Pay $14.8 million in consumer refunds: Amerisave and Novo must provide $14.8 million in refunds to the consumers harmed by the false advertising, impermissible fees, and illegal referrals during the period covered by the order.
· Stop advertising unavailable mortgage rates: The order requires Amerisave to ensure that it will not engage in deceptive mortgage advertising practices. Those practices include, but are not limited to, advertising unavailable rates on third-party searchable rate tables, advertising deceptive rates in its banner ads, and giving consumers mortgage quotes based on an undisclosed 800 credit score.
· No longer charge illegal fees: Amerisave will not charge fees or make referrals to its affiliates before giving consumers the proper disclosure forms.
· Pay $6 million in fines: Amerisave will make a $4.5 million penalty payment, and Patrick Markert will make an additional $1.5 million penalty payment, to the Bureau’s Civil Penalty Fund.
https://www.consumeraffairs.com/news/amerisave-to-pay-19-million-for-bait-and-switch-mortgage-scheme-081214.html
Editor's note: The story was prompted by information about current bad bait and switch experiences by potential mortgage borrowers.
Amazon responds to investigation revealing thousands of banned and unsafe items on its marketplace
BY NAT LEVY on August 23, 2019 at 10:17 am
Amazon’s marketplace for third-party sellers has become a huge part of its business, making up nearly 60 percent of gross merchandise sales last year. However, a new investigation by The Wall Street Journal shows that thousands of unsafe products have made their way onto the marketplace, the latest example of a tech giant struggling to police the platform it created.
WSJ found 4,152 items for sale on Amazon that had been banned or declared unsafe by federal regulators or were deceptively labeled. That included more than 2,000 listings for toys and medication that did not have warnings about health risks for children. Nearly half of those items were listed as shipping from Amazon warehouses.
After WSJ brought its findings to Amazon, 57 percent of the listings in question had their wording altered or were removed. Amazon told WSJ it reviewed and addressed the listings, and that company policies require all products to comply with laws and regulations.
Underscoring the challenges Amazon faces in policing the platform, more than 100 items that Amazon had previously removed popped up in new listings, WSJ found. Amazon then removed the items again and told WSJ it was refining its tools to make sure they wouldn’t re-appear.
The report was impactful enough that Amazon published a blog post in response, detailing the steps it takes to make sure products on its third-party marketplace are safe. The company spent more than $400 million in 2018 to protect its stores and customers and “ensure products offered are safe, compliant, and authentic.”
Amazon has a “dedicated global team of compliance specialists” that reviews product safety information. Amazon in 2018 “blocked more than three billion suspect listings for various forms of abuse, including non-compliance, before they were published to our store.”
Amazon uses automated tools to scan the items on its website for changes. And the company has systems in place to quickly look into any potential concerns.
“For example, if a customer reports a concern with a product, a customer service associate can instantly trigger an investigation,” according to the blog post. “Additionally, because of our direct relationships with customers, we are able to trace and directly notify customers who purchased a particular product online and alert them to a potential safety issue — our systems are far more effective than other online and offline retailers and customers can feel confident they’ll have the information they need.”
WSJ’s investigation comes after Amazon lauded 150 new tools it has built so far this year to help sellers grow their businesses on the third-party marketplace. Amazon said it is investing $15 billion this year to “empower” sellers on its platform.
Like many of its fellow tech giants, Amazon has drawn increased scrutiny from regulators recently, and the third-party marketplace is at the center of those inquiries. However, regulators are looking not at safety issues but potential anti-trust concerns on the marketplace.
Amazon’s issues are the latest indication of the industry-wide struggle among tech giants to control their massive platforms. Facebook and Twitter are at the center of yet another political disinformation campaign. Google’s YouTube is working to reverse a trend of hate speech and extremism populating its platform. And Microsoft’s LinkedIn is in a constant battle to catch and eliminate fake accounts.
From:https://www.geekwire.com/2019/amazon-responds-investigation-revealing-thousands-banned-unsafe-items-marketplace/
New York regulators have reached a settlement worth up to $2.7 million with a hedge fund that provided financing and assistance to a large rent-to-own home firm accused of engaging in predatory business practices.
The settlement announced Tuesday requires the hedge fund, Atalaya Capital Management, to provide at least $20,000 in restitution to the more than 100 state residents who thought they were entering into deals to ultimately buy homes from Vision Property Management.
Atalaya, a $5 billion hedge fund based in New York, also agreed to pay a $250,000 civil penalty under the settlement, reached with the state attorney general and the Department of Financial Services. The deal came less than a month after the agencies filed a lawsuit against Vision, [https://www.nytimes.com/2019/08/01/business/rent-to-own-vision-lawsuit.html?module=inline] saying the company had operated an “illegal, unlicensed mortgage lending” business by using deceptive rent-to-own agreements to sell often-rundown homes.
The consent decree is here:
https://www.dfs.ny.gov/system/files/documents/2019/08/ea190827_atalaya.pdf
Here is an excerpt from the decree:
5. As d_iscussed below, Atalaya provided financing to subsidiaries of Vision, a South Carolina company that buys distressed residential real properties at a discount and sells many of them at a substantial markup to lower income, working class consumers. The NY AG and the Department filed an action against Vision and its chief executive_ officer on August 1, 2019 in the Southern District ofNew York. The People of the State of New York, et al. v. Vision Property Management, LLC, et al., 19-cv-7191-JSR (Aug. 1, 2019). Vision's Seller Financing Business Model
6. The properties purchased and resold by Vision generally have been vacant for a long time and often require significant repairs to make them habitable and compliant with local building codes. The purchase price that Vision pays to acquire these properties, which are purchased in bulk from government entities or from private parties that have been unable to sell them via traditional channels, reflects that condition. Vision is not generally in the business of repairing or rehabilitating these properties. Rather, it typically passed the cost to repair the properties· to the consumer.
7. Vision targets consumers who want to own a home but, due to bad credit or other issues, could not qualify for a "traditional loan." Vision claims that it offers a "unique" program that can be their path to the "American dream of homeownership." Vision characterizes itself as a consumer-friendly alternative to larger irresponsible financial institutions.
8. Vision's "unique" business model is structured as seller financing. Seller financing simply means that the property seller, rather than a bank, provides the funding to finance a property purchase. Instead of advancing money to the purchaser as a typical mortgage lender would, the seller extends credit by deferring payment of the full purchase price in exchange for the purchaser making installment payments over a specified period of time and at a set interest rate until the loan is repaid. 3
9. Vision originally used a Contract for Deed ("CFD") agreement to carry out its seller financing transactions. A typical CFD agreement included a purchase agreement and a promissory note that obligated the consumer to pay principal and interest, at a rate between 7% and 10%, typically over a twenty or thirty-year period. The right to occupy, and the obligation to maintain and repair the property, transferred to the consumer upon the execution of the CFD agreement, but Vision retained record ownership until the consumer paid off the balance of the purchase price. Thus, instead of transferring title and filing a mortgage against the property, Vision retained title ownership as security on the purchaser's obligation to repay the loan.
10. While Vision's CFD agreements facialiy charged an interest rate between 7% and 10%, the agreements included financing charges that could raise the rate as high as 25% in certain circumstances where interest payments were capitalized.
The settlement announced Tuesday requires the hedge fund, Atalaya Capital Management, to provide at least $20,000 in restitution to the more than 100 state residents who thought they were entering into deals to ultimately buy homes from Vision Property Management.
Atalaya, a $5 billion hedge fund based in New York, also agreed to pay a $250,000 civil penalty under the settlement, reached with the state attorney general and the Department of Financial Services. The deal came less than a month after the agencies filed a lawsuit against Vision, [https://www.nytimes.com/2019/08/01/business/rent-to-own-vision-lawsuit.html?module=inline] saying the company had operated an “illegal, unlicensed mortgage lending” business by using deceptive rent-to-own agreements to sell often-rundown homes.
The consent decree is here:
https://www.dfs.ny.gov/system/files/documents/2019/08/ea190827_atalaya.pdf
Here is an excerpt from the decree:
5. As d_iscussed below, Atalaya provided financing to subsidiaries of Vision, a South Carolina company that buys distressed residential real properties at a discount and sells many of them at a substantial markup to lower income, working class consumers. The NY AG and the Department filed an action against Vision and its chief executive_ officer on August 1, 2019 in the Southern District ofNew York. The People of the State of New York, et al. v. Vision Property Management, LLC, et al., 19-cv-7191-JSR (Aug. 1, 2019). Vision's Seller Financing Business Model
6. The properties purchased and resold by Vision generally have been vacant for a long time and often require significant repairs to make them habitable and compliant with local building codes. The purchase price that Vision pays to acquire these properties, which are purchased in bulk from government entities or from private parties that have been unable to sell them via traditional channels, reflects that condition. Vision is not generally in the business of repairing or rehabilitating these properties. Rather, it typically passed the cost to repair the properties· to the consumer.
7. Vision targets consumers who want to own a home but, due to bad credit or other issues, could not qualify for a "traditional loan." Vision claims that it offers a "unique" program that can be their path to the "American dream of homeownership." Vision characterizes itself as a consumer-friendly alternative to larger irresponsible financial institutions.
8. Vision's "unique" business model is structured as seller financing. Seller financing simply means that the property seller, rather than a bank, provides the funding to finance a property purchase. Instead of advancing money to the purchaser as a typical mortgage lender would, the seller extends credit by deferring payment of the full purchase price in exchange for the purchaser making installment payments over a specified period of time and at a set interest rate until the loan is repaid. 3
9. Vision originally used a Contract for Deed ("CFD") agreement to carry out its seller financing transactions. A typical CFD agreement included a purchase agreement and a promissory note that obligated the consumer to pay principal and interest, at a rate between 7% and 10%, typically over a twenty or thirty-year period. The right to occupy, and the obligation to maintain and repair the property, transferred to the consumer upon the execution of the CFD agreement, but Vision retained record ownership until the consumer paid off the balance of the purchase price. Thus, instead of transferring title and filing a mortgage against the property, Vision retained title ownership as security on the purchaser's obligation to repay the loan.
10. While Vision's CFD agreements facialiy charged an interest rate between 7% and 10%, the agreements included financing charges that could raise the rate as high as 25% in certain circumstances where interest payments were capitalized.
Not everyone loves the public nuisance theory adopted by the Court in the Oklahoma AG's opioid case against Johnson and Johnson
Following is an excerpt from a dissenting view published at https://legalnewsline.com/stories/512627243-it-keeps-changing-oklahoma-s-opioid-strategy-is-a-700-year-old-english-law-that-used-to-regulate-wandering-sheep:
A prominent scholarly examination of the evolution of nuisance law suggests Ausness and the North Dakota judge are right – or were, depending on how nuisance law might change in the wake of the opioid litigation. In “Is Public Nuisance a Tort?” Professor Thomas W. Merrill of Columbia Law School wrote that efforts by environmentalists to retool nuisance law as a weapon against pollution and other social problems in the early 1970s had largely failed -- until state attorneys general rediscovered nuisance in the late 1990s with the help of private lawyers. [See https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1829493]
Most of the tobacco lawsuits in the 1990s claimed the marketing of cigarettes was a public nuisance, for example, although the only court to decide the matter rejected that theory in a 1997 decision. A federal judge in New York rejected similar claims that the gasoline additive MTBE was a public nuisance, but in both cases lawyers negotiated lucrative settlements that showered them with fees.
Gun lawsuits may have been headed the same way until Congress passed a statute eliminating most liability for gun manufacturers over crimes committed with their products. Federal courts in New York and California also rejected lawsuits accusing gasoline manufacturers of causing the “public nuisance” of global warming.
The biggest success for public nuisance advocates so far was in California, where a state appeals court in California upheld a judgment requiring several manufacturers to “abate” lead paint in thousands of aging buildings because they advertised the product before World War II. The California and U.S. supreme courts refused to hear further appeals of that decision.
The main reason these cases have gained any traction may be a subtle change in the definition of “public nuisance” in the Restatement (Second) of Torts in 1972. Restatements are guidebooks to the common law for judges and attorneys published by the American Law Institute. After several fierce debates, ALI members supported broadening public nuisance law to address environmental damage, Merrill wrote, even though there was no case law to support the change.
- - - -
Also, See the WSJ comment at https://www.wsj.com/articles/an-oklahoma-opioid-stickup-11566861973
The WSJ points out that the public nuisance theories have been pressed by outside counsel engaged by states and paid on a contingent fee basis.
Editor's Note: The views of the Wall Street Journal editorial writers, Legal News Line and Professor Merrill are presented in the interests of presenting an array of views for discussion, and are not intended to represent views of DCCRC or the editor. DAR
D.C. AG sues Marriott for hidden "drip" pricing
From The D.C. Complaint:
COMPLAINT FOR VIOLATIONS OF THE CONSUMER PROTECTION PROCEDURES ACT
The District of Columbia (“District”), by the Office of the Attorney General, brings this action pursuant to D.C. Code § 28-3909 for injunctive relief, consumer restitution, costs, and civil penalties against Defendant Marriott International, Inc. (“Marriott”) for violations of the District’s Consumer Protection Procedures Act (“CPPA”), D.C. Code § 28-3901, et seq. In support of its claims, the District states as follows:
INTRODUCTION
1. This is a straight-forward price deception case. For at least the last decade, Marriott has used an unlawful trade practice called “drip pricing” in advertising its hotel rooms whereby Marriott initially hides a portion of a hotel room’s daily rate from consumers. Marriott calls this hidden portion of the room rate a number of terms, including a “resort fee,” “amenity fee” and a “destination fee.”
The full Complaint: https://oag.dc.gov/sites/default/files/2019-07/Marriott-Complaint.pdf
From The D.C. Complaint:
COMPLAINT FOR VIOLATIONS OF THE CONSUMER PROTECTION PROCEDURES ACT
The District of Columbia (“District”), by the Office of the Attorney General, brings this action pursuant to D.C. Code § 28-3909 for injunctive relief, consumer restitution, costs, and civil penalties against Defendant Marriott International, Inc. (“Marriott”) for violations of the District’s Consumer Protection Procedures Act (“CPPA”), D.C. Code § 28-3901, et seq. In support of its claims, the District states as follows:
INTRODUCTION
1. This is a straight-forward price deception case. For at least the last decade, Marriott has used an unlawful trade practice called “drip pricing” in advertising its hotel rooms whereby Marriott initially hides a portion of a hotel room’s daily rate from consumers. Marriott calls this hidden portion of the room rate a number of terms, including a “resort fee,” “amenity fee” and a “destination fee.”
The full Complaint: https://oag.dc.gov/sites/default/files/2019-07/Marriott-Complaint.pdf
Large telecom companies and attorneys general from every state forming a new pact for combating robocalls
Under the agreement, the companies are promising to work to prevent illegal robocalls on their networks and to work with state law enforcement investigating the calls’ origins, according to the office of North Carolina Attorney General Josh Stein.
The participating companies include AT&T Inc., Verizon Communications Inc., T-Mobile US Inc., Sprint Corp., CenturyLink Inc.and seven other large carriers, Mr. Stein’s office said.
Among the companies’ promises: to provide customers with free call-blocking technology, investigate and trace illegal calls and confirm the identity of their commercial customers as part of cooperation with law enforcement.
https://www.bloomberg.com/news/articles/2019-08-22/all-50-states-are-preparing-to-tackle-robocalls-in-telecom-deal?srnd=premium
Under the agreement, the companies are promising to work to prevent illegal robocalls on their networks and to work with state law enforcement investigating the calls’ origins, according to the office of North Carolina Attorney General Josh Stein.
The participating companies include AT&T Inc., Verizon Communications Inc., T-Mobile US Inc., Sprint Corp., CenturyLink Inc.and seven other large carriers, Mr. Stein’s office said.
Among the companies’ promises: to provide customers with free call-blocking technology, investigate and trace illegal calls and confirm the identity of their commercial customers as part of cooperation with law enforcement.
https://www.bloomberg.com/news/articles/2019-08-22/all-50-states-are-preparing-to-tackle-robocalls-in-telecom-deal?srnd=premium
Cnet: State attorneys general will reportedly kick off antitrust investigation into tech giants
A group of states will add its voices to the DOJ and FTC reviews into big tech companies, a report says.
BY
AUGUST 19, 2019 4:05 PM PDT
Another antitrust investigation will be kicked off against US tech giants, according to a report, this time coming from a group of state attorneys general. Citing sources, The Wall Street Journal reported Monday the probe could be launched in September and could look into whether companies like Google, Facebook and Amazon use their power to stifle competition in the market.
It follows the Department of Justice last month announcing its own antitrust review of how online platforms achieved market power and whether they are using that power to reduce competition and stifle innovation. And that investigation followed the Federal Trade Commission in February forming a task force to monitor competition among tech platforms.
"A dozen" state attorneys general met with officials from the Department of Justice in July to discuss the investigation, the report said.
From:
https://www.cnet.com/news/state-attorneys-general-will-reportedly-kick-off-antitrust-investigation-into-tech-giants/
A group of states will add its voices to the DOJ and FTC reviews into big tech companies, a report says.
BY
AUGUST 19, 2019 4:05 PM PDT
Another antitrust investigation will be kicked off against US tech giants, according to a report, this time coming from a group of state attorneys general. Citing sources, The Wall Street Journal reported Monday the probe could be launched in September and could look into whether companies like Google, Facebook and Amazon use their power to stifle competition in the market.
It follows the Department of Justice last month announcing its own antitrust review of how online platforms achieved market power and whether they are using that power to reduce competition and stifle innovation. And that investigation followed the Federal Trade Commission in February forming a task force to monitor competition among tech platforms.
"A dozen" state attorneys general met with officials from the Department of Justice in July to discuss the investigation, the report said.
From:
https://www.cnet.com/news/state-attorneys-general-will-reportedly-kick-off-antitrust-investigation-into-tech-giants/
From BizJournal: New restrictions on short-term rentals in the District through home-sharing services like Airbnb could finally go into effect in the coming months, as officials gear up to start enforcing a law passed by the D.C. Council last year.
The Zoning Commission has scheduled a hearing for Oct. 17 on proposed amendments to the city’s zoning rules to allow for home-sharing across many residential areas, according to online records. Lawmakers have been anxiously awaiting action from the commission on the matter, despite passing new short-term rental rules last November that prompted a clash with Mayor Muriel Bowser.
Most home-sharing is technically illegal in the city at the moment, though District inspectors have largely declined to police it too closely. The new law would officially legalize the practice, though it would be subject to a series of restrictions favored largely by hotel executives and workers designed to curb short-term rentals. For instance, property owners will be barred from renting out second homes, or renting spare rooms in their primary residence for more than 90 days a year.
Bowser fiercely opposed the council’s changes and warned that the law may be unconstitutional, arguing that home-sharing has thrived without the council’s interference. Nevertheless, the legislation passed unanimously.
The new rules are set to officially take effect on Oct. 1, but Council Chairman Phil Mendelson has repeatedly warned that the Zoning Commission will need to take action before the law can actually work, in practice. Namely, officials need to conform the District’s zoning code to make short-term rentals a permitted “accessory use” for many properties in the city.
The commission is set to consider a series of changes this fall, adding a definition of short-term rentals to the regulations and stipulating that they’ll be acceptable uses in a variety of areas zoned residential or mixed-use buildings.
Crucially, the proposed zoning changes come courtesy of Mendelson’s office, not anyone in Bowser’s administration.
The chairman has pressed for months for the Office of Planning to submit a report to the commission, outlining potential text amendments to the code instead. But staff there still have not done so, spokespeople for both Mendelson and the planning office confirmed.
Mendelson accused Bowser this spring of deliberately slow-walking that report in an attempt to stall the implementation of the Airbnb-focused rules, though District planners insisted they simply needed more time. The chairman didn’t find that argument convincing, and worked through the budget to compel the planning office to release the report.
At first he threatened to withhold any permits for new government buildings — when that attracted some push back, he settled instead for adding a provisionto the budget barring the city from issuing permits for any construction at the RFK stadium site or at Franklin Park, a downtown space that’s planned for a full renovation.
But instead of waiting on a report from OP, Mendelson decided to submit his own proposed changes, and invited planners to comment on them. Planning office spokeswoman Mekdy Alemayehu says staff there is working on something now, but they haven’t settled yet on whether they’ll submit a report before the Oct. 17 hearing.
Airbnb previously estimated that roughly 6,500 people in the District made use of the service in 2017, generating a total of $82 million in income.
https://www.bizjournals.com/washington/news/2019/08/21/new-d-c-airbnb-restrictions-could-soon-take-effect.html?ana=e_ae_set3&j=89840341&t=Afternoon&mkt_tok=eyJpIjoiWVRBM05qWm1aV1poTXprNCIsInQiOiJUcHlPUFFVTDlqcDVlQThRYnhWSlUwUUcwbEdwU0xJZ0gyYUJMTEh0ajJ0UGptdHpSSUZzMlNjNk9KZVl0dHJyQVNkeXlOU293WjZ6Q2cxemFIV2lQQWhvQ2tNc1cwSTZocU96RGlkZWlGaVJJVUNsT0tua3dcLzhEbzlZc1JaSkpKbzAwYllsUkJRNjBLK05DWDZON0VRPT0ifQ%3D%3D
The Zoning Commission has scheduled a hearing for Oct. 17 on proposed amendments to the city’s zoning rules to allow for home-sharing across many residential areas, according to online records. Lawmakers have been anxiously awaiting action from the commission on the matter, despite passing new short-term rental rules last November that prompted a clash with Mayor Muriel Bowser.
Most home-sharing is technically illegal in the city at the moment, though District inspectors have largely declined to police it too closely. The new law would officially legalize the practice, though it would be subject to a series of restrictions favored largely by hotel executives and workers designed to curb short-term rentals. For instance, property owners will be barred from renting out second homes, or renting spare rooms in their primary residence for more than 90 days a year.
Bowser fiercely opposed the council’s changes and warned that the law may be unconstitutional, arguing that home-sharing has thrived without the council’s interference. Nevertheless, the legislation passed unanimously.
The new rules are set to officially take effect on Oct. 1, but Council Chairman Phil Mendelson has repeatedly warned that the Zoning Commission will need to take action before the law can actually work, in practice. Namely, officials need to conform the District’s zoning code to make short-term rentals a permitted “accessory use” for many properties in the city.
The commission is set to consider a series of changes this fall, adding a definition of short-term rentals to the regulations and stipulating that they’ll be acceptable uses in a variety of areas zoned residential or mixed-use buildings.
Crucially, the proposed zoning changes come courtesy of Mendelson’s office, not anyone in Bowser’s administration.
The chairman has pressed for months for the Office of Planning to submit a report to the commission, outlining potential text amendments to the code instead. But staff there still have not done so, spokespeople for both Mendelson and the planning office confirmed.
Mendelson accused Bowser this spring of deliberately slow-walking that report in an attempt to stall the implementation of the Airbnb-focused rules, though District planners insisted they simply needed more time. The chairman didn’t find that argument convincing, and worked through the budget to compel the planning office to release the report.
At first he threatened to withhold any permits for new government buildings — when that attracted some push back, he settled instead for adding a provisionto the budget barring the city from issuing permits for any construction at the RFK stadium site or at Franklin Park, a downtown space that’s planned for a full renovation.
But instead of waiting on a report from OP, Mendelson decided to submit his own proposed changes, and invited planners to comment on them. Planning office spokeswoman Mekdy Alemayehu says staff there is working on something now, but they haven’t settled yet on whether they’ll submit a report before the Oct. 17 hearing.
Airbnb previously estimated that roughly 6,500 people in the District made use of the service in 2017, generating a total of $82 million in income.
https://www.bizjournals.com/washington/news/2019/08/21/new-d-c-airbnb-restrictions-could-soon-take-effect.html?ana=e_ae_set3&j=89840341&t=Afternoon&mkt_tok=eyJpIjoiWVRBM05qWm1aV1poTXprNCIsInQiOiJUcHlPUFFVTDlqcDVlQThRYnhWSlUwUUcwbEdwU0xJZ0gyYUJMTEh0ajJ0UGptdHpSSUZzMlNjNk9KZVl0dHJyQVNkeXlOU293WjZ6Q2cxemFIV2lQQWhvQ2tNc1cwSTZocU96RGlkZWlGaVJJVUNsT0tua3dcLzhEbzlZc1JaSkpKbzAwYllsUkJRNjBLK05DWDZON0VRPT0ifQ%3D%3D
From DMN: Taylor Swift and the complicated world of recording artists' IP rights:
Taylor Swift is about to make life very complicated for music industry heavyweights Scooter Braun and Scott Borchetta.
Earlier today (August 22nd), Taylor Swift confirmed during an interview with Robin Roberts on “Good Morning America” that she intends to re-record her first 5 albums so that she can gain control over the songs’ master recordings.
This follows earlier comments on “CBS Sunday Morning” indicating that re-recordings were happening.
During the “Good Morning America” interview, Swift indicated that her contract allows her to re-record the 5 albums beginning in November of next year, and this is when she plans to start the process. She further indicated that she’s pumped up about the effort — and damn serious about doing it.
The re-recordings would likely flood platforms like Apple Music and Spotify, resulting in duplicate versions and lots of confusion. The move, if successful, is almost guaranteed to diminish the value of the original catalog, and could spark legal warfare over Swift’s right to re-record.
Swift went on to say that she will be re-recording the music because she feels that music artists should have the right to their own music, which is currently not the case with her previous records.
Those recordings now belong to music manager Scooter Braun, whose Ithaca Holdings bought the rights to Swift’s recordings this past summer through the purchase of Scott Borchetta’s Big Machine Label Group. Ithaca Holdings reportedly paid $300 million for the purchase, with a large percentage of that price predicated on the long-term value of Swift’s intellectual property.
https://www.digitalmusicnews.com/2019/08/22/taylor-swift-re-record-albums-1-5/
Taylor Swift is about to make life very complicated for music industry heavyweights Scooter Braun and Scott Borchetta.
Earlier today (August 22nd), Taylor Swift confirmed during an interview with Robin Roberts on “Good Morning America” that she intends to re-record her first 5 albums so that she can gain control over the songs’ master recordings.
This follows earlier comments on “CBS Sunday Morning” indicating that re-recordings were happening.
During the “Good Morning America” interview, Swift indicated that her contract allows her to re-record the 5 albums beginning in November of next year, and this is when she plans to start the process. She further indicated that she’s pumped up about the effort — and damn serious about doing it.
The re-recordings would likely flood platforms like Apple Music and Spotify, resulting in duplicate versions and lots of confusion. The move, if successful, is almost guaranteed to diminish the value of the original catalog, and could spark legal warfare over Swift’s right to re-record.
Swift went on to say that she will be re-recording the music because she feels that music artists should have the right to their own music, which is currently not the case with her previous records.
Those recordings now belong to music manager Scooter Braun, whose Ithaca Holdings bought the rights to Swift’s recordings this past summer through the purchase of Scott Borchetta’s Big Machine Label Group. Ithaca Holdings reportedly paid $300 million for the purchase, with a large percentage of that price predicated on the long-term value of Swift’s intellectual property.
https://www.digitalmusicnews.com/2019/08/22/taylor-swift-re-record-albums-1-5/
Himes and Perez:
Blowing The Whistle on the Lack Of Antitrust Whistleblower Protection
By CPI on August 12, 2019No Comment
By Jay L. Himes & Matthew J. Perez –
With the Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”) set to sunset in June 2020, legislators and relevant stakeholders will debate the law’s renewal and what changes, if any, should be made. A priority in the discussion should be whistleblower protection for individuals who disclose antitrust violations to the Department of Justice. Three protective features are appropriate. First, anti-retaliation protection for whistleblowers should be enacted. Second, a civil remedy for whistleblowers who suffer retaliation should be created. Finally, a bounty program to further incent whistleblowers to come forward should be adopted. The positive experiences of federal agencies with bounty programs confirm the adage: “money talks.”
Click here for the full article.https://www.competitionpolicyinternational.com/wp-content/uploads/2019/08/CPI-Himes-Perez.pdf
Blowing The Whistle on the Lack Of Antitrust Whistleblower Protection
By CPI on August 12, 2019No Comment
By Jay L. Himes & Matthew J. Perez –
With the Antitrust Criminal Penalty Enhancement and Reform Act (“ACPERA”) set to sunset in June 2020, legislators and relevant stakeholders will debate the law’s renewal and what changes, if any, should be made. A priority in the discussion should be whistleblower protection for individuals who disclose antitrust violations to the Department of Justice. Three protective features are appropriate. First, anti-retaliation protection for whistleblowers should be enacted. Second, a civil remedy for whistleblowers who suffer retaliation should be created. Finally, a bounty program to further incent whistleblowers to come forward should be adopted. The positive experiences of federal agencies with bounty programs confirm the adage: “money talks.”
Click here for the full article.https://www.competitionpolicyinternational.com/wp-content/uploads/2019/08/CPI-Himes-Perez.pdf
From DMN: Spotify, Apple, Pandora, Amazon, Google Warn Against Ditching the PRO Consent Decrees — “The Resulting Chaos Will Be Felt by Everyone in the Music Industry”
August 12, 2019
Should the Department of Justice really do away with the ASCAP and BMI Consent Decrees?Not according to major streaming services like Spotify, Apple Music, Pandora/Sirius, Amazon Music, and YouTube owner Google/Alphabet. As the U.S. Department of Justice deliberates over whether to trash the decades-old Decrees for the licensing of public performances, the streaming services — represented by DiMA — have issued a dire warning of a Decree-less future.
In a formal statement submitted to the DOJ ahead of the weekend — and subsequently emailed to Digital Music News — the message from DiMA was starkly clear. “We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button,” the blue-sky statement begins.
“This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.”
Removing the Decrees, especially without any secondary licensing plan in place, would lead to outright chaos. “Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos,” the statement continues.
“And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.”
rner Chappell Music Inks a Stone Temple Pilots Worldwide Publishing Deal
Also joining DiMA in the warning was the Radio Music Licensing Committee, or RMLC, which also has a strong interest in maintaining regulated, low-cost performance licensing.Ironically, even though streaming platforms are slowly cannibalizing traditional radio and their attempts to transition online, both camps have a very similar interest when it comes to keeping publishing licensing costs low.
Here’s the complete statement, shared by DiMA CEO Garrett Levin to DMN:“We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button. This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.
“The competitive protections provided by the decrees have been a cornerstone in the successful evolution of the U.S. music industry into the economic and cultural juggernaut it is today. Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos. And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.
“Given the paramount importance of maintaining these competitive protections, DiMA and the Radio Music License Committee today called on the Department of Justice to formally establish a blue-ribbon federal advisory committee to assist in the review process. Such a committee of industry stakeholders, including artist and consumer representatives, could fully study the decrees and provide helpful policy recommendations to DOJ and Congress. This is a critical step to guaranteeing a vibrant competitive music marketplace for today, tomorrow, and for generations to come.”
The groups also entered a more elaborated breakdown on the matter.That broadened statement delineates the arguments against the Decrees in greater depth, and includes a recommendation to create a Federal Advisory Committee instead of a ‘rushed comment period’. It also raises the reality that major publishers, as well as their ASCAP and BMI agents, will attempt to dramatically increase performance licensing fees if the
Consent Decrees are lifted
The Department of Justice first enacted the Consent Decrees in 1941 to prevent anti-competitive pricing in the performance licensing market. That licensing has been administered by two major groups, ASCAP and BMI, for which the Decrees remain in effect today.
The result of the Decrees was that any business in the United States could play virtually any song they pleased, so long as they paid relatively low-cost statutory fees. That also extended into traditional radio and online radio and even on-demand streaming formats, though publishers argue that the Decrees are out-of-date and run afoul of fair, open market practices.
Both ASCAP and BMI have been protesting the Consent Decrees for decades, and not one employee of either group has worked in an environment without the regulations in place. All of which makes it fairly exciting that the DOJ is seriously considering removing the statutes, though the removals would certainly introduce lots of uncertainties for all sides.
https://www.digitalmusicnews.com/2019/08/12/spotify-pandora-amazon-google-consent-decrees/
August 12, 2019
Should the Department of Justice really do away with the ASCAP and BMI Consent Decrees?Not according to major streaming services like Spotify, Apple Music, Pandora/Sirius, Amazon Music, and YouTube owner Google/Alphabet. As the U.S. Department of Justice deliberates over whether to trash the decades-old Decrees for the licensing of public performances, the streaming services — represented by DiMA — have issued a dire warning of a Decree-less future.
In a formal statement submitted to the DOJ ahead of the weekend — and subsequently emailed to Digital Music News — the message from DiMA was starkly clear. “We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button,” the blue-sky statement begins.
“This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.”
Removing the Decrees, especially without any secondary licensing plan in place, would lead to outright chaos. “Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos,” the statement continues.
“And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.”
rner Chappell Music Inks a Stone Temple Pilots Worldwide Publishing Deal
Also joining DiMA in the warning was the Radio Music Licensing Committee, or RMLC, which also has a strong interest in maintaining regulated, low-cost performance licensing.Ironically, even though streaming platforms are slowly cannibalizing traditional radio and their attempts to transition online, both camps have a very similar interest when it comes to keeping publishing licensing costs low.
Here’s the complete statement, shared by DiMA CEO Garrett Levin to DMN:“We are living in a golden age of music in which fans and creators alike are benefiting from a highly competitive marketplace that allows any piece of music to be enjoyed wherever and whenever we want, all at the push of the button. This benefits music fans, artists, songwriters and all of us in the music ecosystem, which is why it is no surprise that everyone from small businesses and restaurants to the streaming platforms DiMA represents have had a singular message for the Justice Department: the ASCAP and BMI consent decrees are vital to ensuring a robust and competitive music marketplace today and for the future.
“The competitive protections provided by the decrees have been a cornerstone in the successful evolution of the U.S. music industry into the economic and cultural juggernaut it is today. Terminating or choosing an arbitrary end date for these well-established decrees prior to a new legal framework being established would thrust the music marketplace into chaos. And make no mistake, the resulting chaos will be felt by everyone in the music industry, but most of all by consumers: prices will rise, competition will deteriorate and the quality and variety of music readily available to music fans will decline.
“Given the paramount importance of maintaining these competitive protections, DiMA and the Radio Music License Committee today called on the Department of Justice to formally establish a blue-ribbon federal advisory committee to assist in the review process. Such a committee of industry stakeholders, including artist and consumer representatives, could fully study the decrees and provide helpful policy recommendations to DOJ and Congress. This is a critical step to guaranteeing a vibrant competitive music marketplace for today, tomorrow, and for generations to come.”
The groups also entered a more elaborated breakdown on the matter.That broadened statement delineates the arguments against the Decrees in greater depth, and includes a recommendation to create a Federal Advisory Committee instead of a ‘rushed comment period’. It also raises the reality that major publishers, as well as their ASCAP and BMI agents, will attempt to dramatically increase performance licensing fees if the
Consent Decrees are lifted
The Department of Justice first enacted the Consent Decrees in 1941 to prevent anti-competitive pricing in the performance licensing market. That licensing has been administered by two major groups, ASCAP and BMI, for which the Decrees remain in effect today.
The result of the Decrees was that any business in the United States could play virtually any song they pleased, so long as they paid relatively low-cost statutory fees. That also extended into traditional radio and online radio and even on-demand streaming formats, though publishers argue that the Decrees are out-of-date and run afoul of fair, open market practices.
Both ASCAP and BMI have been protesting the Consent Decrees for decades, and not one employee of either group has worked in an environment without the regulations in place. All of which makes it fairly exciting that the DOJ is seriously considering removing the statutes, though the removals would certainly introduce lots of uncertainties for all sides.
https://www.digitalmusicnews.com/2019/08/12/spotify-pandora-amazon-google-consent-decrees/
The ITT fraudulent student loan settlement
See it at https://files.consumerfinance.gov/f/documents/cfpb_ITT_proposed-stipulated-judgement_2019-08.pdf
"6. The Bureau alleges that the acts and practices described in its Complaint resulted in students enrolling in CUSO Loans that in many cases they did not want, did not understand, or did not even realize they were getting. The Bureau alleges that ITT students experienced substantial injury as a result of the CUSO Loans. "
See it at https://files.consumerfinance.gov/f/documents/cfpb_ITT_proposed-stipulated-judgement_2019-08.pdf
"6. The Bureau alleges that the acts and practices described in its Complaint resulted in students enrolling in CUSO Loans that in many cases they did not want, did not understand, or did not even realize they were getting. The Bureau alleges that ITT students experienced substantial injury as a result of the CUSO Loans. "
AAI Asks Ninth Circuit to Preserve Consumer Recoveries Under State Antitrust Law (Stromberg v. Qualcomm)
AAI has filed an amicus brief in the Ninth Circuit arguing that states that bar antitrust suits by indirect purchasers should not prevent indirect purchasers from recovering in states that allow such suits.
The AAI brief argues that Qualcomm and the DOJ have not shown a “conflict” under California choice-of-law rules for all the same reasons the Supreme Court did not find a conflict under the preemption doctrine in Arc America. The brief also explains why it is incorrect to presume that follower states have different interests than repealer states. Both are aligned on substantive antitrust policy, and both rely on private civil actions to compensate victims and deter future violations. They merely differ as to who they permit to sue, which does not create a conflict under choice-of-law rules.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-to-preserve-consumer-recoveries-under-state-antitrust-law-stromberg-v-qualcomm/
AAI has filed an amicus brief in the Ninth Circuit arguing that states that bar antitrust suits by indirect purchasers should not prevent indirect purchasers from recovering in states that allow such suits.
The AAI brief argues that Qualcomm and the DOJ have not shown a “conflict” under California choice-of-law rules for all the same reasons the Supreme Court did not find a conflict under the preemption doctrine in Arc America. The brief also explains why it is incorrect to presume that follower states have different interests than repealer states. Both are aligned on substantive antitrust policy, and both rely on private civil actions to compensate victims and deter future violations. They merely differ as to who they permit to sue, which does not create a conflict under choice-of-law rules.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-to-preserve-consumer-recoveries-under-state-antitrust-law-stromberg-v-qualcomm/
Baseball Minor League Class Action on Wages Allowed to Go Forward
Minor League Baseball players suing over wages won a victory as the Ninth Circuit upheld a lower court's decision to certify a national Fair Labor Standards Act collective and California class action certification. The opinion is here:
https://www.courthousenews.com/wp-content/uploads/2019/08/minorleague.pdf
Minor League Baseball players suing over wages won a victory as the Ninth Circuit upheld a lower court's decision to certify a national Fair Labor Standards Act collective and California class action certification. The opinion is here:
https://www.courthousenews.com/wp-content/uploads/2019/08/minorleague.pdf
Texas AG Press release: AG Paxton: Texas to Join Multistate Lawsuit Challenging the Sprint/T‑Mobile Merger
Today, Texas Attorney General Ken Paxton announced that Texas intends to join a coalition of 13 other states, and the District of Columbia, in challenging the proposed merger of Sprint and T-Mobile, the 3rd and 4th largest providers of mobile wireless telecommunications services in the United States. The merger, if consummated, would result in a substantial harm to competition in the market for mobile wireless telecommunications services, both nationwide, and specifically within the State of Texas.
“While we appreciate the time and effort that went into the agreement between the parties and the U.S. Dept. of Justice, the Texas Attorney General has an independent obligation to protect Texas consumers. After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon,” Attorney General Paxton said. “It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Dept. of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.”
The New York and California co-led lawsuit was originally filed on June 11 and includes the attorneys general of Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, Wisconsin, and the District of Columbia. Today, at a hearing in the U.S. District court for the Southern District of New York, counsel for New York advised the court that they will be seeking leave for Texas and possibly other states to join the lawsuit next week.
https://www.texasattorneygeneral.gov/news/releases/ag-paxton-texas-join-multistate-lawsuit-challenging-sprintt-mobile-merger
Today, Texas Attorney General Ken Paxton announced that Texas intends to join a coalition of 13 other states, and the District of Columbia, in challenging the proposed merger of Sprint and T-Mobile, the 3rd and 4th largest providers of mobile wireless telecommunications services in the United States. The merger, if consummated, would result in a substantial harm to competition in the market for mobile wireless telecommunications services, both nationwide, and specifically within the State of Texas.
“While we appreciate the time and effort that went into the agreement between the parties and the U.S. Dept. of Justice, the Texas Attorney General has an independent obligation to protect Texas consumers. After careful evaluation of the proposed merger and the settlement, we do not anticipate that the proposed new entrant will replace the competitive role of Sprint anytime soon,” Attorney General Paxton said. “It is the Attorney General’s responsibility to preserve free market competition, which has proven to result in lower prices and better quality for consumers. The bargain struck by the U.S. Dept. of Justice is not in the best interest of working Texans, who need affordable mobile wireless telecommunication services that are fit to match the speed and technological innovation demands of Texas’ growing economy.”
The New York and California co-led lawsuit was originally filed on June 11 and includes the attorneys general of Colorado, Connecticut, Hawaii, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Nevada, Virginia, Wisconsin, and the District of Columbia. Today, at a hearing in the U.S. District court for the Southern District of New York, counsel for New York advised the court that they will be seeking leave for Texas and possibly other states to join the lawsuit next week.
https://www.texasattorneygeneral.gov/news/releases/ag-paxton-texas-join-multistate-lawsuit-challenging-sprintt-mobile-merger
NY AG press release: Rent to own company sued by State
Attorney General James And DFS Superintendent Lacewell Take Action Against Fraudulent Mortgage LenderNEW YORK –
Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell today filed suit in federal court [https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf] against Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.
“For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”
“As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell.
“We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”
The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.
Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.
Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.
Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.
In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.
The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.
Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.
https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf
Attorney General James And DFS Superintendent Lacewell Take Action Against Fraudulent Mortgage LenderNEW YORK –
Attorney General Letitia James and New York Superintendent of Financial Services Linda A. Lacewell today filed suit in federal court [https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf] against Vision Property Management, LLC; the company’s CEO, Alex Szkaradek; and a number of other companies affiliated with Vision for operating an illegal, deceptive, and unlicensed mortgage lending business in New York since at least 2011. By offering disguised, predatory subprime home loans and illegal finance-lease hybrid agreements, Vision and the other defendants took part in fraudulent activities that repeatedly targeted and took advantage of financially vulnerable New Yorkers.
“For nearly a decade, Vision put profits above people — fraudulently targeting, preying upon, and exploiting aspiring homeowners, including people with disabilities, the elderly, and those living on fixed income,” said Attorney General Letitia James. “These deceptive and abusive practices have trapped New Yorkers in mold-infested, dilapidated homes, and wrongfully placed the onus on consumers to pay the price. This behavior is unacceptable, which is why my office is aggressively prosecuting Vision and will do the same against any company or individual that tries to defraud New Yorkers.”
“As alleged in the complaint, Vision swindled vulnerable New Yorkers who wanted nothing more than the American dream of homeownership but instead got distressed properties with unsafe, squalid conditions and high-interest, predatory loans,” said Superintendent Linda A. Lacewell.
“We took this action to protect New York consumers by putting an end to these illegal, predatory and unconscionable business practices and holding Vision and its CEO accountable under New York State law and applicable federal laws. I am proud of the exemplary work of the DFS colleagues who investigated Vision’s activities for over two years, analyzed thousands of documents, and who worked to protect New Yorkers and bring this company to justice.”
The complaint alleges that Vision specializes in buying severely distressed properties and then markets those properties — at a substantial markup to consumers — without making any necessary repairs or renovations, and without fully disclosing to consumers the many conditions that exist and repairs that must be made for safe habitation. Vision targets low-income consumers eager to share in the “American dream” of homeownership, claiming that its “unique” business model provides this path to homeownership. But, in reality, Vision’s illegal business model has generated significant profits by skirting consumer protections and financial regulations and trapping vulnerable consumers with high cost mortgages for uninhabitable homes.
Vision’s deceptive tactics have left many of its consumers in dilapidated homes with unhealthy and hazardous conditions, while simultaneously requiring them to pay subprime, or high-cost, interest rates — in the range of 10% to 25% — on top of paying for extensive repairs and renovations just to make their homes habitable.
Vision has engaged in approximately 150 such transactions in New York since 2011 without possessing the legally required licenses to engage in mortgage lending. Furthermore, Vision entered into contracts with financially strained consumers that illegally required them to shoulder the burden of ensuring their properties were habitable. Often, consumers were deceived and trapped into paying for the treatment and repair of dangerous and unhealthy conditions in their new homes, including infestations, faulty electrical wiring, missing heaters and septic systems, mold, and asbestos, as well as severely damaged and rotted out, floors, walls, and roofs.
Vision has violated laws applicable to both mortgage lending and the leasing of residential properties, as well as numerous state and federal consumer protection laws.
In the suit — being filed in the Southern District of New York — Attorney General James and Superintendent Lacewell are seeking to end Vision’s ongoing illegal activity in New York, secure restitution and damages for all consumers injured by these practices, and obtain statutory penalties.
The matter is being handled by Assistant Attorney General Noah Popp of the Consumer Frauds and Protection Bureau, under the supervision of Jane M. Azia, Chief of the Consumer Frauds and Protection Bureau, and Chief Deputy Attorney General for Social Justice Meghan Faux. The Bureau of Consumer Frauds and Protection is overseen by Chief Deputy Attorney General for Economic Justice Christopher D’Angelo.
Additional attorneys at the Department of Financial Services involved with this litigation include Peter C. Dean of the Real Estate Finance Division and Cynthia M. Reed, Supervising Attorney in the Consumer Protection and Financial Enforcement Division.
https://ag.ny.gov/sites/default/files/filed_-_ecf_stamp_-_nyag_nysdfs_v._vision_property_management_llc_et_al._-_19-cv-7191.pdf
"Free Market" Coalition Letter to DOJ — Re: Antitrust Consent Decrees with the Two Largest Music Collectives August 7, 2019
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To: The Honorable William P. Barr
Dear Attorney General Barr,
The undersigned free market organizations write to raise serious concerns regarding the possible termination, sunset or significant changes to the antitrust consent decrees between the Department of Justice and the two largest music collectives: the American Society of Composers, Authors, and Publishers (ASCAP) and Broadcast Music, Inc. (BMI).
The Department’s Antitrust Division is currently reviewing scores of legacy consent decrees for possible termination. Many of these decrees are outdated, governing industries that no longer exist or markets that no longer pose antitrust concerns. In those cases, such needless regulation should be eliminated. The ASCAP and BMI consent decrees, however, remain extremely relevant to a functioning marketplace. Millions of businesses across the country rely on the efficiencies and anticompetitive protections that these decrees provide.
The market for music licenses is inherently anticompetitive, and traditional free market principles do not necessarily translate. Rather than competing against one another to sell their products, the vast majority of songwriters and publishers have chosen instead to band together under the ASCAP and BMI umbrella (representing about ninety-five percent of all music) in order to collectively set a standard price for music.
This approach of music sellers colluding instead of competing recently led a Federal court to find that SESAC, the next largest music collective, with less than five percent of all music licenses, does possess market power. This finding resulted in the much smaller SESAC agreeing to an antitrust settlement with terms similar to the ASCAP and BMI consent decrees.
This sort of market power, collusion, and price fixing is antithetical to a traditional free market, yet it remains necessary for the music licensing market to operate efficiently. Most businesses, from restaurants to local radio stations, must license millions of songs to indemnify themselves from ruinous infringement damages. Rather than negotiate with thousands of individual rights holders, ASCAP and BMI offer a one-stop shop opportunity. Similarly, thousands of rights holders rely upon the scale of ASCAP and BMI to maximize the enforcement of their copyrights.
These benefits, however necessary to market efficiency, should not excuse ASCAP and BMI from the nation’s antitrust laws.
Given the anticompetitive nature of the music licensing market as a whole, ending the ASCAP and BMI consent decrees would assuredly necessitate some other form of government regulation over the market. Disrupting entire industries, potentially harming millions of individual businesses in the process, only to trade one form of regulation for another, is not in line with conservative, free market principles.
Sincerely,
George Landrith, President, Frontiers of Freedom
Rick Manning, President , Americans for Limited Government
Andrew Quinlan, President, Center for Freedom & Prosperity
Chuck Muth, President, Citizen Outreach
Chris Salcedo, Executive Director, The Conservative Hispanic Society
Mario Lopez, President, Hispanic Leadership Fund
Patrice Onwuka, Senior Policy Analyst, Independent Women’s Forum
Andrew Langer, President, Institute for Liberty
Hector V. Barreto, Chairman & CEO, The Latino Coalition
Seton Motley, President, Less Government
Peter Ferrara, Senior Policy Advisor, National Tax Limitation Committee
Tom Zawistowski, President, We the People Convention
https://www.ff.org/coalition-letter-to-doj/
Can a mortgage lender bypass mortgage foreclosure and sue directly on the underlying note?
That is what happened to a recent client at the DC Bar’s pro bono clinic. Her mortgage lender bypassed mortgage foreclosure and sued directly on the underlying promissory note. The client’s story had its own peculiarities, but brings to mind the question of whether such suits on the underlying note occur frequently instead of foreclosure, and if so why.
I found a helpful discussion in a posting by Alperlaw, a Florida law firm. The posting explains that a mortgagor’s suit directly on a note may dodge some consumer protections that apply to mortgage foreclosures.
The Alper posting explains that as a general matter when you buy a house you sign a promissory note to evidence the obligation to repay the house loan. The mortgage is a security instrument that gives the lender an interest in the house which he can foreclose if you default. Your personal obligation to the lender is based on the underlying note. A lender has the option to sue you for repayment under the note without foreclosing the mortgage. If the lender sues on the note, you, the borrower, will have a personal judgment against you for your default under the note, and the lender still retains his mortgage security in most jurisdictions.
So, why would a lender chose not to foreclose a mortgage on your home and sue you directly on the note. The Alper posting explains that, among other things:
1. The government has given homeowners more rights under the government mortgage modification program (HAMP) which regulations make foreclosures slower and more expensive for banks.
2. Banks who take back properties on foreclosure have to deal with delinquent HOA bills, unpaid taxes, and house repairs.
3. Legally, its much easier for a bank to get a personal judgment against the borrower through a suit on the note than it is to get a personal judgment in a deficiency claim after foreclosure.
4. Where there are environmental issues, banks do not want to foreclose and take over ownership of potential environmental liabilities.
Government programs designed to protect homeowners from foreclosure by requiring loan modifications may have in fact damaged homeowners by giving banks the incentive to sue for personal liability when they mostly have not to this point pursued large scale deficiency claims? The Alper comment suggests that it would not be the first time that government programs have had unintended consequences.
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
That is what happened to a recent client at the DC Bar’s pro bono clinic. Her mortgage lender bypassed mortgage foreclosure and sued directly on the underlying promissory note. The client’s story had its own peculiarities, but brings to mind the question of whether such suits on the underlying note occur frequently instead of foreclosure, and if so why.
I found a helpful discussion in a posting by Alperlaw, a Florida law firm. The posting explains that a mortgagor’s suit directly on a note may dodge some consumer protections that apply to mortgage foreclosures.
The Alper posting explains that as a general matter when you buy a house you sign a promissory note to evidence the obligation to repay the house loan. The mortgage is a security instrument that gives the lender an interest in the house which he can foreclose if you default. Your personal obligation to the lender is based on the underlying note. A lender has the option to sue you for repayment under the note without foreclosing the mortgage. If the lender sues on the note, you, the borrower, will have a personal judgment against you for your default under the note, and the lender still retains his mortgage security in most jurisdictions.
So, why would a lender chose not to foreclose a mortgage on your home and sue you directly on the note. The Alper posting explains that, among other things:
1. The government has given homeowners more rights under the government mortgage modification program (HAMP) which regulations make foreclosures slower and more expensive for banks.
2. Banks who take back properties on foreclosure have to deal with delinquent HOA bills, unpaid taxes, and house repairs.
3. Legally, its much easier for a bank to get a personal judgment against the borrower through a suit on the note than it is to get a personal judgment in a deficiency claim after foreclosure.
4. Where there are environmental issues, banks do not want to foreclose and take over ownership of potential environmental liabilities.
Government programs designed to protect homeowners from foreclosure by requiring loan modifications may have in fact damaged homeowners by giving banks the incentive to sue for personal liability when they mostly have not to this point pursued large scale deficiency claims? The Alper comment suggests that it would not be the first time that government programs have had unintended consequences.
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
http://www.assetprotectionfl.com/2010/08/government-programs-and-market-conditions-may-lead-lenders-to-postpone-foreclosure-and-sue-homeowner-directly-on-underlying-note/
No-deal Brexit: pause competition law to avoid food shortages, say manufacturers
Companies want guarantee they won’t be fined for working together to direct supplies
Jasper Jolly and Rebecca Smithers
Wed 7 Aug 2019 06.34 EDTLast modified on Wed 7 Aug 2019 16.00 EDT
The Food and Drink Federation said ministers had not yet confirmed that controls over collaboration would be lifted. Photograph: Nick Ansell/PA
Britain’s food and drinks industry has asked the government to suspend competition law in the event of a no-deal Brexit so that firms can work together to avert food shortages without facing large fines for collusion.
Collaboration between large companies is controlled to prevent cartels harming consumers’ interests. The Food and Drink Federation (FDF) told the BBC the government had not yet confirmed whether companies would be able to work together to direct food supplies to the areas of greatest need if there were delays as a result of crashing out of the EU.
Many trade experts, from the government’s own analysts to the Bank of England, expect a no-deal Brexit to cause severe disruption at ports, potentially delaying food imports. Boris Johnson has committed to leaving the EU on 31 October whatever the implications, and has put Michael Gove in charge of preparing to exit without a deal.
FDF members, including large companies such as Associated British Foods, Mondelēz and Nestlé, risked incurring large fines from the Competition and Markets Authority (CMA) if they collaborated, the industry body said.
“Competition law is important, but in the event of no-deal disruption, if the government wants the food supply chain to work together to tackle likely shortages – to decide where to prioritise shipments – they will have to provide cast-iron written reassurances that competition law will not be strictly applied to those discussions,” FDF’s chief operating officer, Tim Rycroft, said.
Full article: https://www.theguardian.com/business/2019/aug/07/no-deal-brexit-call-to-suspend-competition-law-to-avert-food-shortages
Companies want guarantee they won’t be fined for working together to direct supplies
Jasper Jolly and Rebecca Smithers
Wed 7 Aug 2019 06.34 EDTLast modified on Wed 7 Aug 2019 16.00 EDT
The Food and Drink Federation said ministers had not yet confirmed that controls over collaboration would be lifted. Photograph: Nick Ansell/PA
Britain’s food and drinks industry has asked the government to suspend competition law in the event of a no-deal Brexit so that firms can work together to avert food shortages without facing large fines for collusion.
Collaboration between large companies is controlled to prevent cartels harming consumers’ interests. The Food and Drink Federation (FDF) told the BBC the government had not yet confirmed whether companies would be able to work together to direct food supplies to the areas of greatest need if there were delays as a result of crashing out of the EU.
Many trade experts, from the government’s own analysts to the Bank of England, expect a no-deal Brexit to cause severe disruption at ports, potentially delaying food imports. Boris Johnson has committed to leaving the EU on 31 October whatever the implications, and has put Michael Gove in charge of preparing to exit without a deal.
FDF members, including large companies such as Associated British Foods, Mondelēz and Nestlé, risked incurring large fines from the Competition and Markets Authority (CMA) if they collaborated, the industry body said.
“Competition law is important, but in the event of no-deal disruption, if the government wants the food supply chain to work together to tackle likely shortages – to decide where to prioritise shipments – they will have to provide cast-iron written reassurances that competition law will not be strictly applied to those discussions,” FDF’s chief operating officer, Tim Rycroft, said.
Full article: https://www.theguardian.com/business/2019/aug/07/no-deal-brexit-call-to-suspend-competition-law-to-avert-food-shortages
Klobuchar press release:
Klobuchar Introduces Legislation to Crack Down on Monopolies that Violate Antitrust Law
August 2, 2019
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation to crack down on monopolies that violate antitrust law. The Monopolization Deterrence Act would give the Justice Department and the Federal Trade Commission (FTC) the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have. The bill was introduced with Senator Richard Blumenthal (D-CT) and cosponsored by Senators Dianne Feinstein (D-CA) and Ed Markey (D-MA).
“We have a major monopoly problem in this country. So when federal enforcers uncover illegal monopolistic conduct, they need to act decisively to make sure it stops. But the threat of an injunction isn’t always enough to deter this unlawful conduct from happening in the first place. Dominant companies need to be put on notice that there will be serious financial consequences for illegal monopolistic behavior,” Klobuchar said. “Our legislation will increase the ability of the Justice Department and the FTC to deter companies from engaging in monopolistic practices that hurt competition, consumers, and innovation in our economy.”
Specifically, the Monopolization Deterrence Act would:
“We need to make sure we have effective enforcement tools to deter dominant corporations from engaging in anti-competitive, monopolistic practices that harm the marketplace and consumers,” said George Slover, senior policy counsel at Consumer Reports. “Senator Klobuchar’s legislation will put new teeth into our antitrust laws by empowering enforcers and courts to impose significant financial penalties when a corporation abuses its dominance in the marketplace.”
“Section 2 monopolization cases are more difficult to bring than other cases, and if the government wins at court, it usually can do no more than stop the offending company from engaging in the same anticompetitive behavior in the future,” said Charlotte Slaiman, Competition Policy Counsel at Public Knowledge. “Adding monetary penalties as a percentage of a company’s U.S. revenue could help deter anticompetitive conduct and give the antitrust enforcement agencies more leverage to promote competition in these types of cases.”
“Senator Klobuchar has been a leader in smart and constructive legislative antitrust reforms. Her proposed bill to strengthen U.S. monopolization law provides for needed expansion of federal remedies to help deter anticompetitive abuses. This initiative should garner strong bipartisan support,” said American Antitrust Institute President Diana Moss.
In her role as Ranking Member of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in several industries including the telecommunications, agriculture, and pharmaceutical industries. In June, she led efforts to obtain details about possible FTC antitrust investigations into Amazon and Facebook and possible Justice Department antitrust investigations into Google and Apple. In the letters, the senators requested information regarding the existence and scope of the potential investigations. In April, Klobuchar and Senator Marsha Blackburn (R-TN) sent a letter to the FTC to take action in response to concerns regarding potential privacy, data security, and antitrust violations involving online platforms. They also called on the FTC to provide additional transparency into its ongoing investigations to ensure that consumers are protected from harmful conduct relating to digital markets.
Klobuchar has also been an outspoken voice in opposing anticompetitive mergers and has introduced legislation to help prevent them. In June, Klobuchar and Senator Chuck Grassley (R-IA) introduced new bipartisan legislation to ensure that antitrust authorities have the resources they need to protect consumers. The Merger Filing Fee Modernization Act would update merger filing fees for the first time since 2001, lower the burden on small and medium-sized businesses, ensure larger deals bring in more income, and raise enough revenue so that taxpayer dollars aren’t required to fund necessary increases to agency enforcement budgets.
Klobuchar leads the Consolidation Prevention and Competition Promotion Act to restore the original purpose of the Clayton Antitrust Act to promote competition and protect American consumers. The bill would strengthen the current legal standard to help stop harmful consolidation that may materially lessen competition. It would clarify that a merger could violate the statute if it gives a company “monopsony” power to unfairly lower the prices it pays or wages it offers because of lack of competition among buyers or employers. The bill further strengthens the law to guard against harmful “mega-mergers” and deals that substantially increase market concentration, shifting the burden to the merging companies to prove that their consolidation does not harm competition. She also introduced the Merger Enforcement Improvement Act which would update existing law to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals. This bill would modernize antitrust enforcement by improving the agencies’ ability to assess the impact of merger settlements, requiring studies of new issues, adjusting merger filing fees to reflect the 21st century economy, and providing adequate funding for antitrust agencies to meet their obligations to protect American consumers. She introduced both bills in February.
###
Permalink: https://www.klobuchar.senate.gov/public/index.cfm/2019/8/klobuchar-introduces-legislation-to-crack-down-on-monopolies-that-violate-antitrust-law
Klobuchar Introduces Legislation to Crack Down on Monopolies that Violate Antitrust Law
August 2, 2019
WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation to crack down on monopolies that violate antitrust law. The Monopolization Deterrence Act would give the Justice Department and the Federal Trade Commission (FTC) the authority to seek civil penalties for monopolization offenses under the antitrust laws, a power they currently do not have. The bill was introduced with Senator Richard Blumenthal (D-CT) and cosponsored by Senators Dianne Feinstein (D-CA) and Ed Markey (D-MA).
“We have a major monopoly problem in this country. So when federal enforcers uncover illegal monopolistic conduct, they need to act decisively to make sure it stops. But the threat of an injunction isn’t always enough to deter this unlawful conduct from happening in the first place. Dominant companies need to be put on notice that there will be serious financial consequences for illegal monopolistic behavior,” Klobuchar said. “Our legislation will increase the ability of the Justice Department and the FTC to deter companies from engaging in monopolistic practices that hurt competition, consumers, and innovation in our economy.”
Specifically, the Monopolization Deterrence Act would:
- Enable the Department of Justice and the FTC to seek civil monetary penalties, in addition to existing remedies, for violations of section 2 of the Sherman Act (15 U.S.C. 2);
- Deter future violations by providing for penalties of up to 15 percent of the violator’s total U.S. revenues or 30 percent of the violator’s U.S. revenues in the affected markets; and
- Ensure that the two agencies work together to create guidelines for how they would exercise their penalty authority considering a number of relevant factors.
“We need to make sure we have effective enforcement tools to deter dominant corporations from engaging in anti-competitive, monopolistic practices that harm the marketplace and consumers,” said George Slover, senior policy counsel at Consumer Reports. “Senator Klobuchar’s legislation will put new teeth into our antitrust laws by empowering enforcers and courts to impose significant financial penalties when a corporation abuses its dominance in the marketplace.”
“Section 2 monopolization cases are more difficult to bring than other cases, and if the government wins at court, it usually can do no more than stop the offending company from engaging in the same anticompetitive behavior in the future,” said Charlotte Slaiman, Competition Policy Counsel at Public Knowledge. “Adding monetary penalties as a percentage of a company’s U.S. revenue could help deter anticompetitive conduct and give the antitrust enforcement agencies more leverage to promote competition in these types of cases.”
“Senator Klobuchar has been a leader in smart and constructive legislative antitrust reforms. Her proposed bill to strengthen U.S. monopolization law provides for needed expansion of federal remedies to help deter anticompetitive abuses. This initiative should garner strong bipartisan support,” said American Antitrust Institute President Diana Moss.
In her role as Ranking Member of the Senate Judiciary Committee Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar has championed efforts to protect consumers, promote competition, and fight consolidation in several industries including the telecommunications, agriculture, and pharmaceutical industries. In June, she led efforts to obtain details about possible FTC antitrust investigations into Amazon and Facebook and possible Justice Department antitrust investigations into Google and Apple. In the letters, the senators requested information regarding the existence and scope of the potential investigations. In April, Klobuchar and Senator Marsha Blackburn (R-TN) sent a letter to the FTC to take action in response to concerns regarding potential privacy, data security, and antitrust violations involving online platforms. They also called on the FTC to provide additional transparency into its ongoing investigations to ensure that consumers are protected from harmful conduct relating to digital markets.
Klobuchar has also been an outspoken voice in opposing anticompetitive mergers and has introduced legislation to help prevent them. In June, Klobuchar and Senator Chuck Grassley (R-IA) introduced new bipartisan legislation to ensure that antitrust authorities have the resources they need to protect consumers. The Merger Filing Fee Modernization Act would update merger filing fees for the first time since 2001, lower the burden on small and medium-sized businesses, ensure larger deals bring in more income, and raise enough revenue so that taxpayer dollars aren’t required to fund necessary increases to agency enforcement budgets.
Klobuchar leads the Consolidation Prevention and Competition Promotion Act to restore the original purpose of the Clayton Antitrust Act to promote competition and protect American consumers. The bill would strengthen the current legal standard to help stop harmful consolidation that may materially lessen competition. It would clarify that a merger could violate the statute if it gives a company “monopsony” power to unfairly lower the prices it pays or wages it offers because of lack of competition among buyers or employers. The bill further strengthens the law to guard against harmful “mega-mergers” and deals that substantially increase market concentration, shifting the burden to the merging companies to prove that their consolidation does not harm competition. She also introduced the Merger Enforcement Improvement Act which would update existing law to reflect the current economy and provide agencies with better information post-merger to ensure that merger enforcement is meeting its goals. This bill would modernize antitrust enforcement by improving the agencies’ ability to assess the impact of merger settlements, requiring studies of new issues, adjusting merger filing fees to reflect the 21st century economy, and providing adequate funding for antitrust agencies to meet their obligations to protect American consumers. She introduced both bills in February.
###
Permalink: https://www.klobuchar.senate.gov/public/index.cfm/2019/8/klobuchar-introduces-legislation-to-crack-down-on-monopolies-that-violate-antitrust-law
From Digital Music News:
In a rapid jury deliberation, Katy Perry, Capitol/UMG, Dr. Luke, Max Martin, Juicy J, and others have been hit with a $2.7 million fine.
That was fast.
After just two days of deliberations, a federal jury in California has ordered damages of $2.7 million against Katy Perry, her label, associated songwriters, and other collaborators on “Dark Horse”. The fine was calculated from a top-line figure of $41 million, with Capitol Records arguing that a large percentage of that revenue was utilized for promotional, marketing, production, and other costs.
The defending party of Katy Perry, Dr. Luke, Max Martin, Cirkut, Sarah Hudson, guest performer/rapper Juicy J, and Capitol Records (UMG) were saddled with the fine. Additionally, the jury ruled that publishing company Kasz Money Inc., Kobalt Music Publishing America Inc. and Warner Bros. Music Corp. would also share in the damages assessment.
The $2.7 million penalty amounts to roughly 6.5% of the initial $41 million ask. Still, that’s little consolation to Perry and the defendants, especially given the controversial nature of the infringement ruling.
The ruling, handed down earlier this week, found substantial, willing infringement involving the 2008 Christian rap song, “Joyful Noise,” as performed by Flame (aka Marcus Gray). The ruling was unanimous, despite testimony from multiple experts and musicologists that called the similarities ‘coincidental’ and involving ‘the basic building blocks of music’.
A quick comparison of the tracks reveals some striking similarities, though it’s entirely unclear if the ‘infringement’ was merely coincidental. The melodic loop shared by both tracks is relatively simple, and the resulting decision is heightening fears of increased music copyright trolling ahead.
In terms of who pays what, Katy Perry was ordered to pay roughly $550,000 of the $2.7 million fine, while Dr. Luke was ordered to pay nearly $61,000. Capitol Records was ordered to pay $1.2 million, while Warner was charged a relatively paltry $29,000.
The remaining fine would be distributed among the other defendants.
The 15-page damages decision was entered into the broader Gray et al. v. Perry et al., case number 2:15-cv-05642, deliberated in the U.S. District Court for the Central District of California.
From https://www.digitalmusicnews.com/2019/08/01/katy-perry-millions-damages/
In a rapid jury deliberation, Katy Perry, Capitol/UMG, Dr. Luke, Max Martin, Juicy J, and others have been hit with a $2.7 million fine.
That was fast.
After just two days of deliberations, a federal jury in California has ordered damages of $2.7 million against Katy Perry, her label, associated songwriters, and other collaborators on “Dark Horse”. The fine was calculated from a top-line figure of $41 million, with Capitol Records arguing that a large percentage of that revenue was utilized for promotional, marketing, production, and other costs.
The defending party of Katy Perry, Dr. Luke, Max Martin, Cirkut, Sarah Hudson, guest performer/rapper Juicy J, and Capitol Records (UMG) were saddled with the fine. Additionally, the jury ruled that publishing company Kasz Money Inc., Kobalt Music Publishing America Inc. and Warner Bros. Music Corp. would also share in the damages assessment.
The $2.7 million penalty amounts to roughly 6.5% of the initial $41 million ask. Still, that’s little consolation to Perry and the defendants, especially given the controversial nature of the infringement ruling.
The ruling, handed down earlier this week, found substantial, willing infringement involving the 2008 Christian rap song, “Joyful Noise,” as performed by Flame (aka Marcus Gray). The ruling was unanimous, despite testimony from multiple experts and musicologists that called the similarities ‘coincidental’ and involving ‘the basic building blocks of music’.
A quick comparison of the tracks reveals some striking similarities, though it’s entirely unclear if the ‘infringement’ was merely coincidental. The melodic loop shared by both tracks is relatively simple, and the resulting decision is heightening fears of increased music copyright trolling ahead.
In terms of who pays what, Katy Perry was ordered to pay roughly $550,000 of the $2.7 million fine, while Dr. Luke was ordered to pay nearly $61,000. Capitol Records was ordered to pay $1.2 million, while Warner was charged a relatively paltry $29,000.
The remaining fine would be distributed among the other defendants.
The 15-page damages decision was entered into the broader Gray et al. v. Perry et al., case number 2:15-cv-05642, deliberated in the U.S. District Court for the Central District of California.
From https://www.digitalmusicnews.com/2019/08/01/katy-perry-millions-damages/
State lawsuit charging generic pharma price fixing
In May, Connecticut Attorney General William Tong led a 44-state coalition in a lawsuit against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs. The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.
The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000 percent.
The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, "girls nights out", lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like "fair share," "playing nice in the sandbox," and "responsible competitor" to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
The lawsuit complaint is here:
https://portal.ct.gov/-/media/AG/Downloads/GDMS%20Complaint%2051019%20FINAL%20REDACTED%20PUBLIC%20VERSIONpdf
In May, Connecticut Attorney General William Tong led a 44-state coalition in a lawsuit against Teva Pharmaceuticals and 19 of the nation's largest generic drug manufacturers alleging a broad conspiracy to artificially inflate and manipulate prices, reduce competition and unreasonably restrain trade for more than 100 different generic drugs. The lawsuit, filed in U.S. District Court for the District of Connecticut, also names 15 individual senior executive defendants at the heart of the conspiracy who were responsible for sales, marketing, pricing and operations. The drugs at issue account for billions of dollars of sales in the United States, and the alleged schemes increased prices affecting the health insurance market, taxpayer-funded healthcare programs like Medicare and Medicaid, and individuals who must pay artificially-inflated prices for their prescriptions drugs.
The complaint alleges that Teva, Sandoz, Mylan, Pfizer and 16 other generic drug manufacturers engaged in a broad, coordinated and systematic campaign to conspire with each other to fix prices, allocate markets and rig bids for more than 100 different generic drugs. The drugs span all types, including tablets, capsules, suspensions, creams, gels, ointments, and classes, including statins, ace inhibitors, beta blockers, antibiotics, anti-depressants, contraceptives, non-steroidal anti-inflammatory drugs, and treat a range of diseases and conditions from basic infections to diabetes, cancer, epilepsy, multiple sclerosis, HIV, ADHD, and more. In some instances, the coordinated price increases were over 1,000 percent.
The complaint lays out an interconnected web of industry executives where these competitors met with each other during industry dinners, "girls nights out", lunches, cocktail parties, golf outings and communicated via frequent telephone calls, emails and text messages that sowed the seeds for their illegal agreements. Throughout the complaint, defendants use terms like "fair share," "playing nice in the sandbox," and "responsible competitor" to describe how they unlawfully discouraged competition, raised prices and enforced an ingrained culture of collusion.
The lawsuit seeks damages, civil penalties and actions by the court to restore competition to the generic drug market.
The lawsuit complaint is here:
https://portal.ct.gov/-/media/AG/Downloads/GDMS%20Complaint%2051019%20FINAL%20REDACTED%20PUBLIC%20VERSIONpdf
Senator Mark Warner on concern about Chinese dominance of 5G telecom technology and other tech, and global security
On June 17, 2019, Senator Mark Warner (D-VA), vice chair of the Senate Intelligence Committee, spoke with PBS' Judy Woodruff about China’s 5G technological advances, and global security. Video is at https://www.c-span.org/video/?461800-1/senator-mark-warner-discusses-china-5g-technology-global-security&start=171
At approximately 3 minutes into the video, Senator Warner begins discussion of the national security and commercial threat posed by China and its centralized government control over technology and technology investment. The Senator uses 5G telecom as an example of the danger that the Chinese government will be able to use Chinese telecom equipment for spying in the US. Also, he uses 5G telecom as an example that the Chinese might take control of world-wide technological standards for telecom and other high tech products that have been the province of the US and other Western countries since the days of Kennedy and Sputnik.
Warner suggests several policy approaches for the US Government and industry. Warner’s proposals suggest a US government industrial policy – investing in technology research and supporting and protecting US and other Western companies rather than Chinese companies. That is quite different than a policy of supporting free global competition and letting the chips fall where they may with regard to which companies win and which companies lose competitive battles, without government intervention. Of course, Warner may be right about the need for US government support for US companies to counter the malign role of the Chinese government in support of Chinese companies. But the consequences of his proposals for usual competition policies are enormous.
Following are a few somewhat corrected excerpts from the machine made transcript, which contains lots of errors. The results are rough, and an imperfect substitute for listening to Warner in the video:
At 00:03:03
I HAVE TO SAY THAT IN THE LAST THREE OF FOUR YEARS AND MANY CLASSIFIED BRIEFINGS LATER, I HAVE FUNDAMENTALLY SHIFTED MY VIEWPOINTS. I BELIEVE THE PRESIDENT XI STARTED WITH THE MAJOR CONSOLIDATION OF POWER IN 2015 AND 2016 AND WE HAD COMMUNIST PARTY DOMINANCE IN CHINA ACROSS ALL BUSINESS SOCIETY, AND MILITARY. AND HE IS NOW USING THE CONSOLIDATED POWER TO BRING ABOUT BOTH STATE AND CIVIL SOCIETY TO ACTUALLY PROPOSE A ROLE FOR CHINA THAT WOULD DOMINATE THE WORLD. THAT DOMINATION WOULD LEAD TO DIMINISHMENT OF U.S. POWER AND INFLUENCE. THE CHINESE GOVERNMENT USES ALL THE TRADITIONAL TOOLS OF THE STATE TO EXERT INFLUENCE.
THERE IS tAGGRESSIVE DEPLOYMENT OF ESPIONAGE TO STEAL SECRETS. WE’VE ALSO SEEN FROM CHINA MORE CREATIVE MECHANISMS. IT TAKES ADVANTAGE OF THE AUTHORITARIAN MODEL TO FORCE CHINESE COMPANIES, RESEARCHERS AND OTHERS TO HACK ON BEHALF OF THE COMMONEST PARTY. ALL OF THIS HAS SET THE STAGE FOR THE CHINESE GOVERNMENT TO AGGRESSIVELY DISPLAY EVERY LEVER OF POWER TO SERVICE THE STATE AND THE SAME TIME EXPLOIT THE OPENNESS OF OUR SOCIETY TO TAKE AN ECONOMIC ADVANTAGE.
I BELIEVE OUR BEEF IS WITH THE COMMUNIST PARTY IN CHINA.
WHERE DO WE GO FROM HERE. FIRST WITH A FOCUS ON TECHNOLOGY. I WOULD ARGUE THAT SPUTNIK WAS THE LAST MOMENT WHEN AMERICA'S TECHNOLOGICAL PRIMACY WAS REALLY QUESTIONED. AND IT JOLTED AMERICA INTO ACTION AND KENNEDY TO PUT A MAN ON THE MOON. AND WE CHANGED OUR ACADEMIC INSTITUTIONS, WE CHANGED OUR RESEARCH AREAS, WE CHANGED THE MILITARY-INDUSTRIAL COMPLEX. AND WE WERE SUCCESSFUL. AND I WOULD ARGUE THAT THAT MOMENT IN TIME EVERY BIG MAJOR TECHNOLOGICAL ADVANCEMENT WITH THE TRANSISTOR, COMPUTING, TILT COMMUNICATIONS, WHETHER IT WAS AROUND THE INTERNET, WHETHER IT IS AROUND SOCIAL MEDIA, ALL OF THESE INNOVATIONS HAVE BEEN AMERICAN. OR WE ENDED UP SETTING THE STANDARDS AND BY SETTING THE STANDARDS AND BY HAVING THE WORLD'S LARGEST ECONOMIC POWER WE HAD A DEFAULT POSITION. WE HAD A SINGLE GOVERNANCE ROLE AROUND A LOT OF THE TECHNOLOGY.
I DON'T THINK IN MANY WAYS THAT WE AS A NATION APPRECIATED ALL OF THE ECONOMIC POLITICAL AND SOCIAL BENEFITS THAT OUR COUNTRY ENJOYED BY BEING A TECHNOLOGY CENTER AND A STANDARD SETTER. IN MANY WAYS, THAT IS ALL UP FOR GRABS NOW. I SEE THIS FIRSTHAND IN THE COMPETITION FOR 5G. AND THOSE OF YOU WHO ARE NOT TECHNOLOGY NERDS IN THE ROOM, IT IS EQUIVALENT IN THE WIRELESS WORLD OF MOVING FROM RADIO TO TELEVISION, AN ENORMOUS OPPORTUNITY.
CHINA IS PROVIDING EQUIPMENT VENDORS WITH 120% MORE FINANCING, FLOODING THE ZONE WITH ENGINEERS IN TERMS OF THE STANDARD-SETTING. AND IN MANY WAYS WHAT IS HAPPENING IN 5G COULD VERY WELL HAPPEN IN ARTIFICIAL INTELLIGENCE AND IN QUANTUM COMPUTING AND OTHERS. IF AMERICA DOES NOT TRY TO REASSERT INVESTMENT AND TECHNOLOGY LEADERSHIP AND WILLINGNESS TO SET THE STANDARDS.
WE NEED TO SOUND THE ALARM, OVER THE LAST YEAR BECAUSE I'VE HAD SO MUCH EVIDENCE AND IT'S BECOME OVERWHELMING. WE ARE NOT DOING OUR JOB IF WE DON'T FIND WAYS TO DECLASSIFY THIS INFORMATION AND GET IT OUT.
SECOND, WE NEED A SHORT-TERM STRATEGY. I WOULD ACKNOWLEDGE THAT THE TRUMP ADMINISTRATION HAS DONE THE RIGHT THING IN SAYING THE STATUS QUO IS NOT WORKING. I WOULD ARGUE THAT THE CHALLENGES OF EMERGING CHINA HAVE BEEN NOT ONLY COUNTER TO THE UNITED STATES BUT FRANKLY COUNTER TO ALL THE WEST. THERE WAS A MOMENT IN TIME WHERE WE COULD'VE BUILT A GRAND INTERNATIONAL COALITION. YOU GOTTA PLAY BY THE RULES AND THINK OF BUILDING THE GRAND COALITION.
FINALLY WE NEED A LONG-TERM STRATEGY. THE LONG-TERM STRATEGY REALLY GOES BACK TO WHAT KIND OF INVESTMENT WE ARE PREPARED TO MAKE IN THIS COUNTRY IN RESEARCH AND DEVELOPMENT. THAT IS $500 BILLION CHINA IS INVESTING IN 5G ARTIFICIAL INTELLIGENCE, AND A HOST OF OTHER AREAS. AGAIN, UNDER PRESIDENT XI JINPING, THE TREND IS THEY WILL DOMINATE. WE NEED TO MAKE THE RESEARCH INVESTMENTS. IF YOU GO BACK, THE US ACCOUNTED FOR 69% OF ANNUAL GLOBAL R&D AND WERE NOW DOWN TO 29%, CHINA IS ON AN UPWARD TREND, AND ON THAT TREND CHINA WILL PASS THE UNITED STATES AND ALL EXPECTATIONS BY 2020. I THINK WE CAN GET THIS RIGHT.
Posting by Dn Allen Resnikoff, who is fully responsible for the content
Chinese competition in quantum mechanics, an important future technology
In the global race to develop quantum technology, the U.S. is competing in an increasingly crowded field. China is a leader . See PBS NewsHour segment at https://www.youtube.com/watch?v=IJijqF8tkTU
In the global race to develop quantum technology, the U.S. is competing in an increasingly crowded field. China is a leader . See PBS NewsHour segment at https://www.youtube.com/watch?v=IJijqF8tkTU
WSJ on the political swamp and MiMedx
MiMedx drove sales of its tissue grafts through improper means to the Department of Veterans Affairs and other clients, according to former employees. Gretchen Morgenson of The Wall Street Journal investigates the alleged fraud and the help the company got from its friends in government.
https://www.wsj.com/articles/va-bans-injectable-wound-care-products-from-mimedx-and-other-companies-for-many-uses-11560529012#
MiMedx drove sales of its tissue grafts through improper means to the Department of Veterans Affairs and other clients, according to former employees. Gretchen Morgenson of The Wall Street Journal investigates the alleged fraud and the help the company got from its friends in government.
https://www.wsj.com/articles/va-bans-injectable-wound-care-products-from-mimedx-and-other-companies-for-many-uses-11560529012#
Erik Hovenkamp explains FTC v. Qualcomm
TC v. Qualcomm: New Frontiers in the Antitrust-IP InterfaceBy Erik Hovenkamp (Harvard)
The Federal Trade Commission recently scored a substantial victory in its antitrust suit against Qualcomm. The case represents a novel confluence of standard-setting and IP licensing issues with bedrock antitrust subjects: tying and exclusive dealing. It also takes a surprising turn in resuscitating the long-dormant doctrine of the antitrust “duty to deal.” In this short essay, I review and evaluate the court’s decision in FTC v. Qualcomm. The analysis of Qualcomm’s exclusive dealing is sound and very likely correct. However, the court’s duty-to-deal analysis sits on shakier ground, omitting consideration of potential immunity under the Patent Act and sidestepping thorny questions on the appropriate source of law.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3397312
TC v. Qualcomm: New Frontiers in the Antitrust-IP InterfaceBy Erik Hovenkamp (Harvard)
The Federal Trade Commission recently scored a substantial victory in its antitrust suit against Qualcomm. The case represents a novel confluence of standard-setting and IP licensing issues with bedrock antitrust subjects: tying and exclusive dealing. It also takes a surprising turn in resuscitating the long-dormant doctrine of the antitrust “duty to deal.” In this short essay, I review and evaluate the court’s decision in FTC v. Qualcomm. The analysis of Qualcomm’s exclusive dealing is sound and very likely correct. However, the court’s duty-to-deal analysis sits on shakier ground, omitting consideration of potential immunity under the Patent Act and sidestepping thorny questions on the appropriate source of law.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3397312
In case you hadn't noticed: This past December the USDA released the first national disclosure requirements for foods that have been altered in a way that doesn’t occur naturally.
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-27283.pdf
The federal statute that authorizes the requirements also precludes competing State requirements.
CNBC explains that he guidelines, which use the term “bioengineered” instead of the more commonly used “genetically modified,” allow disclosure of bioengineered ingredients in several formats: in text, a symbol, a digital link printed on packaging or text message.
Companies can use a QR code with a statement like: “Scan here for more food information.” After scanning the code, consumers will be brought to a website where genetically modified foods will be disclosed. If a company provides a digital link disclosure, it must also provide a telephone number consumers can call for information. Critics say companies that use the QR code should be required to include the word “bioengineered” in their statement.
Advocates of multiple labeling options say it will be easier for companies to comply with the guidelines, but opponents fear it will confuse consumers or restrict access for those without smartphones.
https://www.cnbc.com/2018/12/20/usda-lays-out-the-rules-for-labeling-for-genetically-modified-foods.html
https://s3.amazonaws.com/public-inspection.federalregister.gov/2018-27283.pdf
The federal statute that authorizes the requirements also precludes competing State requirements.
CNBC explains that he guidelines, which use the term “bioengineered” instead of the more commonly used “genetically modified,” allow disclosure of bioengineered ingredients in several formats: in text, a symbol, a digital link printed on packaging or text message.
Companies can use a QR code with a statement like: “Scan here for more food information.” After scanning the code, consumers will be brought to a website where genetically modified foods will be disclosed. If a company provides a digital link disclosure, it must also provide a telephone number consumers can call for information. Critics say companies that use the QR code should be required to include the word “bioengineered” in their statement.
Advocates of multiple labeling options say it will be easier for companies to comply with the guidelines, but opponents fear it will confuse consumers or restrict access for those without smartphones.
https://www.cnbc.com/2018/12/20/usda-lays-out-the-rules-for-labeling-for-genetically-modified-foods.html
From the Commonwealth Fund
Can Germany’s Approach to Pricing New Drugs Work in the U.S.?
June 13, 2019
The German and U.S. health insurance systems are similar in many ways, but Germany has substantially lower drug prices. In a new To the Point post, James C. Robinson of the University of California, Berkeley, and colleagues look at how Germany prices drugs and consider whether its method could work here.
Prices for new drugs in Germany are negotiated between an umbrella organization representing insurers and the drug maker, and there is strong public and political pressure for the two parties to reach agreement.
For such a system to work in the U.S., the authors say assessments of new drugs’ incremental clinical benefits would be essential. That information would in turn be used to negotiate prices, with a “recognition by both buyers and sellers that the process is fair, financially sustainable, and supportive of continued investments in pharmaceutical innovation.”
Read the post https://www.commonwealthfund.org/blog/2019/how-drug-prices-are-negotiated-germany
Can Germany’s Approach to Pricing New Drugs Work in the U.S.?
June 13, 2019
The German and U.S. health insurance systems are similar in many ways, but Germany has substantially lower drug prices. In a new To the Point post, James C. Robinson of the University of California, Berkeley, and colleagues look at how Germany prices drugs and consider whether its method could work here.
Prices for new drugs in Germany are negotiated between an umbrella organization representing insurers and the drug maker, and there is strong public and political pressure for the two parties to reach agreement.
For such a system to work in the U.S., the authors say assessments of new drugs’ incremental clinical benefits would be essential. That information would in turn be used to negotiate prices, with a “recognition by both buyers and sellers that the process is fair, financially sustainable, and supportive of continued investments in pharmaceutical innovation.”
Read the post https://www.commonwealthfund.org/blog/2019/how-drug-prices-are-negotiated-germany
State AGs File to Block Merger of T-Mobile and Sprint
CA press release:
SACRAMENTO - California Attorney General Xavier Becerra, co-leading with New York a coalition of 10 attorneys general, today filed a lawsuit to block the proposed merger of telecommunications companies T-Mobile and Sprint. The companies – two of only four national wireless providers – offer wireless phone services to over 13 million California consumers. The lawsuit challenges the acquisition of Sprint by T-Mobile because it would lead to higher prices and fewer choices for consumers, particularly low-income subscribers of the companies’ services.
“Although T-Mobile and Sprint may be promising faster, better, and cheaper service with this merger, the evidence weighs against it,” said Attorney General Becerra. “This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices. Today, along with New York and eight other partner states, we’ve filed a lawsuit to block this merger and protect the residents of our state.”
“When it comes to corporate power, bigger isn’t always better,” said Attorney General James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
The current market includes four national network providers: T-Mobile, Sprint, Verizon and AT&T. Sprint and T-Mobile’s proposed union would consolidate these four provider options into three, by combining T-Mobile and Sprint’s market shares. In certain areas of California, the market share of the merged firm would be over 50 percent. Moreover, Sprint and T-Mobile have high market shares among low-income populations.
They would become the dominant network provider for prepaid mobile services, which are available without a credit check. Any merger would significantly hurt these communities by diminishing competition and increasing costs to consumers.
This is T-Mobile’s third merger attempt. Each previous attempt has been blocked or abandoned due to opposition from the government based on the same concerns laid out in the lawsuit filed today. In this attempt, T-Mobile and Sprint argue that the merger would allow them to more quickly roll out a next-generation 5G network and more broadly increase service to rural customers. However the companies are already planning to roll out 5G networks, and T-Mobile is already planning increased rural coverage, even without the merger.
A copy of the complaint can be found here, https://oag.ca.gov/system/files/attachments/press-docs/t-mobile-sprint-complaint-redacted-case-19-cv-5434.pdf
CA press release:
SACRAMENTO - California Attorney General Xavier Becerra, co-leading with New York a coalition of 10 attorneys general, today filed a lawsuit to block the proposed merger of telecommunications companies T-Mobile and Sprint. The companies – two of only four national wireless providers – offer wireless phone services to over 13 million California consumers. The lawsuit challenges the acquisition of Sprint by T-Mobile because it would lead to higher prices and fewer choices for consumers, particularly low-income subscribers of the companies’ services.
“Although T-Mobile and Sprint may be promising faster, better, and cheaper service with this merger, the evidence weighs against it,” said Attorney General Becerra. “This merger would hurt the most vulnerable Californians and result in a compressed market with fewer choices and higher prices. Today, along with New York and eight other partner states, we’ve filed a lawsuit to block this merger and protect the residents of our state.”
“When it comes to corporate power, bigger isn’t always better,” said Attorney General James. “The T-Mobile and Sprint merger would not only cause irreparable harm to mobile subscribers nationwide by cutting access to affordable, reliable wireless service for millions of Americans, but would particularly affect lower-income and minority communities here in New York and in urban areas across the country. That’s why we are going to court to stop this merger and protect our consumers, because this is exactly the sort of consumer-harming, job-killing megamerger our antitrust laws were designed to prevent.”
The current market includes four national network providers: T-Mobile, Sprint, Verizon and AT&T. Sprint and T-Mobile’s proposed union would consolidate these four provider options into three, by combining T-Mobile and Sprint’s market shares. In certain areas of California, the market share of the merged firm would be over 50 percent. Moreover, Sprint and T-Mobile have high market shares among low-income populations.
They would become the dominant network provider for prepaid mobile services, which are available without a credit check. Any merger would significantly hurt these communities by diminishing competition and increasing costs to consumers.
This is T-Mobile’s third merger attempt. Each previous attempt has been blocked or abandoned due to opposition from the government based on the same concerns laid out in the lawsuit filed today. In this attempt, T-Mobile and Sprint argue that the merger would allow them to more quickly roll out a next-generation 5G network and more broadly increase service to rural customers. However the companies are already planning to roll out 5G networks, and T-Mobile is already planning increased rural coverage, even without the merger.
A copy of the complaint can be found here, https://oag.ca.gov/system/files/attachments/press-docs/t-mobile-sprint-complaint-redacted-case-19-cv-5434.pdf
Sprint and T-Mobile Merger Approval, Said to Be Near, Could Undercut Challenge by States
The Justice Department is pushing Sprint and T-Mobile to sell Boost Mobile and wireless frequencies, people familiar with a potential agreement said.CreditBrittainy Newman/The New York Times
By Cecilia Kang
If such an arrangement is approved, it could weaken an effort by attorneys general from nine states and the District of Columbia to halt the blockbuster deal with a suit that they filed this week.
From:https://www.nytimes.com/2019/06/14/technology/t-mobile-sprint-merger.html?searchResultPosition=3
The Justice Department is pushing Sprint and T-Mobile to sell Boost Mobile and wireless frequencies, people familiar with a potential agreement said.CreditBrittainy Newman/The New York Times
By Cecilia Kang
- June 14, 2019
If such an arrangement is approved, it could weaken an effort by attorneys general from nine states and the District of Columbia to halt the blockbuster deal with a suit that they filed this week.
From:https://www.nytimes.com/2019/06/14/technology/t-mobile-sprint-merger.html?searchResultPosition=3
Sports gambling raises possible antitrust issues concerning league control of sports data
Excerpt from Forbes:
Now, with the rapid advent of new U.S. markets for sports gambling, certain U.S. professional sports leagues may find themselves facing yet another antitrust challenge, this one related to the centralization of purported “game data rights” and efforts to foreclose non-league parties from competing to collect and resell game-related data.
There are two sections of antitrust law under which the U.S. professional sports leagues have historically faced challenges. Section 1 of the Sherman Act, in pertinent part, states that “every contract, combination … or conspiracy, in the restraint of trade … is declared to be illegal.” Meanwhile, Section 2 of the Sherman Act states that “every person who shall monopolize, or attempt to monopolize …. shall be deemed guilty of a felony.”
The recent practices of Major League Baseball and the National Basketball Association to centralize “ownership” of sports league data on the league (rather than team) level and then attempt to require their business partners to use only their data (and not data collected by any third party) raises novel legal questions under both sections of the Sherman Act.
Continue Reading…https://www.forbes.com/sites/marcedelman/2019/06/10/sports-data-policies-could-provide-next-big-antitrust-challenge-for-pro-sports-leagues/#526481d83284
Excerpt from Forbes:
Now, with the rapid advent of new U.S. markets for sports gambling, certain U.S. professional sports leagues may find themselves facing yet another antitrust challenge, this one related to the centralization of purported “game data rights” and efforts to foreclose non-league parties from competing to collect and resell game-related data.
There are two sections of antitrust law under which the U.S. professional sports leagues have historically faced challenges. Section 1 of the Sherman Act, in pertinent part, states that “every contract, combination … or conspiracy, in the restraint of trade … is declared to be illegal.” Meanwhile, Section 2 of the Sherman Act states that “every person who shall monopolize, or attempt to monopolize …. shall be deemed guilty of a felony.”
The recent practices of Major League Baseball and the National Basketball Association to centralize “ownership” of sports league data on the league (rather than team) level and then attempt to require their business partners to use only their data (and not data collected by any third party) raises novel legal questions under both sections of the Sherman Act.
Continue Reading…https://www.forbes.com/sites/marcedelman/2019/06/10/sports-data-policies-could-provide-next-big-antitrust-challenge-for-pro-sports-leagues/#526481d83284
A nearly decade-long legal battle over the harm inflicted on tens of thousands of women by surgically implanted pelvic mesh is moving away from manufacturers and toward the lawyers who helped the women bring their cases.
In recent weeks, women who received some of roughly $8 billion in settlements have sued their lawyers, accusing them of improperly enriching themselves with excessive fees or stretching themselves too thin to properly handle the pelvic mesh cases.
A potential class action lawsuit filed on Monday in state court in New Jersey contends that the 40 percent fee a group of law firms charged about 1,400 clients violated state law, which caps fees in personal injury lawsuits at about 33 percent. A separate suit filed in federal court in Houston on Thursday alleges that another group of firms took on so many cases that they missed filing deadlines for hundreds of women, potentially reducing the value of their claims against the mesh manufacturers to virtually nothing.
From: https://www.nytimes.com/2019/06/14/business/pelvic-mesh-surgery-litigation.html
In recent weeks, women who received some of roughly $8 billion in settlements have sued their lawyers, accusing them of improperly enriching themselves with excessive fees or stretching themselves too thin to properly handle the pelvic mesh cases.
A potential class action lawsuit filed on Monday in state court in New Jersey contends that the 40 percent fee a group of law firms charged about 1,400 clients violated state law, which caps fees in personal injury lawsuits at about 33 percent. A separate suit filed in federal court in Houston on Thursday alleges that another group of firms took on so many cases that they missed filing deadlines for hundreds of women, potentially reducing the value of their claims against the mesh manufacturers to virtually nothing.
From: https://www.nytimes.com/2019/06/14/business/pelvic-mesh-surgery-litigation.html
USDOJ's Jeff Wilder suggests possible use of monopolization law to challenge serial mergers. (The suggestion may be relevant to Facebook)
On March 19, 2019, House Antitrust Subcommittee Chairman David N. Cicilline (RI-01) wrote to the Federal Trade Commission asking that they open an investigation into whether Facebook has broken antitrust laws. He pointed out, among other things, that since its founding, Facebook has acquired over 75 companies. Two of the most significant purchases were Instagram, which Facebook bought in 2012 for $1 billion, and WhatsApp, which Facebook purchased in 2014 for $19 billion. Through these acquisitions, Facebook now owns three of the top four, and four of the top eight, social media apps.
It is a question whether usual Clayton Act Section 7 merger theories work well where there are a series of relatively small mergers.
In an on-the-record speech delivered on June 10, 2019, Jeffrey M. Wilder, USDOJ Acting Deputy Assistant Attorney General for Antitrust, suggested the possibility of enforcers using Sherman Act monopolization law where there is a series of mergers that, taken together, lead to great market power.
The history of the connection between Sherman Act monopolization law and Clayton Act merger law is an interesting one. See Anthony D. Schlesinger, Merger Litigation under the Sherman Act - Choice or Echo, 18 Sw L.J. 712 (1964) https://scholar.smu.edu/smulr/vol18/iss4/5
There is some historical basis for applying monopolization theories apply to vertical mergers that may greatly enhance a firms market power. See United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 606-08 (1957)(condemned vertical merger on the theory that by acquiring a major purchaser of its fabrics and automobile finishes, Dupont would obtain unfair advantage over competing suppliers); see also Ford Motor Co. v. United States, 405 U.S. 562, 573-75 (1972) (condemning Ford’s acquisition of Autolite spark plug).
The history of using monopolization law in merger cases may be complex, but Wilder’s suggestion is intriguing: that Sherman Act monopolization law be considered as an enforcement tool where there is a series of mergers that lead to great market power. The suggestion seems relevant to the Ciliciline points about Facebook.
Comment by Don Allen Resnikoff, who takes full responsibility for the content
On March 19, 2019, House Antitrust Subcommittee Chairman David N. Cicilline (RI-01) wrote to the Federal Trade Commission asking that they open an investigation into whether Facebook has broken antitrust laws. He pointed out, among other things, that since its founding, Facebook has acquired over 75 companies. Two of the most significant purchases were Instagram, which Facebook bought in 2012 for $1 billion, and WhatsApp, which Facebook purchased in 2014 for $19 billion. Through these acquisitions, Facebook now owns three of the top four, and four of the top eight, social media apps.
It is a question whether usual Clayton Act Section 7 merger theories work well where there are a series of relatively small mergers.
In an on-the-record speech delivered on June 10, 2019, Jeffrey M. Wilder, USDOJ Acting Deputy Assistant Attorney General for Antitrust, suggested the possibility of enforcers using Sherman Act monopolization law where there is a series of mergers that, taken together, lead to great market power.
The history of the connection between Sherman Act monopolization law and Clayton Act merger law is an interesting one. See Anthony D. Schlesinger, Merger Litigation under the Sherman Act - Choice or Echo, 18 Sw L.J. 712 (1964) https://scholar.smu.edu/smulr/vol18/iss4/5
There is some historical basis for applying monopolization theories apply to vertical mergers that may greatly enhance a firms market power. See United States v. E.I. du Pont de Nemours & Co., 353 U.S. 586, 606-08 (1957)(condemned vertical merger on the theory that by acquiring a major purchaser of its fabrics and automobile finishes, Dupont would obtain unfair advantage over competing suppliers); see also Ford Motor Co. v. United States, 405 U.S. 562, 573-75 (1972) (condemning Ford’s acquisition of Autolite spark plug).
The history of using monopolization law in merger cases may be complex, but Wilder’s suggestion is intriguing: that Sherman Act monopolization law be considered as an enforcement tool where there is a series of mergers that lead to great market power. The suggestion seems relevant to the Ciliciline points about Facebook.
Comment by Don Allen Resnikoff, who takes full responsibility for the content
Excerpts from NYT article:
Save Our Food. Free the Seed.
Behemoth agrochemical companies are failing to deliver what farmers need to grow and what people want to eat.
By Dan Barber
Just 50 years ago, some 1,000 small and family-owned seed companies were producing and distributing seeds in the United States; by 2009, there were fewer than 100. Thanks to a series of mergers and acquisitions over the last few years, four multinational agrochemical firms — Corteva, ChemChina, Bayer and BASF — now control over 60 percent of global seed sales.
Big Seed keeps getting bigger, doubling down on a system of monocultures and mass distribution.
The problem is not that these seed corporations are too big to fail. It’s that they are failing to deliver what growers need to grow and what we want to eat.
The knockout punch for farmer-controlled seed was the utility patent. In a landmark (and utterly bananas) decision in 1980, the Supreme Court ruled in favor of allowing patents on living organisms. It wasn’t long before the same protections were extended to crops. New advances in genetic engineering supported the argument, with companies claiming seeds as proprietary inventions rather than part of our shared commons. Utility patents restricted farmers’ freedom to save and exchange seed and breeders’ right to use the germplasm for research.
The slow march of seed consolidation suddenly turned into a sprint. Chemical and pharmaceutical companies with no historical interest in seed bought small regional and family-owned seed companies. Targeting cash crops like corn and soy, these companies saw seeds as part of a profitable package: They made herbicides and pesticides, and then engineered the seeds to produce crops that could survive that drench of chemicals. The same seed companies that now control more than 60 percent of seed sales also sell more than 60 percent of the pesticides. Not a bad business.
More than 90 percent of the 178 million acres of corn and soybeans planted last year in the United States were sown with genetically engineered seeds. It’s a vision as dispiriting as it is unappetizing.
Vegetables have been spared some of this genetic tinkering but are increasingly victim to the same aggressive corporate seed environment. Last year the pharmaceutical company Bayer acquired the world’s largest vegetable seed company, Monsanto.
For these megacompanies, capturing a large share of the vegetable seed market means capturing patentable genetics.
Full article: https://www.nytimes.com/interactive/2019/06/07/opinion/sunday/dan-barber-seed-companies.html?searchResultPosition=1
From USPIRG consumer blog:
Will New York catch up to Mississippi in protecting consumers?
Posted: 07 Jun 2019 07:03 AM PDT
by Jeff Sovern
Many states allow their consumers to sue misbehaving companies for unfair practices, including red and purple states like Mississippi, Georgia, North Carolina, Tennessee and West Virginia, states that we normally don't think of as being in the vanguard of consumer protection. This power can be important in protecting consumers. For example, the CFPB used its own ability to stop unfair practices when it pursued Wells Fargo for opening unauthorized accounts, rather than its power to block deception. But New York has lagged behind these states, as well as its neighbors like Connecticut, Pennsylvania, and Massachusetts, in leaving unfairness out of its UDAP statute. Thus, New Yorkers could not have sued Wells Fargo for unfair conduct in opening unauthorized accounts.
But now that may change. The New York legislature is considering a bill to put the U in its UDAP statute. The bill would also eliminate New York's requirement that plaintiffs in UDAP cases demonstrate that the offending conduct is "consumer-oriented," a requirement that no other state has adopted and that does not even appear in New York's statute; instead it was added by a court that evidently eschewed textualism as a method of statutory interpretation.
Unfortunately, but predictably, the bill is encountering heavy industry opposition. One argument made against the bill is that it "will open the flood gates for litigation." But many other states permit consumers to sue for unfair conduct and don't require consumer-oriented conduct and have not experienced a flood of litigation (even assuming there is something wrong with a flood of litigation against bad actors). The items I have listed merely bring the statute into conformity with other states.
The statute currently provides for only $50 in statutory damages. As a number of studies have demonstrated, consumers almost never bring claims for $50. It just isn't worth it to them. So preserving $50 as the amount of statutory damages would be essentially the same as having no statutory damages. The bill addresses this problem by increasing the amount of statutory damages to $2,000, an amount which is more likely to be enough to cause consumers to enforce the statute, though still less than the red state of Kansas, which allows statutory damages of fives times as much, or 200 times what the New York statute currently provides. Of course, businesses object to this too: they prefer that the amount be so low as to render private enforcement virtually nonexistent in the absence of large actual damages.
New York has a chance to offer its consumers not just the protection they need, but that they deserve. It should leap at the opportunity.
From USPIRG consumer blog:
Senators ask CFPB to reconsider debt collection proposal
Posted: 07 Jun 2019 06:04 AM PDT
More than 20 U.S. senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal to allow debt collectors to send unlimited texts and emails to consumers, and to call consumers seven times a week per debt, USA Today reports. “By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications,” the senators wrote.
The full article (which quotes the full text of the letter) is here.
Will New York catch up to Mississippi in protecting consumers?
Posted: 07 Jun 2019 07:03 AM PDT
by Jeff Sovern
Many states allow their consumers to sue misbehaving companies for unfair practices, including red and purple states like Mississippi, Georgia, North Carolina, Tennessee and West Virginia, states that we normally don't think of as being in the vanguard of consumer protection. This power can be important in protecting consumers. For example, the CFPB used its own ability to stop unfair practices when it pursued Wells Fargo for opening unauthorized accounts, rather than its power to block deception. But New York has lagged behind these states, as well as its neighbors like Connecticut, Pennsylvania, and Massachusetts, in leaving unfairness out of its UDAP statute. Thus, New Yorkers could not have sued Wells Fargo for unfair conduct in opening unauthorized accounts.
But now that may change. The New York legislature is considering a bill to put the U in its UDAP statute. The bill would also eliminate New York's requirement that plaintiffs in UDAP cases demonstrate that the offending conduct is "consumer-oriented," a requirement that no other state has adopted and that does not even appear in New York's statute; instead it was added by a court that evidently eschewed textualism as a method of statutory interpretation.
Unfortunately, but predictably, the bill is encountering heavy industry opposition. One argument made against the bill is that it "will open the flood gates for litigation." But many other states permit consumers to sue for unfair conduct and don't require consumer-oriented conduct and have not experienced a flood of litigation (even assuming there is something wrong with a flood of litigation against bad actors). The items I have listed merely bring the statute into conformity with other states.
The statute currently provides for only $50 in statutory damages. As a number of studies have demonstrated, consumers almost never bring claims for $50. It just isn't worth it to them. So preserving $50 as the amount of statutory damages would be essentially the same as having no statutory damages. The bill addresses this problem by increasing the amount of statutory damages to $2,000, an amount which is more likely to be enough to cause consumers to enforce the statute, though still less than the red state of Kansas, which allows statutory damages of fives times as much, or 200 times what the New York statute currently provides. Of course, businesses object to this too: they prefer that the amount be so low as to render private enforcement virtually nonexistent in the absence of large actual damages.
New York has a chance to offer its consumers not just the protection they need, but that they deserve. It should leap at the opportunity.
From USPIRG consumer blog:
Senators ask CFPB to reconsider debt collection proposal
Posted: 07 Jun 2019 06:04 AM PDT
More than 20 U.S. senators are calling on the Consumer Financial Protection Bureau to reconsider a proposal to allow debt collectors to send unlimited texts and emails to consumers, and to call consumers seven times a week per debt, USA Today reports. “By allowing debt collectors to send consumers unlimited text messages and emails without first receiving affirmative consent for such a method of communication, the proposed rule permits collectors to overwhelm consumers with intrusive communications,” the senators wrote.
The full article (which quotes the full text of the letter) is here.
Open Markets fund raising letter -- antitrust actions looming for big tech
Dear Friends:
When the Open Markets Institute launched in September 2017, the thought that in less than two years, a bipartisan effort would be underway in the halls of Congress, among federal antitrust enforcers, and from state Attorneys General to take on some of the world’s most dangerous monopolies -- Facebook, Google, Amazon -- never crossed our minds.
But this week marked a major turning point.
In the Washington Post: Big Tech’s Antitrust Problems are Just Beginning
In the New York Times: Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In
In the Washington Times: Big Tech Unites Democrats, Republicans Behind Antitrust Crackdown
We’re writing to thank all of you for being a part of this effort, back when it was much lonelier that it is today. The progress we’ve made together has been historic. And momentum is on our side.
But Big Tech is gearing up for an epic fight -- and so should we.
Last year, tech monopolies spent $55 million on lobbyists alone. So we’re asking our community to chip in $55 to make a point -- and make sure we can continue to make progress in the fight to free our country from monopoly power.
DAR comment: There is momentum for antitrust action against big tech, as Open Markets fund raising letter says. But there are countervailing forces in play, as reflected in the articles that follow. The current aggressive international economic policies of the US noted in the Economist article are based on ideas of international business rivalry that are inconsistent with currently traditional antitrust enforcement policies. The opinion piece by Angela Merkel focuses on the inconsistencies. Don Allen Resnikoff
Dear Friends:
When the Open Markets Institute launched in September 2017, the thought that in less than two years, a bipartisan effort would be underway in the halls of Congress, among federal antitrust enforcers, and from state Attorneys General to take on some of the world’s most dangerous monopolies -- Facebook, Google, Amazon -- never crossed our minds.
But this week marked a major turning point.
In the Washington Post: Big Tech’s Antitrust Problems are Just Beginning
In the New York Times: Antitrust Troubles Snowball for Tech Giants as Lawmakers Join In
In the Washington Times: Big Tech Unites Democrats, Republicans Behind Antitrust Crackdown
We’re writing to thank all of you for being a part of this effort, back when it was much lonelier that it is today. The progress we’ve made together has been historic. And momentum is on our side.
But Big Tech is gearing up for an epic fight -- and so should we.
Last year, tech monopolies spent $55 million on lobbyists alone. So we’re asking our community to chip in $55 to make a point -- and make sure we can continue to make progress in the fight to free our country from monopoly power.
DAR comment: There is momentum for antitrust action against big tech, as Open Markets fund raising letter says. But there are countervailing forces in play, as reflected in the articles that follow. The current aggressive international economic policies of the US noted in the Economist article are based on ideas of international business rivalry that are inconsistent with currently traditional antitrust enforcement policies. The opinion piece by Angela Merkel focuses on the inconsistencies. Don Allen Resnikoff
The Economist: America is deploying a new economic arsenal to assert its power
Excerpts from https://www.economist.com/leaders/2019/06/06/america-is-deploying-a-new-economic-arsenal-to-assert-its-power
Outright enemies such as Iran and Venezuela face tighter sanctions—last year 1,500 people, firms and vessels were added to the list, a record figure. The rest of the world faces a new regime for tech and finance. An executive order prohibits transactions in semiconductors and software made by foreign adversaries, and a law passed last year known as firrmapolices foreign investment into Silicon Valley. If a firm is blacklisted, banks usually refuse to deal with it, cutting it off from the dollar payments system. That is crippling—as two firms, zte and Rusal, discovered, briefly, last year.
Such tools used to be reserved for times of war: the legal techniques used for surveillance of the payments system were developed to hunt al-Qaeda. Now a “national emergency” has been declared in tech. Officials have discretion to define what is a threat. Though they often clobber specific firms, such as Huawei, others are running scared (see article). If you run a global company, are you sure your Chinese clients are not about to be blacklisted?
The damage to America’s economy so far has been deceptively small. Tariffs cause agony in export hubs such as northern Mexico, but even if Mr Trump imposes all his threatened tariffs, the tax on imports would be worth only about 1% of America’s gdp. His poll ratings at home have held up, even as they have slumped abroad. His officials believe the experiment in weaponising America’s economic network has only just begun.
In fact, the bill is mounting. America could have built a global coalition to press China to reform its economy, but it has now squandered precious goodwill. Allies looking for new trade deals with America, including post-Brexit Britain, will worry that a presidential tweet could scupper it after it has been signed. Retaliation in kind has begun. China has begun its own blacklist of foreign firms. And the risk of a clumsy mistake that triggers a financial panic is high. Imagine if America banned the $1trn of Chinese shares trading in New York, or cut off foreign banks.
In the long run the American-led network is under threat. There are hints of mutiny—of America’s 35 European and Asian military allies, only three have so far agreed to ban Huawei. Efforts to build a rival global infrastructure will accelerate. China is creating its own courts to adjudicate commercial disputes with foreigners (see Chaguan). Europe is experimenting with building a new payments system to get round the Iran sanctions, which could in time be used elsewhere. China, and eventually India, will be keen to end their dependence on semiconductors from Silicon Valley. Mr Trump is right that America’s network gives it vast power. It will take decades, and cost a fortune, to replace it. But if you abuse it, ultimately you will lose it.◼
Excerpts from https://www.economist.com/leaders/2019/06/06/america-is-deploying-a-new-economic-arsenal-to-assert-its-power
Outright enemies such as Iran and Venezuela face tighter sanctions—last year 1,500 people, firms and vessels were added to the list, a record figure. The rest of the world faces a new regime for tech and finance. An executive order prohibits transactions in semiconductors and software made by foreign adversaries, and a law passed last year known as firrmapolices foreign investment into Silicon Valley. If a firm is blacklisted, banks usually refuse to deal with it, cutting it off from the dollar payments system. That is crippling—as two firms, zte and Rusal, discovered, briefly, last year.
Such tools used to be reserved for times of war: the legal techniques used for surveillance of the payments system were developed to hunt al-Qaeda. Now a “national emergency” has been declared in tech. Officials have discretion to define what is a threat. Though they often clobber specific firms, such as Huawei, others are running scared (see article). If you run a global company, are you sure your Chinese clients are not about to be blacklisted?
The damage to America’s economy so far has been deceptively small. Tariffs cause agony in export hubs such as northern Mexico, but even if Mr Trump imposes all his threatened tariffs, the tax on imports would be worth only about 1% of America’s gdp. His poll ratings at home have held up, even as they have slumped abroad. His officials believe the experiment in weaponising America’s economic network has only just begun.
In fact, the bill is mounting. America could have built a global coalition to press China to reform its economy, but it has now squandered precious goodwill. Allies looking for new trade deals with America, including post-Brexit Britain, will worry that a presidential tweet could scupper it after it has been signed. Retaliation in kind has begun. China has begun its own blacklist of foreign firms. And the risk of a clumsy mistake that triggers a financial panic is high. Imagine if America banned the $1trn of Chinese shares trading in New York, or cut off foreign banks.
In the long run the American-led network is under threat. There are hints of mutiny—of America’s 35 European and Asian military allies, only three have so far agreed to ban Huawei. Efforts to build a rival global infrastructure will accelerate. China is creating its own courts to adjudicate commercial disputes with foreigners (see Chaguan). Europe is experimenting with building a new payments system to get round the Iran sanctions, which could in time be used elsewhere. China, and eventually India, will be keen to end their dependence on semiconductors from Silicon Valley. Mr Trump is right that America’s network gives it vast power. It will take decades, and cost a fortune, to replace it. But if you abuse it, ultimately you will lose it.◼
Merkel Says EU Antitrust Rules Are Naive About Threat of China
By
Patrick Donahue
and
Aoife White
June 4, 2019, 6:19 AM EDT
“How can you say that China won’t engage in Europe in the next five years? I think such a claim is rash,” Merkel said on Tuesday to the BDI industry group. She called again for the EU to alter the rules “in order to be truly competitive.”
Excerpt from: https://www.bloomberg.com/news/articles/2019-06-04/merkel-says-eu-antitrust-rules-are-naive-about-threat-of-china
By
Patrick Donahue
and
Aoife White
June 4, 2019, 6:19 AM EDT
- German Chancellor Angela Merkel blasted the European Union’s merger rules for failing to take into account growing Chinese dominance and hampering efforts to compete on the global stage.
“How can you say that China won’t engage in Europe in the next five years? I think such a claim is rash,” Merkel said on Tuesday to the BDI industry group. She called again for the EU to alter the rules “in order to be truly competitive.”
Excerpt from: https://www.bloomberg.com/news/articles/2019-06-04/merkel-says-eu-antitrust-rules-are-naive-about-threat-of-china
Pro-enforcement editorial in the New York Times on Sprint T-Mobile.
https://www.nytimes.com/2019/06/01/opinion/sunday/t-mobile-sprint-merger-antitrust.html
"Allowing the mobile phone company to merge with Sprint would hurt customers, workers and the broader economy."
https://www.nytimes.com/2019/06/01/opinion/sunday/t-mobile-sprint-merger-antitrust.html
"Allowing the mobile phone company to merge with Sprint would hurt customers, workers and the broader economy."
Commentary: Qualcomm and the debate about monopolization and antitrust law enforcement
-- by Don Allen Resnikoff*
In her opinion in the FTC action against Qualcomm, Judge Loh finds that Qualcomm has monopoly power in the “CDMA and premium LTE modem chip markets,” and has used that power to engage in a wide variety of anticompetitive acts against rivals. The opinion can be read at https://www.scribd.com/document/411066615/19-05-21-FTC-v-Qualcomm-Judicial-Findings?campaign=SkimbitLtd&ad_group=3947X638757X31f5148c5fdf2b8e9de2462cbed96a17&keyword=660149026&source=hp_affiliate&medium=affiliate
Qualcomm is not alone in complaining about Judge Loh’s findings of monopoly power and anticompetitive acts. As a loyal reader of this blog has pointed out, the Wall Street Journal has published opinion pieces critical of Judge Loh’s decision, including the editorial that appears below. The opening sentence of the WSJ opinion piece below says: “The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.”
There are antitrust enforcement advocates who worry about the power of political opposition to antitrust enforcement generally, and monopolization enforcement in particular. Those worries are reinforced by the WSJ editorial focus on American leadership in 5G telecommunications technology and the competitive threat from China. The WSJ message is not just that Judge Loh is unfairly critical of Qualcomm conduct, and overstates Qualcomm’s market power. The further suggestion is that America’s 5G leadership would be better served if the Judge’s decision against Qualcomm were reversed on appeal, so that Qualcomm would be free to deal with licensing issues in an less constrained manner, and government agencies other than the FTC and the judiciary would be less constrained in dealing with competitive threats from China and Huawei.
I read the WSJ editorial as suggesting that the FTC antitrust action against monopolization by Qualcomm is flawed because of a blindness to political and market realities. The FTC prosecution is perceived as naïve and counterproductive. My guess is that such criticism will persist: A continuing controversy will be about whether there should be political and popular support for antitrust enforcement that presumes to be independent of political issues such as international trade controversies. Is there political and popular support for antitrust enforcement that is in conflict with U.S. government industrial policies concerning the fairness of competition in 5G from Huawei as a Chinese government connected company?
*The opinions expressed are entirely the responsibility of Don Allen Resnikoff
The dissenting view from the WSJ editorial board:
Judge Koh’s Qualcomm Coup--Her sweeping antitrust ruling kneecaps the firm and 5G competition.
By
The WSJ Editorial Board
May 22, 2019 6:47 p.m. ET
The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.
Last month Qualcomm and Apple settled their world-wide feud over royalties that the San Diego chipmaker charges for licensing its standard essential patents. Apple had earlier solicited intervention by the FTC, which during the waning days of the Obama Administration sued Qualcomm under the Sherman Antitrust Act.
According to the FTC, Qualcomm’s alleged “no license, no chip” practice of pegging patent royalties to the price of a device—3.25% with a $400 cap on the selling price—is anti-competitive. If smartphone makers reject its terms, Qualcomm could cut off their chip supply. By leveraging its dominance in modems, Qualcomm could charge higher royalties that would reinforce its chip monopoly.
At least that was the FTC’s theory, which hasn't borne out in economic reality. Qualcomm’s pricing practice, pioneered byNokia , Motorola and Ericsson during the 1990s, is standard in the industry. As industry experts noted during trial, chip rivals likeBroadcom and Texas Instruments lagged Qualcomm because they invested less or late in research and development, and they exited the business.
Qualcomm’s market share has also slipped amid increased competition. Apple uses Intel modems in newer iPhones, but the Silicon Valley chipmaker struggled to develop 5G chips. Intel chip delays could have cost Apple market share, which probably prompted its settlement with Qualcomm. Intel bowed out after Apple said Qualcomm would supply its 5G chips.
These facts were irrelevant to Judge Koh, who ruled in favor of the FTC on all counts. Despite scant evidence that Qualcomm’s pricing directly harmed competitors or consumers, Judge Koh opined that “courts should infer ‘causation’ from the fact that a defendant has engaged in anticompetitive conduct that ‘reasonably appear[s] capable of making a significant contribution to . . . maintaining monopoly power.’”
What’s the point of a trial then? After the Apple settlement, the Justice Department urged Judge Koh not to impose an overly broad remedy that “ultimately may cause harm to competition and consumers” and “could reduce competition and innovation in markets for 5G technology and downstream applications that rely on that technology.”
Forget Justice. Judge Koh ordered Qualcomm to renegotiate its contracts with smartphone manufacturers worldwide and license patents based on the chip price. She also ruled that Qualcomm must license patents to rival chipmakers, which would severely reduce royalties it uses to fund research and development. Her diktat could help Huawei and Samsung, which have developed chips.
But it also creates significant market uncertainty. Judge Koh has effectively torn up hundreds of business contracts and rewritten industry standards. Her legal findings could apply to chipmakers for other devices, so Broadcom, MediaTek and others should pay close attention. Businesses that support government intervention sooner or later become targets too.
Interventions by foreign regulators to kneecap Qualcomm and help domestic competitors were far more modest. China’s National Development and Reform Commission in 2015 ordered Qualcomm to cut royalty rates on handsets made and sold in China and pay a $150 million fine, which
Judge Koh dismissed as a bribe to the Chinese government to avoid a stiffer penalty.
In 2018 Qualcomm settled antitrust complaints with Samsung for $100 million. But Judge Koh laments: “Qualcomm’s pursuit of this and similar releases to extinguish antitrust claims threatens to impede the government’s ability to enforce the antitrust laws, and could enable future unlawful Qualcomm conduct to go unreported.”
In essence Judge Koh has barred Qualcomm from settling complaints with companies out of court to avoid government litigation. That’s right—the judge has forbidden businesses from trying to work out disagreements on their own. Qualcomm must also submit to FTC monitoring for seven years, which puts bureaucrats in charge of the company.
Qualcomm plans to ask the Ninth Circuit Court of Appeals to stay Judge Koh’s ruling. FTC Chairman Joseph Simons has recused himself from the case because of an ostensible conflict of interest. But even liberals on the Ninth Circuit and the commission should recognize the lawsuit’s threat to competitive markets and ultimately consumers.
Appeared in the May 23, 2019, print edition.
-- by Don Allen Resnikoff*
In her opinion in the FTC action against Qualcomm, Judge Loh finds that Qualcomm has monopoly power in the “CDMA and premium LTE modem chip markets,” and has used that power to engage in a wide variety of anticompetitive acts against rivals. The opinion can be read at https://www.scribd.com/document/411066615/19-05-21-FTC-v-Qualcomm-Judicial-Findings?campaign=SkimbitLtd&ad_group=3947X638757X31f5148c5fdf2b8e9de2462cbed96a17&keyword=660149026&source=hp_affiliate&medium=affiliate
Qualcomm is not alone in complaining about Judge Loh’s findings of monopoly power and anticompetitive acts. As a loyal reader of this blog has pointed out, the Wall Street Journal has published opinion pieces critical of Judge Loh’s decision, including the editorial that appears below. The opening sentence of the WSJ opinion piece below says: “The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.”
There are antitrust enforcement advocates who worry about the power of political opposition to antitrust enforcement generally, and monopolization enforcement in particular. Those worries are reinforced by the WSJ editorial focus on American leadership in 5G telecommunications technology and the competitive threat from China. The WSJ message is not just that Judge Loh is unfairly critical of Qualcomm conduct, and overstates Qualcomm’s market power. The further suggestion is that America’s 5G leadership would be better served if the Judge’s decision against Qualcomm were reversed on appeal, so that Qualcomm would be free to deal with licensing issues in an less constrained manner, and government agencies other than the FTC and the judiciary would be less constrained in dealing with competitive threats from China and Huawei.
I read the WSJ editorial as suggesting that the FTC antitrust action against monopolization by Qualcomm is flawed because of a blindness to political and market realities. The FTC prosecution is perceived as naïve and counterproductive. My guess is that such criticism will persist: A continuing controversy will be about whether there should be political and popular support for antitrust enforcement that presumes to be independent of political issues such as international trade controversies. Is there political and popular support for antitrust enforcement that is in conflict with U.S. government industrial policies concerning the fairness of competition in 5G from Huawei as a Chinese government connected company?
*The opinions expressed are entirely the responsibility of Don Allen Resnikoff
The dissenting view from the WSJ editorial board:
Judge Koh’s Qualcomm Coup--Her sweeping antitrust ruling kneecaps the firm and 5G competition.
By
The WSJ Editorial Board
May 22, 2019 6:47 p.m. ET
The biggest threat to America’s 5G leadership isn’t China or Huawei, federal Judge Lucy Koh revealed in her sweeping 233-page ruling against Qualcomm Tuesday in a Federal Trade Commission lawsuit. It’s regulators and judges who try to control markets.
Last month Qualcomm and Apple settled their world-wide feud over royalties that the San Diego chipmaker charges for licensing its standard essential patents. Apple had earlier solicited intervention by the FTC, which during the waning days of the Obama Administration sued Qualcomm under the Sherman Antitrust Act.
According to the FTC, Qualcomm’s alleged “no license, no chip” practice of pegging patent royalties to the price of a device—3.25% with a $400 cap on the selling price—is anti-competitive. If smartphone makers reject its terms, Qualcomm could cut off their chip supply. By leveraging its dominance in modems, Qualcomm could charge higher royalties that would reinforce its chip monopoly.
At least that was the FTC’s theory, which hasn't borne out in economic reality. Qualcomm’s pricing practice, pioneered byNokia , Motorola and Ericsson during the 1990s, is standard in the industry. As industry experts noted during trial, chip rivals likeBroadcom and Texas Instruments lagged Qualcomm because they invested less or late in research and development, and they exited the business.
Qualcomm’s market share has also slipped amid increased competition. Apple uses Intel modems in newer iPhones, but the Silicon Valley chipmaker struggled to develop 5G chips. Intel chip delays could have cost Apple market share, which probably prompted its settlement with Qualcomm. Intel bowed out after Apple said Qualcomm would supply its 5G chips.
These facts were irrelevant to Judge Koh, who ruled in favor of the FTC on all counts. Despite scant evidence that Qualcomm’s pricing directly harmed competitors or consumers, Judge Koh opined that “courts should infer ‘causation’ from the fact that a defendant has engaged in anticompetitive conduct that ‘reasonably appear[s] capable of making a significant contribution to . . . maintaining monopoly power.’”
What’s the point of a trial then? After the Apple settlement, the Justice Department urged Judge Koh not to impose an overly broad remedy that “ultimately may cause harm to competition and consumers” and “could reduce competition and innovation in markets for 5G technology and downstream applications that rely on that technology.”
Forget Justice. Judge Koh ordered Qualcomm to renegotiate its contracts with smartphone manufacturers worldwide and license patents based on the chip price. She also ruled that Qualcomm must license patents to rival chipmakers, which would severely reduce royalties it uses to fund research and development. Her diktat could help Huawei and Samsung, which have developed chips.
But it also creates significant market uncertainty. Judge Koh has effectively torn up hundreds of business contracts and rewritten industry standards. Her legal findings could apply to chipmakers for other devices, so Broadcom, MediaTek and others should pay close attention. Businesses that support government intervention sooner or later become targets too.
Interventions by foreign regulators to kneecap Qualcomm and help domestic competitors were far more modest. China’s National Development and Reform Commission in 2015 ordered Qualcomm to cut royalty rates on handsets made and sold in China and pay a $150 million fine, which
Judge Koh dismissed as a bribe to the Chinese government to avoid a stiffer penalty.
In 2018 Qualcomm settled antitrust complaints with Samsung for $100 million. But Judge Koh laments: “Qualcomm’s pursuit of this and similar releases to extinguish antitrust claims threatens to impede the government’s ability to enforce the antitrust laws, and could enable future unlawful Qualcomm conduct to go unreported.”
In essence Judge Koh has barred Qualcomm from settling complaints with companies out of court to avoid government litigation. That’s right—the judge has forbidden businesses from trying to work out disagreements on their own. Qualcomm must also submit to FTC monitoring for seven years, which puts bureaucrats in charge of the company.
Qualcomm plans to ask the Ninth Circuit Court of Appeals to stay Judge Koh’s ruling. FTC Chairman Joseph Simons has recused himself from the case because of an ostensible conflict of interest. But even liberals on the Ninth Circuit and the commission should recognize the lawsuit’s threat to competitive markets and ultimately consumers.
Appeared in the May 23, 2019, print edition.
Is the U.S. Justice Department preparing an investigation of Alphabet Inc.’s Google to determine whether the tech giant broke antitrust law?
Officials from the Justice Department’s Antitrust Division and Federal Trade Commission, which both enforce antitrust law, met in recent weeks to give Justice jurisdiction over Google, said the sources, who sought anonymity because they were not authorized to speak on the record.
The potential investigation represents the latest attack on a tech company by the administration of U.S. President Donald Trump, who has accused social media companies and Google of suppressing conservative voices on their platforms online.
One source said the potential investigation, first reported by the Wall Street Journal, focused on accusations that Google gave preference to its own businesses in searches.
A spokesman for the Justice Department said he could not confirm or deny that an investigation was being considered.
Google declined comment.
FTC investigation
Early in 2013, the FTC closed a long-running investigation of Google, giving it a slap on the wrist. Under FTC pressure, Google agreed to end the practice of “scraping” reviews and other data from rivals’ websites for its own products, and to let advertisers export data to independently assess campaigns.
Google’s search, YouTube, reviews, maps and other businesses, which are largely free to consumers but financed through advertising, have catapulted it from a startup to one of the world’s richest companies in just two decades.
Along the way, it has made enemies in both the tech world, who have complained to law enforcers about its market dominance, and in Washington, where lawmakers have complained about issues from its alleged political bias to its plans for China.
Some welcome news
TripAdvisor chief executive and co-founder Stephen Kaufer welcomed news that Google could face Justice Department antitrust scrutiny.
“TripAdvisor remains concerned about Google’s practices in the United States, the EU and throughout the world,” Kaufer said in a statement. “For the good of consumers and competition on the internet, we welcome any renewed interest by U.S. regulators into Google’s anticompetitive behavior.”
Democratic presidential candidate Elizabeth Warren has pushed for action to break up Google, as well as other big tech companies. Senator Kamala Harris, who is also running for president on the Democratic ticket, has agreed.
“This is very big news, and overdue,” Sen. Josh Hawley, a Republican Google critic, said Twitter, regarding the investigation.
Excerpt from https://www.voanews.com/a/report-us-to-launch-google-antitrust-inquiry/4941585.html
Officials from the Justice Department’s Antitrust Division and Federal Trade Commission, which both enforce antitrust law, met in recent weeks to give Justice jurisdiction over Google, said the sources, who sought anonymity because they were not authorized to speak on the record.
The potential investigation represents the latest attack on a tech company by the administration of U.S. President Donald Trump, who has accused social media companies and Google of suppressing conservative voices on their platforms online.
One source said the potential investigation, first reported by the Wall Street Journal, focused on accusations that Google gave preference to its own businesses in searches.
A spokesman for the Justice Department said he could not confirm or deny that an investigation was being considered.
Google declined comment.
FTC investigation
Early in 2013, the FTC closed a long-running investigation of Google, giving it a slap on the wrist. Under FTC pressure, Google agreed to end the practice of “scraping” reviews and other data from rivals’ websites for its own products, and to let advertisers export data to independently assess campaigns.
Google’s search, YouTube, reviews, maps and other businesses, which are largely free to consumers but financed through advertising, have catapulted it from a startup to one of the world’s richest companies in just two decades.
Along the way, it has made enemies in both the tech world, who have complained to law enforcers about its market dominance, and in Washington, where lawmakers have complained about issues from its alleged political bias to its plans for China.
Some welcome news
TripAdvisor chief executive and co-founder Stephen Kaufer welcomed news that Google could face Justice Department antitrust scrutiny.
“TripAdvisor remains concerned about Google’s practices in the United States, the EU and throughout the world,” Kaufer said in a statement. “For the good of consumers and competition on the internet, we welcome any renewed interest by U.S. regulators into Google’s anticompetitive behavior.”
Democratic presidential candidate Elizabeth Warren has pushed for action to break up Google, as well as other big tech companies. Senator Kamala Harris, who is also running for president on the Democratic ticket, has agreed.
“This is very big news, and overdue,” Sen. Josh Hawley, a Republican Google critic, said Twitter, regarding the investigation.
Excerpt from https://www.voanews.com/a/report-us-to-launch-google-antitrust-inquiry/4941585.html
Kaspersky Lab reports 61% jump in mobile banking malware
May 30, 2019
Mobile banking Trojans are among the most rapidly developing, flexible and dangerous types of malware, according to Kaspersky Lab,
which found a 61% increase in the number of files (from 18,501 to 2,841) of this type of malware between Q4 2018 and Q1 2019.
Banking Trojans grew not only in terms of the number of different samples detected, but also in their share of the threat landscape, the company said in a press release. In Q4 2018, mobile banking Trojans accounted for 1.85% of all mobile malware; in Q1 2019, their share reached 3.24%.
The malware generally looks like a legitimate app, such as a banking application. When a victim tries to reach their genuine bank app, the attackers gain access to that too, the company said.
"The rapid rise of mobile financial malware is a troubling sign, especially since we see how criminals are perfecting their distribution mechanisms," Kaspersky Lab security research Victor Chebyshev said in the release.
Other online threat statistics from the Q1, 2019 report include:
Kaspersky Lab advised users to take a number of precautions to reduce the risk of infection with banking Trojans:
May 30, 2019
Mobile banking Trojans are among the most rapidly developing, flexible and dangerous types of malware, according to Kaspersky Lab,
which found a 61% increase in the number of files (from 18,501 to 2,841) of this type of malware between Q4 2018 and Q1 2019.
Banking Trojans grew not only in terms of the number of different samples detected, but also in their share of the threat landscape, the company said in a press release. In Q4 2018, mobile banking Trojans accounted for 1.85% of all mobile malware; in Q1 2019, their share reached 3.24%.
The malware generally looks like a legitimate app, such as a banking application. When a victim tries to reach their genuine bank app, the attackers gain access to that too, the company said.
"The rapid rise of mobile financial malware is a troubling sign, especially since we see how criminals are perfecting their distribution mechanisms," Kaspersky Lab security research Victor Chebyshev said in the release.
Other online threat statistics from the Q1, 2019 report include:
- Kaspersky Lab solutions detected and repelled 947,027,517 malicious attacks from online resources in 203 countries.
- Web antivirus components recognized 246,695,333 unique URLs as malicious.
- More than 305,000 user computers registered attempted infections by PC malware meant to steal money via online access to bank accounts.
Kaspersky Lab advised users to take a number of precautions to reduce the risk of infection with banking Trojans:
- Install applications only from trusted sources.
- Check permissions requested by the app — if they do not correspond with the app's task, this could be a sign of an unscrupulous app.
- Do not click on links in spam emails;
- Do not perform the rooting procedure on the device, which creates unlimited opportunities for cybercriminals.
From the NYT: This Boutique Bike Shop Shows How Tariffs Can Hit the Little Guy
By Jeanna Smialek
· May 29, 2019
WASHINGTON — Shane Cusick started his small business, Pello, in 2014 with the goal of making lightweight bikes for children. His experience over the past year is a case study in how a trade war can disrupt a fledgling enterprise.
Pello, in Richmond, Va., has met with early success, selling 400 to 500 bright orange two-wheelers a year. The company designs its bikes in the United States but imports them from China because domestic factories are not equipped to churn out tiny bike frames en masse.
“I love American-made products,” Mr. Cusick said. “There’s no other choice. It has to be done over there.”
But President Trump’s trade war with China has started to change the equation. Pello paid 10 percent in extra tariffs on its last batch of imports, a byproduct of Mr. Trump’s decision to impose a tax on $200 billion worth of Chinese goods. The president has now increased that to 25 percent, and Pello expects its next shipment will be hit with that heftier tariff.
Mr. Cusick and his business partner have so far been reluctant to charge more for their bikes, which cost $200 to $600, over worries that customers would opt for cheaper products. But the latest step-up in import taxes, combined with the prospect of an endless trade war, may leave Pello no choice. The factory that produces the bikes in China has razor-thin margins, so it cannot offer much of a discount.
Mr. Trump says his tariffs will hurt Chinese companies more than American firms, and he insists that they will either force Beijing to change its “unfair” trade practices or prompt companies to shift production away from China. But as the president considers imposing tariffs on another $300 billion worth of Chinese goods, companies like Pello highlight the toll Mr. Trump’s trade fight could have on small, young businesses that are reliant on China and unable to rapidly shift production to other, often more expensive, nations.
From https://www.nytimes.com/2019/05/29/business/pello-bikes-china-tariffs.html
brief comment: the tension in 2019 between industrial policy and antitrust law in telecommunications
—Don Allen Resnikoff*
In a article he wrote in 2015, antitrust scholar Daniel Sokol said that sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for particular groups or industries. He said, regretfully, that industrial policy seemed to be alive and well, affecting antitrust law and policy in the U.S. and worldwide.
In 2019, industrial policy is vigorously pressed by the Trump administration, including in telecommunications. A recent article by the American Enterprise Institute, generally viewed as "conservative," says, for example, that the Trump administration pressure on European governments to eliminate Huawei products from their 5G telecomminications rollout has led to resistance based on competitive concerns. Governments and telecom operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. The GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.”
The AEI points out that T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of their proposed merger.
Qualcomm and the USDOJ have questioned remedies against Qualcomm pressed by the FTC, and adopted by a federal court, on the grounds that national security could be undermined by the FTC case if it hampers the company’s ability to compete with Huawei Technologies Co. as a supplier of 5G equipment.
Senator Rubio’s recently published study on meeting the challenges of Chinese competition endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The tension between competition policy and industrial policy is not inconsistent with the ideas that national security concerns must be taken seriously, and that the success of U.S. companies is important to the U.S. economy. But the more weight that is given to national security and the need for successful U.S. companies, the more the pressure on antitrust advocates to justify the relevance and importance of antitrust policy, and the greater he difficulty of addressing the tensions between antitrust and industrial policy in a manner that will strike a broad spectrum of people as reasonable and persuasive.
Can antitrust retain a significant role in the discussion of national security and the need for strong American telecom? That remains to be seen.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
—Don Allen Resnikoff*
In a article he wrote in 2015, antitrust scholar Daniel Sokol said that sound antitrust law and policy is in tension with industrial policy. Antitrust promotes consumer welfare whereas industrial policy promotes government intervention for particular groups or industries. He said, regretfully, that industrial policy seemed to be alive and well, affecting antitrust law and policy in the U.S. and worldwide.
In 2019, industrial policy is vigorously pressed by the Trump administration, including in telecommunications. A recent article by the American Enterprise Institute, generally viewed as "conservative," says, for example, that the Trump administration pressure on European governments to eliminate Huawei products from their 5G telecomminications rollout has led to resistance based on competitive concerns. Governments and telecom operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. The GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.”
The AEI points out that T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of their proposed merger.
Qualcomm and the USDOJ have questioned remedies against Qualcomm pressed by the FTC, and adopted by a federal court, on the grounds that national security could be undermined by the FTC case if it hampers the company’s ability to compete with Huawei Technologies Co. as a supplier of 5G equipment.
Senator Rubio’s recently published study on meeting the challenges of Chinese competition endorses an industrial policy approach: “The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy [in China] with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
The tension between competition policy and industrial policy is not inconsistent with the ideas that national security concerns must be taken seriously, and that the success of U.S. companies is important to the U.S. economy. But the more weight that is given to national security and the need for successful U.S. companies, the more the pressure on antitrust advocates to justify the relevance and importance of antitrust policy, and the greater he difficulty of addressing the tensions between antitrust and industrial policy in a manner that will strike a broad spectrum of people as reasonable and persuasive.
Can antitrust retain a significant role in the discussion of national security and the need for strong American telecom? That remains to be seen.
*The views expressed are entirely the responsibility of Don Allen Resnikoff
Competition policy now vies with industrial and security policy/
From: http://www.aei.org/publication/in-the-5g-race-competition-policy-now-vies-with-industrial-and-security-policy/
As the Trump administration presses European governments to eliminate Huawei products from their 5G rollout, governments and telecoms operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. In February, at the behest of the European operators, the GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.” In this case, national security warnings are being balanced against competitive imperatives.
Finally, closer to home, T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of a proposed merger. So far the Department of Justice is still skeptical, but in the end it will have to balance competitive pros and cons of reducing major US wireless operators from four to three, against Sprint’s dire (and contested) warning that it cannot achieve this goal on its own.
Welcome to the complex world of competition/industrial/security policy.
From: http://www.aei.org/publication/in-the-5g-race-competition-policy-now-vies-with-industrial-and-security-policy/
As the Trump administration presses European governments to eliminate Huawei products from their 5G rollout, governments and telecoms operators are resisting, in part because they want to retain Huawei as a competitor to Ericsson and Nokia. In February, at the behest of the European operators, the GSMA, the international association of mobile operators, stated in a public letter: “Robust competition among network infrastructure suppliers is essential to European operators’ ability to deliver innovative services to European citizens.” In this case, national security warnings are being balanced against competitive imperatives.
Finally, closer to home, T-Mobile and Sprint have made the 5G race and competition with China a central element of their defense of a proposed merger. So far the Department of Justice is still skeptical, but in the end it will have to balance competitive pros and cons of reducing major US wireless operators from four to three, against Sprint’s dire (and contested) warning that it cannot achieve this goal on its own.
Welcome to the complex world of competition/industrial/security policy.
Open Markets fellow Matthew Stoller published an op-ed on POLITICO Magazine encouraging Congressional Democrats to use their power to hold our federal regulators accountable with regard to Facebook.
DAR comment: Controversy over whether and how to regulate Facebook is heightened by Facebook's recent decision not to take down a doctored and distorted video of Nancy Pelosi which inaccurately suggests slowed and slurred speech.
Highlights from the article below. Read the article in full here.
If you are thinking about Facebook or questions of political economy, an important and telling hearing took place recently in the House Energy and Commerce Committee. Democratic leaders Frank Pallone and Jan Schakowsky did an oversight review of Facebook’s regulator, the Federal Trade Commission, with all five commissioners, including Chairman Joe Simons, advancing ideas on how to address privacy rules in America today. [...]
… The Democrats offered little criticism of the commission and actually called for the FTC to get more money and more authority. “Too often,” Pallone lamented, “the FTC can do little more than give a slap on the wrist to companies the first time they violate the law.” What Pallone ignored is that Facebook has broken the law, multiple times, and the FTC has authority to act. But the commission just won’t. Instead of acknowledging the unwillingness of regulators to do their jobs, Pallone is rewarding the agency for failure. [...]
The rationale for Pallone to avoid FTC failures is clear. For one thing, Democrats want to pass a federal privacy bill which would place rules on companies that handle personal data. They need new authorities and a regulator to implement such a bill, and the regulator on hand is the FTC. So they can’t very well acknowledge that the regulator is an institutional catastrophe, and at the same time call for more of it. (It brings to mind the old joke, “this restaurant’s terrible, and the portions are so small.”) The second reason Democrats have a problem pointing the finger at the FTC is because the failures at the agency largely happened under the Obama administration. [...]
The FTC is in charge of blocking anti-competitive mergers, and perhaps the most consequential failures had to do with the mergers that enabled Facebook to become a monopoly…. Joe Simons, when he was appointed to run the commission in May 2018 by President Donald Trump, pledged to look back at mergers, to see if the FTC’s merger policy made sense. So far, Simons hasn’t bothered to follow through on his promise, though the FTC does have economists who spend their time attacking critics who engage in merger retrospectives. [...]
The reason the FTC has done little is not because it lacks authority, but because its officials simply do not believe there is a problem to be solved… The FTC might kick a scam artist once in awhile, but when it comes to big companies, FTC officials don’t want to use the authority they have. They see themselves not as cops but as deal-makers. [...]
There’s a crisis right now, and Congress must step in.
… To address the problem the FTC won’t, Congress should break up Facebook through statute, or be detailed and explicit about what to do to the social networking space rather than deferring to failed regulators.
DAR comment: Controversy over whether and how to regulate Facebook is heightened by Facebook's recent decision not to take down a doctored and distorted video of Nancy Pelosi which inaccurately suggests slowed and slurred speech.
Highlights from the article below. Read the article in full here.
If you are thinking about Facebook or questions of political economy, an important and telling hearing took place recently in the House Energy and Commerce Committee. Democratic leaders Frank Pallone and Jan Schakowsky did an oversight review of Facebook’s regulator, the Federal Trade Commission, with all five commissioners, including Chairman Joe Simons, advancing ideas on how to address privacy rules in America today. [...]
… The Democrats offered little criticism of the commission and actually called for the FTC to get more money and more authority. “Too often,” Pallone lamented, “the FTC can do little more than give a slap on the wrist to companies the first time they violate the law.” What Pallone ignored is that Facebook has broken the law, multiple times, and the FTC has authority to act. But the commission just won’t. Instead of acknowledging the unwillingness of regulators to do their jobs, Pallone is rewarding the agency for failure. [...]
The rationale for Pallone to avoid FTC failures is clear. For one thing, Democrats want to pass a federal privacy bill which would place rules on companies that handle personal data. They need new authorities and a regulator to implement such a bill, and the regulator on hand is the FTC. So they can’t very well acknowledge that the regulator is an institutional catastrophe, and at the same time call for more of it. (It brings to mind the old joke, “this restaurant’s terrible, and the portions are so small.”) The second reason Democrats have a problem pointing the finger at the FTC is because the failures at the agency largely happened under the Obama administration. [...]
The FTC is in charge of blocking anti-competitive mergers, and perhaps the most consequential failures had to do with the mergers that enabled Facebook to become a monopoly…. Joe Simons, when he was appointed to run the commission in May 2018 by President Donald Trump, pledged to look back at mergers, to see if the FTC’s merger policy made sense. So far, Simons hasn’t bothered to follow through on his promise, though the FTC does have economists who spend their time attacking critics who engage in merger retrospectives. [...]
The reason the FTC has done little is not because it lacks authority, but because its officials simply do not believe there is a problem to be solved… The FTC might kick a scam artist once in awhile, but when it comes to big companies, FTC officials don’t want to use the authority they have. They see themselves not as cops but as deal-makers. [...]
There’s a crisis right now, and Congress must step in.
… To address the problem the FTC won’t, Congress should break up Facebook through statute, or be detailed and explicit about what to do to the social networking space rather than deferring to failed regulators.
EU's Vestager says breaking up Facebook would be a last resort
EU Competition Commissioner Margrethe Vestager said breaking up social media giant Facebook would be a last resort, according to a report by Reuters.
Vestager made her comments on Friday, May 17, at the VivaTech technology conference in Paris, after being asked about the subject following US politicians and a Facebook co-founder speaking out in favor of dismantling the company.
“Of course it would be a remedy of very last resort. I think it would keep us in court for maybe a decade. It is much more direct and maybe much more powerful to say we need access to data,” Vestager said.
Earlier in the week, Sen. Bernie Sanders, a 2020 presidential candidate, voiced his support for breaking up Facebook, according to reports, something fellow candidate Sen. Elizabeth Warren has called for as well.
Sanders shared his thoughts with Politico, and when asked if he supports Warren’s proposal for antitrust actions against Facebook, he responded, “The answer is yes of course.”
“We have a monopolistic — an increasingly monopolistic society where you have a handful of very large corporations having much too much power over consumers,” Sanders said.
His comments came on the heels of a much publicized New York Times op-ed piece by Facebook Co-Founder Chris Hughes (who no longer works for the social media giant) also calling for the breakup of Facebook.
“The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar,” Hughes wrote.
“After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.”
Full Content: PYMNTS
EU Competition Commissioner Margrethe Vestager said breaking up social media giant Facebook would be a last resort, according to a report by Reuters.
Vestager made her comments on Friday, May 17, at the VivaTech technology conference in Paris, after being asked about the subject following US politicians and a Facebook co-founder speaking out in favor of dismantling the company.
“Of course it would be a remedy of very last resort. I think it would keep us in court for maybe a decade. It is much more direct and maybe much more powerful to say we need access to data,” Vestager said.
Earlier in the week, Sen. Bernie Sanders, a 2020 presidential candidate, voiced his support for breaking up Facebook, according to reports, something fellow candidate Sen. Elizabeth Warren has called for as well.
Sanders shared his thoughts with Politico, and when asked if he supports Warren’s proposal for antitrust actions against Facebook, he responded, “The answer is yes of course.”
“We have a monopolistic — an increasingly monopolistic society where you have a handful of very large corporations having much too much power over consumers,” Sanders said.
His comments came on the heels of a much publicized New York Times op-ed piece by Facebook Co-Founder Chris Hughes (who no longer works for the social media giant) also calling for the breakup of Facebook.
“The government must hold Mark accountable. For too long, lawmakers have marveled at Facebook’s explosive growth and overlooked their responsibility to ensure that Americans are protected and markets are competitive. Any day now, the Federal Trade Commission is expected to impose a $5 billion fine on the company, but that is not enough; nor is Facebook’s offer to appoint some kind of privacy czar,” Hughes wrote.
“After Mark’s congressional testimony last year, there should have been calls for him to truly reckon with his mistakes. Instead the legislators who questioned him were derided as too old and out of touch to understand how tech works. That’s the impression Mark wanted Americans to have, because it means little will change.”
Full Content: PYMNTS
California SB 206 – Collegiate Athletics: Fair Pay to Play Act Moves Forward
Friday, May 24, 2019
The Fair Pay to Play Act, introduced by California State Senate Majority Whip Nancy Skinner, has passed an initial hurdle toward becoming law as the California State Senate passed the proposed legislation by a 31-4 vote total. The California Assembly will now consider the measure in the near future.
The proposed legislation (as discussed in our recent blog post on March 1, 2019) would prohibit a California public postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics, from preventing student athletes from earning compensation in connection with the use of the student athlete’s name, image, or likeness. Specifically, any such compensation would no longer affect a student athlete’s scholarship eligibility. The proposed legislation would prohibit direct payments from schools to athletes and would become effective in 2023.
Excerpt from https://www.natlawreview.com/article/faces-and-names-modern-issues-athlete-publicity-licensing
Friday, May 24, 2019
The Fair Pay to Play Act, introduced by California State Senate Majority Whip Nancy Skinner, has passed an initial hurdle toward becoming law as the California State Senate passed the proposed legislation by a 31-4 vote total. The California Assembly will now consider the measure in the near future.
The proposed legislation (as discussed in our recent blog post on March 1, 2019) would prohibit a California public postsecondary educational institution, athletic association, conference, or any other organization with authority over intercollegiate athletics, from preventing student athletes from earning compensation in connection with the use of the student athlete’s name, image, or likeness. Specifically, any such compensation would no longer affect a student athlete’s scholarship eligibility. The proposed legislation would prohibit direct payments from schools to athletes and would become effective in 2023.
Excerpt from https://www.natlawreview.com/article/faces-and-names-modern-issues-athlete-publicity-licensing
Qualcomm, the world's largest maker of smartphone modems and microchips, illegally charges companies sky-high prices to license its technology, a federal judge ruled Tuesday.
In a case brought to court in 2017 by the US Federal Trade Commission, District Court Judge Lucy Koh said Qualcomm should not receive a percentage of sales of each phone a company sells; instead, it should receive a much smaller amount based on what Qualcomm technology exists inside the phone. It also must license its patents to rival chipmakers.
From https://www.cnn.com/2019/05/22/tech/qualcomm-antitrust/index.html
The full opinion is at https://www.scribd.com/document/411079122/FTC-v-Qualcomm-Findings-of-Fact-and-Conclusions-of-Law
FROM US Pirg Consumer Blog:
Opposition to CFPB's proposed rescission of protections for payday borrowers
Posted: 17 May 2019 10:34 AM PDT
Public Citizen, along with the Center for Responsible Lending and several other consumer-advocacy groups, submitted a lengthy comment objecting to the CFPB's proposal to rescind many aspects of the agency's own payday lending rule, issued in 2017 to protect consumers from harmful payday lending practices. The comment is here. If you are not up for reading the full 220-page document, the executive summary is available here.
Opposition to CFPB's proposed rescission of protections for payday borrowers
Posted: 17 May 2019 10:34 AM PDT
Public Citizen, along with the Center for Responsible Lending and several other consumer-advocacy groups, submitted a lengthy comment objecting to the CFPB's proposal to rescind many aspects of the agency's own payday lending rule, issued in 2017 to protect consumers from harmful payday lending practices. The comment is here. If you are not up for reading the full 220-page document, the executive summary is available here.
Nearly Seven in Ten Flunked California's February 2019 Bar Exam
By Cheryl Miller
Still, the success rate—31.4 percent—increased 4.1 percentage points from the historically low pass rate... Read More
By Cheryl Miller
Still, the success rate—31.4 percent—increased 4.1 percentage points from the historically low pass rate... Read More
From Rubio study on meeting the challenge of Chinese competition
As Chinese policymakers seek to draw level with the world in semiconductor production and dominate global telecommunications, it is also looking ahead to the next frontiers of technological innovation. The question for the U.S. is whether it can adequately respond not just to the immediate threats posed by individual Chinese technology companies, but to the long-term threats China’s policy poses to the American technology sector. To quote testimony from James Lewis of the Center for Strategic and International Studies to the U.S. Trade Representative:
“What is new is that unfair trade, security and industrial policies, tolerable in a smaller developing economy, are now combined with China’s immense, government-directed investment and regulatory policies to put foreign firms at a disadvantage…China now has the wealth, commercial sophistication and technical expertise to make its pursuit of technological leadership work. The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
https://www.rubio.senate.gov/public/_cache/files/d1c6db46-1a68-481a-b96e-356c8100f1b7/3EDECA923DB439A8E884C6229A4C6003.02.12.19-final-sbc-project-mic2025-report.pdf
Comment by Don Allen Resnikoff: The recommendations for a U.S. industrial policy in the Rubio Report dovetail with Trump Administration policies with regard to Huawei discussed in the articles below. It seems plain that security concerns and a policy favoring rivals of Huawei are important to current U.S. policy. The role of traditional antitrust enforcement policy may be eclipsed by current US industrial policies affecting semiconductors and telecommunications, but it does not follow that traditional antitrust policy is irrelevant. From an antitrust policy perspective, the fewer the constraints on competitors the greater the benefits to consumers with regard to price and quality. For that reason, limitations on competitors based on security and broader industrial policy concerns need to be weighed carefully. DR
As Chinese policymakers seek to draw level with the world in semiconductor production and dominate global telecommunications, it is also looking ahead to the next frontiers of technological innovation. The question for the U.S. is whether it can adequately respond not just to the immediate threats posed by individual Chinese technology companies, but to the long-term threats China’s policy poses to the American technology sector. To quote testimony from James Lewis of the Center for Strategic and International Studies to the U.S. Trade Representative:
“What is new is that unfair trade, security and industrial policies, tolerable in a smaller developing economy, are now combined with China’s immense, government-directed investment and regulatory policies to put foreign firms at a disadvantage…China now has the wealth, commercial sophistication and technical expertise to make its pursuit of technological leadership work. The fundamental issue for the U.S. and other western nations, and the IT sector is how to respond to a managed economy with a well-financed strategy to create a domestic industry intended to displace foreign suppliers.”
https://www.rubio.senate.gov/public/_cache/files/d1c6db46-1a68-481a-b96e-356c8100f1b7/3EDECA923DB439A8E884C6229A4C6003.02.12.19-final-sbc-project-mic2025-report.pdf
Comment by Don Allen Resnikoff: The recommendations for a U.S. industrial policy in the Rubio Report dovetail with Trump Administration policies with regard to Huawei discussed in the articles below. It seems plain that security concerns and a policy favoring rivals of Huawei are important to current U.S. policy. The role of traditional antitrust enforcement policy may be eclipsed by current US industrial policies affecting semiconductors and telecommunications, but it does not follow that traditional antitrust policy is irrelevant. From an antitrust policy perspective, the fewer the constraints on competitors the greater the benefits to consumers with regard to price and quality. For that reason, limitations on competitors based on security and broader industrial policy concerns need to be weighed carefully. DR
From the South China Morning Post: Politics
Trump orders national emergency on information security; Commerce Department follows with Huawei restrictions
- Trump’s order bars the use of telecoms equipment made by companies deemed a threat to US national security, threatening Huawei
- Move would stymie Huawei’s efforts to expand into critical 5G market, giving US a chance to play catch-up
https://www.scmp.com/news/china/politics/article/3010396/donald-trump-signs-executive-order-laying-ground-us-ban-chinas
The Trump Administration war on Huawei 5G, as presented by the PBS Newshour
https://www.pbs.org/newshour/show/why-the-trump-administration-is-so-concerned-about-huawei
https://www.pbs.org/newshour/show/why-the-trump-administration-is-so-concerned-about-huawei
WSJ's take on USDOJ v. FTC on Qualcomm remedies
Excerpt from https://www.wsj.com/articles/justice-department-warns-against-broad-penalty-for-qualcomm-in-ftc-case-11556865004#
The move is the latest sign of the Trump administration’s concern about the fate of Qualcomm, the largest supplier of chips in smartphones and a leading developer of the next-generation 5G wireless technology that is beginning to roll out.
Qualcomm has told the government that American national security could be undermined by the FTC case if it hampers the company’s ability to compete with Huawei Technologies Co., a Chinese supplier of 5G equipment. That argument has received support in Washington, with representatives from the Defense and Energy departments meeting with FTC commissioners to encourage a settlement of the lawsuit, The Wall Street Journal reported in March.
Excerpt-- From http://www.fosspatents.com/2019/05/ftc-calls-doj-statement-in-qualcomm.html
FTC calls DOJ statement in Qualcomm antitrust case "untimely," says it "misconstrues applicable law and the record": this is an unusual inter-institutional quarrel
On Thursday, one week after the Department of Justice submitted its puzzling Statement of Interest in the FTC v. Qualcomm antitrust case awaiting Judge Lucy H. Koh's judgment in the Northern District of California, the Federal Trade Commission filed a response that is as concise as it is informative at different levels (this post continues below the document):
19-05-09 FTC Response to DO... by on Scribd
After the ninth word ("untimely" before "Statement of Interest") it's already clear that the FTC doesn't appreciate the DOJ's bewildering kind of intervention. The FTC doesn't talk about why the DOJ would make such a filing now (and not long before, if at all), but it's easy to see: after the Apple-Qualcomm settlement, Qualcomm's allies in the federal government such as DOJ antitrust chief Makan Delrahim (whose subordinates submitted the Statement of Interest) are now concerned that Judge Koh's impending decision might have an impact on the Apple-Qualcomm deal. The DOJ primarily expressed concerns over the FTC's request that the court order Qualcomm to renegotiate all patent license agreements, and who knows what clauses in the Apple-Qualcomm contract might provide for some adjustments based on the outcome of the FTC case. Within the universe of its own that is the FTC v. Qualcomm antitrust litigation, however, the separate and now-settled Apple-Qualcomm dispute is not an outcome-determinative or even just procedurally relevant factor.
What's funny is that the FTC clarifies it "did not participate in or request [the DOJ's] filing." It's a diplomatic way of saying that the filing is unwanted, unwarranted, and unhelpful.
FTC calls DOJ statement in Qualcomm antitrust case "untimely," says it "misconstrues applicable law and the record": this is an unusual inter-institutional quarrel
On Thursday, one week after the Department of Justice submitted its puzzling Statement of Interest in the FTC v. Qualcomm antitrust case awaiting Judge Lucy H. Koh's judgment in the Northern District of California, the Federal Trade Commission filed a response that is as concise as it is informative at different levels (this post continues below the document):
19-05-09 FTC Response to DO... by on Scribd
After the ninth word ("untimely" before "Statement of Interest") it's already clear that the FTC doesn't appreciate the DOJ's bewildering kind of intervention. The FTC doesn't talk about why the DOJ would make such a filing now (and not long before, if at all), but it's easy to see: after the Apple-Qualcomm settlement, Qualcomm's allies in the federal government such as DOJ antitrust chief Makan Delrahim (whose subordinates submitted the Statement of Interest) are now concerned that Judge Koh's impending decision might have an impact on the Apple-Qualcomm deal. The DOJ primarily expressed concerns over the FTC's request that the court order Qualcomm to renegotiate all patent license agreements, and who knows what clauses in the Apple-Qualcomm contract might provide for some adjustments based on the outcome of the FTC case. Within the universe of its own that is the FTC v. Qualcomm antitrust litigation, however, the separate and now-settled Apple-Qualcomm dispute is not an outcome-determinative or even just procedurally relevant factor.
What's funny is that the FTC clarifies it "did not participate in or request [the DOJ's] filing." It's a diplomatic way of saying that the filing is unwanted, unwarranted, and unhelpful.
FROM DMN: Canada Has a Solution for Growing Local Talent: Make Streaming Services Pay for It
Daniel Sanchez
May 16, 2019
The Standing Committee on Canadian Heritage has unveiled its report on the Copyright Act, and the local music industry is rejoicing.
The all-party committee of MPs (Member of Parliament) has recommended that the Canadian government set harsher rules for local content on foreign streaming services. This would force companies like Netflix, Amazon, and Apple, among others, to actively contribute to the creation of Canadian works.
According to the committee, Canada’s creative industries, broadcasters, digital services, commercial users and distributors have failed to “keep pace with technology and the digital marketplace for music.” The key recommendations would allegedly bolster a “functioning marketplace for creative works.”
Local MPs also recommended the government address Canada’s broad safe harbor laws, outright eliminating or narrowing Copyright Act exemptions to address the growing Value Gap in the country’s creative industries. This, the committee writes, would help creators receive fair compensation, combat modern forms of piracy (including stream-ripping), and strengthen the enforcement of Canadian copyright laws.
The committee noted that no policy currently exists forcing digital streaming services to fund the production of local content. Because of this, the system has “diverted wealth from creators to large digital intermediaries.” This has also led to the erosion of artists’ ability to earn a middle-class living.
In addition, the report – titled Shifting Paradigms – has pushed for a major government crackdown on internet piracy. Witnesses reportedly recommended higher punishments and fines. Should the Canadian government implement the recommendations, Canadian internet service providers would be held liable for the illegal distribution of content on their networks.
Hailing the report, Graham Henderson, Music Canada President and CEO, proclaimed,
“I applaud the Members of the Committee for listening to the voices of artists and the businesses who support music and for taking these critical first steps toward addressing the Value Gap in Canada.”
The report also calls for the end of artist and label payments to Canada’s largest broadcasters. The Radio Royalty Exemption should only apply to community and independent stations. In addition, the MPs recommended a clearer definition of “sound recording” in the Copyright Act. Recordings used in television programs and films must be eligible for public performance remuneration.
Speaking to the committee about the Radio Royalty Exemption and the redefinition of sound recording, Miranda Mulholland, Chair of Music Canada’s Advisory Council, explained,
“The changes recommended by the Heritage Committee in this report are the first step in ensuring artists receive fair remuneration for their work. The changes would end the unfair subsidies that artists have been paying large broadcasting corporations, and [would] mean more creators can earn a sustainable living from their music.”
Yet, not everyone remains excited about the recommendations.
Highlighting ‘inconsistencies’ in the report, MP Pierre Nantel lambasted the call for stricter regulation on digital streaming music services.
Daniel Sanchez
May 16, 2019
The Standing Committee on Canadian Heritage has unveiled its report on the Copyright Act, and the local music industry is rejoicing.
The all-party committee of MPs (Member of Parliament) has recommended that the Canadian government set harsher rules for local content on foreign streaming services. This would force companies like Netflix, Amazon, and Apple, among others, to actively contribute to the creation of Canadian works.
According to the committee, Canada’s creative industries, broadcasters, digital services, commercial users and distributors have failed to “keep pace with technology and the digital marketplace for music.” The key recommendations would allegedly bolster a “functioning marketplace for creative works.”
Local MPs also recommended the government address Canada’s broad safe harbor laws, outright eliminating or narrowing Copyright Act exemptions to address the growing Value Gap in the country’s creative industries. This, the committee writes, would help creators receive fair compensation, combat modern forms of piracy (including stream-ripping), and strengthen the enforcement of Canadian copyright laws.
The committee noted that no policy currently exists forcing digital streaming services to fund the production of local content. Because of this, the system has “diverted wealth from creators to large digital intermediaries.” This has also led to the erosion of artists’ ability to earn a middle-class living.
In addition, the report – titled Shifting Paradigms – has pushed for a major government crackdown on internet piracy. Witnesses reportedly recommended higher punishments and fines. Should the Canadian government implement the recommendations, Canadian internet service providers would be held liable for the illegal distribution of content on their networks.
Hailing the report, Graham Henderson, Music Canada President and CEO, proclaimed,
“I applaud the Members of the Committee for listening to the voices of artists and the businesses who support music and for taking these critical first steps toward addressing the Value Gap in Canada.”
The report also calls for the end of artist and label payments to Canada’s largest broadcasters. The Radio Royalty Exemption should only apply to community and independent stations. In addition, the MPs recommended a clearer definition of “sound recording” in the Copyright Act. Recordings used in television programs and films must be eligible for public performance remuneration.
Speaking to the committee about the Radio Royalty Exemption and the redefinition of sound recording, Miranda Mulholland, Chair of Music Canada’s Advisory Council, explained,
“The changes recommended by the Heritage Committee in this report are the first step in ensuring artists receive fair remuneration for their work. The changes would end the unfair subsidies that artists have been paying large broadcasting corporations, and [would] mean more creators can earn a sustainable living from their music.”
Yet, not everyone remains excited about the recommendations.
Highlighting ‘inconsistencies’ in the report, MP Pierre Nantel lambasted the call for stricter regulation on digital streaming music services.
Congress is considering privacy legislation – be afraid
Posted USPIRG Consumer Blog: 16 May 2019 01:19 PM PDT
by Jeff Sovern
That's the title of my latest essay for The Conversation, about how preemption of state privacy laws could harm consumers. Here's an excerpt:
[R]ather than circumventing state laws, a federal privacy law should work in partnership with them – just as federal laws regulating auto safety such as airbag requirements operate in tandem with state regulations that govern related issues such as how fast motorists can drive.
Industry advocates, however, don’t want federal and state laws to exist side by side because they say companies will have trouble following the rules of different states. Businesses had the same concerns about state data breach laws, and testimony from Marriott’s CEO suggests the company didn’t find it too troublesome to comply with them, however different.
It’s more likely, then, that companies realize that it will be easier for their lobbyists to win a victory in one legislature – Congress – than in 50 states.
Lobbyists have also argued consumers would be bewildered by such a patchwork of state privacy laws. They claimed, for example, that a consumer driving from Biloxi, Mississippi, to Bellevue, Washington, would be confused by the different privacy regimes she would encounter.
But that same person – during that same drive – copes with a wide variety of traffic laws. Drivers seem to be able to navigate those different laws just fine.
Dept of Education blocking CFPB oversight of student loan servicing
Posted USPIRG Consumer Blog: 16 May 2019 08:55 AM PDT
In a letter responding to an inquiry from Senator Warren, the director of the Consumer Financial Protection Bureau says that the Education Department is hampering the CFPB's efforts to protect borrowers by performing oversight of the student loan industry. The Senators' letter has asked whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans.
The CFPB letter states that companies that student loan servicing companies are refusing to share information that the CFPB needs to perform oversight because the Department of Education has issued guidance telling them not to do so.
NPR has the story, here, along with a link to the CFPB's letter.
Posted USPIRG Consumer Blog: 16 May 2019 01:19 PM PDT
by Jeff Sovern
That's the title of my latest essay for The Conversation, about how preemption of state privacy laws could harm consumers. Here's an excerpt:
[R]ather than circumventing state laws, a federal privacy law should work in partnership with them – just as federal laws regulating auto safety such as airbag requirements operate in tandem with state regulations that govern related issues such as how fast motorists can drive.
Industry advocates, however, don’t want federal and state laws to exist side by side because they say companies will have trouble following the rules of different states. Businesses had the same concerns about state data breach laws, and testimony from Marriott’s CEO suggests the company didn’t find it too troublesome to comply with them, however different.
It’s more likely, then, that companies realize that it will be easier for their lobbyists to win a victory in one legislature – Congress – than in 50 states.
Lobbyists have also argued consumers would be bewildered by such a patchwork of state privacy laws. They claimed, for example, that a consumer driving from Biloxi, Mississippi, to Bellevue, Washington, would be confused by the different privacy regimes she would encounter.
But that same person – during that same drive – copes with a wide variety of traffic laws. Drivers seem to be able to navigate those different laws just fine.
Dept of Education blocking CFPB oversight of student loan servicing
Posted USPIRG Consumer Blog: 16 May 2019 08:55 AM PDT
In a letter responding to an inquiry from Senator Warren, the director of the Consumer Financial Protection Bureau says that the Education Department is hampering the CFPB's efforts to protect borrowers by performing oversight of the student loan industry. The Senators' letter has asked whether the federal regulator had "abandoned its supervision and enforcement activities" related to more than $1 trillion in student loans.
The CFPB letter states that companies that student loan servicing companies are refusing to share information that the CFPB needs to perform oversight because the Department of Education has issued guidance telling them not to do so.
NPR has the story, here, along with a link to the CFPB's letter.
San Diego approves new vehicle habitation restrictions
A San Diego ordinance that prohibits people from living in vehicles parked within 500 feet of a school or home has gained City Council approval. Disability Rights California attorney Ann Menasche, who challenged the city's prior restrictions on living in vehicles, said that "[i]f this issue comes before the court again, we can strike multiple holes into [the new] ordinance as unconstitutional and discriminatory."
From Courthouse News Service (5/15)
https://www2.smartbrief.com/uyd/editProfile.action;jsessionid=BB620E184F1F3485B618BA751495FA6A.web2.smartbrief.com?t1=63629357&t2=https%3A%2F%2Fwww.courthousenews.com%2Fsan-diego-revives-law-outlawing-living-in-vehicles%2F
Law enforcement authorities from dozens of states filed a federal complaint accusing 20 pharmaceutical companies – including Teva, Sandoz and Pfizer – of conspiring to hike generic drug prices, costing billions of dollars in overcharges and undermining government efforts to hold down medical costs.
The complaint (524 pages): https://assets.documentcloud.org/documents/5997931/TevComplaint.pdf
Excerpt:
I. SUMMARY OF THE CASE
1. For many years, the generic pharmaceutical industry has operated pursuant to an understanding among generic manufacturers not to compete with each other and to instead settle for what these competitors refer to as "fair share." This understanding has permeated every segment of the industry, and the purpose of the agreement was to avoid competition among generic manufacturers that would normally result in significant price erosion and great savings to the ultimate consumer. Rather than enter a particular generic drug market by competing on price in order to gain market share, competitors in the generic drug industry would systematically and routinely communicate with one another directly, divvy up customers to create an artificial equilibrium in the market, and then maintain anticompetitively high prices. This "fair share" understanding was not the result of independent decision making by individual companies to avoid competing with one another. Rather, it was a direct result of specific discussion, negotiation and collusion among industry participants over the course of many years.
2. By 2012, Teva and other co-conspirators decided to take this understanding to the next level. . . .
Are State's published statutes copyright protected?
But when Mr. Malamud’s group posted the Official Code of Georgia Annotated, the state sued for copyright infringement. Providing public access to the state’s laws and related legal materials, Georgia’s lawyers said, was part of a “strategy of terrorism.”
A federal appeals court ruled against the state, which has asked the Supreme Court to step in. On Friday, in an unusual move, Mr. Malamud’s group, Public.Resource.Org, also urged the court to hear the dispute, saying that the question of who owns the law is an urgent one, as about 20 other states have claimed that parts of similar annotated codes are copyrighted.
The issue, the group said, is whether citizens can have access to “the raw materials of our democracy.”
The case, Georgia v. Public.Resource.Org, No. 18-1150, concerns the 54 volumes of the Official Code of Georgia Annotated, which contain state statutes and related materials.
The state, through a legal publisher, makes the statutes themselves available online, and it has said it does not object to Mr. Malamud doing the same thing. But people who want to see other materials in the books, the state says, must pay the publisher.
This is part of a disturbing trend, according to a new law review article, “Who Owns the Law? Why We Must Restore Public Ownership of Legal Publishing,” by Leslie Street, a law professor and librarian at Mercer University in Macon, Ga., and David Hansen, a librarian at Duke. It will be published in The Journal of Intellectual Property Law.
States have struck deals with legal publishers, the article said, that have effectively privatized the law. “Publishers now use powerful legal tools to control who has access to the text of the law, how much they must pay and under what terms,” the article said.
Excerpt from https://www.nytimes.com/2019/05/13/us/politics/georgia-official-code-copyright.html?action=click&module=Top%20Stories&pgtype=Homepage
But when Mr. Malamud’s group posted the Official Code of Georgia Annotated, the state sued for copyright infringement. Providing public access to the state’s laws and related legal materials, Georgia’s lawyers said, was part of a “strategy of terrorism.”
A federal appeals court ruled against the state, which has asked the Supreme Court to step in. On Friday, in an unusual move, Mr. Malamud’s group, Public.Resource.Org, also urged the court to hear the dispute, saying that the question of who owns the law is an urgent one, as about 20 other states have claimed that parts of similar annotated codes are copyrighted.
The issue, the group said, is whether citizens can have access to “the raw materials of our democracy.”
The case, Georgia v. Public.Resource.Org, No. 18-1150, concerns the 54 volumes of the Official Code of Georgia Annotated, which contain state statutes and related materials.
The state, through a legal publisher, makes the statutes themselves available online, and it has said it does not object to Mr. Malamud doing the same thing. But people who want to see other materials in the books, the state says, must pay the publisher.
This is part of a disturbing trend, according to a new law review article, “Who Owns the Law? Why We Must Restore Public Ownership of Legal Publishing,” by Leslie Street, a law professor and librarian at Mercer University in Macon, Ga., and David Hansen, a librarian at Duke. It will be published in The Journal of Intellectual Property Law.
States have struck deals with legal publishers, the article said, that have effectively privatized the law. “Publishers now use powerful legal tools to control who has access to the text of the law, how much they must pay and under what terms,” the article said.
Excerpt from https://www.nytimes.com/2019/05/13/us/politics/georgia-official-code-copyright.html?action=click&module=Top%20Stories&pgtype=Homepage
Antitrust Issues Confronting Small Business and Professionals
Bar luncheon program:
Antitrust: it's not just for big business!
Presented by:
Antitrust Law Committee of the D.C. Bar Antitrust and Consumer Law Community
Thursday, May 16, 2019
12:00 p.m. to 2:00 p.m.
D.C. Bar
901 4th Street NW
IN-PERSON WEBCAST or in person
Antitrust: it's not just for big business! While your news feed is rife with chatter about the antitrust perils faced by the world's largest tech firms, it's important to know that antitrust risks confront a variety of professionals, corporate managers, and other regional/local businesses in many industries. And yet . . . these antitrust risks are often discounted or ignored altogether by those who think the law is concerned only with the market's largest, most dominant firms. In addition, small businesses and professionals need to be aware that they can be the victims of conduct that violates antitrust laws, and know what steps to take.
Learn more...
Presenters:SPEAKERS
Unsubsc
Bar luncheon program:
Antitrust: it's not just for big business!
Presented by:
Antitrust Law Committee of the D.C. Bar Antitrust and Consumer Law Community
Thursday, May 16, 2019
12:00 p.m. to 2:00 p.m.
D.C. Bar
901 4th Street NW
IN-PERSON WEBCAST or in person
Antitrust: it's not just for big business! While your news feed is rife with chatter about the antitrust perils faced by the world's largest tech firms, it's important to know that antitrust risks confront a variety of professionals, corporate managers, and other regional/local businesses in many industries. And yet . . . these antitrust risks are often discounted or ignored altogether by those who think the law is concerned only with the market's largest, most dominant firms. In addition, small businesses and professionals need to be aware that they can be the victims of conduct that violates antitrust laws, and know what steps to take.
Learn more...
Presenters:SPEAKERS
- Thomas Gilbertsen, The Gilbertsen Law Office
- Mark Woodward, Deputy Assistant Director, Federal Trade Commission
- Don Allen Resnikoff (Moderator)
Unsubsc
"The United States further submits that, in fashioning a remedy, the Court should take careful consideration of all relevant issues and effects of such a remedy. That includes the principle that, although a proper remedy must restore any competition lost due to actions found to have violated the antitrust laws, a remedy should work as little injury as possible to other public policies. The United States underscores, however, that it takes no position at this time on the underlying merits of the FTC’s claims or on any other issues related to the Court’s pending determination of liability. "
The USDOJ filing is here:https://essentialpatentblog.lexblogplatform.com/wp-content/uploads/sites/64/2019/05/2019-05-02-DOJ-Statement-dckt-1487_0.pdf
- USDOJ goes to Court to question remedies sought by FTC against Qualcomm
"The United States further submits that, in fashioning a remedy, the Court should take careful consideration of all relevant issues and effects of such a remedy. That includes the principle that, although a proper remedy must restore any competition lost due to actions found to have violated the antitrust laws, a remedy should work as little injury as possible to other public policies. The United States underscores, however, that it takes no position at this time on the underlying merits of the FTC’s claims or on any other issues related to the Court’s pending determination of liability. "
The USDOJ filing is here:https://essentialpatentblog.lexblogplatform.com/wp-content/uploads/sites/64/2019/05/2019-05-02-DOJ-Statement-dckt-1487_0.pdf
From USPIRG Blog: Opposition to the draft Restatement of the Law of Consumer Contracts
Posted: 02 May 2019 05:18 AM PDT
The members of the American Law Institute are poised to vote on May 21 on whether to adopt, for the first time, a Restatement of the Law of Consumer Contracts. That's right: A Restatement that would purport to state the law on, among other things, the take-or-leave-it contracts that we "agree to" every day and that seek to impose on us all manner of things that we know little or nothing about. [We've posted about this project several times before, including this warning posted nearly three years ago by law prof and consumer-law expert Dee Pridgen.]
The positions taken in Restatements are often highly influential with courts. For instance, most folks who litigate are aware of the influence Restatements have had on modern product-liability law.
Over at Credits Slips, Georgetown law prof Adam Levitin has posted this critique of the draft that the members will be voting on. I recommend reading Adam's post in full and taking a look at the links contained in it. In the meantime, check out these excerpts:
The draft Restatement of Consumer Contracts is founded on a set of six quantitative empirical studies about consumer contracts. This is a major and novel move for a Restatement; traditionally Restatements engaged in a qualitative distillation of the law. Professor Gregory Klass of Georgetown has [found] pervasive problems in the Reporters' coding. ... A draft version of Professor Klass's study inspired me and a number of other advisors to the Restatement project to attempt our own replication study of the empirical studies of contract modification and clickwrap enforcement. We found the same sort of pervasive problems as Professor Klass. While the ALI Council completely ignored our findings, we wrote them up into a companion article to Professor Klass's. * * *
For example, [the Restatement] would require findings of both procedural and substantive unconscionability for a contract to be unconscionable, while many states only require substantive unconscionability. Not surprisingly, I am unaware of any consumer law expert (other than the Reporters) who supports the project.
But the thing that should really be a wake up call that something is very, very off with this Restatement project is the presence of outside opposition, which is virtually unheard of in the ALI process. Every major consumer group (also here, here, and here), weighed in in opposition as well as 13 state attorneys general (and also here), and our former co-blogger (and also former ALI Vice-Chair), Senator Elizabeth Warren. Nor has the opposition been solely from consumer-minded groups. The US Chamber of Commerce and the major trade associations for banking, telecom, retailers, and insurers are also opposed (albeit with very different motivations). Simply put, it's hard to find anyone other than the Reporters (and the ALI Council, which has a strong tradition of deference to Reporters) who actually likes the draft Restatement.
From US PIRG Blog: The National Consumer Law Center on racial and ethnic disparities in buying and using cars
Posted: 01 May 2019 12:24 PM PDT
John Van Alst of the National Consumer Law Center has written this comprehensive report entitled Time to Stop Racing Cars: The Role of Race and Ethnicity in Buying and Using a Car.
Here is the executive summary:
For many in America, a car provides not only physical mobility but also economic mobility. Yet for years, studies have shown that the costs of buying, financing, and using a car can vary based on race or ethnicity. A consumer’s race or ethnicity can impact:
How much it costs to finance a car;
How much a consumer is charged for the car itself;
How much a consumer is charged for add-on products sold with the car;
The ability of consumers to successfully negotiate for better terms;
The rates paid to insure a car; and
The likelihood that civil fines or penalties will lead to suspensions of a driver’s license.
These disparities make cars more expensive for some races and ethnic groups and keep some families from getting a car at all. They contribute to the differences we see in the ability of families to get a car. For those at or below the poverty line, 13% of White households lack access to a car, compared to 31% of African American households and 20% of Hispanic households.
Many disparities arise because the market for cars is troublingly opaque and inconsistent. A more consistent and transparent marketplace would not only benefit consumers of color but all marketplace participants, including car dealers, finance entities, and insurers that want to
compete fairly and openly on price and quality on a level playing field.
Recommendations
To move toward this goal, federal and state policymakers should:
Ban dealer interest rate markups. Any compensation paid to the dealer as part of the financing process should not be based on the interest rate or other financing terms, and should be consistently applied to all transactions.
Amend the Equal Credit Opportunity Act (ECOA) regulations (Regulation B) to enable and require the collection and analysis of race and ethnicity data for auto financing transactions.
Prohibit discrimination in the pricing of goods and services.
Increase enforcement of the ECOA and state fair lending laws.
Increase enforcement against general abuses in the sale and financing of cars. Given the evidence of discrimination in the sale and finance of cars, it is likely that many other abuses, from yo-yo sales to failure to pay off existing liens, are more likely to affect people of color. Stepped-up enforcement against all abuses in the sale and finance of cars could help address disparities and level the playing field for everyone.
Take action on insurance rate setting to address disparities based upon race and ethnicity. End suspension of driver’s licenses for reasons beyond dangerous driving.
Posted: 02 May 2019 05:18 AM PDT
The members of the American Law Institute are poised to vote on May 21 on whether to adopt, for the first time, a Restatement of the Law of Consumer Contracts. That's right: A Restatement that would purport to state the law on, among other things, the take-or-leave-it contracts that we "agree to" every day and that seek to impose on us all manner of things that we know little or nothing about. [We've posted about this project several times before, including this warning posted nearly three years ago by law prof and consumer-law expert Dee Pridgen.]
The positions taken in Restatements are often highly influential with courts. For instance, most folks who litigate are aware of the influence Restatements have had on modern product-liability law.
Over at Credits Slips, Georgetown law prof Adam Levitin has posted this critique of the draft that the members will be voting on. I recommend reading Adam's post in full and taking a look at the links contained in it. In the meantime, check out these excerpts:
The draft Restatement of Consumer Contracts is founded on a set of six quantitative empirical studies about consumer contracts. This is a major and novel move for a Restatement; traditionally Restatements engaged in a qualitative distillation of the law. Professor Gregory Klass of Georgetown has [found] pervasive problems in the Reporters' coding. ... A draft version of Professor Klass's study inspired me and a number of other advisors to the Restatement project to attempt our own replication study of the empirical studies of contract modification and clickwrap enforcement. We found the same sort of pervasive problems as Professor Klass. While the ALI Council completely ignored our findings, we wrote them up into a companion article to Professor Klass's. * * *
For example, [the Restatement] would require findings of both procedural and substantive unconscionability for a contract to be unconscionable, while many states only require substantive unconscionability. Not surprisingly, I am unaware of any consumer law expert (other than the Reporters) who supports the project.
But the thing that should really be a wake up call that something is very, very off with this Restatement project is the presence of outside opposition, which is virtually unheard of in the ALI process. Every major consumer group (also here, here, and here), weighed in in opposition as well as 13 state attorneys general (and also here), and our former co-blogger (and also former ALI Vice-Chair), Senator Elizabeth Warren. Nor has the opposition been solely from consumer-minded groups. The US Chamber of Commerce and the major trade associations for banking, telecom, retailers, and insurers are also opposed (albeit with very different motivations). Simply put, it's hard to find anyone other than the Reporters (and the ALI Council, which has a strong tradition of deference to Reporters) who actually likes the draft Restatement.
From US PIRG Blog: The National Consumer Law Center on racial and ethnic disparities in buying and using cars
Posted: 01 May 2019 12:24 PM PDT
John Van Alst of the National Consumer Law Center has written this comprehensive report entitled Time to Stop Racing Cars: The Role of Race and Ethnicity in Buying and Using a Car.
Here is the executive summary:
For many in America, a car provides not only physical mobility but also economic mobility. Yet for years, studies have shown that the costs of buying, financing, and using a car can vary based on race or ethnicity. A consumer’s race or ethnicity can impact:
How much it costs to finance a car;
How much a consumer is charged for the car itself;
How much a consumer is charged for add-on products sold with the car;
The ability of consumers to successfully negotiate for better terms;
The rates paid to insure a car; and
The likelihood that civil fines or penalties will lead to suspensions of a driver’s license.
These disparities make cars more expensive for some races and ethnic groups and keep some families from getting a car at all. They contribute to the differences we see in the ability of families to get a car. For those at or below the poverty line, 13% of White households lack access to a car, compared to 31% of African American households and 20% of Hispanic households.
Many disparities arise because the market for cars is troublingly opaque and inconsistent. A more consistent and transparent marketplace would not only benefit consumers of color but all marketplace participants, including car dealers, finance entities, and insurers that want to
compete fairly and openly on price and quality on a level playing field.
Recommendations
To move toward this goal, federal and state policymakers should:
Ban dealer interest rate markups. Any compensation paid to the dealer as part of the financing process should not be based on the interest rate or other financing terms, and should be consistently applied to all transactions.
Amend the Equal Credit Opportunity Act (ECOA) regulations (Regulation B) to enable and require the collection and analysis of race and ethnicity data for auto financing transactions.
Prohibit discrimination in the pricing of goods and services.
Increase enforcement of the ECOA and state fair lending laws.
Increase enforcement against general abuses in the sale and financing of cars. Given the evidence of discrimination in the sale and finance of cars, it is likely that many other abuses, from yo-yo sales to failure to pay off existing liens, are more likely to affect people of color. Stepped-up enforcement against all abuses in the sale and finance of cars could help address disparities and level the playing field for everyone.
Take action on insurance rate setting to address disparities based upon race and ethnicity. End suspension of driver’s licenses for reasons beyond dangerous driving.
Peloton Fires Back At Music Publishers With Antitrust Allegations
Peloton Interactive Inc. isn’t going down without a fight in the face of an ongoing $150 million lawsuit. Only weeks after being accused of copyright infringement, the fitness and technology company has filed a countersuit against a group of music publishers and an industry trade organization.
In March, Peloton was hit with a massive copyright infringement lawsuit filed by the National Music Publishers’ Association (NMPA), which alleged that it has used thousands of songs in its workout videos without proper licensing. If found liable, Peloton could end up paying over $150 million in damages. According to the suit, “Peloton was fully aware that in order to lawfully embody copyrighted musical works in connection with visual images, copyright law required Peloton to obtain authorization from owners of the copyrighted works in the form of what is commonly referred to as a ‘synchronization’ or ‘sync’ license.”
In response, Peloton has claimed that it isn’t infringing at all. In today’s filing, the company states, “Peloton is not the bad actor the Plaintiffs portray it to be.” According to the countersuit, Peloton follows the law by paying all music publishers and PROs. “Peloton values the musical element of its service offering and respects – and pays – the music rightsholders associated with that offering,” the filing adds.
From: https://www.forbes.com/sites/legalentertainment/2019/04/30/peloton-fires-back-at-music-publishers-with-antitrust-allegations/#6a4e7d974aea
Peloton Interactive Inc. isn’t going down without a fight in the face of an ongoing $150 million lawsuit. Only weeks after being accused of copyright infringement, the fitness and technology company has filed a countersuit against a group of music publishers and an industry trade organization.
In March, Peloton was hit with a massive copyright infringement lawsuit filed by the National Music Publishers’ Association (NMPA), which alleged that it has used thousands of songs in its workout videos without proper licensing. If found liable, Peloton could end up paying over $150 million in damages. According to the suit, “Peloton was fully aware that in order to lawfully embody copyrighted musical works in connection with visual images, copyright law required Peloton to obtain authorization from owners of the copyrighted works in the form of what is commonly referred to as a ‘synchronization’ or ‘sync’ license.”
In response, Peloton has claimed that it isn’t infringing at all. In today’s filing, the company states, “Peloton is not the bad actor the Plaintiffs portray it to be.” According to the countersuit, Peloton follows the law by paying all music publishers and PROs. “Peloton values the musical element of its service offering and respects – and pays – the music rightsholders associated with that offering,” the filing adds.
From: https://www.forbes.com/sites/legalentertainment/2019/04/30/peloton-fires-back-at-music-publishers-with-antitrust-allegations/#6a4e7d974aea
From Bruce Johnson: 'We want our land back' | DC government wants Viacom to return land once leased by BET network
Viacom wants to lease land to Washington developer Douglas Jamaal and is taking the city to court.
Author: Bruce Johnson
Published: 2:33 PM EDT April 29, 2019
Updated: 9:08 PM EDT April 29, 2019WASHINGTON -- D.C. is locked in a court battle with entertainment cable channel BET over land the city practically gave away to help launch an African-American entertainment center in 1992.
The late Marion Barry was mayor at the time, and his friend Robert Johnson was co-founder of the Black Entertainment Television network. He started the company with a reported $15,000 personal loan.
Under Barry, the D.C. government agreed to lease nearly seven acres of commercial land it owned off New York Avenue in northeast to Johnson. BET would pay the city $100 per year and the city would kick in another $385,000 toward site development. The lease now calls for a payment of $300,000 a year. That's well under market value.
BET agreed to give city residents preference in hiring.The cable company created some notable national broadcasts over the years, including "Video Soul," "The BET Awards," "Video Gospel," "106 and Park" and more all originating from its studios in the D.C.
In 2002, Johnson and his wife at the time Sheila Johnson sold BET to Viacom for $2.3 billion. BET remained in D.C. But in 2017 Viacom closed the northeast campus and moved BET to New York. An estimated 500 jobs were lost in the move.
D.C.'s current Mayor Muriel Bowser wants the seven acres back. She said the deal with BET was contingent on the company remaining in D.C. as part of their economic development joint agreement.
She's refusing to sign off on Viacom's decision to assign the (BET) lease to Douglas Jamaal. He's one of Washington biggest developers.
Viacom is taking the city to court. The company is asking a superior court judge to issue a summary judgement requiring the city to abide by the original lease with BET.
https://www.wusa9.com/article/news/local/exclusive-we-want-our-land-back-dc-government-wants-viacom-to-return-land-once-leased-by-bet-network/65-0e76ee7e-b055-4f53-b89f-d46be3b267b0
Viacom wants to lease land to Washington developer Douglas Jamaal and is taking the city to court.
Author: Bruce Johnson
Published: 2:33 PM EDT April 29, 2019
Updated: 9:08 PM EDT April 29, 2019WASHINGTON -- D.C. is locked in a court battle with entertainment cable channel BET over land the city practically gave away to help launch an African-American entertainment center in 1992.
The late Marion Barry was mayor at the time, and his friend Robert Johnson was co-founder of the Black Entertainment Television network. He started the company with a reported $15,000 personal loan.
Under Barry, the D.C. government agreed to lease nearly seven acres of commercial land it owned off New York Avenue in northeast to Johnson. BET would pay the city $100 per year and the city would kick in another $385,000 toward site development. The lease now calls for a payment of $300,000 a year. That's well under market value.
BET agreed to give city residents preference in hiring.The cable company created some notable national broadcasts over the years, including "Video Soul," "The BET Awards," "Video Gospel," "106 and Park" and more all originating from its studios in the D.C.
In 2002, Johnson and his wife at the time Sheila Johnson sold BET to Viacom for $2.3 billion. BET remained in D.C. But in 2017 Viacom closed the northeast campus and moved BET to New York. An estimated 500 jobs were lost in the move.
D.C.'s current Mayor Muriel Bowser wants the seven acres back. She said the deal with BET was contingent on the company remaining in D.C. as part of their economic development joint agreement.
She's refusing to sign off on Viacom's decision to assign the (BET) lease to Douglas Jamaal. He's one of Washington biggest developers.
Viacom is taking the city to court. The company is asking a superior court judge to issue a summary judgement requiring the city to abide by the original lease with BET.
https://www.wusa9.com/article/news/local/exclusive-we-want-our-land-back-dc-government-wants-viacom-to-return-land-once-leased-by-bet-network/65-0e76ee7e-b055-4f53-b89f-d46be3b267b0
NY AG opens Facebook data probe
New York’s attorney general is launching an investigation into Facebook after it was reported last week that the company had scraped the email contacts of 1.5 million users without their consent, reported The Hill.
“It is time Facebook is held accountable for how it handles consumers’ personal information,” state Attorney General Letitia James said in a statement. “Facebook has repeatedly demonstrated a lack of respect for consumers’ information while at the same time profiting from mining that data.”
James added that the incident is the “latest demonstration that Facebook does not take seriously its role in protecting our personal information.”
A spokesperson for Facebook said it was “in touch with the New York State attorney general’s office” and that it would be “responding to their questions on this matter.”
The incident is just the latest in a series of crises for Facebook which is still facing regulatory blowback from its handling of the Cambridge Analytica scandal that was revealed a year ago.
On Wednesday, the company revealed that it had set aside $3 billion for a potential settlement with the Federal Trade Commission over the debacle, and that it anticipated a fine as high as $5 billion.
Full Content: The Hill https://thehill.com/policy/technology/440731-ny-ag-opens-investigation-into-facebook-for-harvesting-user-email-contacts
New York’s attorney general is launching an investigation into Facebook after it was reported last week that the company had scraped the email contacts of 1.5 million users without their consent, reported The Hill.
“It is time Facebook is held accountable for how it handles consumers’ personal information,” state Attorney General Letitia James said in a statement. “Facebook has repeatedly demonstrated a lack of respect for consumers’ information while at the same time profiting from mining that data.”
James added that the incident is the “latest demonstration that Facebook does not take seriously its role in protecting our personal information.”
A spokesperson for Facebook said it was “in touch with the New York State attorney general’s office” and that it would be “responding to their questions on this matter.”
The incident is just the latest in a series of crises for Facebook which is still facing regulatory blowback from its handling of the Cambridge Analytica scandal that was revealed a year ago.
On Wednesday, the company revealed that it had set aside $3 billion for a potential settlement with the Federal Trade Commission over the debacle, and that it anticipated a fine as high as $5 billion.
Full Content: The Hill https://thehill.com/policy/technology/440731-ny-ag-opens-investigation-into-facebook-for-harvesting-user-email-contacts
From DMN: Thousands of indie songwriters are now speaking out against major music publishers like Sony/ATV, Warner/Chappell, and Universal Music Publishing Group (UMPG) over a questionable ‘black box’ collection scheme.
As the U.S. Copyright Office mulls over competing bids to run the Mechanical Licensing Collective, indie songwriters and publishers are becoming increasingly vocal. Yesterday, the Copyright Office’s deadline for receiving comments on the selection of an MLC proposal lapsed, with hundreds of comments peppering the agency’s site.
Among the detailed commenters was the Nashville-based Songwriters Guild of America (SGA). The Guild is headed by songwriter and musician Rick Carnes and represents thousands of writers.
In a detailed filing submitted to the Copyright Office and Register of Copyrights, the SGA raised flags over plans by the major music publishers to claim hundreds of millions — if not billions — of dollars in unmatched and unclaimed royalties that likely belong to smaller songwriters.
The issue has been a serious sticking point since major publishers Warner/Chappell, Sony/ATV, and Universal Music Publishing Group (UMPG), among others, moved to control the Music Modernization Act’s Mechanical Licensing Collective, or MLC. Those publishers are represented by the National Music Publishers’ Association, or NMPA, which has remained silent on growing concerns about black box claiming processes.
The SGA emphatically underscored a serious conflict-of-interest problem. “As to the first criterion set forth in the prior section above, transparency and accountability, Congress had reasons for serious concern that certain inherent conflicts created by the MMA would require particularly intensive scrutiny of the Mechanical Collective at both the threshold of its designation, and over the later performance of its duties,” the SGA declared in its filing this week (full submission here).
Carnes is a board member of the AMLC, which opposes the NMPA-backed MLC submission. The group was largely formed to address perceived issues of unfair collusion among major music publishers.
Also chiming in: MusicAnswers, a group that has drawn more than 3,000 signatories for its ‘Declaration of Principles‘ surrounding fair music compensation and accounting transparency.
According to the group’s filing, major publishers are likely to claim more than a billion in unclaimed royalties, even though they have direct royalty-paying arrangements with major streaming companies like Spotify.
“A Board consisting largely of major music publishers, most of who have (or will have) direct licensing arrangements with digital music services, and whose royalties are therefore unlikely to flow through the MLC, strikes us as an inappropriate choice,” the group commented (full comment filing here).
“Moreover, because those same large publishers will receive the lion’s share of any distribution of unclaimed funds and would
have control over the distribution of those funds, it is a blatant conflict of interest for individuals representing those large publishers to occupy a significant number of the seats on the Board of Directors.”
Just yesterday, the highly-influential Recording Academy declined to endorse the NMPA-backed ‘consensus’ MLC, noting that the group needed time to vet through the competing proposals before making a decision.
From: https://www.digitalmusicnews.com/2019/04/23/indie-songwriters-nmpa-mlc/
From DMN:
In a Stunning Defeat, Madonna ‘Vogue’ Co-Writer Beats Warner Music Group in Court
Daniel Sanchez https://www.digitalmusicnews.com/2019/04/18/madonna-pettibone-v-warner-music-group/
April 18, 2019
A federal appeals court has found that Warner Music Group had wrongfully kept Madonna’s co-writer’s royalties – his livelihood – for years.
Two years ago, the co-writer behind Madonna’s ‘Vogue’ filed a lawsuit against a major music group.
Taking on Warner Music Group, Robert ‘Shep’ Pettibone claimed that the label group had withheld royalties from the 1990 hit.
He alleged both that WMG and publishing division Warner/Chappell “admittedly withheld and failed to pay Pettibone royalties owed to Plaintiff for its defense of the VMG Salsoul lawsuit, despite Plaintiff’s demand that they pay these royalties to him, and despite giving them notice of breach.”
VMG Salsoul had sued Madonna and Pettibone for allegedly infringing on a 1976 song, ‘Love Break.’ Siding with the pop singer and her songwriter, the 9th Circuit Court of Appeals upheld a lower court decision.
Yet, in overruling the lower court’s decision, the appeals court handed Pettibone some pretty bad news. He was no longer entitled to attorneys’ fees, which totaled over $500,000.
Now, Madonna’s co-writer has received a major victory in court.
How to take on a major label – and win.
When Pettibone challenged the ruling, WMG swiftly defended itself.
The major label group said it remained entitled to withhold royalties as part of “an indemnification agreement between the parties.” WMG had kept nearly $1 million in royalties.
Naturally, the songwriter disagreed. He stated that the indemnity clause doesn’t cover “a deductible under the errors-and-omissions policy.”
In another major setback for Pettibone, former Manhattan U.S. District Court Judge Richard J. Sullivan sided with WMG.
He ruled that the copyright administration contract granted the label group the right to withhold royalties.
“The agreement unambiguously requires Pettibone to indemnify Warner for the attorneys’ fees and costs it incurred.”
Following oral arguments late last month, Judge Sullivan’s now-fellow Circuit Judges Barrington D. Parker and Peter W. Hall disagreed.
Calling the contract language “tortured,” “garbled,” and “ambiguous,” both hinted that Judge Sullivan may have forced Pettibone to pay “enormous” legal fees just to defend his rights. After all, Warner Music Group had likely paid its own counsel, Alexander Kaplan, around $1 million for his services. So, why had he ruled WMG should keep Pettibone’s royalties?
Yesterday morning, the United States Court of Appeals for the Second Circuit in New York handed Warner Music Group a rare defeat.
In the summary order vacating the label’s previous win, the federal appeals court ordered Judge Sullivan to rule in favor of Pettibone.
The court found WMG’s agreement with Madonna’s songwriter was “pock-marked with ambiguity.” In fact, the agreement actually suggests each party would pay for their own legal fees.
“[T]o the extent Warner urges that it intended to bury…a highly unorthodox fee-shifting provision that is astonishing in its breadth, the contractual language undoubtedly ‘fails to disclose its purpose.’”
Thus, WMG had no right to withhold Pettibone’s royalties.
With Warner’s legal fees nearing $1 million, the federal appeals court ruled Pettibone shouldn’t have to pay the price.
“Warner would have us read the Agreement to shift attorneys’ fees of this magnitude to individual songwriters for any and all infringement claims brought against them, regardless of merit or frivolousness.
“Because the Agreement’s language does not come close to unambiguously requiring such an extraordinary result, we hold that Warner cannot enforce [the Agreement] against Pettibone.”
In a statement to Digital Music News, Richard Busch, Pettibone’s lawyer, hailed the ruling.
“I am thrilled for Shep. Warner literally wanted to apply the indemnification provision of their contract, even though Shep breached no warranty and we defeated the underlying claim of infringement.
“They have just kept his royalties that he relies on for years. This is a truly sweet victory, and will hopefully prevent others from trying to pull the same nonsense in the future.”
You can view the summary order here: https://www.scribd.com/document/406745256/Pettibone-v-WMG-Summary-Order#from_embed
In a Stunning Defeat, Madonna ‘Vogue’ Co-Writer Beats Warner Music Group in Court
Daniel Sanchez https://www.digitalmusicnews.com/2019/04/18/madonna-pettibone-v-warner-music-group/
April 18, 2019
A federal appeals court has found that Warner Music Group had wrongfully kept Madonna’s co-writer’s royalties – his livelihood – for years.
Two years ago, the co-writer behind Madonna’s ‘Vogue’ filed a lawsuit against a major music group.
Taking on Warner Music Group, Robert ‘Shep’ Pettibone claimed that the label group had withheld royalties from the 1990 hit.
He alleged both that WMG and publishing division Warner/Chappell “admittedly withheld and failed to pay Pettibone royalties owed to Plaintiff for its defense of the VMG Salsoul lawsuit, despite Plaintiff’s demand that they pay these royalties to him, and despite giving them notice of breach.”
VMG Salsoul had sued Madonna and Pettibone for allegedly infringing on a 1976 song, ‘Love Break.’ Siding with the pop singer and her songwriter, the 9th Circuit Court of Appeals upheld a lower court decision.
Yet, in overruling the lower court’s decision, the appeals court handed Pettibone some pretty bad news. He was no longer entitled to attorneys’ fees, which totaled over $500,000.
Now, Madonna’s co-writer has received a major victory in court.
How to take on a major label – and win.
When Pettibone challenged the ruling, WMG swiftly defended itself.
The major label group said it remained entitled to withhold royalties as part of “an indemnification agreement between the parties.” WMG had kept nearly $1 million in royalties.
Naturally, the songwriter disagreed. He stated that the indemnity clause doesn’t cover “a deductible under the errors-and-omissions policy.”
In another major setback for Pettibone, former Manhattan U.S. District Court Judge Richard J. Sullivan sided with WMG.
He ruled that the copyright administration contract granted the label group the right to withhold royalties.
“The agreement unambiguously requires Pettibone to indemnify Warner for the attorneys’ fees and costs it incurred.”
Following oral arguments late last month, Judge Sullivan’s now-fellow Circuit Judges Barrington D. Parker and Peter W. Hall disagreed.
Calling the contract language “tortured,” “garbled,” and “ambiguous,” both hinted that Judge Sullivan may have forced Pettibone to pay “enormous” legal fees just to defend his rights. After all, Warner Music Group had likely paid its own counsel, Alexander Kaplan, around $1 million for his services. So, why had he ruled WMG should keep Pettibone’s royalties?
Yesterday morning, the United States Court of Appeals for the Second Circuit in New York handed Warner Music Group a rare defeat.
In the summary order vacating the label’s previous win, the federal appeals court ordered Judge Sullivan to rule in favor of Pettibone.
The court found WMG’s agreement with Madonna’s songwriter was “pock-marked with ambiguity.” In fact, the agreement actually suggests each party would pay for their own legal fees.
“[T]o the extent Warner urges that it intended to bury…a highly unorthodox fee-shifting provision that is astonishing in its breadth, the contractual language undoubtedly ‘fails to disclose its purpose.’”
Thus, WMG had no right to withhold Pettibone’s royalties.
With Warner’s legal fees nearing $1 million, the federal appeals court ruled Pettibone shouldn’t have to pay the price.
“Warner would have us read the Agreement to shift attorneys’ fees of this magnitude to individual songwriters for any and all infringement claims brought against them, regardless of merit or frivolousness.
“Because the Agreement’s language does not come close to unambiguously requiring such an extraordinary result, we hold that Warner cannot enforce [the Agreement] against Pettibone.”
In a statement to Digital Music News, Richard Busch, Pettibone’s lawyer, hailed the ruling.
“I am thrilled for Shep. Warner literally wanted to apply the indemnification provision of their contract, even though Shep breached no warranty and we defeated the underlying claim of infringement.
“They have just kept his royalties that he relies on for years. This is a truly sweet victory, and will hopefully prevent others from trying to pull the same nonsense in the future.”
You can view the summary order here: https://www.scribd.com/document/406745256/Pettibone-v-WMG-Summary-Order#from_embed
Senator Elizabeth Warren of Massachusetts has offered legislation that would make it easier to prosecute corporate executives with the Corporate Executive Accountability Act.
The challenge with charging corporate executives is that they are often insulated from the decisions that violate the law. That can make it difficult, if not impossible, for prosecutors to prove they have the requisite intent. The former head of the Justice Department’s criminal division, Lanny A. Breuer, has defended the lack of prosecutions. In a PBS “Frontline” special, he said, “When we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.” Former Attorney General Eric H. Holder Jr. told a Senate committee that some banks had become so big that prosecuting them would have negatively affected the economy. In other words, they had become “too big to jail.”
Ms. Warren’s bill would make it easier for federal prosecutors to pursue charges against individuals by holding executives liable if they “negligently permit or fail to prevent a violation of law.” The government often uses statutes like mail and wire fraud to pursue criminal cases. Those laws, however, require proving the defendant’s intent to defraud, which is unlikely when a senior executive has little to do with the actual misconduct. The new provision would allow punishment if the executive were merely negligent in overseeing the enterprise, which means the person acted in an objectively unreasonable manner.
The legislation has already drawn criticism. An article in Slate argued that “the proposal to put corporate executives in jail for acting negligently is a very bad idea.” The authors’ main objection is that negligence is a far lower standard, so executives with minimal culpability could end up in prison.
Holding business executives criminally responsible for violations by the company is not a new concept. In United States v. Park, decided in 1975, the Supreme Court upheld the conviction of the chief executive of Acme Markets for violating a provision of the Food, Drug and Cosmetic Act, which makes it a crime to ship adulterated or misbranded food. The court found that the statute imposed strict liability on the executive, which “reflected the view both that knowledge or intent were not required to be proved in prosecutions under its criminal provisions, and that responsible corporate agents could be subjected to the liability thereby imposed.”
In both the Clean Water Act and the Clean Air Act, Congress provided that a person who violates the law can include “any responsible corporate officer.” In United States v. Iverson, the federal appeals court in San Francisco held that a corporate officer can be held liable “only when the officer in fact exercises control over the activity causing the discharge or has an express corporate duty to oversee the activity.”
Ms. Warren’s proposal is much broader than the food and environmental laws, however. It would apply to any company with more than $1 billion in annual revenue, and the punishment for an executive would be up to one year in prison for a first violation, and as much as three years for a second offense. Those are much more severe penalties than typically imposed for crimes resulting from a lack of adequate oversight.
In addition, the proposal would apply if a company engaged in a civil violation of federal or state law that affected the “health, safety, finances or personal data” of 1 percent of the population of the United States or any individual state, including entering into a settlement agreement with regulators. That provision could encourage companies to fight regulatory claims rather than settling them, ratcheting up the cost of pursuing cases by civil regulators.
One potential limitation in the law is that it refers specifically to a Securities and Exchange Commission rule that defines an “executive officer” as the president of a company or any vice president in charge of a principal business unit or subsidiary. But that rule applies only to companies that have securities registered with the S.E.C., which means that privately held corporations could avoid the strictures of the new negligence standard by not selling securities to the general public. By using the S.E.C.’s definition of executive, the law would not apply to private companies. That may discourage companies from going public to avoid coming under the provision.
The proposal would add a powerful tool to the arsenal of federal prosecutors to pursue cases against corporate executives. But the key question is whether using negligence as the standard for criminal liability is the best means to police corporate leaders.
Proving negligence is a far lower bar than proving intent. If it is too low, then companies may do everything to fight any claims of a violation. Executives may even cover up violations rather than reporting them if they are more worried about personal exposure to a prison term than ensuring their companies are in compliance with the law.
And that would end up reducing compliance with the law.
Credit: https://www.nytimes.com/2019/04/22/business/dealbook/elizabeth-warren-finance-executives.html
The challenge with charging corporate executives is that they are often insulated from the decisions that violate the law. That can make it difficult, if not impossible, for prosecutors to prove they have the requisite intent. The former head of the Justice Department’s criminal division, Lanny A. Breuer, has defended the lack of prosecutions. In a PBS “Frontline” special, he said, “When we cannot prove beyond a reasonable doubt that there was criminal intent, then we have a constitutional duty not to bring those cases.” Former Attorney General Eric H. Holder Jr. told a Senate committee that some banks had become so big that prosecuting them would have negatively affected the economy. In other words, they had become “too big to jail.”
Ms. Warren’s bill would make it easier for federal prosecutors to pursue charges against individuals by holding executives liable if they “negligently permit or fail to prevent a violation of law.” The government often uses statutes like mail and wire fraud to pursue criminal cases. Those laws, however, require proving the defendant’s intent to defraud, which is unlikely when a senior executive has little to do with the actual misconduct. The new provision would allow punishment if the executive were merely negligent in overseeing the enterprise, which means the person acted in an objectively unreasonable manner.
The legislation has already drawn criticism. An article in Slate argued that “the proposal to put corporate executives in jail for acting negligently is a very bad idea.” The authors’ main objection is that negligence is a far lower standard, so executives with minimal culpability could end up in prison.
Holding business executives criminally responsible for violations by the company is not a new concept. In United States v. Park, decided in 1975, the Supreme Court upheld the conviction of the chief executive of Acme Markets for violating a provision of the Food, Drug and Cosmetic Act, which makes it a crime to ship adulterated or misbranded food. The court found that the statute imposed strict liability on the executive, which “reflected the view both that knowledge or intent were not required to be proved in prosecutions under its criminal provisions, and that responsible corporate agents could be subjected to the liability thereby imposed.”
In both the Clean Water Act and the Clean Air Act, Congress provided that a person who violates the law can include “any responsible corporate officer.” In United States v. Iverson, the federal appeals court in San Francisco held that a corporate officer can be held liable “only when the officer in fact exercises control over the activity causing the discharge or has an express corporate duty to oversee the activity.”
Ms. Warren’s proposal is much broader than the food and environmental laws, however. It would apply to any company with more than $1 billion in annual revenue, and the punishment for an executive would be up to one year in prison for a first violation, and as much as three years for a second offense. Those are much more severe penalties than typically imposed for crimes resulting from a lack of adequate oversight.
In addition, the proposal would apply if a company engaged in a civil violation of federal or state law that affected the “health, safety, finances or personal data” of 1 percent of the population of the United States or any individual state, including entering into a settlement agreement with regulators. That provision could encourage companies to fight regulatory claims rather than settling them, ratcheting up the cost of pursuing cases by civil regulators.
One potential limitation in the law is that it refers specifically to a Securities and Exchange Commission rule that defines an “executive officer” as the president of a company or any vice president in charge of a principal business unit or subsidiary. But that rule applies only to companies that have securities registered with the S.E.C., which means that privately held corporations could avoid the strictures of the new negligence standard by not selling securities to the general public. By using the S.E.C.’s definition of executive, the law would not apply to private companies. That may discourage companies from going public to avoid coming under the provision.
The proposal would add a powerful tool to the arsenal of federal prosecutors to pursue cases against corporate executives. But the key question is whether using negligence as the standard for criminal liability is the best means to police corporate leaders.
Proving negligence is a far lower bar than proving intent. If it is too low, then companies may do everything to fight any claims of a violation. Executives may even cover up violations rather than reporting them if they are more worried about personal exposure to a prison term than ensuring their companies are in compliance with the law.
And that would end up reducing compliance with the law.
Credit: https://www.nytimes.com/2019/04/22/business/dealbook/elizabeth-warren-finance-executives.html
New civil suits against opioid pharma distributors from the attorneys general in New York, Vermont and Washington State
The suits accuse distributors of devising systems to evade regulators. They allege that the companies warned many pharmacies at risk of being reported to the Drug Enforcement Administration, helped others to increase and circumvent limits on how many opioids they were allowed to buy, and often gave advance notice on the rare occasions they performed audits.
The complaints are here:
NY: https://www.documentcloud.org/documents/5817053-Unredacted-NYOAG-complaint.html
Vermont: https://www.documentcloud.org/documents/5793376-Vermont-vs-Opioid-Distributors.html
Washington State: https://www.documentcloud.org/documents/5793374-Wash-State-vs-Distributors.html
The suits accuse distributors of devising systems to evade regulators. They allege that the companies warned many pharmacies at risk of being reported to the Drug Enforcement Administration, helped others to increase and circumvent limits on how many opioids they were allowed to buy, and often gave advance notice on the rare occasions they performed audits.
The complaints are here:
NY: https://www.documentcloud.org/documents/5817053-Unredacted-NYOAG-complaint.html
Vermont: https://www.documentcloud.org/documents/5793376-Vermont-vs-Opioid-Distributors.html
Washington State: https://www.documentcloud.org/documents/5793374-Wash-State-vs-Distributors.html
NYT: Apple Inc. purges rivals from its store
Apple Cracks Down on Apps That Fight iPhone AddictionLast year, with much fanfare, the tech giant unveiled a screen-time tracker of its own. Then it quietly began purging competitors from its store.
By JACK NICAS
https://www.nytimes.com/2019/04/27/technology/apple-screen-time-trackers.html?rref=collection%2Ftimestopic%2FApple%20Inc
Apple Cracks Down on Apps That Fight iPhone AddictionLast year, with much fanfare, the tech giant unveiled a screen-time tracker of its own. Then it quietly began purging competitors from its store.
By JACK NICAS
https://www.nytimes.com/2019/04/27/technology/apple-screen-time-trackers.html?rref=collection%2Ftimestopic%2FApple%20Inc
NYT: The raisins mafia
Excerpt:
Mr. Overly [of Sun-Maid] attended a meeting of some raisin industry players in the back room of a restaurant in Fresno, Calif. This introduction left him shaken. “I’m not saying this lightly, because — you can read about this in different spots — people kind of think there’s this raisin mafia out there and that kind of stuff,” Mr. Overly said.
He said that he asked the group how they thought they could work together. “And the answer I got back was nothing short of collusion,” he said. While no one was proposing they take action, the anti-competitive tactics discussed in that back room, he said, were “completely illegal.”
As he tried to make changes in the raisin industry and at his own company, Mr. Overly said he faced intimidation, harassing phone calls and multiple death threats.
https://www.nytimes.com/2019/04/27/style/sun-maid-raisin-industry.html?searchResultPosition=1
Excerpt:
Mr. Overly [of Sun-Maid] attended a meeting of some raisin industry players in the back room of a restaurant in Fresno, Calif. This introduction left him shaken. “I’m not saying this lightly, because — you can read about this in different spots — people kind of think there’s this raisin mafia out there and that kind of stuff,” Mr. Overly said.
He said that he asked the group how they thought they could work together. “And the answer I got back was nothing short of collusion,” he said. While no one was proposing they take action, the anti-competitive tactics discussed in that back room, he said, were “completely illegal.”
As he tried to make changes in the raisin industry and at his own company, Mr. Overly said he faced intimidation, harassing phone calls and multiple death threats.
https://www.nytimes.com/2019/04/27/style/sun-maid-raisin-industry.html?searchResultPosition=1
1911 USDOJ decree against Standard Oil was terminated earlier this month
Until just a few days ago, Standard Oil was still the subject of a Justice Department decree forcing it to split into dozens of smaller chunks. A decree that came out of former President Theodore Roosevelt's lawsuit [https://supreme.justia.com/cases/federal/us/221/1/] against Standard Oil, which his government won 108 years ago.
Yet as The Wall Street Journal reports, [https://www.wsj.com/articles/justice-department-closes-book-on-landmark-standard-oil-breakup-11555418344?tesla=y&ns=prod/accounts-wsj] the government recently asked a St. Louis federal court to end the 1911 decree, officially declaring it was finished breaking up Standard Oil.
After winning what historian Daniel Yergin calls "the most famous antitrust case" in U.S. history, the government only tried enforcing its resulting decree once, the Journal notes. Standard Oil still split up into 34 smaller companies over the years, including today's behemoths Exxon and Chevron. But since the decree only applied to Standard and not the entire industry, the Justice Department recently moved to end it and let newer, broader laws run their course.
Until just a few days ago, Standard Oil was still the subject of a Justice Department decree forcing it to split into dozens of smaller chunks. A decree that came out of former President Theodore Roosevelt's lawsuit [https://supreme.justia.com/cases/federal/us/221/1/] against Standard Oil, which his government won 108 years ago.
Yet as The Wall Street Journal reports, [https://www.wsj.com/articles/justice-department-closes-book-on-landmark-standard-oil-breakup-11555418344?tesla=y&ns=prod/accounts-wsj] the government recently asked a St. Louis federal court to end the 1911 decree, officially declaring it was finished breaking up Standard Oil.
After winning what historian Daniel Yergin calls "the most famous antitrust case" in U.S. history, the government only tried enforcing its resulting decree once, the Journal notes. Standard Oil still split up into 34 smaller companies over the years, including today's behemoths Exxon and Chevron. But since the decree only applied to Standard and not the entire industry, the Justice Department recently moved to end it and let newer, broader laws run their course.
Jamie McAndrews on anonymous internet payments
Expert economist McAndrews' observation is startlingly simple: private companies do not have the incentive to agree to anonymous internet payments. Here is part of the otline of a talk he gave in 2017:
Conjecture: anonymity of internet payments will be underprovided by the private sector. Providers of internet payment, such as Visa, Paypal, Square, etc. face two impediments in providing sufficient anonymity:
1. The inability to commit not to utilize information gained during a transaction.
2. The usefulness of the information revealed is dependent on a host of related investments made by the parties.
An additional impediment relates to the consumer: The information revealed by a consumer in a transaction may have “external value.” Combined with information about other transactions, it can assist in forecasting demand of other consumers or an individual’s future actions. In this environment, Coasean bargaining is unlikely to result in an optimal contract, and anonymity will be underprovided.
Conclusion: Currency offers anonymity. This can be valuable to society in a variety of environments, not only in criminal or illicit transactions. The internet is an information-rich environment because of the ability to collect information cheaply. The private sector has insufficient incentives to provide anonymity of transactions. Public authorities have a role in promoting greater anonymity and privacy in Internet payments and transactions.
https://www.interdependence.org/wp-content/uploads/2017/02/Jamie-McAndrews.pdf
Expert economist McAndrews' observation is startlingly simple: private companies do not have the incentive to agree to anonymous internet payments. Here is part of the otline of a talk he gave in 2017:
Conjecture: anonymity of internet payments will be underprovided by the private sector. Providers of internet payment, such as Visa, Paypal, Square, etc. face two impediments in providing sufficient anonymity:
1. The inability to commit not to utilize information gained during a transaction.
2. The usefulness of the information revealed is dependent on a host of related investments made by the parties.
An additional impediment relates to the consumer: The information revealed by a consumer in a transaction may have “external value.” Combined with information about other transactions, it can assist in forecasting demand of other consumers or an individual’s future actions. In this environment, Coasean bargaining is unlikely to result in an optimal contract, and anonymity will be underprovided.
Conclusion: Currency offers anonymity. This can be valuable to society in a variety of environments, not only in criminal or illicit transactions. The internet is an information-rich environment because of the ability to collect information cheaply. The private sector has insufficient incentives to provide anonymity of transactions. Public authorities have a role in promoting greater anonymity and privacy in Internet payments and transactions.
https://www.interdependence.org/wp-content/uploads/2017/02/Jamie-McAndrews.pdf
Decoding the Cost of College: The Case for Transparent Financial Aid Award Letters
POLICY PAPER
By
Stephen Burd,Rachel Fishman,Laura Keane,Julie Habbert.Ben Barrett,Kim Dancy,Sophie Nguyen, Brendan Williams
June 5, 2018Executive SummaryStudents and families confront a detrimental lack of information and transparency when making one of the biggest financial decisions of their lives: paying for college.
New America and uAspire, a nonprofit leader on college affordability, analyzed thousands of financial aid award letters and found not only that financial aid is insufficient to cover the cost of college for many students, but also that award letters lack consistency and transparency. As a result, it is exceedingly difficult for students and families to make a financially-informed college decision. While solutions for tackling the cost barrier may be complex, solutions to improve award letter terminology and formatting are well within reach.
Through a quantitative analysis of over 11,000 financial aid award letters, we found that students who receive a Pell Grant are still left to cover a significant gap—an average of nearly $12,000. The gap persisted even when students made cost-saving decisions about where to attend (public versus private colleges and universities) or where to live (at home versus on campus). Given that financial aid falls short, clear and consistent communication on award letters is critical.
After a thorough qualitative review using a subset of 515 award letters from unique institutions, we emerged with seven key findings:
To read the entire report, please download it here. https://newamerica.org/documents/2301/Decoding_the_Cost_of_College_Final_6218.pdf
POLICY PAPER
By
Stephen Burd,Rachel Fishman,Laura Keane,Julie Habbert.Ben Barrett,Kim Dancy,Sophie Nguyen, Brendan Williams
June 5, 2018Executive SummaryStudents and families confront a detrimental lack of information and transparency when making one of the biggest financial decisions of their lives: paying for college.
New America and uAspire, a nonprofit leader on college affordability, analyzed thousands of financial aid award letters and found not only that financial aid is insufficient to cover the cost of college for many students, but also that award letters lack consistency and transparency. As a result, it is exceedingly difficult for students and families to make a financially-informed college decision. While solutions for tackling the cost barrier may be complex, solutions to improve award letter terminology and formatting are well within reach.
Through a quantitative analysis of over 11,000 financial aid award letters, we found that students who receive a Pell Grant are still left to cover a significant gap—an average of nearly $12,000. The gap persisted even when students made cost-saving decisions about where to attend (public versus private colleges and universities) or where to live (at home versus on campus). Given that financial aid falls short, clear and consistent communication on award letters is critical.
After a thorough qualitative review using a subset of 515 award letters from unique institutions, we emerged with seven key findings:
- Confusing Jargon and Terminology: Of the 455 colleges that offered an unsubsidized student loan, we found 136 unique terms for that loan, including 24 that did not include the word “loan.”
- Omission of the Complete Cost: Of our 515 letters, more than one-third did not include any cost information with which to contextualize the financial aid offered.
- Failure to Differentiate Types of Aid: Seventy percent of letters grouped all aid together and provided no definitions to indicate to students how grants and scholarships, loans, and work-study all differ.
- Misleading Packaging of Parent PLUS Loans: Nearly 15 percent of letters included a PLUS loan as an “award,” making the financial aid package appear far more generous than it really was.
- Vague Definitions and Poor Placement of Work-Study: Of institutions that offered work-study, 70 percent provided no explanation of work-study and how it differs from other types of aid.
- Inconsistent Bottom Line Calculations: In our sample, only 40 percent calculated what students would need to pay, and those 194 institutions had 23 different ways of calculating remaining costs.
- No Clear Next Steps: Only about half of letters provided information about what to do to accept or decline awards, and those that did had inconsistent policies.
To read the entire report, please download it here. https://newamerica.org/documents/2301/Decoding_the_Cost_of_College_Final_6218.pdf
From Public Citizen Consumer Blog
Sandy Hook, gun-maker liability, and state consumer-protection law
Posted: 17 Apr 2019 04:37 AM PDT
Take a good look at this easy-to-read, informative essay by law prof Heidi Li Feldman in the Harvard Law Review blog. In Why the Latest Ruling in the Sandy Hook Shooting Litigation Matters, Feldman explains that, among other things, the Connecticut Supreme Court's recent decision in Soto v. Bushmaster Firearms (concerning the prospect of liability for gun manufacturers, distributors, and direct sellers in the Sandy Hook massacre) is potentially important as a matter of state UDAP law.
NYT on the CFPB: "Mick Mulvaney’s Master Class in Destroying the Government From Within"
Posted: 16 Apr 2019 06:21 AM PDT
The New York Times has a lengthy article on Mick Mulvaney's tenure as acting director of the Consumer Financial Protection Bureau.
This account of Mulvaney’s tenure is based on interviews with more than 60 current or former bureau employees, current and former Mulvaney aides, consumer advocates and financial-industry executives and lobbyists, as well as hundreds of pages of internal bureau documents obtained by The New York Times and others. When Mulvaney took over, the fledgling C.F.P.B. was perhaps Washington’s most feared financial regulator: It announced dozens of cases annually against abusive debt collectors, sloppy credit agencies and predatory lenders, and it was poised to force sweeping changes on the $30 billion payday-loan industry, one of the few corners of the financial world that operates free of federal regulation. What he left behind is an agency whose very mission is now a matter of bitter dispute. “The bureau was constructed really deliberately to protect ordinary people,” says Lisa Donner, the head of Americans for Financial Reform. “He’s taken it apart — dismantled it, piece by piece, brick by brick.”
Although Mulvaney has move don to serve as White House Chief of Staff, he had a notable on the work of the CFPB.
Over the last year, Mulvaney’s temporary hiring freeze has turned into an indefinite one, slowly shrinking the C.F.P.B.’s staff by attrition. Bureau news releases, once packed with colorful details about abusive lending practices, have been toned down to dry legalese. According to a report by Christopher Peterson, a senior fellow at the Consumer Federation of America, enforcement at the bureau appears to have dwindled radically. In 2018, the bureau announced just 11 lawsuits or settlements, less than a third of the number during Cordray’s last year. In the months since Mulvaney reorganized the Office of Fair Lending, the bureau has not brought a single case alleging illegal discrimination. While Mulvaney pledged data-driven enforcement, his bureau brought only one case against debt collectors, who account for more complaints to the C.F.P.B. than almost any other industry. Where Mulvaney or his successor have allowed cases to go forward, lenders have often settled with lowered fines or none at all. When the bureau settled a three-year prosecution of a group of payday lenders called NDG Enterprise — which found that the group had falsely threatened American customers with arrest and imprisonment if they failed to repay loans — NDG walked away without paying a cent.
The full article is here.
Recent legislation overhauled CFIUS, known as the Foreign Investment Risk Review Modernization Act.
The measure emphasized the development of methods for the ongoing monitoring of merger and acquisition agreements for security concerns, and imposing sanctions.
The modernization act, which was signed into law in August, stipulated that CFIUS "shall develop and agree upon methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction that will allow the committee to adequately ensure compliance without unnecessarily diverting Committee resources from assessing any new covered transaction."
A rcently announced penalty is also just one recent crackdown from CFIUS to make headlines in recent weeks.
Cybersecurity firm Cofense said April 11 that one of its minority investors, Pamplona Capital Management, will sell its stake following a yearlong review of its investment.
Virginia-headquartered Cofense, formerly known as PhishMe, had announced in February 2018 that it would be bought by a private equity consortium in a deal that valued the cybersecurity firm at $400 million. The buyer group included Pamplona, Adam Street Partners and Telstra Ventures.
The following month, CFIUS began taking a closer look at the involvement of Pamplona, which is reported to be partially backed by a Russian oligarch.
After Pamplona agreed to give up its board seats and sever communications with Cofense, the private equity firm in October agreed to sell its stake in the cybersecurty firm in a transaction being overseen by a CFIUS-approved trustee.
Toshiba Corp. also confirmed on April 11 that China's ENN Ecological Holdings Co. Ltd. had backed out of a planned 91.3 billion yen ($815 million) deal for the Japanese conglomerate's flagging U.S. liquid natural gas business after the transaction failed to secure regulatory approvals in the U.S. and China.
Tokyo-based Toshiba said at the time that ENN's board moved to terminate the planned acquisition of Toshiba America LNG Corp. as the deal had yet to secure clearance from CFIUS and China's State Administration of Foreign Exchange.
The Cofense and Toshiba matters came on the heels of a March report by The Wall Street Journal indicating that China's Beijing Kunlun Tech Co. Ltd. had been ordered to sell the majority stake in acquired in gay dating app Grindr in 2016 due to concerns about the Chinese government's potential access to users' data.
Despite the recent headlines, however, civil penalties — and blocked deals, for that matter — are still few and far between.
Read more at (Pay wall) : https://www.law360.com/mergersacquisitions/articles/1150189/-1m-cfius-fine-is-rare-public-enforcement-flex?nl_pk=fb4cbe8b-4906-46d6-b8e5-a9b207ebe544&utm_source=newsletter&utm_medium=email&utm_campaign=mergersacquisitions&read_more=1?copied=1dit.
The measure emphasized the development of methods for the ongoing monitoring of merger and acquisition agreements for security concerns, and imposing sanctions.
The modernization act, which was signed into law in August, stipulated that CFIUS "shall develop and agree upon methods for evaluating compliance with any agreement entered into or condition imposed with respect to a covered transaction that will allow the committee to adequately ensure compliance without unnecessarily diverting Committee resources from assessing any new covered transaction."
A rcently announced penalty is also just one recent crackdown from CFIUS to make headlines in recent weeks.
Cybersecurity firm Cofense said April 11 that one of its minority investors, Pamplona Capital Management, will sell its stake following a yearlong review of its investment.
Virginia-headquartered Cofense, formerly known as PhishMe, had announced in February 2018 that it would be bought by a private equity consortium in a deal that valued the cybersecurity firm at $400 million. The buyer group included Pamplona, Adam Street Partners and Telstra Ventures.
The following month, CFIUS began taking a closer look at the involvement of Pamplona, which is reported to be partially backed by a Russian oligarch.
After Pamplona agreed to give up its board seats and sever communications with Cofense, the private equity firm in October agreed to sell its stake in the cybersecurty firm in a transaction being overseen by a CFIUS-approved trustee.
Toshiba Corp. also confirmed on April 11 that China's ENN Ecological Holdings Co. Ltd. had backed out of a planned 91.3 billion yen ($815 million) deal for the Japanese conglomerate's flagging U.S. liquid natural gas business after the transaction failed to secure regulatory approvals in the U.S. and China.
Tokyo-based Toshiba said at the time that ENN's board moved to terminate the planned acquisition of Toshiba America LNG Corp. as the deal had yet to secure clearance from CFIUS and China's State Administration of Foreign Exchange.
The Cofense and Toshiba matters came on the heels of a March report by The Wall Street Journal indicating that China's Beijing Kunlun Tech Co. Ltd. had been ordered to sell the majority stake in acquired in gay dating app Grindr in 2016 due to concerns about the Chinese government's potential access to users' data.
Despite the recent headlines, however, civil penalties — and blocked deals, for that matter — are still few and far between.
Read more at (Pay wall) : https://www.law360.com/mergersacquisitions/articles/1150189/-1m-cfius-fine-is-rare-public-enforcement-flex?nl_pk=fb4cbe8b-4906-46d6-b8e5-a9b207ebe544&utm_source=newsletter&utm_medium=email&utm_campaign=mergersacquisitions&read_more=1?copied=1dit.
The Airbus and Boeing Duopoly: Would More Aggressive Antitrust Enforcement Benefit the Commercial Aviation Industry?
By Grant Petrosyan, Esq. (Constantine Cannon)1
Click here for a PDF version of the article https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-4-Full.pdf
It is no secret that Airbus SE (“Airbus”) and The Boeing Company (“Boeing”) dominate the commercial aircraft manufacturing industry. According to the Teal Group, an aerospace market analysis company, Airbus and Boeing make up 99 percent of global large aircraft orders.2 And large airplane orders comprise more than 90 percent of the total airplane market. As the numbers indicate, Airbus and Boeing do not have much, if any, competition other than between themselves. Further, in recent years, Airbus and Boeing have merged with their smaller competitors, namely, Canada’s Bombardier and Brazil’s Embraer. These mergers have not faced much, if any, resistance from global antitrust enforcement agencies despite the evident consolidation in an already under-competitive industry.
Boeing, founded in Seattle, Washington in 1916, has been one of the largest aviation companies for more than a century.3 Airbus is a European aerospace manufacturing company founded in 1970, tracing its roots to an agreement entered among the French, German, and British governments. The governments agreed that their collaboration was necessary to create an aircraft manufacturing company that could rival Boeing. Today, these two companies dominate an industry which, fifty years ago, had a number of competitors. In the mid-twentieth century, global airlines could choose from companies including Douglas Aircraft Company, Lockheed, Sud-Aviation, and Boeing.4
Until recently, Bombardier and Embraer were growing rivals to Boeing and Airbus. However, Bombardier was unable to sustain its operations and its commercial division was essentially absorbed by Airbus through a joint-venture agreement in 2018.5 The primary reason for Bombardier’s decision to enter into this agreement was its inability to meet financial obligations as its costs soared to $2 billion above budget. “Bombardier of Canada had the best hope of getting in but they simply ran out of cash and this year their jetliner was basically absorbed by Airbus…” stated Richard Aboulafia, Vice President of Analysis, Teal Group, in a CNBC report regarding the Airbus and Boeing duopoly. As a result, Airbus and Bombardier made a deal that gave Airbus a slightly more than 50 percent stake in Bombardier’s C Series. Shortly after, Airbus announced it would discontinue production of its A319 — a competing aircraft to Bombardier’s C Series.
A year after the Airbus-Bombardier deal was announced, Boeing began negotiations to purchase Embraer’s commercial aviation business. The Brazilian government owns a large stake in Embraer and, despite initial reservations, Brazil’s President Jair Bolsonaro approved the deal in January 2019.6 On February 25, Embraer’s shareholders voted to sell 80 percent of the company’s commercial plane division to Boeing for $4.2 billion. Although the transaction must still be approved by regulators, it is expected that the deal will close by the end of 2019. Once finalized, Boeing will have total control of the new venture.
Other countries are trying to enter the aircraft manufacturing space, but so far have been unable to make a significant impact in the industry. The Commercial Aircraft Corporation of China (Comac), the leading Chinese aircraft manufacturer, was founded in 2008 and is sponsored by the government of China. In response to CNBC’s inquiry regarding competition in the industry, a spokesperson for Airbus stated, “The Airbus-Boeing duopoly isn’t likely to last forever. In general, we see China as the next major competitor though in some 10 to 20 years from now.”7 However, considering the immense investment and time required from the conception of a new plane model to delivery to a customer, competing with Airbus and Boeing will prove to be a great challenge for the Russian and Chinese manufacturers. As a result, it is more than likely that the Airbus and Boeing duopoly will continue, and even strengthen, in the near future.
Building airplanes is not cheap. A single airplane can cost millions of dollars in construction fees alone. Considering the additional costs of safety and regulatory compliance as well as maintenance, operations, etc., it is no surprise that competitors in this industry are few and far between. “The barriers to entry in this business are huge in terms of capital requirements, in terms of technology, experience, customer support, customer finance,” stated Aboulafia.8 Such enormous overhead expenses make economies of scale critical to an aircraft manufacturer’s viability.
Because of their economies of scale, Airbus and Boeing today have tremendous advantages over potential new entrants to the market — even Comac, which is sponsored by the world’s second largest economy. Furthermore, Airbus and Boeing both have completed extensive research and development over the years, and have established production capability and network support.
Indeed, Airbus and Boeing report growth year after year. Airbus delivered 800 planes in 2018, an 11 percent increase from 2017. Boeing set a record of 806 planes in 2018, a 5.6 percent growth from the previous year. The consequences and implications of Airbus and Boeing’s dominance are vast and impactful. As the commercial aviation industry affects everyone from airline companies to passengers, such consolidation and market power could have long lasting effects on prices, quality, innovation, and choice. Boeing has already announced an increase for their commercial list prices by nearly 4 percent in 2019 compared to the previous year.9
Notwithstanding the evident market concentration that has led to the Boeing and Airbus duopoly, there is debate whether increased competition will ultimately benefit or harm airlines and passengers. On the one hand, competition is integral to any successful, productive market as it ensures lower prices for consumers and enhances quality and innovation. On the other hand, critics of stronger enforcement argue that while competition is preferable in most cases, the aviation industry is unique and basic economic and competition principles do not apply in this space as they would not only harm competition, but also harm airlines and passengers as well as entire countries’ economies.
One of the leading arguments against strict antitrust enforcement in the aircraft manufacturing industry is that, because Airbus and other aircraft manufacturers are either government-subsidized or state-owned, it is very difficult for private companies like Boeing to compete with wealthy governments. For instance, Robert D. Atkinson, President of the Information Technology and Innovation Foundation, a public policy think tank, discussed why more competition in the aircraft industry would result in negative consequences.10 He argued that increased competition by foreign companies will harm U.S. aerospace companies, U.S. consumers, and, ultimately, the U.S. economy.
According to Atkinson, those who view the Airbus and Boeing duopoly, including their recent mergers with Embraer and Bombardier, as anticompetitive are essentially following a simplistic approach to antitrust enforcement. He wrote, “When it comes to aviation, Economics 101 is a children’s fairy tale.” He explained that the aviation industry is unique, and that Boeing’s competitors are “deep-pocketed rivals backed by governments.”11 It is true that Airbus was formed by the governments of France, England, and Germany, and has received many government subsidies since its inception. Additionally, many European airlines purchase most of their airplanes from Airbus. In fact, Atkinson points out that in the early 2010s, Air France operated a fleet that was 71 percent Airbus; Lufthansa’s fleet was 62 percent Airbus; Alitalia’s 71 percent; and Iberia’s 100 percent.12 In comparison, the percentage of Airbus airplanes purchased by various non-European airlines was much lower – ranging from 13-29 percent.13
Another government-subsidized aircraft manufacturer is China’s Comac. Comac is a state-sponsored company that started with $2.8 billion in capital from the central government of China. To date, the company has received various subsidies and other benefits from state and regional governments.14 Financial and other assistance from the Chinese government will contribute greatly to the strength and growth of Comac. In his article, Atkinson states, “[t]he free market would never ever have funded the creation of Comac.”15
Those who oppose more competition in the aircraft manufacturing industry argue that Boeing will no longer be competitive in a market where its rivals are all supported by their respective governments. They further argue that consumers will be worse off because, as demand and therefore production decreases for Boeing, its prices will increase to compensate for the loss of economies of scale.16
Other opponents of more aggressive antitrust enforcement in the commercial aircraft manufacturing industry argue that consolidation is just simple economics. They claim that, because it requires enormous capital to design, plan, and build an airplane, and enormous scale to compete, the aircraft manufacturing industry is unique and antitrust enforcement agencies should not apply the same principles as are applied to other industries.17
The question thus remains the same: should antitrust enforcement agencies exercise more vigor in blocking mergers and in prosecuting other potentially anticompetitive conduct in the commercial aircraft manufacturing industry? Or will doing so leave domestic companies, consumers, and the economy worse off? One thing is for sure: Airbus and Boeing have strongholds in the market, at least for the foreseeable future. As discussed above, their duopoly has only strengthened in recent years as a result of their mergers with Bombardier and Embraer. As Aboulafia stated, the commercial aviation industry is “one of the most efficient duopolies ever in the history of manufacturing.”18
1 Grant Petrosyan is an attorney at the New York office of Constantine Cannon LLP. The views expressed in this article are the author’s own and not those of Constantine Cannon LLP or its clients.
2 Sprague, Kate, Why Airbus and Boeing Are the Only Two Companies to Dominate 99% of the Large Plane Market, CNBC Business News, (January 26, 2019), https://www.cnbc.com/2019/01/25/why-the-airbus-boeing-companies-dominate-99percent-of-the-large-plane-market.html.
3 Id.
4 Winship, William. Boeing & Douglas: A History of Customer Service, https://www.boeing.com/commercial/aeromagazine/aero_01/textonly/ps01txt.html (last visited February 15, 2019); L-1011: Luxury Among the Clouds, https://www.lockheedmartin.com/en-us/news/features/history/l-1011.html (last visited February 15, 2019); Sud-Aviation History, http://sudaviation.com/?page_id=65 (last visited February 15, 2019).
5 Airbus’ Majority Stake in C Series Partnership with Bombardier and Investissement Quebec Comes Into Effect, Airbus Newsroom, (July 1, 2018), https://www.airbus.com/newsroom/press-releases/en/2018/07/airbus–majority-stake-in-c-series-partnership-with-bombardier-a.html.
6 Schipani, Andres, Brazil’s Bolsonaro Approves Embraer-Boeing Tie-up, Financial Times, (January 10, 2019), https://www.ft.com/content/bf0e473e-1525-11e9-a581-4ff78404524e.
7 Sprague, Kate, Why Airbus and Boeing Are the Only Two Companies to Dominate 99% of the Large Plane Market, CNBC Business News, (January 26, 2019), https://www.cnbc.com/2019/01/25/why-the-airbus-boeing-companies-dominate-99percent-of-the-large-plane-market.html.
8 Id.
9 McCoy, Daniel, Boeing Hikes Commercial List Prices by Nearly 4 Percent (2019), The Business Journals. https://www.bizjournals.com/wichita/news/2019/02/22/boeing-hikes-commercial-list-prices-by-nearly-4.html.
10 Atkinson, Robert D., Why More Aircraft Competition Is Bad for the U.S. Economy, Not Good for Customers, Information Technology & Innovation Foundation, (May 1, 2018), https://itif.org/publications/2018/05/01/why-more-aircraft-competition-bad-us-economy-not-good-consumers.
11 Id.
12 Atkinson, Robert D., Innovation Economics: The Race for Global Advantage (2012).
13 Id.
14 Atkinson, Robert D., Why More Aircraft Competition Is Bad for the U.S. Economy, Not Good for Customers, Information Technology & Innovation Foundation, (May 1, 2018),https://itif.org/publications/2018/05/01/why-more-aircraft-competition-bad-us-economy-not-good-consumers.
15 Id.
16 Id.
17 Boyd, Michael, Only Two Global Airliner Manufacturers Left, And Lots of Fallout Coming, Forbes, (November 26, 2018), https://www.forbes.com/sites/mikeboyd/2018/11/26/only-two-global-airliner-manufacturers-left-and-lots-of-fallout-coming/#22c24c9c5f83.
18 Sprague, Kate, Why Airbus and Boeing Are the Only Two Companies to Dominate 99% of the Large Plane Market, CNBC Business News, (January 26, 2019), https://www.cnbc.com/2019/01/25/why-the-airbus-boeing-companies-dominate-99percent-of-the-large-plane-market.html.
"Integrity fee" to pro sports for Missouri sports betting advances
Adam Candee, Legal Sports Report · April 16, 2019 at 5:16 pmSave
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The Missouri House General Laws Committee amended H 119 Monday to include an integrity fee of 0.25% of handle to pro sports leagues and state universities. The NFL, MLB and NHL have franchises located in St. Louis and Kansas City.
The amendment inserting the integrity fee also creates a fee of 0.6% to fund maintenance and upkeep of Missouri sports stadiums. That fee would be delivered only to leagues with a presence in the state.
Committee members also voted to weaponize official data in Missouri in advancing the bill on a 7-3 vote. The bill allows leagues to require operators to use official data in settling any bet unrelated to the final score of a game.
Continue Reading.... https://www.legalsportsreport.com/31256/missouri-sports-betting-integrity-fee-mobile/
See also « 4/16 Tennessee sports betting bill looks to clear another hurdle in committee https://www.cdcgamingreports.com/tennessee-sports-betting-bill-looks-to-clear-another-hurdle-in-committee/
The Consumer Federation of America report on the decline of the CFPB as a consumer interest enforcer
Executive summary:
In the aftermath of the 2008 financial crisis, Congress created the Consumer Financial Protection Bureau (“CFPB”), and charged it with enforcing federal consumer financial law. The CFPB has a number of tools with which to fulfill this mandate, including the authority to bring legal action against companies who violate the law. Congress also gave the CFPB the authority to collect, investigate, and respond to complaints from consumers. In recent years, complaints involving credit reporting, debt collection, mortgages and student lending have topped the CFPB’s list of most frequent complaints. Historically, these complaints have helped to inform and prioritize areas of focus for enforcement activity.
This study analyzes whether the CFPB, under the Trump Administration, is delivering on its statutory law enforcement objectives and stated commitments to take aggressive action in the area of consumer law enforcement, particularly where complaint volume is the largest. To accomplish this, this study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Director Kathleen Kraninger’s term in office. Overall, this study finds that under the leadership of Acting Director Mick Mulvaney, and more recently, Director Kathy Kraninger, enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior Administration, even in the areas where consumer complaint activity is the highest.
The Bureau has announced only two cases each under authorities specifically given to the Bureau to address issues with credit reporting and mortgage lending, one case related to debt collection, and no cases related to student lending. Troublingly, the Bureau has also failed to announce or resolve a single antidiscrimination case. Further, in addition to a decline in the overall volume of enforcement actions, this study shows significantly less monetary relief going to consumers. The CFPB returned about $43 million in restitution to consumers for each week of the Bureau’s first Director’s term in office. In the relatively few cases resolved since, this amount has plummeted to about $6.4 million per week under Acting Director Mulvaney and most recently dropped again to about $925,000 per week under Director Kraninger.
The Bureau has not announced a single dollar Executive Summary Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 3 of monetary relief in any of the high-volume complaint areas of credit reporting, debt collection, or student lending. Overall, enforcement activity and relief to the consumer has declined since the appointment of Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initial priorities for her term of leadership, law enforcement activity continues to remain significantly below earlier levels since her confirmation.
Key Findings
• The number of public enforcement cases announced in 2018 declined by 80% from the Bureau’s peak productivity in 2015. In 2015, the CFPB announced 55 public law enforcement actions. In 2018, this number had declined to 11. • The average amount of monetary relief per case awarded to victims of illegal consumer financial practices has declined by approximately 96%. Under Director Cordray, the CFPB awarded an average of $59.6 million in consumer restitution per case. Under Director Kraninger, average consumer relief has declined to $2.4 million per case.
• Law enforcement addressing illegal credit reporting practices has declined sharply under the Trump Administration’s leadership. The CFPB has announced only two cases enforcing the Fair Credit Reporting Act and settled both without providing a single dollar of restitution to victims of illegal practices.
• Law enforcement addressing illegal debt collection practices has declined sharply under the Trump Administration’s leadership. Under Acting Director Mulvaney and Director Kraninger, the CFPB has announced only one case enforcing the Fair Debt Collection Practices Act. The CFPB agreed to settle this case without ordering a single dollar of restitution to victims of illegal debt collection practices.
• Law enforcement policing the home mortgage market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 61 mortgage lending cases that returned nearly $3 billion in restitution to consumers at a pace of over $10 million per week. Under Acting Director Mulvaney, consumer relief in mortgage lending declined by over 99% to less than $5,000 per week for the entire nation. Under Director Kraninger, the Bureau has not announced a single mortgage-related case, nor any restitution for consumers. Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 4
• Law Enforcement policing the student loan market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 15 student lending related cases with an average of $47.5 million in consumer relief per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single student lending enforcement case and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to enforce consumer protection laws prohibiting discrimination. Under Director Cordray, the CFPB announced 11 cases enforcing the Equal Credit Opportunity Act producing average consumer relief over $56 million per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single case alleging unlawful discrimination and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to provide adequate restitution to victims of deceptive practices. Under Director Cordray, the CFPB announced 116 enforcement cases against consumer finance companies that used in deceptive or misleading practices producing average consumer relief of over $94 million per case. Director Kraninger has announced 3 cases alleging deceptive practices but agreed to settle each case without ordering any monetary restitution for victims.
From https://consumerfed.org/wp-content/uploads/2019/03/CFPB-Enforcement-in-Decline.pdf
Executive summary:
In the aftermath of the 2008 financial crisis, Congress created the Consumer Financial Protection Bureau (“CFPB”), and charged it with enforcing federal consumer financial law. The CFPB has a number of tools with which to fulfill this mandate, including the authority to bring legal action against companies who violate the law. Congress also gave the CFPB the authority to collect, investigate, and respond to complaints from consumers. In recent years, complaints involving credit reporting, debt collection, mortgages and student lending have topped the CFPB’s list of most frequent complaints. Historically, these complaints have helped to inform and prioritize areas of focus for enforcement activity.
This study analyzes whether the CFPB, under the Trump Administration, is delivering on its statutory law enforcement objectives and stated commitments to take aggressive action in the area of consumer law enforcement, particularly where complaint volume is the largest. To accomplish this, this study identifies and classifies every public enforcement action since the inception of the CFPB through the first three months of Director Kathleen Kraninger’s term in office. Overall, this study finds that under the leadership of Acting Director Mick Mulvaney, and more recently, Director Kathy Kraninger, enforcement activity at the CFPB has declined to levels that are either nonexistent or significantly below that of the prior Administration, even in the areas where consumer complaint activity is the highest.
The Bureau has announced only two cases each under authorities specifically given to the Bureau to address issues with credit reporting and mortgage lending, one case related to debt collection, and no cases related to student lending. Troublingly, the Bureau has also failed to announce or resolve a single antidiscrimination case. Further, in addition to a decline in the overall volume of enforcement actions, this study shows significantly less monetary relief going to consumers. The CFPB returned about $43 million in restitution to consumers for each week of the Bureau’s first Director’s term in office. In the relatively few cases resolved since, this amount has plummeted to about $6.4 million per week under Acting Director Mulvaney and most recently dropped again to about $925,000 per week under Director Kraninger.
The Bureau has not announced a single dollar Executive Summary Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 3 of monetary relief in any of the high-volume complaint areas of credit reporting, debt collection, or student lending. Overall, enforcement activity and relief to the consumer has declined since the appointment of Mick Mulvaney in 2017. And, despite being touted as one of Director Kraninger’s initial priorities for her term of leadership, law enforcement activity continues to remain significantly below earlier levels since her confirmation.
Key Findings
• The number of public enforcement cases announced in 2018 declined by 80% from the Bureau’s peak productivity in 2015. In 2015, the CFPB announced 55 public law enforcement actions. In 2018, this number had declined to 11. • The average amount of monetary relief per case awarded to victims of illegal consumer financial practices has declined by approximately 96%. Under Director Cordray, the CFPB awarded an average of $59.6 million in consumer restitution per case. Under Director Kraninger, average consumer relief has declined to $2.4 million per case.
• Law enforcement addressing illegal credit reporting practices has declined sharply under the Trump Administration’s leadership. The CFPB has announced only two cases enforcing the Fair Credit Reporting Act and settled both without providing a single dollar of restitution to victims of illegal practices.
• Law enforcement addressing illegal debt collection practices has declined sharply under the Trump Administration’s leadership. Under Acting Director Mulvaney and Director Kraninger, the CFPB has announced only one case enforcing the Fair Debt Collection Practices Act. The CFPB agreed to settle this case without ordering a single dollar of restitution to victims of illegal debt collection practices.
• Law enforcement policing the home mortgage market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 61 mortgage lending cases that returned nearly $3 billion in restitution to consumers at a pace of over $10 million per week. Under Acting Director Mulvaney, consumer relief in mortgage lending declined by over 99% to less than $5,000 per week for the entire nation. Under Director Kraninger, the Bureau has not announced a single mortgage-related case, nor any restitution for consumers. Dormant: The CFPB’s Law Enforcement Program in Decline | Consumer Federation of America 4
• Law Enforcement policing the student loan market has declined sharply under the Trump Administration’s leadership. Under Director Cordray, the CFPB announced 15 student lending related cases with an average of $47.5 million in consumer relief per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single student lending enforcement case and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to enforce consumer protection laws prohibiting discrimination. Under Director Cordray, the CFPB announced 11 cases enforcing the Equal Credit Opportunity Act producing average consumer relief over $56 million per case. Under the Trump Administration’s leadership, the CFPB has not announced or resolved a single case alleging unlawful discrimination and has provided no restitution to any consumers.
• Under the Trump Administration’s leadership, the CFPB has failed to provide adequate restitution to victims of deceptive practices. Under Director Cordray, the CFPB announced 116 enforcement cases against consumer finance companies that used in deceptive or misleading practices producing average consumer relief of over $94 million per case. Director Kraninger has announced 3 cases alleging deceptive practices but agreed to settle each case without ordering any monetary restitution for victims.
From https://consumerfed.org/wp-content/uploads/2019/03/CFPB-Enforcement-in-Decline.pdf
A contrarian view: “The NCAA, Which Is Tied to Education, May Be a Necessary Monopoly”
The article, with the captioned title, discusses a recent successful challenge made to the NCAA’s governing policies on antitrust grounds. That ruling, now on appeal, upheld the plaintiffs’ argument that the NCAA has a monopoly on the college athletic market and has misused it.
Authors Hittinger and Mariani discuss the potential inequities of permitting player compensation and some of the scenarios that could arise and conclude: “The verdict is still out as to whether a drastic change is necessary or even better, but if the status quo of at least the operation of [Division 1] sports is optimal, then it may be that the NCAA’s monopoly presence remains necessary.”
Read the article. https://www.bakerlaw.com/webfiles/Litigation/2019/Articles/04-01-2019-Hittinger-NCAA.pdf
The article, with the captioned title, discusses a recent successful challenge made to the NCAA’s governing policies on antitrust grounds. That ruling, now on appeal, upheld the plaintiffs’ argument that the NCAA has a monopoly on the college athletic market and has misused it.
Authors Hittinger and Mariani discuss the potential inequities of permitting player compensation and some of the scenarios that could arise and conclude: “The verdict is still out as to whether a drastic change is necessary or even better, but if the status quo of at least the operation of [Division 1] sports is optimal, then it may be that the NCAA’s monopoly presence remains necessary.”
Read the article. https://www.bakerlaw.com/webfiles/Litigation/2019/Articles/04-01-2019-Hittinger-NCAA.pdf
GW Center for Extremism uses PACER court records to find otherwise hidden information
The nation's federal court system produces thousands of pages of documents every single week. The indictments, detention memos and criminal complaints can reveal plenty of important information. But the problem is, almost no one reads them.
Seamus Hughes does. He has found "scoops" like the otherwise unrevealed indictment against Julian Assange, and a planned domestic terror attack.
Hughes finds these scoops through a buggy government website called PACER that charges 10 cents per search.
"It's godawful. You can't use it unless you know how to use it right," Hughes said. "It is absolutely a quirky system. You know, if you search a certain way you're gonna get zero results. You search a different way you'll get 10,000 results."
Most of what Hughes finds – even the Julian Assange thing – doesn't much matter to him. Hughes studies extremism and is supported by a staff of eight at George Washington's Center for Extremism. Court filings are his best research material and he says he reads about 1,000 pages a day.
"You have to go through all of the haystack to get the needle," Hughes said. "Because you're dealing with a lot of stuff that is not talked about or possibly classified and you've got to break through that."
Source #1: https://www.cbsnews.com/news/seamus-hughes-uncovered-news-about-assange-a-kickback-scheme-and-an-isis-commander/
Source #2: https://extremism.gwu.edu/cases
The nation's federal court system produces thousands of pages of documents every single week. The indictments, detention memos and criminal complaints can reveal plenty of important information. But the problem is, almost no one reads them.
Seamus Hughes does. He has found "scoops" like the otherwise unrevealed indictment against Julian Assange, and a planned domestic terror attack.
Hughes finds these scoops through a buggy government website called PACER that charges 10 cents per search.
"It's godawful. You can't use it unless you know how to use it right," Hughes said. "It is absolutely a quirky system. You know, if you search a certain way you're gonna get zero results. You search a different way you'll get 10,000 results."
Most of what Hughes finds – even the Julian Assange thing – doesn't much matter to him. Hughes studies extremism and is supported by a staff of eight at George Washington's Center for Extremism. Court filings are his best research material and he says he reads about 1,000 pages a day.
"You have to go through all of the haystack to get the needle," Hughes said. "Because you're dealing with a lot of stuff that is not talked about or possibly classified and you've got to break through that."
Source #1: https://www.cbsnews.com/news/seamus-hughes-uncovered-news-about-assange-a-kickback-scheme-and-an-isis-commander/
Source #2: https://extremism.gwu.edu/cases
Johns Hopkins, Bristol-Myers Want Sanctions In Syphilis Class Action Suit
By Cara Salvatore
Law360 (April 10, 2019, 5:30 PM EDT) -- Johns Hopkins University and Bristol-Myers Squibb want sanctions imposed in a $1 billion lawsuit against them over experiments in which Guatemalan citizens were allegedly infected with syphilis without consent, saying Tuesday the lawyers behind the suit have exhibited a "pattern of litigation abuse."
According to the three defendants, which also include the Rockefeller Foundation, lies and deceit have driven the gathering of plaintiffs and the finding of expert and fact witnesses in the suit, which was filed in 2015 in Maryland federal court.
The suit concerns experiments done in the 1940s and 1950s in Guatemala in which more than 1,300 prisoners, soldiers and psychiatric patients were allegedly deceived and exposed to syphilis and other diseases without their informed consent. JHU and the Rockefeller Foundation allegedly supervised and participated; Bristol-Myers Squibb allegedly supplied the penicillin for the experiments.
The three defendants — the same people allegedly responsible for the Tuskegee Study, a well-known episode in which African-American sharecroppers in Alabama were allowed to suffer untreated syphilis for decades — acknowledge the experiments were "reprehensible" but say they were carried out mainly by the governments of the U.S. and Guatemala. More to the point, they say, this suit has been conducted in an indefensible way.
"Recent discovery has revealed that plaintiffs' claims are based on manufactured evidence, false sworn statements, and unsupportable allegations that even a cursory investigation would have shown were unfounded," the three said. Immediate punishment is needed to "address plaintiffs' counsel's bad faith abuse of the judicial process," they said in their brief.
Excerpt from https://www.law360.com/classaction/articles/1148396/johns-hopkins-bristol-myers-want-sanctions-in-syphilis-suit?nl_pk=81b89ec7-c689-4100-9061-0cc06106b24a&utm_source=newsletter&utm_medium=email&utm_campaign=classaction (paywall)
The brief is at https://www.law360.com/articles/1148396/attachments/0 (paywall)
By Cara Salvatore
Law360 (April 10, 2019, 5:30 PM EDT) -- Johns Hopkins University and Bristol-Myers Squibb want sanctions imposed in a $1 billion lawsuit against them over experiments in which Guatemalan citizens were allegedly infected with syphilis without consent, saying Tuesday the lawyers behind the suit have exhibited a "pattern of litigation abuse."
According to the three defendants, which also include the Rockefeller Foundation, lies and deceit have driven the gathering of plaintiffs and the finding of expert and fact witnesses in the suit, which was filed in 2015 in Maryland federal court.
The suit concerns experiments done in the 1940s and 1950s in Guatemala in which more than 1,300 prisoners, soldiers and psychiatric patients were allegedly deceived and exposed to syphilis and other diseases without their informed consent. JHU and the Rockefeller Foundation allegedly supervised and participated; Bristol-Myers Squibb allegedly supplied the penicillin for the experiments.
The three defendants — the same people allegedly responsible for the Tuskegee Study, a well-known episode in which African-American sharecroppers in Alabama were allowed to suffer untreated syphilis for decades — acknowledge the experiments were "reprehensible" but say they were carried out mainly by the governments of the U.S. and Guatemala. More to the point, they say, this suit has been conducted in an indefensible way.
"Recent discovery has revealed that plaintiffs' claims are based on manufactured evidence, false sworn statements, and unsupportable allegations that even a cursory investigation would have shown were unfounded," the three said. Immediate punishment is needed to "address plaintiffs' counsel's bad faith abuse of the judicial process," they said in their brief.
Excerpt from https://www.law360.com/classaction/articles/1148396/johns-hopkins-bristol-myers-want-sanctions-in-syphilis-suit?nl_pk=81b89ec7-c689-4100-9061-0cc06106b24a&utm_source=newsletter&utm_medium=email&utm_campaign=classaction (paywall)
The brief is at https://www.law360.com/articles/1148396/attachments/0 (paywall)
Citi Bike Pulls New Electric Bikes Off New York City Streets, Citing Safety Concerns (bad brakes)
https://www.nytimes.com/2019/04/15/nyregion/citi-bike-electric.html?action=click&module=Latest&pgtype=Homepage
https://www.nytimes.com/2019/04/15/nyregion/citi-bike-electric.html?action=click&module=Latest&pgtype=Homepage
DMN - “You Have Used Us” — Hit Songwriters Pen Open Letter Slamming Spotify’s CRB Appeal
Spotify is doing a great job of alienating the music industry right now.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/songwriters-v-spotify-letter/
DMN - Apple Music Caught Taking Down Pro-Democracy Songs in China
The Chinese government may have forced Apple Music to take down songs celebrating democracy.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/apple-music-democracy-takedown/
Spotify is doing a great job of alienating the music industry right now.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/songwriters-v-spotify-letter/
DMN - Apple Music Caught Taking Down Pro-Democracy Songs in China
The Chinese government may have forced Apple Music to take down songs celebrating democracy.
The story continues here. https://www.digitalmusicnews.com/2019/04/10/apple-music-democracy-takedown/
No fee ATM cash access
Maryland CU partners with Allpoint to expand members' fee-free cash accessMarch 28, 2019State Employees Credit Union of Maryland, the state's largest credit union, serving more than 260,000 members, has expanded its relationship with Cardtronics PLC to provide fee-free cash access through thousands of retail ATMs on the company's Allpoint Network, according to a press release.
Cardtronics' Allpoint Network supplements the CU's current ATM options, which include its owned ATM fleet; participation in a credit union-shared ATM network; and existing SECU-branded retail ATMs with Cardtronics.
"Our focus throughout our 68-year history has been on continuing to improve and expand service to our members," Joseli Wright, SECU senior vice president of member and brand strategy, said in the release. "Members asked for expanded access beyond our existing footprint of SECU locations, a need that the Allpoint Network was uniquely able to satisfy. Joining Allpoint has maximized member convenience by giving members the cash they need in the stores they already visit in their neighborhoods and, now, when traveling out of state."
Topics: Bank / Credit Union, Branding, Networking / Connectivity, Retail / Off-Premises, Transaction Processing
Companies: Cardtronics
https://www.atmia.com/news/state-employees-cu-of-maryland-extends-members-fee-free-cash-access-with-allpoint/8324/
Maryland CU partners with Allpoint to expand members' fee-free cash accessMarch 28, 2019State Employees Credit Union of Maryland, the state's largest credit union, serving more than 260,000 members, has expanded its relationship with Cardtronics PLC to provide fee-free cash access through thousands of retail ATMs on the company's Allpoint Network, according to a press release.
Cardtronics' Allpoint Network supplements the CU's current ATM options, which include its owned ATM fleet; participation in a credit union-shared ATM network; and existing SECU-branded retail ATMs with Cardtronics.
"Our focus throughout our 68-year history has been on continuing to improve and expand service to our members," Joseli Wright, SECU senior vice president of member and brand strategy, said in the release. "Members asked for expanded access beyond our existing footprint of SECU locations, a need that the Allpoint Network was uniquely able to satisfy. Joining Allpoint has maximized member convenience by giving members the cash they need in the stores they already visit in their neighborhoods and, now, when traveling out of state."
Topics: Bank / Credit Union, Branding, Networking / Connectivity, Retail / Off-Premises, Transaction Processing
Companies: Cardtronics
https://www.atmia.com/news/state-employees-cu-of-maryland-extends-members-fee-free-cash-access-with-allpoint/8324/
Boeing as an antitrust issue
Some see Boeing as a corporate giant with too much political and economic muscle, allowing it to manipulate government policy and be lazy about safety issues. See https://www.thedailybeast.com/boeing-gets-300-tariff-on-competitor-after-cozying-up-to-trump?ref=scroll Others focus on Boeing’s market power, because Boeing shares with Airbus an international role as one of only two competitors in major commercial airplane markets.
Have antitrust enforcers done enough to control Boeing? A hard question about enforcement against Boeing is whether it should be broken up based on the sort of “no-fault” analysis offered by Elizabeth Warren with regard to Google, Amazon, and Facebook. She said that “my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.” See https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c
A short answer to the “no-fault” break up question is that U.S. enforcers do not have authority to break up large companies on a “no-fault” basis. U.S. enforcers must go to court and prove an antitrust violation before applying a remedy. New legislation of the kind proposed by Elizabeth Warren would change that, but even under a no-fault standard significant analysis of market facts would be required before imposing a remedy.
Merger enforcement is a different story. Whether antitrust enforcement agencies have taken sufficient action with regard to merger enforcement is a question that applies both to U.S. and European enforcers.
Respected Washington Post business analyst Steven Pearlstein pointed out some months ago that “Boeing and Airbus have done what desperate duopolists invariably try to do — buy up their potential competitors.” See https://www.washingtonpost.com/news/wonk/wp/2018/04/25/boeing-and-airbus-the-new-super-duopoly/?noredirect=on&utm_term=.3e773f3197c7
Pearlstein explains that there have been two duopolies in the commercial aircraft business. There is the market for large jets — roughly speaking, those with 140 to 400 seats and a range of 3,500 to 8,000 miles, dominated by Boeing and Airbus. And there is the market for smaller “regional” jets with 40 to 90 seats, used on shorter flights to secondary cities — a market dominated by Bombardier and Brazil’s Embraer: “Until recently, there was little or no overlap in the two markets and the duopolies had settled into a comfortable, at times cooperative, coexistence.
But when the world’s airlines started to show interest in buying planes with 100 to 150 seats, Bombardier and Embraer saw an opportunity to extend their product lines in ways that, for the first time, would put them in a position to steal business away from Boeing and Airbus, which had not fundamentally redesigned their smaller single-aisle planes in decades.”
Pearlstein says that Boeing wanted to prevent Bombardier from gaining a toehold in the American market, and Boeing did so by offering to sell the smallest version of its 737 for a very low price, edging out Bombardier and Embraer for some U.S. sales. Bombardier responded in kind with some very low prices, and snagged some U.S. orders.
After Boeing successfully brought to the U.S. Commerce Department a below-cost pricing complaint against Bombardier, Bombardier formed a joint venture with Airbus. As a result, “Not only could Bombardier now enter the U.S. market with a sleek new fuel-efficient plane against which Boeing could offer no alternative — at least not without undermining its pricing for its smallest 737s — but it also had unwittingly strengthened the market position of its archrival, Airbus.”
So Boeing responded in kind and began negotiations to buy the commercial aircraft division of Embraer. The deal creates a joint venture combining commercial jet operations in which Boeing would retain 80 percent control. Press reports indicate that in February, 2019, Embraer shareholders approved the deal. See https://www.upi.com/Embraer-shareholders-approve-sale-to-Boeing/4721551205060/
Pearlstein’s take is that what were once two duopolies in the global market for commercial jets will morph into one super duopoly. Pearlstein was not happy about the response of antitrust enforcers: “Antitrust laws, of course, are meant to prevent mergers that substantially reduce competition, particularly in industries such as this one where there are already only a few competitors and high barriers for any new players to enter. What’s missing in this case, as so many others, are regulators or judges willing to aggressively enforce those laws and adapt them to a globalized high-tech economy where winner-take-all competition is more the rule than the exception.”
Recent safety issues with Boeing aircraft bring Pearlstein’s questions about antitrust enforcement into sharper focus.
This posting is by Don Allen Resnikoff, who is responsible for its content
Some see Boeing as a corporate giant with too much political and economic muscle, allowing it to manipulate government policy and be lazy about safety issues. See https://www.thedailybeast.com/boeing-gets-300-tariff-on-competitor-after-cozying-up-to-trump?ref=scroll Others focus on Boeing’s market power, because Boeing shares with Airbus an international role as one of only two competitors in major commercial airplane markets.
Have antitrust enforcers done enough to control Boeing? A hard question about enforcement against Boeing is whether it should be broken up based on the sort of “no-fault” analysis offered by Elizabeth Warren with regard to Google, Amazon, and Facebook. She said that “my administration will make big, structural changes to the tech sector to promote more competition — including breaking up Amazon, Facebook, and Google.” See https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c
A short answer to the “no-fault” break up question is that U.S. enforcers do not have authority to break up large companies on a “no-fault” basis. U.S. enforcers must go to court and prove an antitrust violation before applying a remedy. New legislation of the kind proposed by Elizabeth Warren would change that, but even under a no-fault standard significant analysis of market facts would be required before imposing a remedy.
Merger enforcement is a different story. Whether antitrust enforcement agencies have taken sufficient action with regard to merger enforcement is a question that applies both to U.S. and European enforcers.
Respected Washington Post business analyst Steven Pearlstein pointed out some months ago that “Boeing and Airbus have done what desperate duopolists invariably try to do — buy up their potential competitors.” See https://www.washingtonpost.com/news/wonk/wp/2018/04/25/boeing-and-airbus-the-new-super-duopoly/?noredirect=on&utm_term=.3e773f3197c7
Pearlstein explains that there have been two duopolies in the commercial aircraft business. There is the market for large jets — roughly speaking, those with 140 to 400 seats and a range of 3,500 to 8,000 miles, dominated by Boeing and Airbus. And there is the market for smaller “regional” jets with 40 to 90 seats, used on shorter flights to secondary cities — a market dominated by Bombardier and Brazil’s Embraer: “Until recently, there was little or no overlap in the two markets and the duopolies had settled into a comfortable, at times cooperative, coexistence.
But when the world’s airlines started to show interest in buying planes with 100 to 150 seats, Bombardier and Embraer saw an opportunity to extend their product lines in ways that, for the first time, would put them in a position to steal business away from Boeing and Airbus, which had not fundamentally redesigned their smaller single-aisle planes in decades.”
Pearlstein says that Boeing wanted to prevent Bombardier from gaining a toehold in the American market, and Boeing did so by offering to sell the smallest version of its 737 for a very low price, edging out Bombardier and Embraer for some U.S. sales. Bombardier responded in kind with some very low prices, and snagged some U.S. orders.
After Boeing successfully brought to the U.S. Commerce Department a below-cost pricing complaint against Bombardier, Bombardier formed a joint venture with Airbus. As a result, “Not only could Bombardier now enter the U.S. market with a sleek new fuel-efficient plane against which Boeing could offer no alternative — at least not without undermining its pricing for its smallest 737s — but it also had unwittingly strengthened the market position of its archrival, Airbus.”
So Boeing responded in kind and began negotiations to buy the commercial aircraft division of Embraer. The deal creates a joint venture combining commercial jet operations in which Boeing would retain 80 percent control. Press reports indicate that in February, 2019, Embraer shareholders approved the deal. See https://www.upi.com/Embraer-shareholders-approve-sale-to-Boeing/4721551205060/
Pearlstein’s take is that what were once two duopolies in the global market for commercial jets will morph into one super duopoly. Pearlstein was not happy about the response of antitrust enforcers: “Antitrust laws, of course, are meant to prevent mergers that substantially reduce competition, particularly in industries such as this one where there are already only a few competitors and high barriers for any new players to enter. What’s missing in this case, as so many others, are regulators or judges willing to aggressively enforce those laws and adapt them to a globalized high-tech economy where winner-take-all competition is more the rule than the exception.”
Recent safety issues with Boeing aircraft bring Pearlstein’s questions about antitrust enforcement into sharper focus.
This posting is by Don Allen Resnikoff, who is responsible for its content
The 747-MAX problem as a design problem more than a software problem
Editor's note: A number of experts have commented publicly that the stability problem with the 747-max is primarily a design problem to which a problematical software patch was applied. Putting a larger and heavier (and more efficient) engine on the old 747 design was a problem because of lack of ground clearance if the engine was placed in the traditional position. The solution could have been a new design, as it was for the Airbus 320, but Boeing did not choose that solution. Instead it mounted the new bigger engine on the old design 747 further forward and higher to solve the ground clearance issue. The result was lowered stability, which was addressed with a software patch that has proved to be troublesome. Following is a published discussion that expresses that opinion in language that is relatively clear and free of engineering jargon. DAR
The new 737 MAX 8 and MAX 9 aircraft don’t fly quite like the old 737 Next Generation (737NG) series. Where the old planes were very stable in flight, the new 737 MAX is less so. This is the result of the placement of the new LEAP 1-B engines, which required an adjustment to the design of the plane to accommodate their increased physical size.
Simply put, the LEAP 1-B engines are larger, and they could not be simply swapped with the existing 737 engines. Boeing engineers had to move the point at which the engines attach to the wing, and this changes everything.
Moving the engine from its current position destabilizes the aircraft at in pitch (essentially the up and down movement of the nose). When the aircraft is in normal flight with a low pitch / angle of attack, it should fly basically just like the old 737s. However, when the pitch is increased, the engines themselves provide extra lift. The force of this lift is now applied forward of the center of gravity of the aircraft, due to the change in position of the engine, which in turn can cause the nose of the plane to pitch upward even more. This could cause the aircraft to swing into too high of an angle of attack and subsequently stall.
So it would appear that the 737 MAX 8 flies just fine in normal flight, but it is less stable in when flown at a high angle of attack, which is not good. This is a marked difference from its predecessor 737s.
The angle of attack (AOA) sensor and MCAS system in the 737 MAX is what Boeing designed to guard against a stall, kicking in an automatic “trim” if the aircraft begins to approach too high an AOA. But what if this sensor is faulty? This sensor failure is what contributed to the Lion Air crash back in October. Oddly, Boeing placed two sensors on the aircraft, one on each side of the nose, but the MCAS system only ever receives input from one at a time. If the one sensor fails, the whole system is in jeopardy.
Is Boeing using software to correct a flawed design?This is my biggest worry. As I mentioned, the old 737NG design is very stable, and the aircraft has proved to be incredibly safe over many, many years of operation and an insane number of operating cycles. It is no wonder that it is the most popular commercial jet aircraft ever manufactured.
But the new design isn’t as stable as the old design, with the previously mentioned change in the engine placement. My worry is that Boeing chose to bank on this design and a potential inherent flaw, providing a patch using a new software system rather than going back and changing the actual design of the aircraft itself. Banking on a software system that is unfamiliar to pilots (who are going to expect the new 737 flies just like the old one) was a very poor choice in my opinion. To top it off, the new MCAS system was not properly explained to pilots, and they received no training on it. Boeing provided little to no documentation on MCAS.
Taking a step back, I find that “fixing” an aircraft stability problem through the use of software is a dubious decision at best.
Excerpt from: https://www.pointswithacrew.com/can-boeing-fix-a-potentially-faulty-737-max-design-with-software/
The author is Dan Miller, who frequently writes on travel, and offers travel advice. His email: dan@pointswithacrew.com.
Editor's note: A number of experts have commented publicly that the stability problem with the 747-max is primarily a design problem to which a problematical software patch was applied. Putting a larger and heavier (and more efficient) engine on the old 747 design was a problem because of lack of ground clearance if the engine was placed in the traditional position. The solution could have been a new design, as it was for the Airbus 320, but Boeing did not choose that solution. Instead it mounted the new bigger engine on the old design 747 further forward and higher to solve the ground clearance issue. The result was lowered stability, which was addressed with a software patch that has proved to be troublesome. Following is a published discussion that expresses that opinion in language that is relatively clear and free of engineering jargon. DAR
The new 737 MAX 8 and MAX 9 aircraft don’t fly quite like the old 737 Next Generation (737NG) series. Where the old planes were very stable in flight, the new 737 MAX is less so. This is the result of the placement of the new LEAP 1-B engines, which required an adjustment to the design of the plane to accommodate their increased physical size.
Simply put, the LEAP 1-B engines are larger, and they could not be simply swapped with the existing 737 engines. Boeing engineers had to move the point at which the engines attach to the wing, and this changes everything.
Moving the engine from its current position destabilizes the aircraft at in pitch (essentially the up and down movement of the nose). When the aircraft is in normal flight with a low pitch / angle of attack, it should fly basically just like the old 737s. However, when the pitch is increased, the engines themselves provide extra lift. The force of this lift is now applied forward of the center of gravity of the aircraft, due to the change in position of the engine, which in turn can cause the nose of the plane to pitch upward even more. This could cause the aircraft to swing into too high of an angle of attack and subsequently stall.
So it would appear that the 737 MAX 8 flies just fine in normal flight, but it is less stable in when flown at a high angle of attack, which is not good. This is a marked difference from its predecessor 737s.
The angle of attack (AOA) sensor and MCAS system in the 737 MAX is what Boeing designed to guard against a stall, kicking in an automatic “trim” if the aircraft begins to approach too high an AOA. But what if this sensor is faulty? This sensor failure is what contributed to the Lion Air crash back in October. Oddly, Boeing placed two sensors on the aircraft, one on each side of the nose, but the MCAS system only ever receives input from one at a time. If the one sensor fails, the whole system is in jeopardy.
Is Boeing using software to correct a flawed design?This is my biggest worry. As I mentioned, the old 737NG design is very stable, and the aircraft has proved to be incredibly safe over many, many years of operation and an insane number of operating cycles. It is no wonder that it is the most popular commercial jet aircraft ever manufactured.
But the new design isn’t as stable as the old design, with the previously mentioned change in the engine placement. My worry is that Boeing chose to bank on this design and a potential inherent flaw, providing a patch using a new software system rather than going back and changing the actual design of the aircraft itself. Banking on a software system that is unfamiliar to pilots (who are going to expect the new 737 flies just like the old one) was a very poor choice in my opinion. To top it off, the new MCAS system was not properly explained to pilots, and they received no training on it. Boeing provided little to no documentation on MCAS.
Taking a step back, I find that “fixing” an aircraft stability problem through the use of software is a dubious decision at best.
Excerpt from: https://www.pointswithacrew.com/can-boeing-fix-a-potentially-faulty-737-max-design-with-software/
The author is Dan Miller, who frequently writes on travel, and offers travel advice. His email: dan@pointswithacrew.com.
Elizabeth Warren on antitrust for farmers
https://medium.com/@teamwarren/leveling-the-playing-field-for-americas-family-farmers-823d1994f067
Farmers are caught in a vise, but the squeeze on family farms isn’t inevitable. We can make better policy choices — and we can begin by leveling the playing field for America’s family farmers.
Tackling Consolidation
To start, we must address consolidation in the agriculture sector, which is leaving family farmers with fewer choices, thinner margins, and less independence.
Federal regulators have allowed multinational companies to crush competition and seize control over key markets. Over the last few decades, giant agribusinesses have grown bigger and bigger. They’ve merged horizontally, like Dow-Dupont and Syngenta-ChemChina. And they’ve expanded vertically.
Tyson, for example, controls just about every aspect of bringing chicken to market — feed, slaughter, trucking — everything except owning the farms themselves. Chicken farmers have gotten locked into a “contract farming” system in which they take on huge risks — loading up on debts to build and upgrade facilities — while remaining wholly dependent on Tyson for everything from receiving chicks to buying feed to selling the grown broilers.
The result of mergers and expansions is immense market power. The top four meat processing companies have 53% market share. The three big chicken companies have 90% market share. The two biggest seed companies, Monsanto and DuPont, had 71% of the corn seed market in 2015 — before Monsanto merged with Bayer and DuPont merged with Dow. According toconservative estimates, the newly merged Bayer-Monsanto by itself will control “more than 37 percent of the U.S. vegetable seed market” overall, and will control more than half of the market for some vegetables.
Mergers mean that farmers have fewer and fewer choices for buying and selling, while vertical integration has meant that big agribusinesses face less competition throughout the chain and thus capture more and more of the profits. The result is that farmers are getting a record-low amount of every dollar Americans spend on food, food prices aren’t going down, and agribusiness CEOs and other corporate executives are raking it in. The CEO of the Chinese group that owns Smithfield -- a massive meat processing company -- made $291 million in 2017 alone.
I will tackle consolidation in the agriculture and farming sector head on and break the stranglehold a handful of companies have over the market. Here’s how:
First, I will appoint trustbusters to review -- and reverse -- anti-competitive mergers, including the recent Bayer-Monsanto merger that should never have been approved. I opposed this merger from the start and was deeply disappointed to see the Trump Administration approve it earlier this year. l will appoint regulators at the Federal Trade Commission and the Department of Justice who are serious about using the tools they have to produce competitive markets and who are committed to reviewing recent mergers in the agriculture sector and breaking up companies where mergers have reduced competition.
Second, my team will be committed to breaking up big agribusinesses that have become vertically integrated and that control more and more of the market. The Department of Justice has not revised its guidelines on vertical mergers in 35 years. And in that time, we have seen merger after merger linking together every aspect of the chain in farming. We do not want to see other sectors come to resemble the chicken sector. My administration will bring vertical integration cases to break up integrated agribusinesses.
Consolidation in agriculture is just part of a broader trend of consolidation that has hurt family farmers. Consolidation in the transportation sector has made it harder for farmers to deliver their goods and harder for rural areas to compete economically. Consolidation in the banking sector has hurt community banks and made it more difficult for small businesses and farms to get loans. Consolidation in the healthcare sector has cut off many rural communities from high-quality and accessible care. My administration will prioritize competition and reverse these trends.
But it all starts with attacking consolidation in the agriculture sector head on. We must give family farmers more options and more bargaining power in the marketplace so they can build more economic security.
https://medium.com/@teamwarren/leveling-the-playing-field-for-americas-family-farmers-823d1994f067
Farmers are caught in a vise, but the squeeze on family farms isn’t inevitable. We can make better policy choices — and we can begin by leveling the playing field for America’s family farmers.
Tackling Consolidation
To start, we must address consolidation in the agriculture sector, which is leaving family farmers with fewer choices, thinner margins, and less independence.
Federal regulators have allowed multinational companies to crush competition and seize control over key markets. Over the last few decades, giant agribusinesses have grown bigger and bigger. They’ve merged horizontally, like Dow-Dupont and Syngenta-ChemChina. And they’ve expanded vertically.
Tyson, for example, controls just about every aspect of bringing chicken to market — feed, slaughter, trucking — everything except owning the farms themselves. Chicken farmers have gotten locked into a “contract farming” system in which they take on huge risks — loading up on debts to build and upgrade facilities — while remaining wholly dependent on Tyson for everything from receiving chicks to buying feed to selling the grown broilers.
The result of mergers and expansions is immense market power. The top four meat processing companies have 53% market share. The three big chicken companies have 90% market share. The two biggest seed companies, Monsanto and DuPont, had 71% of the corn seed market in 2015 — before Monsanto merged with Bayer and DuPont merged with Dow. According toconservative estimates, the newly merged Bayer-Monsanto by itself will control “more than 37 percent of the U.S. vegetable seed market” overall, and will control more than half of the market for some vegetables.
Mergers mean that farmers have fewer and fewer choices for buying and selling, while vertical integration has meant that big agribusinesses face less competition throughout the chain and thus capture more and more of the profits. The result is that farmers are getting a record-low amount of every dollar Americans spend on food, food prices aren’t going down, and agribusiness CEOs and other corporate executives are raking it in. The CEO of the Chinese group that owns Smithfield -- a massive meat processing company -- made $291 million in 2017 alone.
I will tackle consolidation in the agriculture and farming sector head on and break the stranglehold a handful of companies have over the market. Here’s how:
First, I will appoint trustbusters to review -- and reverse -- anti-competitive mergers, including the recent Bayer-Monsanto merger that should never have been approved. I opposed this merger from the start and was deeply disappointed to see the Trump Administration approve it earlier this year. l will appoint regulators at the Federal Trade Commission and the Department of Justice who are serious about using the tools they have to produce competitive markets and who are committed to reviewing recent mergers in the agriculture sector and breaking up companies where mergers have reduced competition.
Second, my team will be committed to breaking up big agribusinesses that have become vertically integrated and that control more and more of the market. The Department of Justice has not revised its guidelines on vertical mergers in 35 years. And in that time, we have seen merger after merger linking together every aspect of the chain in farming. We do not want to see other sectors come to resemble the chicken sector. My administration will bring vertical integration cases to break up integrated agribusinesses.
Consolidation in agriculture is just part of a broader trend of consolidation that has hurt family farmers. Consolidation in the transportation sector has made it harder for farmers to deliver their goods and harder for rural areas to compete economically. Consolidation in the banking sector has hurt community banks and made it more difficult for small businesses and farms to get loans. Consolidation in the healthcare sector has cut off many rural communities from high-quality and accessible care. My administration will prioritize competition and reverse these trends.
But it all starts with attacking consolidation in the agriculture sector head on. We must give family farmers more options and more bargaining power in the marketplace so they can build more economic security.
From DMN: AMLC Songwriters Blast Major Music Publishers Over Wrongful Royalty Claims — Here’s Their Statement
Once the MMA goes into effect, where will the $1.2 billion in ‘black box’ royalties go?
The story continues here. https://www.digitalmusicnews.com/2019/04/07/music-royalties-claims-publishers/
Once the MMA goes into effect, where will the $1.2 billion in ‘black box’ royalties go?
The story continues here. https://www.digitalmusicnews.com/2019/04/07/music-royalties-claims-publishers/
From DMN: Google/Alphabet Acquiring Spotify In $43.4 Billion Cash, Equity Deal
Google/Alphabet is announcing its acquisition of Spotify in a deal valued at $43.4 billion in cash and equity.
The story continues here. https://www.digitalmusicnews.com/2019/04/01/google-alphabet-spotify-acquisition/
Google/Alphabet is announcing its acquisition of Spotify in a deal valued at $43.4 billion in cash and equity.
The story continues here. https://www.digitalmusicnews.com/2019/04/01/google-alphabet-spotify-acquisition/
From DCRA: Understanding Tenant's Rights Workshop
Thursday, April 4, 2019
5:30 pm – 7:30 pm
Department of Consumer & Regulatory Affairs
1100 4th Street SW, 2nd Floor, Room E-200, Washington, DC 20024
Register: dcrasbrc.ecenterdirect.com/events/47232
Join us for a workshop on understanding tenant's rights. The following topics will be covered:
Thursday, April 4, 2019
5:30 pm – 7:30 pm
Department of Consumer & Regulatory Affairs
1100 4th Street SW, 2nd Floor, Room E-200, Washington, DC 20024
Register: dcrasbrc.ecenterdirect.com/events/47232
Join us for a workshop on understanding tenant's rights. The following topics will be covered:
- Overview of tenant rights
- Business licensing process
- Complaint/proactive based inspections
- Common Housing Code violations
- Scheduling an inspection process
- Enforcement process
- Rights when applying for an apartment
- Understanding Tenant Opportunity to Purchase Act (TOPA)
- Importance of tenants forming an association and rights under TOPA
- Landlord/Tenant Court - how and when to file
Aaron Judge, poster boy for MLB unfair control of young player's salaries
Aaron Judge may be the biggest star on the largest stage in baseball and the New York Yankees’ top box-office draw since Derek Jeter. He also happens to be one of the team's lowest-paid players. Judge will earn $684,300 this season, or about $300,000 less than Los Angeles Dodgers ace Clayton Kershaw will earn for each start.
The 26-year-old Judge has been in the big leagues for two full seasons. The Yankees have all the power the first three years he’s in the big leagues, an independent salary arbitrator takes care of the next three years, and then he hits free agency.
It’s why Tampa Bay Rays ace Blake Snell got a mere $15,500 raise – $10,000 of that built in with a league-wide increase in the minimum salary – to $573,700, even after winning last year’s Cy Young award. It’s why the New York Mets are paying closer Edwin Diaz just $607,425, after he led the majors in saves. It’s why the Milwaukee Brewers renewed reliever Josh Hader at $687,600, despite his setting a major-league strikeout record for left-handed relievers.
From: https://www.usatoday.com/story/sports/mlb/columnist/bob-nightengale/2019/03/11/aaron-judge-yankees-salary-mlb/3129226002/
Aaron Judge may be the biggest star on the largest stage in baseball and the New York Yankees’ top box-office draw since Derek Jeter. He also happens to be one of the team's lowest-paid players. Judge will earn $684,300 this season, or about $300,000 less than Los Angeles Dodgers ace Clayton Kershaw will earn for each start.
The 26-year-old Judge has been in the big leagues for two full seasons. The Yankees have all the power the first three years he’s in the big leagues, an independent salary arbitrator takes care of the next three years, and then he hits free agency.
It’s why Tampa Bay Rays ace Blake Snell got a mere $15,500 raise – $10,000 of that built in with a league-wide increase in the minimum salary – to $573,700, even after winning last year’s Cy Young award. It’s why the New York Mets are paying closer Edwin Diaz just $607,425, after he led the majors in saves. It’s why the Milwaukee Brewers renewed reliever Josh Hader at $687,600, despite his setting a major-league strikeout record for left-handed relievers.
From: https://www.usatoday.com/story/sports/mlb/columnist/bob-nightengale/2019/03/11/aaron-judge-yankees-salary-mlb/3129226002/
Raiders move from Oakland to Las Vegas as antitrust? Raiders ask judge to throw out Oakland antitrust suit
The Raiders and NFL are asking a judge to toss out a lawsuit filed by Oakland, arguing the city’s claims “turn antitrust on its head” and are a “striking perversion of antitrust law.”
Attorneys for the team, league and its 31 other franchises laid out their legal arguments for the first time in court papers filed March 1. Spero is expected to rule on June 7 whether to dismiss the lawsuit. Both sides met for the first time in San Francisco before U.S. District Judge Joseph C. Spero on Friday afternoon.
Oakland filed suit in December, alleging the NFL and Raiders violated antitrust laws by approving the move to Las Vegas, and said doing so amounted to a group boycott of Oakland. Outside attorneys have taken the city’s case on a contingency basis, meaning it comes at no cost to the city. The city also alleges in its suit that the Raiders violated the league’s relocation policy by not seriously negotiating with Oakland and Hall of Famer Ronnie Lott’s group, which proposed to help finance a new stadium at the Coliseum.
But attorneys for the Raiders and NFL wrote that the competition between Las Vegas and Oakland was not a violation of antitrust laws, which are designed to promote competition and prohibit monopolies. The city did not suffer antitrust injury, the attorneys said, but rather “the injury flows from an increase in competition” and “another community’s willingness to make an offer better than Oakland’s.”
Full Content: Sports Naut https://sportsnaut.com/2019/03/raiders-nfl-asks-judge-to-throw-out-oakland-antitrust-lawsuit/
The Raiders and NFL are asking a judge to toss out a lawsuit filed by Oakland, arguing the city’s claims “turn antitrust on its head” and are a “striking perversion of antitrust law.”
Attorneys for the team, league and its 31 other franchises laid out their legal arguments for the first time in court papers filed March 1. Spero is expected to rule on June 7 whether to dismiss the lawsuit. Both sides met for the first time in San Francisco before U.S. District Judge Joseph C. Spero on Friday afternoon.
Oakland filed suit in December, alleging the NFL and Raiders violated antitrust laws by approving the move to Las Vegas, and said doing so amounted to a group boycott of Oakland. Outside attorneys have taken the city’s case on a contingency basis, meaning it comes at no cost to the city. The city also alleges in its suit that the Raiders violated the league’s relocation policy by not seriously negotiating with Oakland and Hall of Famer Ronnie Lott’s group, which proposed to help finance a new stadium at the Coliseum.
But attorneys for the Raiders and NFL wrote that the competition between Las Vegas and Oakland was not a violation of antitrust laws, which are designed to promote competition and prohibit monopolies. The city did not suffer antitrust injury, the attorneys said, but rather “the injury flows from an increase in competition” and “another community’s willingness to make an offer better than Oakland’s.”
Full Content: Sports Naut https://sportsnaut.com/2019/03/raiders-nfl-asks-judge-to-throw-out-oakland-antitrust-lawsuit/
Opinion: The "new" Apple Card relies on old and expensive payment system technology, processing by MasterCard
Payments using the new Apple credit card, a cousin to phone-based ApplePay, will be processed by MasterCard. So, in an important sense it is just another credit card, reinforcing the payment system approach of MasterCard and the Visa. Visa and MasterCard are, of course, the dominant global payment players in payment systems.
There are payment systems alternatives to Visa and MasterCard that are less expensive to use, potentially saving money for consumers, but they have not gained broad market acceptance.
One alternative uses Quick Response codes, or QR, a bar code format comprised of patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
QR is widely used in China and some other countries for payment systems that bypass intermediaries like Visa and MasterCard. It is on the phones of more than 700 million smartphone owners.
Another alternative is CurrentC.
CurrentC is a payment alternative that was developed by large U.S. retailers who wish to eliminate payment intermediary payment networks such as those owned by Visa and MasterCard.
CurrentC uses the technology of the paperless electronic check. It uses “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
It would seem that ACH based payment systems or QR systems have the potential to undermine the considerable power to charge high prices for electronic transactions that Visa and MasterCard exercise through the use of their networks. But at present, there appears to be little evidence of this occurring.
The adoption by Apple of old MasterCard processing technology will not help move the new alternative technologies.
https://www.barrons.com/articles/apple-card-is-a-modest-win-for-mastercard-says-a-wedbush-analyst-51553620183
This posting is by Don Allen Resnikoff, who takes responsibility for its content
Payments using the new Apple credit card, a cousin to phone-based ApplePay, will be processed by MasterCard. So, in an important sense it is just another credit card, reinforcing the payment system approach of MasterCard and the Visa. Visa and MasterCard are, of course, the dominant global payment players in payment systems.
There are payment systems alternatives to Visa and MasterCard that are less expensive to use, potentially saving money for consumers, but they have not gained broad market acceptance.
One alternative uses Quick Response codes, or QR, a bar code format comprised of patterns of black squares on white background, capable of holding 300 times more data than traditional bar codes.
QR is widely used in China and some other countries for payment systems that bypass intermediaries like Visa and MasterCard. It is on the phones of more than 700 million smartphone owners.
Another alternative is CurrentC.
CurrentC is a payment alternative that was developed by large U.S. retailers who wish to eliminate payment intermediary payment networks such as those owned by Visa and MasterCard.
CurrentC uses the technology of the paperless electronic check. It uses “ACH” payment system technology to move money directly from the consumer’s bank account to the merchant’s or other payee’s account. The ACH Network provides an electronic funds transfer network for direct account-to-account consumer, business, and government payments. The ACH Network is governed by the not-for-profit Electronic Payments Association (“NACHA’) Operating Rules. See https://www.nacha.org/ach-network
It would seem that ACH based payment systems or QR systems have the potential to undermine the considerable power to charge high prices for electronic transactions that Visa and MasterCard exercise through the use of their networks. But at present, there appears to be little evidence of this occurring.
The adoption by Apple of old MasterCard processing technology will not help move the new alternative technologies.
https://www.barrons.com/articles/apple-card-is-a-modest-win-for-mastercard-says-a-wedbush-analyst-51553620183
This posting is by Don Allen Resnikoff, who takes responsibility for its content
Baltimore files antitrust suit against 10 major banks that allegedly inflated bond interest rates
Baltimore is suing 10 major banks, alleging they illegally inflated interest rates for particular bonds for public works, overcharging Baltimore and other municipalities by billions of dollars, reported Reuters.
The city is seeking class-action status for the federal antitrust lawsuit, claiming the banks inflated costs for the city and other local governments, which Baltimore seeks to represent. That takes money away that could be spent on schools, police, roads, sewer lines and the like.
Baltimore, which has issued more than US$260 million of the bonds, alleges the banks “conspired in a coordinated and confidential scheme” from at least August 2007 to June 2016 to collect billions in unearned fees from the city and others on the bonds, which are used to pay for major, long-term city infrastructure projects.
Full Content: Reuters https://www.reuters.com/article/usa-baltimore-banks/baltimore-alleges-big-banks-colluded-on-municipal-securities-rates-idUSL1N21D1WC
Baltimore is suing 10 major banks, alleging they illegally inflated interest rates for particular bonds for public works, overcharging Baltimore and other municipalities by billions of dollars, reported Reuters.
The city is seeking class-action status for the federal antitrust lawsuit, claiming the banks inflated costs for the city and other local governments, which Baltimore seeks to represent. That takes money away that could be spent on schools, police, roads, sewer lines and the like.
Baltimore, which has issued more than US$260 million of the bonds, alleges the banks “conspired in a coordinated and confidential scheme” from at least August 2007 to June 2016 to collect billions in unearned fees from the city and others on the bonds, which are used to pay for major, long-term city infrastructure projects.
Full Content: Reuters https://www.reuters.com/article/usa-baltimore-banks/baltimore-alleges-big-banks-colluded-on-municipal-securities-rates-idUSL1N21D1WC
Squire Patton Boggs on John Oliver rant on robocalls: laugh but verify
https://tcpaworld.com/2019/03/13/fact-checking-john-olivers-robocall-bit-it-was-hilarious-but-was-it-accurate-tcpaworld-com-breaks-it-down/
[If you disagree with the SPB critique, just give them a call, or many calls. DR]
https://tcpaworld.com/2019/03/13/fact-checking-john-olivers-robocall-bit-it-was-hilarious-but-was-it-accurate-tcpaworld-com-breaks-it-down/
[If you disagree with the SPB critique, just give them a call, or many calls. DR]
From Public Citizen
FTC and CFPB report on FDCPA activities
Posted: 26 Mar 2019 06:53 AM PDT
Last week, the Federal Trade Commission and the Consumer Financial Protection Bureau reported on their 2018 activities to administer the Fair Debt Collection Practices Act. The report highlights both agencies’ law enforcement, education and public outreach, and policy initiatives.
The report is here. https://files.consumerfinance.gov/f/documents/cfpb_fdcpa_annual-report-congress_03-2019.pdf
FTC and CFPB report on FDCPA activities
Posted: 26 Mar 2019 06:53 AM PDT
Last week, the Federal Trade Commission and the Consumer Financial Protection Bureau reported on their 2018 activities to administer the Fair Debt Collection Practices Act. The report highlights both agencies’ law enforcement, education and public outreach, and policy initiatives.
The report is here. https://files.consumerfinance.gov/f/documents/cfpb_fdcpa_annual-report-congress_03-2019.pdf
The Southern District Complaint against Michael Avenatti
https://www.documentcloud.org/documents/5780634-U-S-v-Michael-Avenatti-Complaint.html
https://www.documentcloud.org/documents/5780634-U-S-v-Michael-Avenatti-Complaint.html
West Virginia uses consumer law to sue Catholic Diocese
A copy of the Complaint is here:https://ago.wv.gov/Documents/Diocese%20complaint.PDF
An excerpt from the Complaint:
The State of West Virginia, by and through its duly elected Attorney General, Patrick Morrisey (hereinafter "the State"), brings this action pursuant to the provisions of the West Virginia Consumer Credit and Protection Act, West Virginia Code § 46A-1-101, et seq., to redress the above-named Defendants' violations of the Consumer Credit and Protection Act. PARTIES
1. The State, by and through the Attorney General, is authorized to bring this action pursuant to the Consumer Credit and Protection Act, W. Va. Code § 46A- 1-101, et seq.
2. Defendant Diocese of Wheeling-Charleston (hereinafter "Diocese") is a non-profit organization operating and doing business at 1322 Eoff Street, Wheeling, West Virginia. The entire state of West Virginia lies within the Diocese's territory. The Diocese is a subdivision of the Archdiocese of Baltimore, Maryland, and also of the Roman Catholic Church, which is headed worldwide by Pope Francis.
3. Defendant Michael J. Bransfield is an individual who was Bishop of the Diocese from early 2005 through September 2018, and is sued in his capacity as Bishop of the Diocese during this time period. Title to diocesan property is held in the name of the Bishop. JURISDICTION AND VENUE
4. This Court has jurisdiction to hear this matter pursuant to Article VIII, Section 6 of the West Virginia Constitution, W. Va. Code § 51-2-2, and W. Va. Code § 53-5-3.
5. Venue is proper in this Court pursuant to W. Va. Code § 46A-7-114 and W. Va. Code § 56-1 -1(a)(6).
I. FACTS COMMON TO ALL COUNTS A. Procedural Facts
6. A Statewide Grand Jury Report issued by the State of Pennsylvania on August 14, 2018 identified hundreds of Roman Catholic Church priests who had abused one thousand or more children in six dioceses in Pennsylvania. One or more of the identified priests had also been employed in the Diocese.
7. The State commenced an investigation in the fall of 2018 to determine if other Catholic priests who were active or had been employed in West Virginia had been accused of sexually abusing children. The preliminary investigation of the Attorney General disclosed that 2 priests other than the ones identified in the Pennsylvania Grand Jury Report had worked in West Virginia and had been accused of sexual abuse of children.
8. The Diocese currently operates six high schools and 19 elementary schools in West Virginia, but has operated more in the past. Some parishes also operate pre-kindergarten day care facilities.
9. Based upon the foregoing, the Attorney General issued two formal investigative subpoenas ("Subpoenas") to the Diocese on October 12, 2018, and February 14, 2019, as authorized by the West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-7- 104(1). The Diocese responded to the Subpoenas in part and withheld documents based upon objections.
10. Although the State has not fully completed its investigation, due, in part, to the lack of cooperation from the Diocese, the facts learned and the documents disclosed allege the Diocese has engaged in unfair or deceptive acts or practices by failing to disclose to consumers of its educational and recreational services that it employed priests and laity who have sexually abused children, including an admitted abuser who the Diocese nevertheless allowed to work in a Catholic elementary school, in violation of the West Virginia Consumer Credit and Protection Act. W. Va. Code § 46A-1-101 et seq. (the "WVCCPA").
A copy of the Complaint is here:https://ago.wv.gov/Documents/Diocese%20complaint.PDF
An excerpt from the Complaint:
The State of West Virginia, by and through its duly elected Attorney General, Patrick Morrisey (hereinafter "the State"), brings this action pursuant to the provisions of the West Virginia Consumer Credit and Protection Act, West Virginia Code § 46A-1-101, et seq., to redress the above-named Defendants' violations of the Consumer Credit and Protection Act. PARTIES
1. The State, by and through the Attorney General, is authorized to bring this action pursuant to the Consumer Credit and Protection Act, W. Va. Code § 46A- 1-101, et seq.
2. Defendant Diocese of Wheeling-Charleston (hereinafter "Diocese") is a non-profit organization operating and doing business at 1322 Eoff Street, Wheeling, West Virginia. The entire state of West Virginia lies within the Diocese's territory. The Diocese is a subdivision of the Archdiocese of Baltimore, Maryland, and also of the Roman Catholic Church, which is headed worldwide by Pope Francis.
3. Defendant Michael J. Bransfield is an individual who was Bishop of the Diocese from early 2005 through September 2018, and is sued in his capacity as Bishop of the Diocese during this time period. Title to diocesan property is held in the name of the Bishop. JURISDICTION AND VENUE
4. This Court has jurisdiction to hear this matter pursuant to Article VIII, Section 6 of the West Virginia Constitution, W. Va. Code § 51-2-2, and W. Va. Code § 53-5-3.
5. Venue is proper in this Court pursuant to W. Va. Code § 46A-7-114 and W. Va. Code § 56-1 -1(a)(6).
I. FACTS COMMON TO ALL COUNTS A. Procedural Facts
6. A Statewide Grand Jury Report issued by the State of Pennsylvania on August 14, 2018 identified hundreds of Roman Catholic Church priests who had abused one thousand or more children in six dioceses in Pennsylvania. One or more of the identified priests had also been employed in the Diocese.
7. The State commenced an investigation in the fall of 2018 to determine if other Catholic priests who were active or had been employed in West Virginia had been accused of sexually abusing children. The preliminary investigation of the Attorney General disclosed that 2 priests other than the ones identified in the Pennsylvania Grand Jury Report had worked in West Virginia and had been accused of sexual abuse of children.
8. The Diocese currently operates six high schools and 19 elementary schools in West Virginia, but has operated more in the past. Some parishes also operate pre-kindergarten day care facilities.
9. Based upon the foregoing, the Attorney General issued two formal investigative subpoenas ("Subpoenas") to the Diocese on October 12, 2018, and February 14, 2019, as authorized by the West Virginia Consumer Credit and Protection Act, W. Va. Code § 46A-7- 104(1). The Diocese responded to the Subpoenas in part and withheld documents based upon objections.
10. Although the State has not fully completed its investigation, due, in part, to the lack of cooperation from the Diocese, the facts learned and the documents disclosed allege the Diocese has engaged in unfair or deceptive acts or practices by failing to disclose to consumers of its educational and recreational services that it employed priests and laity who have sexually abused children, including an admitted abuser who the Diocese nevertheless allowed to work in a Catholic elementary school, in violation of the West Virginia Consumer Credit and Protection Act. W. Va. Code § 46A-1-101 et seq. (the "WVCCPA").
Did D.C. Central Kitchen lose part of its DC contract to feed homeless to a higher bidder?
By Justin Wm. Moyer
March 18
A nonprofit that has provided meals for homeless people in the District for three decades has lost part of its government contract to another vendor and is questioning the award process.
D.C. Central Kitchen, founded in 1989, provides 3 million meals for homeless shelters, schools and nonprofits each year, according to its website. The organization lost part of its contract — funded by the D.C. Department of Human Services through the nonprofit Community Partnership for the Prevention of Homelessness — to Henry’s Soul Cafe, a caterer with locations on U Street and in Prince George’s County.
Washington City Paper first reported the contract changes.
In a statement, D.C. Central Kitchen chief executive Mike Curtin Jr. said the organization has worked for 30 years to provide healthy meals to residents of the city’s shelters.
“While the upheaval around our shelter food service contract is extremely challenging for our organization, we are far more concerned about how this contracting process failed to uphold our community’s values around transparency, health, sustainability, and creating good jobs for District residents,” the statement said. “We will persevere, as always, and hope this unfortunate outcome will inspire much-needed and long-overdue progress in our city’s approach to shelter nutrition programs.”
In a statement, D.C. Department of Human Services spokeswoman Dora Taylor-Lowe called the November selection of food vendors “an open, competitive process.” The agency didn’t respond to a request for comment Monday beyond the statement.
D.C. Council member Brianne K. Nadeau (D-Ward 1), who chairs the Committee on Human Services, declined to comment, as did Community Partnership.
D.C. Central Kitchen chief development officer Alexander Moore said the change meant the nonprofit’s contract shrank from about $1.8 million to $1 million a year. It had delivered up to 2,500 meals to 10 shelters each day under the contract but now delivers 800 meals to five shelters.
Moore said D.C. Central Kitchen underbid Henry’s — requesting reimbursement of $3.50 for a supper, for example, while Henry’s gets $5.18. Moore speculated that Henry’s may have won the contract because it is a certified business enterprise — a local business that receives preference in procurement.
“This was done in the least responsible, least transparent way possible,” he said. “There’s no reason to disadvantage us against a for-profit company. . . . We’ve created jobs and are keeping money right here.”
Henry’s Soul Cafe didn’t respond to requests for comment.
https://www.washingtonpost.com/local/dc-central-kitchen-loses-part-of-contract-to-feed-homeless/2019/03/18/3e81b0f8-473c-11e9-a14c-e5844465ff8a_story.html?utm_term=.180182304e11
The GAO on the Federal Aviation Administration's (FAA) process for certifying designs of transport aircraft to meet safety standards
A 1993 report focused on whether FAA staff are: (1) effectively involved in the certification process; and (2) competent in assessing the latest technologies. The GAO found that:
(1) FAA ability to evaluate and certify new aircraft technologies is questionable because, in response to an escalating workload, FAA has increasingly relied on manufacturers for safety certification;
(2) FAA has not clearly defined staff responsibilities or performance standards to ensure that staff are effectively involved in the certification process;
(3) aircraft manufacturers' technical expertise and commitment to safety have kept the number of design-related safety problems to a minimum;
(4) FAA efforts to increase its technical expertise and build an in-house team of experts to oversee the certification process may be flawed because FAA has not defined when these experts are to be involved in the certification process;
(5) although FAA has previously identified and attempted to address its certification staff training deficiencies, inadequacies remain because training programs do not develop staff members' competence in specific fields and the availability of technical courses remains limited; and (6) FAA plans to improve training and staff retention include new technical certification training programs and plans to create technical career paths for certification engineers; however, these programs may not be adequate to overcome current training and staff limitations.
- View Report (PDF) https://www.gao.gov/assets/160/153711.pdf
Subsequent GAO reports are ambiguous on the question of whether inadequacies noticed in 1993 have been fully addressed. It may be that the FAA has continued to rely on manufacturers for safety certification analysis. See the 2017 GAO report at https://www.gao.gov/assets/690/683649.pdf which talks about "continued progress" at the FAA.
A recent Wall Street Journal article referred to the " FAA’s longstanding reliance on using thousands of designated industry employees–rather than agency officials—to sign off on some safety-related regulatory matters." https://www.wsj.com/articles/steve-dickson-is-white-house-pick-as-permanent-faa-head-11553024733?mod=hp_major_pos7 That of course suggests that the problems of delegation of safety issues by the FAA to regulated companies has persisted.
Similarly, another recent WSJ article says: " The agency [FAA] for some time has been moving to delegate more responsibility to plane and equipment manufacturers for conducting detailed risk assessments on new or derivative products. Congress has been pushing FAA leaders in the same direction, partly to save federal dollars and partly to speed and streamline regulatory requirements for industry.
The NYT reports:
The 737 Max was one of the first commercial jets approved under new rules, which delegated more authority to Boeing than had been the case when most previous planes were certified. And the software system did not raise warnings during the approval process. Top F.A.A. officials, who are briefed on significant safety issues, were not aware of the software system, according to three people with knowledge of the process.
https://www.nytimes.com/2019/03/19/business/boeing-elaine-chao.html?module=inline
Posted by Don Allen Resnikoff
NYT Editorial:Avoid the mistakes of the past that led to bank failures
Excerpt:
Barely a decade has passed since the recklessness of major financial institutions helped to catalyze the largest economic crisis since the Great Depression. Many Americans have yet to recover their losses. Yet somehow, the lessons of the crisis already appear to be fading.
The government has loosened a number of the key strictures imposed on banks and other financial firms in the wake of the 2008 crisis, and more leniencies are in the pipeline. In particular, the government is allowing large banks to rely more on borrowed money as a source of funding, even as it has reduced scrutiny of their lending decisions.
https://www.nytimes.com/2019/03/20/opinion/trump-bank-regulation.html?action=click&module=Opinion&pgtype=Homepage
Excerpt:
Barely a decade has passed since the recklessness of major financial institutions helped to catalyze the largest economic crisis since the Great Depression. Many Americans have yet to recover their losses. Yet somehow, the lessons of the crisis already appear to be fading.
The government has loosened a number of the key strictures imposed on banks and other financial firms in the wake of the 2008 crisis, and more leniencies are in the pipeline. In particular, the government is allowing large banks to rely more on borrowed money as a source of funding, even as it has reduced scrutiny of their lending decisions.
https://www.nytimes.com/2019/03/20/opinion/trump-bank-regulation.html?action=click&module=Opinion&pgtype=Homepage
AAI Asks Antitrust Division to Reconsider Its Reversal on Standard-Essential Patents
In a letter to Assistant Attorney General Makan Delrahim, the American Antitrust Institute (AAI) asked the Antitrust Division to reconsider its withdrawal from its 2013 Joint Policy Statement with the Patent & Trademark Office (PTO) on Remedies for Standard Essential Patents (SEPs). The Policy Statement endorsed sensible limits on the International Trade Commission's issuance of exclusion orders, which ban imports of products into the United States if the products infringe a U.S. patent. It cautioned against such orders when the alleged infringer's products are compliant with industry standards and the patent holder has voluntarily committed to a standard-setting organization (SSO) to license the patent on reasonable and non-discriminatory (RAND) terms. The AAI letter also objects to the Division's heightened scrutiny of SSOs that clarify the meaning of RAND commitments in ways that supposedly favor product manufacturers but that are entirely consistent with patent law.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-antitrust-division-to-reconsider-its-reversal-on-standard-essential-patents/
In a letter to Assistant Attorney General Makan Delrahim, the American Antitrust Institute (AAI) asked the Antitrust Division to reconsider its withdrawal from its 2013 Joint Policy Statement with the Patent & Trademark Office (PTO) on Remedies for Standard Essential Patents (SEPs). The Policy Statement endorsed sensible limits on the International Trade Commission's issuance of exclusion orders, which ban imports of products into the United States if the products infringe a U.S. patent. It cautioned against such orders when the alleged infringer's products are compliant with industry standards and the patent holder has voluntarily committed to a standard-setting organization (SSO) to license the patent on reasonable and non-discriminatory (RAND) terms. The AAI letter also objects to the Division's heightened scrutiny of SSOs that clarify the meaning of RAND commitments in ways that supposedly favor product manufacturers but that are entirely consistent with patent law.
Read More https://www.antitrustinstitute.org/work-product/aai-asks-antitrust-division-to-reconsider-its-reversal-on-standard-essential-patents/
Electrical engineer institute's new WiFi measures won’t get American national standard designation -- the sticking point seems to be concerns of large patent holders
11 March 2019. By Leah Nylen.
Two WiFi standards proposed by the Institute of Electrical and Electronics Engineers have failed to win the backing of a non-profit that accredits US standards. The American National Standards Institute didn’t offer any public reasoning for its rare disapproval, but the standards are the first it has reviewed since IEEE controversially changed it patent policy in 2015 over the objections of companies like Ericsson, Nokia and Qualcomm.
ANSI is a non-governmental body composed of businesses, trade associations and US agencies that accredits standards groups and coordinates US standards. The group describes itself as a “neutral forum” to promote standards policies and a “watchdog” for standards development.
In its March 1 newsletter, ANSI said it had disapproved two standards proposed by IEEE. Both of the proposed standards are amendments to IEEE’s primary WiFi standard, 802.11.
Susanah Doucet, an ANSI spokeswoman, confirmed the disapproval.
“It is not an everyday occurrence, but it does happen from time to time,” she said, adding that IEEE can seek to appeal within ANSI or modify the standard and submit it again.
The two IEEE standards — 802.11ah and 802.11ai — were the products of years of work and finalized within the standards group in 2017. The 802.11ah standard focuses on lower-energy consumption and connectivity for Internet of Things devices, while 802.11ai focuses on improving connectivity in dense environments such as stadiums and shopping malls.
The two standards were the first finalized under IEEE’s new patent policy, adopted in 2015. Under the new policy, IEEE agreed to place limits on the ability of patent holders to obtain injunctions embedded in its standards. The policy also required patent holders to make their technology available to component makers — as opposed to licensing only to end-device manufacturers — and stipulated that royalties should be based on the “smallest salable unit.”
Companies such as Cisco and Intel were staunch supporters of the change, while those with large patent portfolios such as Qualcomm and Ericsson were opposed. The US Department of Justice reviewed the change and declined to object on antitrust grounds.
After IEEE adopted the policy change, however, a number of companies declined to agree to license under the new terms, providing what is known as a negative letter of assurance. On the 802.11ah standard, Ericsson, Nokia and the Dutch telecommunication company KPN said they wouldn’t provide licenses under IEEE’s new patent policy. Ericsson and Nokia also declined for 802.11ai, according to IEEE documents.
Without ANSI’s approval, the two standards aren’t considered “American National Standards” and the group won’t promote their usage within international standards bodies, such as the International Standards Organization, or ISO.
IEEE spokesperson Monika Stickel said the group is reviewing the information ANSI provided and declined to comment on whether it would seek an appeal.
Source: https://mlexmarketinsight.com/insights-center/editors-picks/antitrust/cross-jurisdiction/electrical-engineer-institutes-new-wifi-measures-wont-get-american-national-standard-designation
11 March 2019. By Leah Nylen.
Two WiFi standards proposed by the Institute of Electrical and Electronics Engineers have failed to win the backing of a non-profit that accredits US standards. The American National Standards Institute didn’t offer any public reasoning for its rare disapproval, but the standards are the first it has reviewed since IEEE controversially changed it patent policy in 2015 over the objections of companies like Ericsson, Nokia and Qualcomm.
ANSI is a non-governmental body composed of businesses, trade associations and US agencies that accredits standards groups and coordinates US standards. The group describes itself as a “neutral forum” to promote standards policies and a “watchdog” for standards development.
In its March 1 newsletter, ANSI said it had disapproved two standards proposed by IEEE. Both of the proposed standards are amendments to IEEE’s primary WiFi standard, 802.11.
Susanah Doucet, an ANSI spokeswoman, confirmed the disapproval.
“It is not an everyday occurrence, but it does happen from time to time,” she said, adding that IEEE can seek to appeal within ANSI or modify the standard and submit it again.
The two IEEE standards — 802.11ah and 802.11ai — were the products of years of work and finalized within the standards group in 2017. The 802.11ah standard focuses on lower-energy consumption and connectivity for Internet of Things devices, while 802.11ai focuses on improving connectivity in dense environments such as stadiums and shopping malls.
The two standards were the first finalized under IEEE’s new patent policy, adopted in 2015. Under the new policy, IEEE agreed to place limits on the ability of patent holders to obtain injunctions embedded in its standards. The policy also required patent holders to make their technology available to component makers — as opposed to licensing only to end-device manufacturers — and stipulated that royalties should be based on the “smallest salable unit.”
Companies such as Cisco and Intel were staunch supporters of the change, while those with large patent portfolios such as Qualcomm and Ericsson were opposed. The US Department of Justice reviewed the change and declined to object on antitrust grounds.
After IEEE adopted the policy change, however, a number of companies declined to agree to license under the new terms, providing what is known as a negative letter of assurance. On the 802.11ah standard, Ericsson, Nokia and the Dutch telecommunication company KPN said they wouldn’t provide licenses under IEEE’s new patent policy. Ericsson and Nokia also declined for 802.11ai, according to IEEE documents.
Without ANSI’s approval, the two standards aren’t considered “American National Standards” and the group won’t promote their usage within international standards bodies, such as the International Standards Organization, or ISO.
IEEE spokesperson Monika Stickel said the group is reviewing the information ANSI provided and declined to comment on whether it would seek an appeal.
Source: https://mlexmarketinsight.com/insights-center/editors-picks/antitrust/cross-jurisdiction/electrical-engineer-institutes-new-wifi-measures-wont-get-american-national-standard-designation
FROM DMN
YouTube has come under fire for its vague requirements for Content ID claims. Critics says the system has been getting abused for years. This month, YouTube is making changes to its ContentID claims process.
YouTube wants everyone to rely on its all-encompassing ContentID, an automated system that can reference millions of songs, films, TV shows, audiobooks, and more to find matching content. ContentID trawls YouTube looking for instances in which a copyrighted work might have been used and notifies the original owner.
The copyright owner then has a few choices, including removing a video or simply monetizing it.
The new change will prevent content owners from filing a manual claim if ContentID has already discovered a claim on the same video.
YouTube revealed the new changes in a Help Center post for the site, noting that the changes were necessary for several reasons.
Manual flagging is not available to everyone on YouTube. It is typically reserved for multi-channel networks (MCNs) and other large entities. In a post informing these networks of the policies, YouTube says the change addresses dispute queue times.
“This change is intended, in part, to address feedback that you’d like to spend less time managing your dispute queue.”
Manual copyright claims will now require the copyright owner to provide timestamps to the copyrighted content.
Creators who have their videos flagged can remove the video and re-upload it, or dispute the content owner’s claim. YouTube will then decide who is right in the dispute.
'
If YouTube favors the YouTuber, then the content will be left alone. If YouTube finds the content owner has a legitimate claim, the YouTuber will receive a copyright strike.
YouTube says the changes will help uploaders better understand any copyright claims they do receive, while minimizing bogus demands.
Despite announcing the new feature through a Help Center post, YouTube has not given a timeframe for when the timestamps feature will be released.
https://www.digitalmusicnews.com/2019/03/21/youtube-contentid-changes/
YouTube has come under fire for its vague requirements for Content ID claims. Critics says the system has been getting abused for years. This month, YouTube is making changes to its ContentID claims process.
YouTube wants everyone to rely on its all-encompassing ContentID, an automated system that can reference millions of songs, films, TV shows, audiobooks, and more to find matching content. ContentID trawls YouTube looking for instances in which a copyrighted work might have been used and notifies the original owner.
The copyright owner then has a few choices, including removing a video or simply monetizing it.
The new change will prevent content owners from filing a manual claim if ContentID has already discovered a claim on the same video.
YouTube revealed the new changes in a Help Center post for the site, noting that the changes were necessary for several reasons.
Manual flagging is not available to everyone on YouTube. It is typically reserved for multi-channel networks (MCNs) and other large entities. In a post informing these networks of the policies, YouTube says the change addresses dispute queue times.
“This change is intended, in part, to address feedback that you’d like to spend less time managing your dispute queue.”
Manual copyright claims will now require the copyright owner to provide timestamps to the copyrighted content.
Creators who have their videos flagged can remove the video and re-upload it, or dispute the content owner’s claim. YouTube will then decide who is right in the dispute.
'
If YouTube favors the YouTuber, then the content will be left alone. If YouTube finds the content owner has a legitimate claim, the YouTuber will receive a copyright strike.
YouTube says the changes will help uploaders better understand any copyright claims they do receive, while minimizing bogus demands.
Despite announcing the new feature through a Help Center post, YouTube has not given a timeframe for when the timestamps feature will be released.
https://www.digitalmusicnews.com/2019/03/21/youtube-contentid-changes/
Challenging Monopolies in Court
Can there be encouraging points about the future of antitrust enforcement against monopolization? The expert panelists at a conference of the American Antitrust Institute held in the District of Columbia on March 14 were able to identify some. Inevitably there were conference themes that were less upbeat: there haven’t been a lot of big courtroom challenges to monopolization recently, and challenging monopolies in court is difficult. But there were also upbeat points.
First, antitrust enforcement against monopolies is not entirely dormant.
NY AG cases
Elinor Hoffman, a highly respected antitrust enforcer with the New York AG’s office, was able to point out that her office has pursued a series of successful monopolization cases, either independently or in coordination with others. Following are details of just one example, drawn from a New York AG press release:
A 2015 press release from the NY AG explains that the office resolved an antitrust lawsuit it brought in September 2014, and successfully prevented pharmaceutical manufacturer Allergan plc (previously named Actavis plc) from forcing Alzheimer’s patients to switch medications as part of an anticompetitive strategy designed to maintain high drug prices.
The background is that in February 2014, Allergan’s subsidiary Forest Laboratories announced a plan designed to impede competition from low cost generic drugs for its blockbuster Alzheimer’s drug Namenda IR. Forest’s plan was to withdraw Namenda IR from the market a few months before generic versions became available, in order to force Alzheimer’s patients to switch to a very similar drug manufactured by Forest that had a longer lasting patent – Namenda XR. Forest knew that once patients were forced to switch to the new drug, they would likely remain on that medication even after generics for Namenda IR entered the market, due to the practical difficulties of switching back. The tactic was expected to dramatically curtail the ability of generics to compete in the market, and to cost the public hundreds of millions – if not billions – of dollars in unnecessary drug costs.
In December 2014, a federal judge granted New York’s request for an injunction and prohibited Allergan from engaging in the controversial tactic – sometimes called a “forced switch” – which would have needlessly disrupted the treatment plans of these patients solely to protect corporate profits. The injunction protected competition and allowed low cost generic drugs to enter the market unimpeded.
The FTC case against Qualcomm
There was some suggestion at the conference that Europeans are more active than U.S. enforcers on matters of monopolization, and use “abuse of dominant position” standards for prosecution in Europe are more flexible that U.S. monopolization standards.
Panelist Maria Coppola of the U.S. Federal Trade Commission defended her agencies record. She pointed out, among other things, that the FTC’s action against Qualcomm is much broader than the European’s action.
The following detail is from a 2017 FTC press release about the FTC action:
The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. [https://www.ftc.gov/system/files/documents/cases/170117qualcomm_redacted_complaint.pdf]
Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.
Qualcomm also holds patents that it has declared essential to industry standards that enable cellular connectivity. These standards were adopted by standard-setting organizations for the telecommunications industry, which include Qualcomm and many of its competitors. In exchange for having their patented technologies included in the standards, participants typically commit to license their patents on what are known as fair, reasonable, and non-discriminatory, or “FRAND,” terms.
When a patent holder that has made a FRAND commitment negotiates a license, ordinarily it is constrained by the fact that if the parties are unable to reach agreement, the patent holder may have to establish reasonable royalties in court.
According to the complaint, by threatening to disrupt cell phone manufacturers’ supply of baseband processors, Qualcomm obtains elevated royalties and other license terms for its standard-essential patents that manufacturers would otherwise reject. These royalties amount to a tax on the manufacturers’ use of baseband processors manufactured by Qualcomm’s competitors, a tax that excludes these competitors and harms competition. Increased costs imposed by this tax are passed on to consumers, the complaint alleges.
By excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and other items commonly referred to as the Internet of Things.
The FTC has charged Qualcomm with violating the FTC Act. The complaint alleges that Qualcomm:
The Commission vote to file the complaint was 2-1. Commissioner Maureen K. Ohlhausen dissented and issued a statement. Both a public and sealed version of the complaint were filed in the U.S. District Court for the Northern District of California on January 17, 2017.
Private Class action
Panelist Kalpana Srinivasn of Susman and Godfrey LLP was able to speak about her firm’s private class action against Qualcomm. In September of this past year a federal District Court judge certified the case to move forward, explaining:
In sum, the Court finds that the proposed class members' interests weigh in favor of having this case litigated as a class action. In particular, the nature of Qualcomm's alleged overarching conduct and the desirability of concentrating the litigation in one proceeding weigh heavily in favor of finding that class treatment is superior to other methods of adjudication of the controversy. See Zinser, 253 F.3d at 1190-92. Nor do manageability concerns favor another form of adjudication. Therefore, Plaintiffs have satisfied the superiority requirement. Because Plaintiffs have also satisfied the predominance requirement, the Court GRANTS Plaintiffs' motion for class certification under Rule 23(b)(3).
See the full opinion at https://casetext.com/case/in-re-qualcomm-antitrust-litig-1
Antitrust in Court and the world outside of Court
Recently, the world outside of the courts included Elizabeth Warren discussing breaking up companies without use of courtroom litigation. Here is part of what she said in a recent article at https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c:
In this tradition, my administration would restore competition to the tech sector by taking two major steps:
First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
**
Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.
Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers . . . .
Panelists at the AAI conference commented perceptively about alternatives to current courtroom efforts directed at monopolization, including proposals for “no-fault” break-up of monopolies following the Warren approach, proposals to adopt European abuse of dominant position standards, and others.
Among a number of interesting points made about alternatives was Richard Brunell’s point that proposals for “no-fault” enforcement from the 1970s were more nuanced than may now be commonly recognized.
Jon Liebowitz and others had interesting comments about potential for FTC Act Section 5, which broadly prohibits prohibits “unfair or deceptive acts or practices in or affecting commerce.”
Jon Baker, in a question from the floor, encouraged discussion comparing Elizabeth Warren’s proposals with courtroom litigation standards.
And, in an article discussing current antitrust reform proposals that was provided as part of the resource materials for the AAI conference, Harry First writes, in an open spirit purposefully and playfully evoking Woodstock (a large gathering of hippies that occurred some time ago):
Say what you will about Hipster antitrust, it has connected to broader political concerns, and that is for the good. A slogan of the Woodstock decade was “Power to the People.” It still works for antitrust, “Right On.”
Harry First’s article is at https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Frist-Woodstock-Antitrust.pdf
Great credit for the excellent and interesting AAI program goes to organizers Randy Stutz and Richard Brunell
This posting is by Don Allen Resnikoff, who takes responsibility for its content.
Can there be encouraging points about the future of antitrust enforcement against monopolization? The expert panelists at a conference of the American Antitrust Institute held in the District of Columbia on March 14 were able to identify some. Inevitably there were conference themes that were less upbeat: there haven’t been a lot of big courtroom challenges to monopolization recently, and challenging monopolies in court is difficult. But there were also upbeat points.
First, antitrust enforcement against monopolies is not entirely dormant.
NY AG cases
Elinor Hoffman, a highly respected antitrust enforcer with the New York AG’s office, was able to point out that her office has pursued a series of successful monopolization cases, either independently or in coordination with others. Following are details of just one example, drawn from a New York AG press release:
A 2015 press release from the NY AG explains that the office resolved an antitrust lawsuit it brought in September 2014, and successfully prevented pharmaceutical manufacturer Allergan plc (previously named Actavis plc) from forcing Alzheimer’s patients to switch medications as part of an anticompetitive strategy designed to maintain high drug prices.
The background is that in February 2014, Allergan’s subsidiary Forest Laboratories announced a plan designed to impede competition from low cost generic drugs for its blockbuster Alzheimer’s drug Namenda IR. Forest’s plan was to withdraw Namenda IR from the market a few months before generic versions became available, in order to force Alzheimer’s patients to switch to a very similar drug manufactured by Forest that had a longer lasting patent – Namenda XR. Forest knew that once patients were forced to switch to the new drug, they would likely remain on that medication even after generics for Namenda IR entered the market, due to the practical difficulties of switching back. The tactic was expected to dramatically curtail the ability of generics to compete in the market, and to cost the public hundreds of millions – if not billions – of dollars in unnecessary drug costs.
In December 2014, a federal judge granted New York’s request for an injunction and prohibited Allergan from engaging in the controversial tactic – sometimes called a “forced switch” – which would have needlessly disrupted the treatment plans of these patients solely to protect corporate profits. The injunction protected competition and allowed low cost generic drugs to enter the market unimpeded.
The FTC case against Qualcomm
There was some suggestion at the conference that Europeans are more active than U.S. enforcers on matters of monopolization, and use “abuse of dominant position” standards for prosecution in Europe are more flexible that U.S. monopolization standards.
Panelist Maria Coppola of the U.S. Federal Trade Commission defended her agencies record. She pointed out, among other things, that the FTC’s action against Qualcomm is much broader than the European’s action.
The following detail is from a 2017 FTC press release about the FTC action:
The Federal Trade Commission filed a complaint in federal district court charging Qualcomm Inc. with using anticompetitive tactics to maintain its monopoly in the supply of a key semiconductor device used in cell phones and other consumer products. [https://www.ftc.gov/system/files/documents/cases/170117qualcomm_redacted_complaint.pdf]
Qualcomm is the world’s dominant supplier of baseband processors – devices that manage cellular communications in mobile products. The FTC alleges that Qualcomm has used its dominant position as a supplier of certain baseband processors to impose onerous and anticompetitive supply and licensing terms on cell phone manufacturers and to weaken competitors.
Qualcomm also holds patents that it has declared essential to industry standards that enable cellular connectivity. These standards were adopted by standard-setting organizations for the telecommunications industry, which include Qualcomm and many of its competitors. In exchange for having their patented technologies included in the standards, participants typically commit to license their patents on what are known as fair, reasonable, and non-discriminatory, or “FRAND,” terms.
When a patent holder that has made a FRAND commitment negotiates a license, ordinarily it is constrained by the fact that if the parties are unable to reach agreement, the patent holder may have to establish reasonable royalties in court.
According to the complaint, by threatening to disrupt cell phone manufacturers’ supply of baseband processors, Qualcomm obtains elevated royalties and other license terms for its standard-essential patents that manufacturers would otherwise reject. These royalties amount to a tax on the manufacturers’ use of baseband processors manufactured by Qualcomm’s competitors, a tax that excludes these competitors and harms competition. Increased costs imposed by this tax are passed on to consumers, the complaint alleges.
By excluding competitors, Qualcomm impedes innovation that would offer significant consumer benefits, including those that foster the increased interconnectivity of consumer products, vehicles, buildings, and other items commonly referred to as the Internet of Things.
The FTC has charged Qualcomm with violating the FTC Act. The complaint alleges that Qualcomm:
- Maintains a “no license, no chips” policy under which it will supply its baseband processors only on the condition that cell phone manufacturers agree to Qualcomm’s preferred license terms. The FTC alleges that this tactic forces cell phone manufacturers to pay elevated royalties to Qualcomm on products that use a competitor’s baseband processors. According to the Commission’s complaint, this is an anticompetitive tax on the use of rivals’ processors. “No license, no chips” is a condition that other suppliers of semiconductor devices do not impose. The risk of losing access to Qualcomm baseband processors is too great for a cell phone manufacturer to bear because it would preclude the manufacturer from selling phones for use on important cellular networks.
- Refuses to license standard-essential patents to competitors. Despite its commitment to license standard-essential patents on FRAND terms, Qualcomm has consistently refused to license those patents to competing suppliers of baseband processors.
- Extracted exclusivity from Apple in exchange for reduced patent royalties. Qualcomm precluded Apple from sourcing baseband processors from Qualcomm’s competitors from 2011 to 2016. Qualcomm recognized that any competitor that won Apple’s business would become stronger, and used exclusivity to prevent Apple from working with and improving the effectiveness of Qualcomm’s competitors.
The Commission vote to file the complaint was 2-1. Commissioner Maureen K. Ohlhausen dissented and issued a statement. Both a public and sealed version of the complaint were filed in the U.S. District Court for the Northern District of California on January 17, 2017.
Private Class action
Panelist Kalpana Srinivasn of Susman and Godfrey LLP was able to speak about her firm’s private class action against Qualcomm. In September of this past year a federal District Court judge certified the case to move forward, explaining:
In sum, the Court finds that the proposed class members' interests weigh in favor of having this case litigated as a class action. In particular, the nature of Qualcomm's alleged overarching conduct and the desirability of concentrating the litigation in one proceeding weigh heavily in favor of finding that class treatment is superior to other methods of adjudication of the controversy. See Zinser, 253 F.3d at 1190-92. Nor do manageability concerns favor another form of adjudication. Therefore, Plaintiffs have satisfied the superiority requirement. Because Plaintiffs have also satisfied the predominance requirement, the Court GRANTS Plaintiffs' motion for class certification under Rule 23(b)(3).
See the full opinion at https://casetext.com/case/in-re-qualcomm-antitrust-litig-1
Antitrust in Court and the world outside of Court
Recently, the world outside of the courts included Elizabeth Warren discussing breaking up companies without use of courtroom litigation. Here is part of what she said in a recent article at https://medium.com/@teamwarren/heres-how-we-can-break-up-big-tech-9ad9e0da324c:
In this tradition, my administration would restore competition to the tech sector by taking two major steps:
First, by passing legislation that requires large tech platforms to be designated as “Platform Utilities” and broken apart from any participant on that platform.
**
Second, my administration would appoint regulators committed to reversing illegal and anti-competitive tech mergers.
Current antitrust laws empower federal regulators to break up mergers that reduce competition. I will appoint regulators who are committed to using existing tools to unwind anti-competitive mergers . . . .
Panelists at the AAI conference commented perceptively about alternatives to current courtroom efforts directed at monopolization, including proposals for “no-fault” break-up of monopolies following the Warren approach, proposals to adopt European abuse of dominant position standards, and others.
Among a number of interesting points made about alternatives was Richard Brunell’s point that proposals for “no-fault” enforcement from the 1970s were more nuanced than may now be commonly recognized.
Jon Liebowitz and others had interesting comments about potential for FTC Act Section 5, which broadly prohibits prohibits “unfair or deceptive acts or practices in or affecting commerce.”
Jon Baker, in a question from the floor, encouraged discussion comparing Elizabeth Warren’s proposals with courtroom litigation standards.
And, in an article discussing current antitrust reform proposals that was provided as part of the resource materials for the AAI conference, Harry First writes, in an open spirit purposefully and playfully evoking Woodstock (a large gathering of hippies that occurred some time ago):
Say what you will about Hipster antitrust, it has connected to broader political concerns, and that is for the good. A slogan of the Woodstock decade was “Power to the People.” It still works for antitrust, “Right On.”
Harry First’s article is at https://www.antitrustinstitute.org/wp-content/uploads/2018/12/Frist-Woodstock-Antitrust.pdf
Great credit for the excellent and interesting AAI program goes to organizers Randy Stutz and Richard Brunell
This posting is by Don Allen Resnikoff, who takes responsibility for its content.
Tim Wu on Warren breakup proposals
Excerpt from Wired article:
LAST WEEK, PRESIDENTIAL candidate Senator Elizabeth Warren (D-Massachusetts) announced an ambitious plan to break up big tech companies like Google, Facebook, and Amazon and block them from selling their own products on their platforms.
Warren called out Facebook's acquisitions of Instagram and WhatsApp and Google's acquisition of online advertising giant DoubleClick as examples of the deals she'd like to see reversed.
**
WIRED spoke with Wu about how antitrust enforcement all but died in the US, and how leaders could bring it back. An edited transcript follows:
WIRED: What do you think of Senator Elizabeth Warren's proposal?
Tim Wu: Her proposal is aggressive but not crazy, I think. A good hard look at the mergers of the past decade is a big priority.
WIRED: The biggest impediment to antitrust enforcement now though is the courts. The Department of Justice sued to block AT&T’s acquisition of Time Warner and lost. Is this outside of elected officials' control at this point?
Wu: One problem is the priorities of not just the Republican Party but the Democratic Party. The Democrats get a turn now and then; the problem is that antitrust hasn't been given any weight. They need to screen for judges that care about economic justice. They need judges who are believers in robust enforcement of antitrust laws. I can't think of many judges like that who were appointed by Obama. Antitrust hasn't been a Democratic priority at all, and I think that has to change.
Warren's proposal strikes me as evidence that breakups, monopoly, and corporate concentration will be a 2020 issue.
I don't think it's crazy for Republicans to want some people like that too. It hasn't been their thing, they usually want people who are conservative all the way across the line. But the Republican Party has historically had more of a concern with promoting competition and preventing monopoly. The AT&T breakup started under Nixon and was completed under Reagan. People have almost forgotten that tradition.
Full interview article: https://www.wired.com/story/tim-wu-says-us-must-enforce-antitrust-laws/?CNDID=22877431&CNDID=22877431&bxid=MjM5Njc3NTA1Mzg2S0&hasha=63818d37ef32527bc50fd7b3eeb62882&hashb=a080f322dd48fe799a8c7787d567429bd9281dfb&mbid=nl_031119_daily_list1_p2&source=DAILY_NEWSLETTER&utm_brand=wired&utm_mailing=WIRED%20NL%20031119%20(1)&utm_medium=email&utm_source=nl
EU: Spotify files antitrust complaint against Apple
According to a reporte from Reuters, Spotify has filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service.
Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015.
“Apple operates a platform that, for over a billion people around the world, is the gateway to the internet,” Spotify CEO Daniel Ek wrote in a blog post on Wednesday. “Apple is both the owner of the iOS platform and the App Store, and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”
One of Spotify’s complaints is that it must choose between paying the 30 percent fee that Apple imposes on purchases made through its app store — which Ek says would “artificially inflate” the price of Spotify’s premium service so that it costs more than Apple Music — or accept technical limitations imposed by Apple restricting how it can improve its app or interact with customers.
Full Content: The Hill & Reuter
According to a reporte from Reuters, Spotify has filed a complaint with EU antitrust regulators against Apple, saying the iPhone maker unfairly limits rivals to its own Apple Music streaming service.
Spotify, which launched a year after the 2007 launch of the iPhone, said on Wednesday that Apple’s control of its App store deprived consumers of choice and rival providers of audio streaming services to the benefit of Apple Music, which began in 2015.
“Apple operates a platform that, for over a billion people around the world, is the gateway to the internet,” Spotify CEO Daniel Ek wrote in a blog post on Wednesday. “Apple is both the owner of the iOS platform and the App Store, and a competitor to services like Spotify. In theory, this is fine. But in Apple’s case, they continue to give themselves an unfair advantage at every turn.”
One of Spotify’s complaints is that it must choose between paying the 30 percent fee that Apple imposes on purchases made through its app store — which Ek says would “artificially inflate” the price of Spotify’s premium service so that it costs more than Apple Music — or accept technical limitations imposed by Apple restricting how it can improve its app or interact with customers.
Full Content: The Hill & Reuter
Buy American – musical instruments
I cherish my made-in-America upright tuba, made by the Olds company in California many years ago. I also cherish my euphonium (which is like a small tuba) made by the Conn company in Elkhart, Indiana many years ago. The Conn euphonium is very similar to the one I played in the Plainfield (N.J.) High School band. Olds, and Conn are among a number of revered American musical instrument companies that abandoned manufacturing in North America many years ago.
When I recently wanted a large tuba more suitable for amateur orchestras I now play in, the main practical choices were instruments made in China. They have prices I can afford. Beginning players and older amateurs like myself with budgets of three thousand dollars or less who want new tubas are as a practical matter limited to Chinese manufactured instruments. Of course, some used antique horns like my Olds and Conn can be purchased at low prices, especially if they have lots of dents in them, and are a partial alternative.
Musical instruments are a poster child for the observation that for many products a trade war with China that is based on tariffs will not bring manufacturing back to the U.S. It will just make Chinese imports more expensive for the U.S. consumer – effectively a tax. Take my large Chinese made tuba as an example. A Chinese made tuba is often a good but imperfect copy of a tuba made by a European company such as Miraphone. The German made Miraphone tuba copied by the maker of my Chinese made tuba has a selling price of more than $10,000. The difference in price between a European made tuba and the Chinese copy is so great that most students and adult amateurs will not switch from Chinese to European tubas even if tariffs push up prices 10% to 25% or more, perhaps from $2,500 to $3,500 for a particular instrument. A Chinese tuba selling for $3,500 does not compete with a similar if somewhat better European tuba that costs $11,000.
A tariff-driven price increase to a consumer for the Chinese tuba from, say, $2,500 to $3,500 is unlikely to be enough to encourage more American manufacturing of relatively low priced tubas that compete with the Chinese models. U.S. labor costs are likely to be too high to allow profitable manufacture in the U.S. of a tuba that sells at retail for $3,500. Manufacturing a tuba in the U.S. is likely to result in a product roughly as expensive as those made in Germany or the Czech Republic, because labor costs are comparable. (Actually, Czech made tubas are a little cheaper than German made.) Just as $11,000 tubas made in Europe do not compete with Chinese tubas costing $3,500, neither will $11,000 tubas made in the U.S. compete with $3,500 Chinese tubas. Students and penurious old amateurs will stay with the Chinese tubas even with the tariff driven price increase. A proof of the point is offered by an American company named Kanstul that has taken up manufacturing tubas in Los Angeles, California. It’s products remind players of products once made by the old York company in North America, but buying a Kanstul is expensive. Kanstuls compete in price in quality with expensive European tubas, not low end Chinese instruments.
Several U.S. companies make a business of importing low end Chinese musical instruments, selling to students and penurious old amateurs, adding value and boosting price somewhat by providing some quality control. They do a brisk business. Examples are Musicians Friend, Jim Laabs Music, and Mack Brass. A UK company called Wessex has a similar business, and has an interesting industry story of moving from a role as small importer of Chinese instruments to a big importer and then taking on some limited manufacturing.
The Wessex story is similar to the story of several American importers, and is told in an interesting if sometimes wandering blog by Founder and CEO Jonathan Hodgetts that is on the company website -- https://wessex-tubas.com/blogs/news/a-message-from-our-founder Mr. Hodgetts’ story reinforces the observation that tariffs will not bring manufacturing of low priced musical instruments back to the U.S. in any significant way.
Posting by Don Resnikoff, who takes responsibility for the content
I cherish my made-in-America upright tuba, made by the Olds company in California many years ago. I also cherish my euphonium (which is like a small tuba) made by the Conn company in Elkhart, Indiana many years ago. The Conn euphonium is very similar to the one I played in the Plainfield (N.J.) High School band. Olds, and Conn are among a number of revered American musical instrument companies that abandoned manufacturing in North America many years ago.
When I recently wanted a large tuba more suitable for amateur orchestras I now play in, the main practical choices were instruments made in China. They have prices I can afford. Beginning players and older amateurs like myself with budgets of three thousand dollars or less who want new tubas are as a practical matter limited to Chinese manufactured instruments. Of course, some used antique horns like my Olds and Conn can be purchased at low prices, especially if they have lots of dents in them, and are a partial alternative.
Musical instruments are a poster child for the observation that for many products a trade war with China that is based on tariffs will not bring manufacturing back to the U.S. It will just make Chinese imports more expensive for the U.S. consumer – effectively a tax. Take my large Chinese made tuba as an example. A Chinese made tuba is often a good but imperfect copy of a tuba made by a European company such as Miraphone. The German made Miraphone tuba copied by the maker of my Chinese made tuba has a selling price of more than $10,000. The difference in price between a European made tuba and the Chinese copy is so great that most students and adult amateurs will not switch from Chinese to European tubas even if tariffs push up prices 10% to 25% or more, perhaps from $2,500 to $3,500 for a particular instrument. A Chinese tuba selling for $3,500 does not compete with a similar if somewhat better European tuba that costs $11,000.
A tariff-driven price increase to a consumer for the Chinese tuba from, say, $2,500 to $3,500 is unlikely to be enough to encourage more American manufacturing of relatively low priced tubas that compete with the Chinese models. U.S. labor costs are likely to be too high to allow profitable manufacture in the U.S. of a tuba that sells at retail for $3,500. Manufacturing a tuba in the U.S. is likely to result in a product roughly as expensive as those made in Germany or the Czech Republic, because labor costs are comparable. (Actually, Czech made tubas are a little cheaper than German made.) Just as $11,000 tubas made in Europe do not compete with Chinese tubas costing $3,500, neither will $11,000 tubas made in the U.S. compete with $3,500 Chinese tubas. Students and penurious old amateurs will stay with the Chinese tubas even with the tariff driven price increase. A proof of the point is offered by an American company named Kanstul that has taken up manufacturing tubas in Los Angeles, California. It’s products remind players of products once made by the old York company in North America, but buying a Kanstul is expensive. Kanstuls compete in price in quality with expensive European tubas, not low end Chinese instruments.
Several U.S. companies make a business of importing low end Chinese musical instruments, selling to students and penurious old amateurs, adding value and boosting price somewhat by providing some quality control. They do a brisk business. Examples are Musicians Friend, Jim Laabs Music, and Mack Brass. A UK company called Wessex has a similar business, and has an interesting industry story of moving from a role as small importer of Chinese instruments to a big importer and then taking on some limited manufacturing.
The Wessex story is similar to the story of several American importers, and is told in an interesting if sometimes wandering blog by Founder and CEO Jonathan Hodgetts that is on the company website -- https://wessex-tubas.com/blogs/news/a-message-from-our-founder Mr. Hodgetts’ story reinforces the observation that tariffs will not bring manufacturing of low priced musical instruments back to the U.S. in any significant way.
Posting by Don Resnikoff, who takes responsibility for the content
Judge orders CVS/Aetna merger hearing
Judge Richard Leon of the US District Court for the District of Columbia, who has been asked to sign off on a government agreement that allowed CVS Health to buy health insurer Aetna, has ordered a hearing for April 5 on the matter.
The Judge issued the order on Thursday, March 14, saying that he wanted the hearing to discuss which witnesses—if any—should testify before he decides whether to approve the government’s deal with the companies.
The Justice Department approved the merger of CVS, a US pharmacy chain and benefits manager, and Aetna in October on condition that Aetna sell its Medicare prescription drug plan business to WellCare Health Plans.
Judges usually approve merger agreements that the government strikes with companies with little fanfare, but Leon has balked. In December, he said he was “less convinced” than the government that the asset sale to WellCare would resolve antitrust concerns.
Full Content: Reuters
Judge Richard Leon of the US District Court for the District of Columbia, who has been asked to sign off on a government agreement that allowed CVS Health to buy health insurer Aetna, has ordered a hearing for April 5 on the matter.
The Judge issued the order on Thursday, March 14, saying that he wanted the hearing to discuss which witnesses—if any—should testify before he decides whether to approve the government’s deal with the companies.
The Justice Department approved the merger of CVS, a US pharmacy chain and benefits manager, and Aetna in October on condition that Aetna sell its Medicare prescription drug plan business to WellCare Health Plans.
Judges usually approve merger agreements that the government strikes with companies with little fanfare, but Leon has balked. In December, he said he was “less convinced” than the government that the asset sale to WellCare would resolve antitrust concerns.
Full Content: Reuters
Jon Baker on Restoring a Competitive Economy
At a moment when political progressives like Bernie Sanders, Elizabeth Warren, Amy Klobuchar, and Tim Wu are addressing the general public on the politics of antitrust and competition policy, respected American University Law Professor Jonathan Baker has authored a book coming out in May: “The Antitrust Paradigm; Restoring a Competitive Economy.” As the book’s title suggests, Baker shares the interest expressed by the politicians in making the American economy more competitive, but his focus includes a lot of attention to improving antitrust litigation. Baker brings authority to the discussion as a respected economist with substantial real life experience at the Federal Trade Commission and the Federal Communications Commission.
Recently Baker presided over an American University Law School panel of experts who were invited to react to an advance copy of his book. Baker previewed his book’s contents. Part 1 of the book will talk about antitrust enforcement history, including political disputes and arguments pressed in opposition to antitrust enforcement. Part 2 is about antitrust issues and standards in our time. Part 3 is about the future and the challenge of restoring a competitive economy.
Panelist William Kovacic offered a cynical context for the discussion, even as he joined the call for enhanced enforcement. He pointed out that antitrust enforcement has never actually had a “golden age.” Generally speaking the forces of industry concentration have checked the efforts of enforcers, so that enforcement efforts have often been more symbolic than effective. Kovacic’s cautionary comments seem particularly relevant given the often conservative attitudes toward antitrust enforcement of the current federal judiciary.
The closing speaker on the program, Joseph Simons, the FTC’s current Chair, argued that antitrust enforcement must focus on close knowledge of the economics of particular industries, rather than vague ideological or political thinking. He explained that good economics might point us toward more or less enforcement, depending on the facts. He said the alternative of basing enforcement decisions on an ideological viewpoint or political considerations, either from the left or the right, is a mistake. Simons would rather make policy and enforcement decisions based on the best evidence and analysis –including in particular, empirically grounded economic analyses that weighs the costs and benefits of enforcement.
The impression I took away from the recent forum is that Professor Baker agrees that antitrust enforcement, at least as pursued through litigation, should be focused and empirically grounded on economic analysis relevant to understanding market power as exercised in particular product markets. That is mainly consistent with Chairman Simons’ thinking. Where Professor Baker and Chairman Simons may differ is on whether the data supports litigation reforms Baker proposes, such as modifying particular presumptions and burdens of proof in courtroom enforcement proceedings.
Baker has long supported the utility of suitably crafted presumptions in court proceedings, because strong evidence is required to overcome presumptions. With regard to mergers, for example, he has pointed out that unless the government enforcement agencies have some simple and sensible way of establishing a presumption of harm to competition, which the merging parties must then overcome to persuade a court to permit the transaction, few proposed mergers will be subject to effective challenge. Baker emphasizes that litigation presumptions must have sound economic grounding. Presumptions must be based on observable features of market structure that economic understanding suggests correlate well with harm to competition.
It will be interesting to compare Jonathan Baker’s antitrust reform proposals in his new book with the proposals of progressive political activist Tim Wu with regard to the nuts and bolts of antitrust litigation. In his book “The Curse of Bigness: Antitrust in the New Gilded Age” Wu said that he would like to jettison the government prosecutor’s reliance in litigation on the “consumer welfare” standard for antitrust enforcement. Wu believes that the consumer welfare standard suffers from a preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct “promotes competition or whether it is such as may suppress or even destroy competition."
Wu’s revised litigation standard is not, however, necessarily inconsistent with the idea that in antitrust litigation case presumptions, burdens of proof, and outcomes should be consistent with empirical data concerning exercise of market power in particular markets.
Of course, there are difficult competition policy issues that are outside of questions about what standards and rules should apply in antitrust litigation. Debates about antitrust litigation reform occur in the context of broader political debates about competition policy among people who consider themselves progressives or conservatives, Democrats or Republicans. Topics for political debate include identifying and pursuing policies concerning firm size and conduct that promote and protect a political economy perceived as desirable from one point of view or another.
It would seem that politically oriented reformers who identify as progressives, like the people named at the outset of this note, can address broader political issues without conflict with advocates like Jonathan Baker, whose goals include promoting practical and effective proposals for antitrust litigation reform. But that is a topic for another occasion.
This posting is by Don Allen Resnikoff, who takes responsibility for its content
At a moment when political progressives like Bernie Sanders, Elizabeth Warren, Amy Klobuchar, and Tim Wu are addressing the general public on the politics of antitrust and competition policy, respected American University Law Professor Jonathan Baker has authored a book coming out in May: “The Antitrust Paradigm; Restoring a Competitive Economy.” As the book’s title suggests, Baker shares the interest expressed by the politicians in making the American economy more competitive, but his focus includes a lot of attention to improving antitrust litigation. Baker brings authority to the discussion as a respected economist with substantial real life experience at the Federal Trade Commission and the Federal Communications Commission.
Recently Baker presided over an American University Law School panel of experts who were invited to react to an advance copy of his book. Baker previewed his book’s contents. Part 1 of the book will talk about antitrust enforcement history, including political disputes and arguments pressed in opposition to antitrust enforcement. Part 2 is about antitrust issues and standards in our time. Part 3 is about the future and the challenge of restoring a competitive economy.
Panelist William Kovacic offered a cynical context for the discussion, even as he joined the call for enhanced enforcement. He pointed out that antitrust enforcement has never actually had a “golden age.” Generally speaking the forces of industry concentration have checked the efforts of enforcers, so that enforcement efforts have often been more symbolic than effective. Kovacic’s cautionary comments seem particularly relevant given the often conservative attitudes toward antitrust enforcement of the current federal judiciary.
The closing speaker on the program, Joseph Simons, the FTC’s current Chair, argued that antitrust enforcement must focus on close knowledge of the economics of particular industries, rather than vague ideological or political thinking. He explained that good economics might point us toward more or less enforcement, depending on the facts. He said the alternative of basing enforcement decisions on an ideological viewpoint or political considerations, either from the left or the right, is a mistake. Simons would rather make policy and enforcement decisions based on the best evidence and analysis –including in particular, empirically grounded economic analyses that weighs the costs and benefits of enforcement.
The impression I took away from the recent forum is that Professor Baker agrees that antitrust enforcement, at least as pursued through litigation, should be focused and empirically grounded on economic analysis relevant to understanding market power as exercised in particular product markets. That is mainly consistent with Chairman Simons’ thinking. Where Professor Baker and Chairman Simons may differ is on whether the data supports litigation reforms Baker proposes, such as modifying particular presumptions and burdens of proof in courtroom enforcement proceedings.
Baker has long supported the utility of suitably crafted presumptions in court proceedings, because strong evidence is required to overcome presumptions. With regard to mergers, for example, he has pointed out that unless the government enforcement agencies have some simple and sensible way of establishing a presumption of harm to competition, which the merging parties must then overcome to persuade a court to permit the transaction, few proposed mergers will be subject to effective challenge. Baker emphasizes that litigation presumptions must have sound economic grounding. Presumptions must be based on observable features of market structure that economic understanding suggests correlate well with harm to competition.
It will be interesting to compare Jonathan Baker’s antitrust reform proposals in his new book with the proposals of progressive political activist Tim Wu with regard to the nuts and bolts of antitrust litigation. In his book “The Curse of Bigness: Antitrust in the New Gilded Age” Wu said that he would like to jettison the government prosecutor’s reliance in litigation on the “consumer welfare” standard for antitrust enforcement. Wu believes that the consumer welfare standard suffers from a preoccupation with avoiding high consumer prices. Instead, he believes prosecutors and courts should focus on finding antitrust violations based on whether the targeted conduct “promotes competition or whether it is such as may suppress or even destroy competition."
Wu’s revised litigation standard is not, however, necessarily inconsistent with the idea that in antitrust litigation case presumptions, burdens of proof, and outcomes should be consistent with empirical data concerning exercise of market power in particular markets.
Of course, there are difficult competition policy issues that are outside of questions about what standards and rules should apply in antitrust litigation. Debates about antitrust litigation reform occur in the context of broader political debates about competition policy among people who consider themselves progressives or conservatives, Democrats or Republicans. Topics for political debate include identifying and pursuing policies concerning firm size and conduct that promote and protect a political economy perceived as desirable from one point of view or another.
It would seem that politically oriented reformers who identify as progressives, like the people named at the outset of this note, can address broader political issues without conflict with advocates like Jonathan Baker, whose goals include promoting practical and effective proposals for antitrust litigation reform. But that is a topic for another occasion.
This posting is by Don Allen Resnikoff, who takes responsibility for its content
Judge narrows NCAA cap on athlete compensation
A judge has ruled against the NCAA in a federal antitrust case, opening door for players to receive more compensation, but limited to education purposes. US District Judge Claudia Wilken said that the NCAA cannot “limit compensation or benefits related to education” for athletes playing Division I men’s or women’s basketball or Bowl Subdivision football.
Wilken said these athletes may receive are scholarships to complete undergraduate or graduate degrees at any school. The judge also appeared to open the possibility of athletes being able to receive cash or cash-equivalent awards based on academics or graduation, albeit under some constraints.
At the same time, however, her 104-page ruling prevents athletes from receiving unlimited benefits, as the plaintiffs had hoped.
The NCAA “may continue … to limit compensation and benefits that are unrelated to education,” Wilken ruled.
The New York Times article emphasized the shortfall for Plaintiffs:
So why doesn’t it feel as if the group of athletes who pursued the litigation to end the N.C.A.A.’s rule won the case? Why did they and their star sports labor lawyer Jeffrey Kessler not get the outcome they most fervently sought?
Despite finding that the N.C.A.A. was violating federal law, Wilken turned away the plaintiffs’ main proposed remedy, which was also the logical one: to lift the supposedly lawbreaking cap on compensation. That means the continuation of a status quo where so many players feel they are working basically for free. How’s that?
“When you apply a uniquely muddled set of laws to a unique industry, this is the kind of ruling you get,” said Gabe Feldman, who directs Tulane’s sports law program and teaches antitrust law (the unique muddle to which he was referring).
The upshot of Friday’s ruling, pending a likely appeal, is that the N.C.A.A. may continue to cap payments to athletes after all — with the limited exception of expenses that are educational in nature. Think computers, or costs related to internships, or postgraduate scholarships.
https://www.nytimes.com/2019/03/11/sports/ncaa-court-ruling-antitrust.html
A copy of the NCAA Court Opinion is here (paywall) https://www.law360.com/articles/1113787/attachments/0
A judge has ruled against the NCAA in a federal antitrust case, opening door for players to receive more compensation, but limited to education purposes. US District Judge Claudia Wilken said that the NCAA cannot “limit compensation or benefits related to education” for athletes playing Division I men’s or women’s basketball or Bowl Subdivision football.
Wilken said these athletes may receive are scholarships to complete undergraduate or graduate degrees at any school. The judge also appeared to open the possibility of athletes being able to receive cash or cash-equivalent awards based on academics or graduation, albeit under some constraints.
At the same time, however, her 104-page ruling prevents athletes from receiving unlimited benefits, as the plaintiffs had hoped.
The NCAA “may continue … to limit compensation and benefits that are unrelated to education,” Wilken ruled.
The New York Times article emphasized the shortfall for Plaintiffs:
So why doesn’t it feel as if the group of athletes who pursued the litigation to end the N.C.A.A.’s rule won the case? Why did they and their star sports labor lawyer Jeffrey Kessler not get the outcome they most fervently sought?
Despite finding that the N.C.A.A. was violating federal law, Wilken turned away the plaintiffs’ main proposed remedy, which was also the logical one: to lift the supposedly lawbreaking cap on compensation. That means the continuation of a status quo where so many players feel they are working basically for free. How’s that?
“When you apply a uniquely muddled set of laws to a unique industry, this is the kind of ruling you get,” said Gabe Feldman, who directs Tulane’s sports law program and teaches antitrust law (the unique muddle to which he was referring).
The upshot of Friday’s ruling, pending a likely appeal, is that the N.C.A.A. may continue to cap payments to athletes after all — with the limited exception of expenses that are educational in nature. Think computers, or costs related to internships, or postgraduate scholarships.
https://www.nytimes.com/2019/03/11/sports/ncaa-court-ruling-antitrust.html
A copy of the NCAA Court Opinion is here (paywall) https://www.law360.com/articles/1113787/attachments/0
More on Huawei as 5G industry leader and US security threat:
Excerpt from an article by By Tom Wheeler, Robert D. Williams
Wednesday, February 20, 2019, 4:18 PM https://www.lawfareblog.com/keeping-huawei-hardware-out-us-not-enough-secure-5g
American leadership on 5G must also be part of a comprehensive U.S. strategy for technology competition.
One element of such a strategy is pushing back on Chinese trade and investment practices that benefit companies such as Huawei but undermine fair competition for U.S. firms whose market share and innovation edge are eroded in the face of distortive Chinese industrial policies. This is both an economic and a national-security priority, given the importance of 5G-enabled technologies to the operation of the military and critical infrastructure. U.S. trade negotiators are pressing China to commit to structural reforms on everything from government subsidies to state-sponsored cyber espionage for exactly those reasons (among others).
There is, of course, the possibility that the crackdown on Huawei and related efforts to protect U.S. technology could reinforce views within China that Trump’s trade war merely serves a broader effort by Washington to thwart China’s rise. That reactioncould stimulate China to double down on aggressive state policies to reduce its dependence on American semiconductors and other technology. For this reason, as with the cybersecurity challenge, it’s crucial that the United States enlist the supportof like-minded allies who broadly share U.S. concerns about discriminatory and distortive Chinese trade practices. At the same time, it is also important for the U.S. to seek cooperation with China in areas where leveraging the two countries’ technological strengths can yield mutual benefits without undermining their legitimate security interests.
U.S. technology and trade policy cannot be merely reactionary. It must include aggressive leadership to both protect U.S. networks and promote U.S. technology. This includes redoubled government investments in basic research and regulatory expectations that the security of 5G will not be decided unilaterally by those who build the network. Any national effort must prioritize not only STEM skills but also cybersecurity skills, in particular through university and workforce-education programs.
Even as the United States takes legitimate steps to protect national security in 5G infrastructure and operations, it should not succumb to the impulse to close off the U.S. economy to the innovation-driving investment, capital and talent that have made the United States a technology leader. America’s open economic model—not China’s state-directed approach—offers the best chance to realize the enormous opportunities of 5G while mitigating its manifold risks.
Huawei lawsuit complaint against US is here:
https://www.wsj.com/public/resources/documents/huawei.pdf?mod=article_inline
Excerpt:
PRELIMINARY STATEMENT
1. The Framers of the United States Constitution were deeply concerned about the potential abuse of legislative power. They believed that “[t]he legislative department is everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex,” and that as a result, “[i]t is against the enterprising ambition of this department that the people ought to indulge all their jealousy and exhaust all their precautions.” The Federalist No. 48 (James Madison). The Framers accordingly granted Congress only limited and enumerated legislative powers; divided these powers between a House of Representatives and a Senate; subjected the exercise of these powers to strict procedures; and vested the executive and judicial powers in separate, independent branches of the government.
2. One of the Framers’ particular concerns was that the legislature would use its power to target specific individuals for adverse treatment. The Framers believed that, if the legislature could itself sanction specific persons “without hearing or trial” conducted by the Executive or the courts, “no man can be safe, nor know when he may be the innocent victim of a prevailing faction.” The Papers of Alexander Hamilton, at 485–86 (Harold C. Syrett ed. 1961– - 3 - 1979). Thus, even where the Framers otherwise granted Congress enumerated legislative powers, they prohibited it from using those powers to enact bills of attainder that impose punishment on specific individuals identified by the legislature. Further, through the Due Process Clause, they prohibited legislation that would single out particular persons for deprivations of liberty. Finally, through the Vesting Clauses and the resulting separation of powers, the Framers prohibited legislation that, rather than simply enacting a general rule, applied a rule to an individual case or person.
3. Provisions of section 889 of the 2019 NDAA violate these constitutional limitations. In particular, section 889 specifically targets Plaintiff Huawei Technologies Co., Ltd., and its subsidiaries and affiliates, such as Plaintiff Huawei Technologies USA, Inc. Section 889 calls out Huawei by name, legislatively adjudicates it to be connected to the Government of the People’s Republic of China, and precludes U.S. government agencies not only from purchasing specified Huawei equipment and services, but also from contracting with or awarding grants or loans to third parties who purchase or use such equipment or services—regardless of whether the equipment or services have any impact on or connection to the government of the United States. The actual and intended effect of these prohibitions is to bar Huawei from significant segments of the U.S. market for telecommunications equipment and services, thereby inflicting immediate and ongoing economic, competitive, and reputational harms on Huawei.
4. Section 889 permanently imposes these burdens and sanctions on Huawei without giving it a fair hearing or the opportunity to rebut the allegations against it, and without opportunity for escape. The statute specifically and expressly applies these broad prohibitions and sanctions only to Huawei and one other named entity. In contrast, the statute gives the Secretary of Defense, in consultation with the FBI Director or the Director of National Intelligence, authority to determine whether other entities are owned or controlled by, or otherwise connected to, the Chinese government—determinations that are then subject to judicial review under the Administrative Procedure Act. The statute affords those Officers of the United States the discretion to change their determinations if they find, for example, that the facts about a particular entity have changed. But those Officers have no such discretion with respect to Huawei: even if those Officers definitively find that Huawei has no connection to the Chinese government, the prohibitions targeting, and sanctions imposed on, Huawei will remain in place. In short, section 889 blacklists Huawei and bars it from significant sectors of the U.S. telecommunications market, all without giving Huawei a fair hearing at which it could be informed of and confront the accusations made against it.
5. In so doing, section 889 violates at least three constitutional provisions: It violates the Bill of Attainder Clause by singling out Huawei for punishment—blacklisting it, impugning both its general reputation and its specific commitment to honoring the laws of the United States, and denying it any procedure through which it can clear its name and escape sanction. Section 889 also violates the Due Process Clause by selectively depriving Huawei of its liberty— severely curtailing its freedom to do business, stigmatizing it by effectively branding it a tool of the Chinese government and a risk to U.S. security, and denying it any pre-deprivation legal process to confront the congressional charges against it. And section 889 violates the Vesting Clauses and the resulting separation of powers by legislatively adjudicating Huawei to be “guilty” of an alleged connection to the Chinese government, and by implication a threat to U.S. security, rather than leaving it to the Executive and the courts to make and adjudicate any such charges.
6. Moreover, as a practical matter, section 889’s focus on Huawei (and one other company), apparently based on Huawei Technologies Co., Ltd.’s national origin, makes no sense. Section 889 permits manufacturers with extensive operations in China and joint venture agreements with the Chinese government to continue to sell equipment to the U.S. Government and its contractors and grant and loan recipients, while legislatively singling out Huawei—a private, non-government-owned company controlled by a private Board of Directors—and just one other entity for sweeping adverse treatment. Further, the government itself has recognized that virtually all manufacturers of telecommunications equipment in the world face cybersecurity risks as a result of vulnerabilities in the global supply chain. Yet section 889 does nothing to address these global supply chain risks. Thus, if the central purpose of section 889 is to prevent Chinese-origin equipment from being used, directly or indirectly, by the U.S. Government, the provision is ineffective on its face. Moreover, it is overbroad, because it bars use (by government contractors) or purchase (by government grant and loan recipients) of Huawei equipment and services even where Huawei equipment or services are not being used to support a governmentrelated function.
7. In short, Section 889 is not only contrary to the economic interests of the United States and its citizens, and ineffective at advancing U.S. security interests, it is also contrary to the Constitution of the United States. Huawei is a world-leading provider of information and communications technology products and services, offering more advanced equipment at lower costs than any other such company, and doing so in areas of the world and of the United States that other providers serve less effectively or not at all. Without Huawei equipment and services, consumers in the United States (particularly in rural and poor areas) will be deprived of access to the most advanced technologies, and will face higher prices and a significantly less competitive market. In the area of 5G mobile service in particular, American consumers will have reduced access to state-of-the art networks and suffer from inferior service. At the same time, Huawei equipment and services are subject to advanced security procedures, and no backdoors, implants, or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where Huawei equipment and services are used. Moreover, while there are real risks in the global supply chain that can and should be addressed by comprehensive supply chain strategies and rules, those risks are not rationally or effectively addressed by singling out and blacklisting equipment of specific companies such as Huawei. Indeed, as noted, Huawei is a privately-owned company controlled by a private Board of Directors. While courts do not have the authority to protect the people from all the ill-advised aspects of the NDAA, they do have the duty to protect Huawei and others from its unconstitutional aspects—including its specific targeting of Huawei for punishment, its deprivation of Huawei’s liberty without a fair and impartial hearing, and its usurpation of the charging and adjudicative powers reserved by the Constitution to the executive and judicial branches. Plaintiffs respectfully request that the Court declare unconstitutional and enjoin enforcement of those discrete aspects of section 889 that violate the Constitution, while leaving all other aspects of the NDAA, and the remainder of section 889 itself, intact.
Excerpt from an article by By Tom Wheeler, Robert D. Williams
Wednesday, February 20, 2019, 4:18 PM https://www.lawfareblog.com/keeping-huawei-hardware-out-us-not-enough-secure-5g
American leadership on 5G must also be part of a comprehensive U.S. strategy for technology competition.
One element of such a strategy is pushing back on Chinese trade and investment practices that benefit companies such as Huawei but undermine fair competition for U.S. firms whose market share and innovation edge are eroded in the face of distortive Chinese industrial policies. This is both an economic and a national-security priority, given the importance of 5G-enabled technologies to the operation of the military and critical infrastructure. U.S. trade negotiators are pressing China to commit to structural reforms on everything from government subsidies to state-sponsored cyber espionage for exactly those reasons (among others).
There is, of course, the possibility that the crackdown on Huawei and related efforts to protect U.S. technology could reinforce views within China that Trump’s trade war merely serves a broader effort by Washington to thwart China’s rise. That reactioncould stimulate China to double down on aggressive state policies to reduce its dependence on American semiconductors and other technology. For this reason, as with the cybersecurity challenge, it’s crucial that the United States enlist the supportof like-minded allies who broadly share U.S. concerns about discriminatory and distortive Chinese trade practices. At the same time, it is also important for the U.S. to seek cooperation with China in areas where leveraging the two countries’ technological strengths can yield mutual benefits without undermining their legitimate security interests.
U.S. technology and trade policy cannot be merely reactionary. It must include aggressive leadership to both protect U.S. networks and promote U.S. technology. This includes redoubled government investments in basic research and regulatory expectations that the security of 5G will not be decided unilaterally by those who build the network. Any national effort must prioritize not only STEM skills but also cybersecurity skills, in particular through university and workforce-education programs.
Even as the United States takes legitimate steps to protect national security in 5G infrastructure and operations, it should not succumb to the impulse to close off the U.S. economy to the innovation-driving investment, capital and talent that have made the United States a technology leader. America’s open economic model—not China’s state-directed approach—offers the best chance to realize the enormous opportunities of 5G while mitigating its manifold risks.
Huawei lawsuit complaint against US is here:
https://www.wsj.com/public/resources/documents/huawei.pdf?mod=article_inline
Excerpt:
PRELIMINARY STATEMENT
1. The Framers of the United States Constitution were deeply concerned about the potential abuse of legislative power. They believed that “[t]he legislative department is everywhere extending the sphere of its activity, and drawing all power into its impetuous vortex,” and that as a result, “[i]t is against the enterprising ambition of this department that the people ought to indulge all their jealousy and exhaust all their precautions.” The Federalist No. 48 (James Madison). The Framers accordingly granted Congress only limited and enumerated legislative powers; divided these powers between a House of Representatives and a Senate; subjected the exercise of these powers to strict procedures; and vested the executive and judicial powers in separate, independent branches of the government.
2. One of the Framers’ particular concerns was that the legislature would use its power to target specific individuals for adverse treatment. The Framers believed that, if the legislature could itself sanction specific persons “without hearing or trial” conducted by the Executive or the courts, “no man can be safe, nor know when he may be the innocent victim of a prevailing faction.” The Papers of Alexander Hamilton, at 485–86 (Harold C. Syrett ed. 1961– - 3 - 1979). Thus, even where the Framers otherwise granted Congress enumerated legislative powers, they prohibited it from using those powers to enact bills of attainder that impose punishment on specific individuals identified by the legislature. Further, through the Due Process Clause, they prohibited legislation that would single out particular persons for deprivations of liberty. Finally, through the Vesting Clauses and the resulting separation of powers, the Framers prohibited legislation that, rather than simply enacting a general rule, applied a rule to an individual case or person.
3. Provisions of section 889 of the 2019 NDAA violate these constitutional limitations. In particular, section 889 specifically targets Plaintiff Huawei Technologies Co., Ltd., and its subsidiaries and affiliates, such as Plaintiff Huawei Technologies USA, Inc. Section 889 calls out Huawei by name, legislatively adjudicates it to be connected to the Government of the People’s Republic of China, and precludes U.S. government agencies not only from purchasing specified Huawei equipment and services, but also from contracting with or awarding grants or loans to third parties who purchase or use such equipment or services—regardless of whether the equipment or services have any impact on or connection to the government of the United States. The actual and intended effect of these prohibitions is to bar Huawei from significant segments of the U.S. market for telecommunications equipment and services, thereby inflicting immediate and ongoing economic, competitive, and reputational harms on Huawei.
4. Section 889 permanently imposes these burdens and sanctions on Huawei without giving it a fair hearing or the opportunity to rebut the allegations against it, and without opportunity for escape. The statute specifically and expressly applies these broad prohibitions and sanctions only to Huawei and one other named entity. In contrast, the statute gives the Secretary of Defense, in consultation with the FBI Director or the Director of National Intelligence, authority to determine whether other entities are owned or controlled by, or otherwise connected to, the Chinese government—determinations that are then subject to judicial review under the Administrative Procedure Act. The statute affords those Officers of the United States the discretion to change their determinations if they find, for example, that the facts about a particular entity have changed. But those Officers have no such discretion with respect to Huawei: even if those Officers definitively find that Huawei has no connection to the Chinese government, the prohibitions targeting, and sanctions imposed on, Huawei will remain in place. In short, section 889 blacklists Huawei and bars it from significant sectors of the U.S. telecommunications market, all without giving Huawei a fair hearing at which it could be informed of and confront the accusations made against it.
5. In so doing, section 889 violates at least three constitutional provisions: It violates the Bill of Attainder Clause by singling out Huawei for punishment—blacklisting it, impugning both its general reputation and its specific commitment to honoring the laws of the United States, and denying it any procedure through which it can clear its name and escape sanction. Section 889 also violates the Due Process Clause by selectively depriving Huawei of its liberty— severely curtailing its freedom to do business, stigmatizing it by effectively branding it a tool of the Chinese government and a risk to U.S. security, and denying it any pre-deprivation legal process to confront the congressional charges against it. And section 889 violates the Vesting Clauses and the resulting separation of powers by legislatively adjudicating Huawei to be “guilty” of an alleged connection to the Chinese government, and by implication a threat to U.S. security, rather than leaving it to the Executive and the courts to make and adjudicate any such charges.
6. Moreover, as a practical matter, section 889’s focus on Huawei (and one other company), apparently based on Huawei Technologies Co., Ltd.’s national origin, makes no sense. Section 889 permits manufacturers with extensive operations in China and joint venture agreements with the Chinese government to continue to sell equipment to the U.S. Government and its contractors and grant and loan recipients, while legislatively singling out Huawei—a private, non-government-owned company controlled by a private Board of Directors—and just one other entity for sweeping adverse treatment. Further, the government itself has recognized that virtually all manufacturers of telecommunications equipment in the world face cybersecurity risks as a result of vulnerabilities in the global supply chain. Yet section 889 does nothing to address these global supply chain risks. Thus, if the central purpose of section 889 is to prevent Chinese-origin equipment from being used, directly or indirectly, by the U.S. Government, the provision is ineffective on its face. Moreover, it is overbroad, because it bars use (by government contractors) or purchase (by government grant and loan recipients) of Huawei equipment and services even where Huawei equipment or services are not being used to support a governmentrelated function.
7. In short, Section 889 is not only contrary to the economic interests of the United States and its citizens, and ineffective at advancing U.S. security interests, it is also contrary to the Constitution of the United States. Huawei is a world-leading provider of information and communications technology products and services, offering more advanced equipment at lower costs than any other such company, and doing so in areas of the world and of the United States that other providers serve less effectively or not at all. Without Huawei equipment and services, consumers in the United States (particularly in rural and poor areas) will be deprived of access to the most advanced technologies, and will face higher prices and a significantly less competitive market. In the area of 5G mobile service in particular, American consumers will have reduced access to state-of-the art networks and suffer from inferior service. At the same time, Huawei equipment and services are subject to advanced security procedures, and no backdoors, implants, or other intentional security vulnerabilities have been documented in any of the more than 170 countries in the world where Huawei equipment and services are used. Moreover, while there are real risks in the global supply chain that can and should be addressed by comprehensive supply chain strategies and rules, those risks are not rationally or effectively addressed by singling out and blacklisting equipment of specific companies such as Huawei. Indeed, as noted, Huawei is a privately-owned company controlled by a private Board of Directors. While courts do not have the authority to protect the people from all the ill-advised aspects of the NDAA, they do have the duty to protect Huawei and others from its unconstitutional aspects—including its specific targeting of Huawei for punishment, its deprivation of Huawei’s liberty without a fair and impartial hearing, and its usurpation of the charging and adjudicative powers reserved by the Constitution to the executive and judicial branches. Plaintiffs respectfully request that the Court declare unconstitutional and enjoin enforcement of those discrete aspects of section 889 that violate the Constitution, while leaving all other aspects of the NDAA, and the remainder of section 889 itself, intact.
Reports that Trump asked Gary Cohn to block ATT merger with Time-Warner
https://www.competitionpolicyinternational.com/us-trump-reportedly-asked-gary-cohn-to-block-att-time-warner-merger/
From CPI: A new report about the close relationship between Fox News and President Donald Trump states the President personally asked a top White House aide to make sure the Justice Department (DOJ) stopped AT&T from purchasing Time Warner.
Ever since the DOJ sued in 2017 to block AT&T’s acquisition of Time Warner, theories and accusations of political animus has swirled around the antitrust case.
At the heart of the theories is Trump’s public dislike of CNN, which was a division of Time Warner. The company that has since been renamed WarnerMedia, which also includes networks such TNT and HBO, in addition to CNN.
In a new piece for the New Yorker, investigative journalist Jane Mayer reports that a few months before the DOJ filed its lawsuit, Trump pressured Gary Cohn, the former director of the National Economic Council, to tell the DOJ to block AT&T’s Time Warner deal.
According to Mayer’s source, Trump called Cohn and then Chief-of-Staff John Kelly into his office and said to Kelly, “I’ve been telling Cohn to get this lawsuit filed and nothing’s happened! I’ve mentioned it fifty times. And nothing’s happened. I want to make sure it’s filed. I want that deal blocked.”
After the two men walked out of the Oval Office meeting, Cohn told Kelly not to follow through with the president’s request, according to Mayer’s report.
Full Content: New Yorker -https://www.newyorker.com/magazine/2019/03/11/the-making-of-the-fox-news-white-house
https://www.competitionpolicyinternational.com/us-trump-reportedly-asked-gary-cohn-to-block-att-time-warner-merger/
From CPI: A new report about the close relationship between Fox News and President Donald Trump states the President personally asked a top White House aide to make sure the Justice Department (DOJ) stopped AT&T from purchasing Time Warner.
Ever since the DOJ sued in 2017 to block AT&T’s acquisition of Time Warner, theories and accusations of political animus has swirled around the antitrust case.
At the heart of the theories is Trump’s public dislike of CNN, which was a division of Time Warner. The company that has since been renamed WarnerMedia, which also includes networks such TNT and HBO, in addition to CNN.
In a new piece for the New Yorker, investigative journalist Jane Mayer reports that a few months before the DOJ filed its lawsuit, Trump pressured Gary Cohn, the former director of the National Economic Council, to tell the DOJ to block AT&T’s Time Warner deal.
According to Mayer’s source, Trump called Cohn and then Chief-of-Staff John Kelly into his office and said to Kelly, “I’ve been telling Cohn to get this lawsuit filed and nothing’s happened! I’ve mentioned it fifty times. And nothing’s happened. I want to make sure it’s filed. I want that deal blocked.”
After the two men walked out of the Oval Office meeting, Cohn told Kelly not to follow through with the president’s request, according to Mayer’s report.
Full Content: New Yorker -https://www.newyorker.com/magazine/2019/03/11/the-making-of-the-fox-news-white-house
Maryland car dealers fight minimum advertised price (“MAP”) restrictions
Unhappy car dealers in Maryland are pressing the Maryland legislature to pass a bill, MD HB610, that would limit minimum advertised price (“MAP”) restrictions. The proposed legislation would stop car manufacturers or distributors from forbidding dealers from advertising a vehicle for sale or lease below a specified price. Dealers say the advertising restrictions are designed to keep car prices higher, and should be stopped.
See: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=hb0610&stab=01&pid=billpage&tab=subject3&ys=2019rs
To understand the proposed bill, a little background is helpful. Retail price maintenance or “RPM” has been used by manufacturers and distributors to set a minimum retail price for products. For particular products, like cars, RPM keeps retail prices higher than they otherwise would be.
For many years retail price maintenance was found by the courts to violate the antitrust laws on its face – it was ruled “per se” illegal. But in Leegin Creative Leather Products, Inc., 551 U.S. 887 (2007), the U.S. Supreme Court overturned earlier case law saying that any agreement setting retail prices is illegal without any need to prove competitive harm. In Leegin the U.S. Supreme Court held that minimum resale price maintenance agreements are no longer per se illegal under federal law. Instead, the Court held that federal law requires that such agreements must be evaluated under a reasonableness standard. That is, if a price restriction has a reasonable business justification, perhaps guaranteeing the consumer great dealer service, then a restriction on retail price might be viewed by courts as reasonable.
In Maryland and some other states, particularly California, Illinois, Michigan, and New York, the legislature rejected the U.S. Supreme Court’s Leegin holding. In 2009, in response to the Leegin case, the Maryland General Assembly enacted Chapter 43 of the 2009 Laws of Maryland, which amended the Maryland Antitrust Act to provide that an agreement establishing a minimum retail price is an unreasonable restraint of trade and, thus, per se illegal in Maryland. Md. Code Ann., Com' Law $ 11-204(b). Such agreements, although no longer per se illegal under federal law, once again became per se illegal in Maryland. So, such a practice was much more likely to run afoul of Maryland antitrust law than it was to violate federal antitrust law. See http://www.marylandattorneygeneral.gov/News%20Documents/JJVC_COMPLAINT.pdf
Complaining Maryland car dealers believe that the use of MAP advertising restrictions provides manufacturers with a way to evade Retail Price Maintenance restrictions. While it is true that with MAP restrictions there is no agreement setting retail price, so the dealer can sell at any price, the concern is that prices actually paid by consumers will be higher where there is a restriction on how low a price the dealer can advertise. Some manufacturers encourage dealer cooperation on MAP advertising limits by offering dealers co-op advertising funds as an incentive. Some manufacturers go further, applying MAP policies to all resellers, and refusing to sell inventory to any dealer that refuses to comply.
Dealers believe that even though a MAP policy focuses on setting the price that resellers may advertise for their cars, and allows resellers to complete sales at prices determined by the resellers, MAP is a loophole for manufacturers that wish to limit retail price competition. The problem is that MAP advertising restrictions make an advertising “price war” much less likely, diminishing price competition.
The proposed legislation would plug this perceived loophole.
A question suggested by the dealer action is whether MAP policies for car dealers might be found to violate the antitrust laws, even in the absence of the proposed new Maryland State statute. Although there has not yet been a court case considering this issue, the answer appears to be “maybe,” depending on the facts of particular situations.
As a general matter, dealers can point out to a Court, persuasively, that consumers are likely to be harmed by MAP limitations, because actual retail prices paid will be higher. Also, muzzling dealers by preventing them from advertising low prices seems wrong in principle.
But these are tough times for antitrust enforcement. These days a MAP policy may be subject to the same sort of antitrust “rule of reason” that is applied by courts to RPM under federal law, perhaps applied with a bias toward the manufacturer. The conventional wisdom that may apply is that unless there is accompanying anti-competitive conduct or circumstances, the courts are likely to conclude that anti-competitive aspects of a MAP agreement won’t exceed the pro-competitive benefits, and there won’t be an antitrust problem.
But it is quite possible that if a court were to look into particular MAP arrangements, it might discover accompanying anti-competitive conduct or circumstances that could change its assessment of the legality of the practice. The agreement between manufacturer and dealer by its terms or as applied may in reality discourage a dealer from actually selling below a minimum price. Empirical investigation may reinforce the common-sense point that in the auto sales context (big ticket, relatively few brands) the limitations on ability of dealers to advertise low prices can cause prices to be higher than they would otherwise be. In reality the MAP arrangement between manufacturer and dealer may look and perform like an RPM agreement. In that case, the courts could take a closer look to see if consumers are actually being harmed. That is particular important in those state courts where resale price maintenance is per se illegal.
The FTC offers a relevant Guide at https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed
The FTC Guide offers a Q and A section, copied below. The Q and A focuses on manufacturer inducements of promotional money to encourage dealer agreement to MAP restrictions. Promotional money was important in the FTC’s cited music industry case. The unreasonable use of manufacturer inducements in the FTC’s music industry case is an instance where a MAP policy is transformed by manufacturer conduct into something more like a RPM program, causing more aggressive antitrust scrutiny. The FTC music industry case supports the thought that manufacturers should not limit dealers from advertising to consumers about discounts. But the mention at the end of the FTC Q and A of "new standards that allow more direct influence of retail prices" by manufacturers reflects the current shrinking antitrust enforcement environment.
The FTC Q and A
Q: My supplier offers a cooperative advertising program, but I can't participate if I advertise a price that is below the supplier's minimum advertised price. I think that's unfair.
A: The law allows a manufacturer considerable leeway in setting the terms for advertising that it helps to pay for. The manufacturer offers these promotional programs to better compete against the products of the other manufacturers. There are limited situations when these programs can have an unreasonable effect on price levels. For instance, the FTC challenged the Minimum Advertised Price (MAP) policies of five large distributors of pre-recorded music [Universal Music & Video Distribution Corp.and UMG Recordings, Inc. url https://www.ftc.gov/enforcement/cases-proceedings/9710070/universal-music-video-distribution-corpand-umg-recordings-inc] because the policies were unreasonable in their reach: they prohibited ads with discounted prices, even if the retailer paid for the ads with its own money; they applied to in-store advertising; and a single violation required the retailer to forfeit funds for all of its stores for up to 90 days. The FTC found that these policies, in effect for more than 85 percent of market sales, were unreasonable and prevented retailers from telling consumers about discounts on records and CDs. Issues involving advertising allowances may become of less practical concern as manufacturers adjust to new standards that allow more direct influence on retail prices.
Posting by Don Allen Resnikoff – thanks to KMJ and others for helping
Unhappy car dealers in Maryland are pressing the Maryland legislature to pass a bill, MD HB610, that would limit minimum advertised price (“MAP”) restrictions. The proposed legislation would stop car manufacturers or distributors from forbidding dealers from advertising a vehicle for sale or lease below a specified price. Dealers say the advertising restrictions are designed to keep car prices higher, and should be stopped.
See: http://mgaleg.maryland.gov/webmga/frmMain.aspx?id=hb0610&stab=01&pid=billpage&tab=subject3&ys=2019rs
To understand the proposed bill, a little background is helpful. Retail price maintenance or “RPM” has been used by manufacturers and distributors to set a minimum retail price for products. For particular products, like cars, RPM keeps retail prices higher than they otherwise would be.
For many years retail price maintenance was found by the courts to violate the antitrust laws on its face – it was ruled “per se” illegal. But in Leegin Creative Leather Products, Inc., 551 U.S. 887 (2007), the U.S. Supreme Court overturned earlier case law saying that any agreement setting retail prices is illegal without any need to prove competitive harm. In Leegin the U.S. Supreme Court held that minimum resale price maintenance agreements are no longer per se illegal under federal law. Instead, the Court held that federal law requires that such agreements must be evaluated under a reasonableness standard. That is, if a price restriction has a reasonable business justification, perhaps guaranteeing the consumer great dealer service, then a restriction on retail price might be viewed by courts as reasonable.
In Maryland and some other states, particularly California, Illinois, Michigan, and New York, the legislature rejected the U.S. Supreme Court’s Leegin holding. In 2009, in response to the Leegin case, the Maryland General Assembly enacted Chapter 43 of the 2009 Laws of Maryland, which amended the Maryland Antitrust Act to provide that an agreement establishing a minimum retail price is an unreasonable restraint of trade and, thus, per se illegal in Maryland. Md. Code Ann., Com' Law $ 11-204(b). Such agreements, although no longer per se illegal under federal law, once again became per se illegal in Maryland. So, such a practice was much more likely to run afoul of Maryland antitrust law than it was to violate federal antitrust law. See http://www.marylandattorneygeneral.gov/News%20Documents/JJVC_COMPLAINT.pdf
Complaining Maryland car dealers believe that the use of MAP advertising restrictions provides manufacturers with a way to evade Retail Price Maintenance restrictions. While it is true that with MAP restrictions there is no agreement setting retail price, so the dealer can sell at any price, the concern is that prices actually paid by consumers will be higher where there is a restriction on how low a price the dealer can advertise. Some manufacturers encourage dealer cooperation on MAP advertising limits by offering dealers co-op advertising funds as an incentive. Some manufacturers go further, applying MAP policies to all resellers, and refusing to sell inventory to any dealer that refuses to comply.
Dealers believe that even though a MAP policy focuses on setting the price that resellers may advertise for their cars, and allows resellers to complete sales at prices determined by the resellers, MAP is a loophole for manufacturers that wish to limit retail price competition. The problem is that MAP advertising restrictions make an advertising “price war” much less likely, diminishing price competition.
The proposed legislation would plug this perceived loophole.
A question suggested by the dealer action is whether MAP policies for car dealers might be found to violate the antitrust laws, even in the absence of the proposed new Maryland State statute. Although there has not yet been a court case considering this issue, the answer appears to be “maybe,” depending on the facts of particular situations.
As a general matter, dealers can point out to a Court, persuasively, that consumers are likely to be harmed by MAP limitations, because actual retail prices paid will be higher. Also, muzzling dealers by preventing them from advertising low prices seems wrong in principle.
But these are tough times for antitrust enforcement. These days a MAP policy may be subject to the same sort of antitrust “rule of reason” that is applied by courts to RPM under federal law, perhaps applied with a bias toward the manufacturer. The conventional wisdom that may apply is that unless there is accompanying anti-competitive conduct or circumstances, the courts are likely to conclude that anti-competitive aspects of a MAP agreement won’t exceed the pro-competitive benefits, and there won’t be an antitrust problem.
But it is quite possible that if a court were to look into particular MAP arrangements, it might discover accompanying anti-competitive conduct or circumstances that could change its assessment of the legality of the practice. The agreement between manufacturer and dealer by its terms or as applied may in reality discourage a dealer from actually selling below a minimum price. Empirical investigation may reinforce the common-sense point that in the auto sales context (big ticket, relatively few brands) the limitations on ability of dealers to advertise low prices can cause prices to be higher than they would otherwise be. In reality the MAP arrangement between manufacturer and dealer may look and perform like an RPM agreement. In that case, the courts could take a closer look to see if consumers are actually being harmed. That is particular important in those state courts where resale price maintenance is per se illegal.
The FTC offers a relevant Guide at https://www.ftc.gov/tips-advice/competition-guidance/guide-antitrust-laws/dealings-supply-chain/manufacturer-imposed
The FTC Guide offers a Q and A section, copied below. The Q and A focuses on manufacturer inducements of promotional money to encourage dealer agreement to MAP restrictions. Promotional money was important in the FTC’s cited music industry case. The unreasonable use of manufacturer inducements in the FTC’s music industry case is an instance where a MAP policy is transformed by manufacturer conduct into something more like a RPM program, causing more aggressive antitrust scrutiny. The FTC music industry case supports the thought that manufacturers should not limit dealers from advertising to consumers about discounts. But the mention at the end of the FTC Q and A of "new standards that allow more direct influence of retail prices" by manufacturers reflects the current shrinking antitrust enforcement environment.
The FTC Q and A
Q: My supplier offers a cooperative advertising program, but I can't participate if I advertise a price that is below the supplier's minimum advertised price. I think that's unfair.
A: The law allows a manufacturer considerable leeway in setting the terms for advertising that it helps to pay for. The manufacturer offers these promotional programs to better compete against the products of the other manufacturers. There are limited situations when these programs can have an unreasonable effect on price levels. For instance, the FTC challenged the Minimum Advertised Price (MAP) policies of five large distributors of pre-recorded music [Universal Music & Video Distribution Corp.and UMG Recordings, Inc. url https://www.ftc.gov/enforcement/cases-proceedings/9710070/universal-music-video-distribution-corpand-umg-recordings-inc] because the policies were unreasonable in their reach: they prohibited ads with discounted prices, even if the retailer paid for the ads with its own money; they applied to in-store advertising; and a single violation required the retailer to forfeit funds for all of its stores for up to 90 days. The FTC found that these policies, in effect for more than 85 percent of market sales, were unreasonable and prevented retailers from telling consumers about discounts on records and CDs. Issues involving advertising allowances may become of less practical concern as manufacturers adjust to new standards that allow more direct influence on retail prices.
Posting by Don Allen Resnikoff – thanks to KMJ and others for helping
NYT on The TV Station Run by China’s Communist Party
In an environment where media consumers are frequently said to be beset by biased news, it is interesting to notice the more or less open efforts of foreign governments in US media. The NYT article focuses on a Chinese government sponsored US media effort.
The NYT explains that CGTN America, which is based in Washington and available in 30 million United States households, insists it does not do Beijing’s bidding. Some people are skeptical. The article suggests that while the goal of Russian propaganda is to divide people in the US, the focus of Chinese propaganda is to paint a cheery picture of Chinese life and politics.
The article is at https://www.nytimes.com/2019/02/28/business/cctv-china-usa-propaganda.html
The USDOJ letter requesting foreign agent registration for the station is at https://int.nyt.com/data/documenthelper/638-doj-letter-cgtn/b852f4eae0647820f27e/optimized/full.pdf#page=1
Posting by Don Allen Resnikoff
Illegal message businesses as a law enforcement issue
Illicit message businesses selling sexual services have been in the news recently. Polaris one of a number of organizations focused on eradication of illicit message businesses and human trafficking networks. Polaris points out that women who are trafficked and work at the illicit businesses are robbed of their lives and their freedom. Polaris "puts victims at the center of what we do — helping survivors restore their freedom, preventing more victims, and leveraging data and technology to pursue traffickers wherever they operate."
A Report from Polaris is at https://polarisproject.org/sites/default/files/Full_Report_Human_Trafficking_in_Illicit_Massage_Businesses.pdf
A significant focus of the report is on law enforcement needed to stop illicit message businesses (IMBs) and human trafficking. Recommendations include local, regional, and national law enforcement activities. Following is a brief excerpt:
Characteristics of a strong law will vary by location. Here are a few elements that many strong laws have in common:
• Regulating hours of operation. San Francisco city has used, among other things, a provision on hours of operation to successfully close more than 100 IMBs in two years.119
• Prohibiting structures like buzzercontrolled front doors and back-door entrances that obscure buyer behavior. Santa Clara County’s law, which includes provisions around entrances, was used to close down all IMBs in its unincorporated areas within one year.120
• Regulating massage businesses with other commercial licensed businesses. Within the past 10 years, Delaware has gone from regulating massage establishments as “sexually-oriented businesses” to having a robust, statewide law categorizing massage businesses as health businesses.
• Working with local massage therapists. North Carolina passed a new statewide law on massage establishments in July 2017. This law was passed with collaboration by Polaris, North Carolina’s American Massage Therapy Association chapter, and members of the Human Trafficking Task Force to ensure strong provisions against traffickers while protecting massage therapists. This kind of collaboration, both in the original passage of the law and in the aftermath to monitor and make changes accordingly, is the baseline for ensuring laws are written to succeed and amended as necessary as traffickers adapt to changing conditions.
Posting by Don Allen Resnikoff
Illicit message businesses selling sexual services have been in the news recently. Polaris one of a number of organizations focused on eradication of illicit message businesses and human trafficking networks. Polaris points out that women who are trafficked and work at the illicit businesses are robbed of their lives and their freedom. Polaris "puts victims at the center of what we do — helping survivors restore their freedom, preventing more victims, and leveraging data and technology to pursue traffickers wherever they operate."
A Report from Polaris is at https://polarisproject.org/sites/default/files/Full_Report_Human_Trafficking_in_Illicit_Massage_Businesses.pdf
A significant focus of the report is on law enforcement needed to stop illicit message businesses (IMBs) and human trafficking. Recommendations include local, regional, and national law enforcement activities. Following is a brief excerpt:
Characteristics of a strong law will vary by location. Here are a few elements that many strong laws have in common:
• Regulating hours of operation. San Francisco city has used, among other things, a provision on hours of operation to successfully close more than 100 IMBs in two years.119
• Prohibiting structures like buzzercontrolled front doors and back-door entrances that obscure buyer behavior. Santa Clara County’s law, which includes provisions around entrances, was used to close down all IMBs in its unincorporated areas within one year.120
• Regulating massage businesses with other commercial licensed businesses. Within the past 10 years, Delaware has gone from regulating massage establishments as “sexually-oriented businesses” to having a robust, statewide law categorizing massage businesses as health businesses.
• Working with local massage therapists. North Carolina passed a new statewide law on massage establishments in July 2017. This law was passed with collaboration by Polaris, North Carolina’s American Massage Therapy Association chapter, and members of the Human Trafficking Task Force to ensure strong provisions against traffickers while protecting massage therapists. This kind of collaboration, both in the original passage of the law and in the aftermath to monitor and make changes accordingly, is the baseline for ensuring laws are written to succeed and amended as necessary as traffickers adapt to changing conditions.
Posting by Don Allen Resnikoff
The US Justice Department has called for public input about reform or termination of the long-standing consent decrees that govern performing rights organizations ASCAP and BMI, but not their competitors, SESAC and Global Music Rights.
In an open letter, ASCAP CEO Elizabeth Matthews and BMI CEO Mike O’Neill outline the two organization’s position on the DOJ’s review and make initial recommendations for how the industry might transition to a world without the decrees. “The DOJ’s attention to this matter represents a clear opportunity to do what BMI and ASCAP have been trying to do for years – modernize music licensing to better reflect the transformative changes in the industry,” they write. “It’s why when we first heard about the possibility of the DOJ sunsetting the consent decrees, it came as welcome news.”
See https://www.digitalmusicnews.com/2019/02/28/consent-decree-ascap-bmi/
Democrats have introduced a bill that would block companies from forcing workers to sign mandatory arbitration clauses that take away their right to take employers to court
The Forced Arbitration Injustice Repeal Act, sponsored in the Senate by Sen. Richard Blumenthal, D-Conn., and in the House of Representatives by Rep. Hank Johnson, D-Ga., would bar mandatory arbitration agreements not only in employment disputes, but also for consumer, antitrust and civil rights claims. Additionally, it would block agreements that stop individuals, workers and businesses from joining or filing class actions.
A copy of the bill is here:https://www.congress.gov/bill/115th-congress/senate-bill/2591/text
The Forced Arbitration Injustice Repeal Act, sponsored in the Senate by Sen. Richard Blumenthal, D-Conn., and in the House of Representatives by Rep. Hank Johnson, D-Ga., would bar mandatory arbitration agreements not only in employment disputes, but also for consumer, antitrust and civil rights claims. Additionally, it would block agreements that stop individuals, workers and businesses from joining or filing class actions.
A copy of the bill is here:https://www.congress.gov/bill/115th-congress/senate-bill/2591/text
NYT on 5G and the continuing Huawei quandary
Huawei’s fate will hang over the wireless industry’s largest annual trade conference, MWC Barcelona, previously called Mobile World Congress, which starts on Monday. Typically a celebration of new handsets from Samsung, LG, Sony and other brands, this year’s conference in Spain is being overshadowed by less glamorous policy questions about how to safeguard the behind-the-scenes infrastructure that keeps those devices connected to the internet.
“Many operators are now delaying their 5G investments because there is so much uncertainty related to whether they can work with Huawei or not,” said Mikael Rautanen, an industry analyst with Inderes Oy, a research firm. “That affects the whole telecommunications sector.”
5G networks are considered critical to the future global economy, increasing mobile phone speeds by up to 20 times from the current 4G system, while also creating new applications in medicine, augmented reality and manufacturing. Telecom companies are starting to roll out the new systems this year, with wider adoption coming in 2020.
Huawei makes the antennas, base stations, switches and other gear that make the technology work.
The debate over Huawei is particularly intense in Europe, where network operators that have long relied on the company’s equipment are facing potential new regulations. Britain, Germany, France, Poland and the Czech Republic are among those considering new restrictions against Huawei.
British and German authorities have indicated that a complete ban is unlikely, but the United States-led campaign threatens to slow down construction of the new technology in Europe that governments and businesses believe is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For a year, Trump administration officials have been working on an executive order that would effectively ban Chinese telecom companies, including Huawei, from American 5G networks. The order would block American companies from purchasing equipment from China and other “adversarial powers,” but would not stop purchases of European-made equipment.
The wireless industry’s global trade group, GSM Association, said a ban of Huawei equipment in Europe would disrupt the overall market and increase costs for consumers.
“The effects would be delay the roll out, delay the technology and very probably higher pricing,” said Boris Nemsic, chairman of Delta Partners, an advisory and investment firm focused on the telecommunications market.
Huawei has become a lightning rod in the broader trade war between the United States and China. The Trump administration argues that Huawei is beholden to the Chinese government, and that allowing its equipment into 5G networks will create a grave national security risk — a charge Huawei has vehemently denied.
The increased scrutiny of Huawei would appear to present an opportunity for rivals such as Ericsson and Nokia, but executives at the companies have said it risks creating a broader slowdown.
“All our customers are trying to work out what this means, and that is causing uncertainty,” Borje Ekholm, the chief executive of Ericsson, told The Financial Times this month.
Ericsson and Nokia, which declined to comment, have fallen behind Huawei in market share over the past decade, struggling to match its rival’s lower prices and large investments in 5G and other emerging technology. Many carriers say the Chinese company’s 5G technology is more advanced than that of its Western rivals.
Despite being blocked by the United States, Huawei is the largest seller of telecommunications equipment, accounting for about 28 percent of the global market, according to the Dell’Oro Group, a market research firm. Companies such as Cisco Systems provide equipment like routers used by carriers in other parts of their networks.
The new 5G networks represent a once-in-a-decade opportunity. In Europe, mobile carriers are expected to spend at least $340 billion by 2025 constructing the networks, according to GSMA.
Ericsson and Nokia have been careful not to appear to take advantage of Huawei’s misfortune, perhaps out of concern that China would retaliate against the European companies if new bans against Huawei were introduced.
The two companies each earn around $1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. By contrast, Huawei earns $3.5 billion a year in Europe, Mr. Ferragu estimates.
Any company forced to replace Huawei equipment will have to shoulder heavy costs. “It would take time for the existing vendors to scale R&D, operations, sales, services and partner agreements to fill the void,” the Dell’Oro Group said in a recent report.
It may be for that reason wireless carriers that have long depended on Huawei are coming to its defense. Mr. Read of Vodafone urged governments to act carefully before imposing new restrictions, because much of the present debate was not “fact based.”
Source: https://www.nytimes.com/2019/02/22/technology/huawei-europe-mwc.html
Huawei’s fate will hang over the wireless industry’s largest annual trade conference, MWC Barcelona, previously called Mobile World Congress, which starts on Monday. Typically a celebration of new handsets from Samsung, LG, Sony and other brands, this year’s conference in Spain is being overshadowed by less glamorous policy questions about how to safeguard the behind-the-scenes infrastructure that keeps those devices connected to the internet.
“Many operators are now delaying their 5G investments because there is so much uncertainty related to whether they can work with Huawei or not,” said Mikael Rautanen, an industry analyst with Inderes Oy, a research firm. “That affects the whole telecommunications sector.”
5G networks are considered critical to the future global economy, increasing mobile phone speeds by up to 20 times from the current 4G system, while also creating new applications in medicine, augmented reality and manufacturing. Telecom companies are starting to roll out the new systems this year, with wider adoption coming in 2020.
Huawei makes the antennas, base stations, switches and other gear that make the technology work.
The debate over Huawei is particularly intense in Europe, where network operators that have long relied on the company’s equipment are facing potential new regulations. Britain, Germany, France, Poland and the Czech Republic are among those considering new restrictions against Huawei.
British and German authorities have indicated that a complete ban is unlikely, but the United States-led campaign threatens to slow down construction of the new technology in Europe that governments and businesses believe is needed to stay competitive in a digitized economy. The head of T-Mobile in Poland warned this week that new restrictions could disrupt the introduction of 5G technology.
For a year, Trump administration officials have been working on an executive order that would effectively ban Chinese telecom companies, including Huawei, from American 5G networks. The order would block American companies from purchasing equipment from China and other “adversarial powers,” but would not stop purchases of European-made equipment.
The wireless industry’s global trade group, GSM Association, said a ban of Huawei equipment in Europe would disrupt the overall market and increase costs for consumers.
“The effects would be delay the roll out, delay the technology and very probably higher pricing,” said Boris Nemsic, chairman of Delta Partners, an advisory and investment firm focused on the telecommunications market.
Huawei has become a lightning rod in the broader trade war between the United States and China. The Trump administration argues that Huawei is beholden to the Chinese government, and that allowing its equipment into 5G networks will create a grave national security risk — a charge Huawei has vehemently denied.
The increased scrutiny of Huawei would appear to present an opportunity for rivals such as Ericsson and Nokia, but executives at the companies have said it risks creating a broader slowdown.
“All our customers are trying to work out what this means, and that is causing uncertainty,” Borje Ekholm, the chief executive of Ericsson, told The Financial Times this month.
Ericsson and Nokia, which declined to comment, have fallen behind Huawei in market share over the past decade, struggling to match its rival’s lower prices and large investments in 5G and other emerging technology. Many carriers say the Chinese company’s 5G technology is more advanced than that of its Western rivals.
Despite being blocked by the United States, Huawei is the largest seller of telecommunications equipment, accounting for about 28 percent of the global market, according to the Dell’Oro Group, a market research firm. Companies such as Cisco Systems provide equipment like routers used by carriers in other parts of their networks.
The new 5G networks represent a once-in-a-decade opportunity. In Europe, mobile carriers are expected to spend at least $340 billion by 2025 constructing the networks, according to GSMA.
Ericsson and Nokia have been careful not to appear to take advantage of Huawei’s misfortune, perhaps out of concern that China would retaliate against the European companies if new bans against Huawei were introduced.
The two companies each earn around $1.5 billion in revenue each year in China, according to an estimate by Pierre Ferragu, an analyst at New Street Research in New York. By contrast, Huawei earns $3.5 billion a year in Europe, Mr. Ferragu estimates.
Any company forced to replace Huawei equipment will have to shoulder heavy costs. “It would take time for the existing vendors to scale R&D, operations, sales, services and partner agreements to fill the void,” the Dell’Oro Group said in a recent report.
It may be for that reason wireless carriers that have long depended on Huawei are coming to its defense. Mr. Read of Vodafone urged governments to act carefully before imposing new restrictions, because much of the present debate was not “fact based.”
Source: https://www.nytimes.com/2019/02/22/technology/huawei-europe-mwc.html
From Digital Music News
The American Mechanical Licensing Collective (AMLC) Wants Competition And Isn’t Going Away — Here’s Their Full Statement to the Music Industry
Paul Resnikoff
February 21, 2019
2https://www.digitalmusicnews.com/2019/02/21/amlc-american-mechanical-licensing-collective/#comments
The American Mechanical Licensing Collective (AMLC) says they represent the interests of independent songwriters and rights owners. In fact, they feel they’re addressing a bigger group than the major publisher-backed ‘MLC’.
Back in November, we first reported on a new mechanical licensing agency: the American Mechanical Licensing Collective, or AMLC. The group tossed their hat in the ring to administer mechanical licenses for the government-created Mechanical Licensing Collective, or MLC, as outlined by the now-passed Music Modernization Act.
In response, major publishers and other industry heavyweights assembled a broad consortium of industry players to back its own mechanical licensing contender. David Israelite, head of the National Music Publishers’ Association (NMPA), argued that the role of the MLC should not be filled by a competitive process, especially since his group already enjoyed an overwhelming consensus among industry players.
In fact, the NMPA-backed group has already called themselves the ‘MLC’, while also naming themselves the ‘consensus’ mechanical licensing organization. Additionally, Israelite has argued that his group was most responsible for passing the MMA, therefore, they should be the ones implementing its core function.
The AMLC, along with a long list of independent songwriters and producers, have sharply questioned that approach. They say this shouldn’t be a no-bid contract. And more importantly, they feel that they represent the real majority of rights owners, most of whom would be marginalized by the mainline MLC group.
Here’s the AMLC’s official statement on their position.
The Mechanical Licensing Collective will be a non-profit organization charged with the payment of songwriter and music publisher “mechanical” royalties to the rightful songwriter and music publishers. In addition, it must maintain a musical works database, providing blanket licenses to U.S. digital streaming services; hold onto earned but unpaid money; resolve conflicts; and more.
The Register of Copyrights will designate the MLC from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the MMA.
Last week it was reported in the press that an organization planning to apply to be designated as the MLC prematurely suggested that the competition among entities to become the MLC is all but over.
This suggestion was made despite the Register of Copyright making no such statement and still awaiting receipt of complete applications, which are not due until mid-March. If the suggestion is true, the selection process would at best not have been made — and, at worst, been compromised.
It is possible that the reported public press statement indicating their application is “the only one that meets the statutory definition” is inaccurate or perhaps rests on the role the traditional industry played in the passage of the Music Modernization Act. Although we recognize the role and importance those organizations played in getting the bill drafted and passed, we agree with the Copyright Office’s statement that “[s]ervice on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated.”
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements.
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.
As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”
About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.
It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.
This point further exacerbates the yet-to-be-resolved conflict of interest; that is, board members of the MLC can recommend other copyright owners’ money be liquidated and given to themselves through market share disbursements, all without actually having to use the MLC for their own copyrights. This outcome is most certainly not the intended application of the law.
This speaks as to why competition is needed.
The AMLC (American Mechanical License Collective) is competing to become the MLC. The AMLC’s board members are independent songwriters, technologists, entrepreneurs, music publishers and administrators, legal scholars, and business people who have profound and extensive knowledge in the areas of administration, technology, and identification of royalties without the same conflict of interest as the other.
The AMLC believes it serves all copyright owners including the independent writers and publishers as well as the major music publishers. It believes the companies and individuals of the board members of the MLC should use the MLC whenever possible. In addition, the AMLC directly addresses the importance of serving both the traditional industry as well as the independent writers and publisher, as it is their songs which will generate the vast majority of licenses and royalties flowing through the MLC.
In further contrast, the experience and credentials of the AMLC in the relatively new world of digital streaming are impressive and profound. This can be seen not just by examining the creation of the technology, innovation and success of its board members but also by the fact that many of the AMLC board members were hired by the traditional industry to build the systems
they needed to fix their data, resolve conflicts, audit statements, confirm splits, locate recordings and more (the very same needs of the MLC).
The AMLC has been forthright and has highlighted that its primary goals are to get all copyright owners and songwriters paid what they earned and reducing black box money by ensuring those funds go to its rightful owners and are not liquidated without intense due diligence. Finally, the AMLC is focused on keeping any perceived or actual conflict of interest to the lowest possible minimum and avoiding any activities that might give one group of copyright owners advantages over other groups of owners.
To that end, as we further expand our board, round out our committees and put forth an efficient one of a kind cutting edge technology solution we encourage the spirit and goal of the MMA to create competition, allowing the best entity possible to emerge and serve the world’s songwriters, publishers, and copyright owners under the requirements of the law.
The AMLC
The American Mechanical Licensing Collective (AMLC) Wants Competition And Isn’t Going Away — Here’s Their Full Statement to the Music Industry
Paul Resnikoff
February 21, 2019
2https://www.digitalmusicnews.com/2019/02/21/amlc-american-mechanical-licensing-collective/#comments
The American Mechanical Licensing Collective (AMLC) says they represent the interests of independent songwriters and rights owners. In fact, they feel they’re addressing a bigger group than the major publisher-backed ‘MLC’.
Back in November, we first reported on a new mechanical licensing agency: the American Mechanical Licensing Collective, or AMLC. The group tossed their hat in the ring to administer mechanical licenses for the government-created Mechanical Licensing Collective, or MLC, as outlined by the now-passed Music Modernization Act.
In response, major publishers and other industry heavyweights assembled a broad consortium of industry players to back its own mechanical licensing contender. David Israelite, head of the National Music Publishers’ Association (NMPA), argued that the role of the MLC should not be filled by a competitive process, especially since his group already enjoyed an overwhelming consensus among industry players.
In fact, the NMPA-backed group has already called themselves the ‘MLC’, while also naming themselves the ‘consensus’ mechanical licensing organization. Additionally, Israelite has argued that his group was most responsible for passing the MMA, therefore, they should be the ones implementing its core function.
The AMLC, along with a long list of independent songwriters and producers, have sharply questioned that approach. They say this shouldn’t be a no-bid contract. And more importantly, they feel that they represent the real majority of rights owners, most of whom would be marginalized by the mainline MLC group.
Here’s the AMLC’s official statement on their position.
The Mechanical Licensing Collective will be a non-profit organization charged with the payment of songwriter and music publisher “mechanical” royalties to the rightful songwriter and music publishers. In addition, it must maintain a musical works database, providing blanket licenses to U.S. digital streaming services; hold onto earned but unpaid money; resolve conflicts; and more.
The Register of Copyrights will designate the MLC from submitted applications based on an entity proving itself able to achieve the goals of the MLC, as well as meeting all the legal requirements as stipulated in the MMA.
Last week it was reported in the press that an organization planning to apply to be designated as the MLC prematurely suggested that the competition among entities to become the MLC is all but over.
This suggestion was made despite the Register of Copyright making no such statement and still awaiting receipt of complete applications, which are not due until mid-March. If the suggestion is true, the selection process would at best not have been made — and, at worst, been compromised.
It is possible that the reported public press statement indicating their application is “the only one that meets the statutory definition” is inaccurate or perhaps rests on the role the traditional industry played in the passage of the Music Modernization Act. Although we recognize the role and importance those organizations played in getting the bill drafted and passed, we agree with the Copyright Office’s statement that “[s]ervice on the Board or its committees is not a reward for past actions, but is instead a serious responsibility that must not be underestimated.”
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements.
The suggestion that only one entity gets to compete — which, by default, is not a competition — counters the MMA and the Copyright Office’s intentions and requirements. In fact, to help encourage the needed competition, the Copyright Office publicly stated that “the Office does not read this clause as prohibiting a musical work copyright owner from endorsing multiple prospective MLCs.” The intent of the law is to clearly allow copyright owners to recognize and endorse multiple groups.
As the MLC will work for independent and major music publishers as well as all global music copyright owners, this ties into the MMA provision that clearly states, and logically requires, that the MLC have “substantial support” from “musical copyright owners” who together represent “the greatest percentage of the Licensor Market for uses.”
About 90 percent of the millions of global music copyright creators own and control their own copyrights. Each month alone in the U.S. there are over 500,000 new recordings of new songs from tens of thousands of DIY, self-owning copyright owners being delivered to U.S. music services and made available to stream. In just the last year, hundreds of thousands of DIY copyright owners have created and distributed at least 6 million works. In the past 10 years, estimates place that number closer to millions of copyright owners distributing over 20 million songs to streaming services. The majority of works being written, recorded, distributed and made available to stream overwhelmingly come from this constituency.
It is this constituency of millions of hard-working individuals, with a rising market share, that represents the majority of musical works copyright owners. These global copyright owners, combined with the legacy industry, make up the entire Licensor Market eligible to be streamed in the U.S. Surely the intent of the law is not to make them irrelevant in the process of establishing the MLC, particularly when there is a further important distinction between the two market segments: some of the biggest publishers in the traditional music industry are expected to bypass and not use the MLC due to their direct licensing deals with the digital streaming services, as compared to the millions of global copyright owners whom will rely on the MLC for licensing and payments.
This point further exacerbates the yet-to-be-resolved conflict of interest; that is, board members of the MLC can recommend other copyright owners’ money be liquidated and given to themselves through market share disbursements, all without actually having to use the MLC for their own copyrights. This outcome is most certainly not the intended application of the law.
This speaks as to why competition is needed.
The AMLC (American Mechanical License Collective) is competing to become the MLC. The AMLC’s board members are independent songwriters, technologists, entrepreneurs, music publishers and administrators, legal scholars, and business people who have profound and extensive knowledge in the areas of administration, technology, and identification of royalties without the same conflict of interest as the other.
The AMLC believes it serves all copyright owners including the independent writers and publishers as well as the major music publishers. It believes the companies and individuals of the board members of the MLC should use the MLC whenever possible. In addition, the AMLC directly addresses the importance of serving both the traditional industry as well as the independent writers and publisher, as it is their songs which will generate the vast majority of licenses and royalties flowing through the MLC.
In further contrast, the experience and credentials of the AMLC in the relatively new world of digital streaming are impressive and profound. This can be seen not just by examining the creation of the technology, innovation and success of its board members but also by the fact that many of the AMLC board members were hired by the traditional industry to build the systems
they needed to fix their data, resolve conflicts, audit statements, confirm splits, locate recordings and more (the very same needs of the MLC).
The AMLC has been forthright and has highlighted that its primary goals are to get all copyright owners and songwriters paid what they earned and reducing black box money by ensuring those funds go to its rightful owners and are not liquidated without intense due diligence. Finally, the AMLC is focused on keeping any perceived or actual conflict of interest to the lowest possible minimum and avoiding any activities that might give one group of copyright owners advantages over other groups of owners.
To that end, as we further expand our board, round out our committees and put forth an efficient one of a kind cutting edge technology solution we encourage the spirit and goal of the MMA to create competition, allowing the best entity possible to emerge and serve the world’s songwriters, publishers, and copyright owners under the requirements of the law.
The AMLC
From the Complaint in
THE CITY OF PHILADELPHIA, Plaintiff,
vs.
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANC OF AMERICA SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIGROUP, INC., CITIBANK N.A., CITIGROUP GLOBAL MARKETS INC., CITIGROUP GLOBAL MARKETS LIMITED, THE GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO. LLC, JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, THE ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, WELLS FARGO & CO., WELLS FARGO BANK, N.A., WACHOVIA BANK, N.A., WELLS FARGO FUNDS MANAGEMENT, LLC, WELLS FARGO SECURITIES LLC, Defendants.
Case No.: 1:19-cv-01608, Southern District of New York
Plaintiff The City of Philadelphia, individually and on behalf of all persons and entities similarly situated, brings this class action under Section 1 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Antitrust Act, and certain state laws, for actual damages, treble damages, punitive damages, declaratory and injunctive relief, costs of suit, pre- and post-judgment interest, and other relief, and alleges as follows:
NATURE OF THE ACTION
1. This is an antitrust class action charging the Defendant banks with conspiring to inflate the interest rates for a type of bonds often called “Variable Rate Demand Obligations” or “VRDOs.” 1 The City of Philadelphia (“Philadelphia” or “Plaintiff”) brings this action on behalf of itself and a proposed Class of VRDO issuers—mainly state and local public entities such as municipalities, agencies, public universities, and hospitals—to redress the harm inflicted by Defendants, which likely amounts to billions of dollars class-wide.
2. VRDOs are tax-exempt bonds with interest rates that are reset on a periodic basis, typically weekly. VDROs are issued by public entities to raise money to fund their operations, as well as critically important infrastructure and public services, such as neighborhood schools, water and wastewater systems, public power utilities, and transportation services. VRDOs are also issued by public entities on behalf of tax-exempt 501(c)(3) organizations—including schools, community organizations, and charities—which use the VRDOs to fund their operations and projects.
3. VRDOs allow issuers to borrow money for long periods of time while paying short-term interest rates. Investors find VRDOs attractive because the bonds include a built-in “put” feature that allows investors to redeem the bond at any periodic reset date, thus making VRDOs a low-risk and high-liquidity investment.
4. To manage the bond, VRDO issuers contract with banks—like Defendants here— to act as re-marketing agents (“RMAs”). RMAs have two primary jobs under the remarketing agreements. First, on each reset date, RMAs are required to reset the interest rate of the VRDO at the lowest possible rate that would permit the bonds to trade at par. For the vast majority of VRDOs, the reset date occurs on a weekly basis, typically every Tuesday or Wednesday. Second, when an existing investor exercises the “put” on the bonds and tenders the bond to RMAs, RMAs are required to “remarket” the VRDO to other investors at the lowest possible rate. For these ongoing services, issuers pay RMAs remarketing fees.
5. VRDO issuers are motivated to obtain the lowest interest rates for their debt. The higher the rates that VRDO issuers pay, the more costly it is for them to finance their operations and fund infrastructure projects. If an RMA cannot deliver low rates, issuers have the right to replace that RMA with another one who can. Thus, in a properly functioning market, RMAs would compete against each other for issuers’ business by actively working to set the best (i.e., the lowest) possible rate for their customers.
6. Defendants—which, collectively, served as RMAs for approximately 70% of all VRDOs in the United States from 2008 through 2016—did not work to set the lowest possible VRDO rates for Plaintiff and the Class, however.
7. Since about late 2015, various government authorities have been investigating Defendants’ practices in the market for VRDO remarketing services, based on facts that were first brought to their attention by a whistleblower. Among other things, the whistleblower alleges that RMAs (including Defendants here) were not actively and individually marketing and pricing VRDOs at the lowest possible interest rates, but instead were setting artificially high rates without regard to the individual characteristics of VRDOs, market conditions, or investor demand. The whistleblower also alleges that RMAs (including Defendants here) were improperly coordinating the rates they set for VRDOs. These allegations were based on the whistleblower’s extensive analysis of data available to the whistleblower due to that person’s role in the marketplace.
8. Starting in or about late 2015 and 2016, the whistleblower began to meet and share data and the whistleblower’s analysis of data with federal authorities, including the Antitrust Division of the U.S. Department of Justice (the “DOJ”). The DOJ subsequently opened a preliminary criminal investigation into Defendants’ remarketing practices in connection with VRDOs. That preliminary criminal investigation is ongoing.
9. Plaintiff counsel’s investigation of this matter has confirmed that there exists evidence of direct communications between competing banks concerning VRDO rate-setting. In these communications, senior personnel sitting within Defendants’ Municipal Securities Groups, which housed the Short-Term Products desks on which Defendants ran their VRDO operations, shared competitively sensitive information that was material to the setting and resetting of VRDO rates.
10. As a result of Plaintiff counsel’s investigation, Plaintiff has further learned that, as early as February 2008, Defendants were agreeing among themselves not to compete against each other in the market for remarketing services, and instead to keep VRDO rates artificially high, to the detriment of their customers, including Plaintiff here. Defendants conspired by communicating with each other in person, via telephone, and through electronic communications. In these inter-Defendant communications, they repeatedly shared highly sensitive information about the “base rates” that Defendants used to make initial determinations of the interest rates they set for VRDOs as well as the levels of VRDO inventory Defendants held on their books.
11. Defendants’ overarching objective was to ensure that the cartel members would keep VRDO rates artificially high in order to prevent investors from “putting” the bonds back to Defendants. When investors tender VRDOs back to RMAs, it triggers the RMAs’ obligation to remarket the VRDOs while also forcing the RMAs to carry the bonds in their inventory. By keeping rates high, Defendants ensured that investors would not exercise their put options on the bonds on a widespread basis. This allowed Defendants to continue to collect remarketing fees for doing, essentially, nothing.
12. Economic analysis provides strong support for the existence of this conspiracy. As detailed below, Plaintiff’s preliminary economic analysis demonstrates that VRDO interest rates were artificially inflated for several years starting as early as 2008 and continuing until late 2015 to early 2016. This economic analysis also demonstrates the existence of several historical patterns in VRDO rates that are each indicative of an agreement among Defendants not to compete in the market for VRDO remarketing services that began to break up in late 2015 to early 2016, around the same time that government authorities began investigating Defendants’ practices in the market for VRDO remarketing services.
13. Defendants’ conspiracy restrained competition in the market for VRDO remarketing services and inflicted significant financial harm on Plaintiff and the Class. Plaintiff and the Class paid billions of dollars in inflated interest rates during the Class Period due to Defendants’ conspiracy. By artificially increasing the rates paid by Plaintiff and the Class, Defendants’ conduct necessarily decreased the amount of funding available for critical public projects and services, as well as the operations of 501(c)(3) organizations. At the same time, Defendants banked hundreds of millions of dollars in the form of remarketing fees charged for services that Defendants never provided.
14. Free-market competition is, and has long been, the fundamental economic policy of the United States. As the Supreme Court has explained, this policy is enshrined in the Sherman Act,2 which makes it per se illegal for competitors (like Defendants here) to conspire and coordinate with each other to limit competition. Defendants’ conspiracy offends the very core of the antitrust laws. Defendants were supposed to be aggressively competing with each other for the business of their customers, but they secretly conspired not to compete against each other and instead to work together to keep rates high. Accordingly, Plaintiff brings this class action to hold Defendants accountable for the injuries they have caused.
Full Complaint at https://images.law.com/contrib/content/uploads/documents/402/36507/2019.02.20-Philly-VRDO-complaint.pdf
THE CITY OF PHILADELPHIA, Plaintiff,
vs.
BANK OF AMERICA CORPORATION, BANK OF AMERICA, N.A., BANC OF AMERICA SECURITIES LLC, MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, BARCLAYS BANK PLC, BARCLAYS CAPITAL INC., CITIGROUP, INC., CITIBANK N.A., CITIGROUP GLOBAL MARKETS INC., CITIGROUP GLOBAL MARKETS LIMITED, THE GOLDMAN SACHS GROUP, INC., GOLDMAN SACHS & CO. LLC, JPMORGAN CHASE & CO., JPMORGAN CHASE BANK, N.A., J.P. MORGAN SECURITIES LLC, THE ROYAL BANK OF CANADA, RBC CAPITAL MARKETS LLC, WELLS FARGO & CO., WELLS FARGO BANK, N.A., WACHOVIA BANK, N.A., WELLS FARGO FUNDS MANAGEMENT, LLC, WELLS FARGO SECURITIES LLC, Defendants.
Case No.: 1:19-cv-01608, Southern District of New York
Plaintiff The City of Philadelphia, individually and on behalf of all persons and entities similarly situated, brings this class action under Section 1 of the Sherman Antitrust Act, Sections 4 and 16 of the Clayton Antitrust Act, and certain state laws, for actual damages, treble damages, punitive damages, declaratory and injunctive relief, costs of suit, pre- and post-judgment interest, and other relief, and alleges as follows:
NATURE OF THE ACTION
1. This is an antitrust class action charging the Defendant banks with conspiring to inflate the interest rates for a type of bonds often called “Variable Rate Demand Obligations” or “VRDOs.” 1 The City of Philadelphia (“Philadelphia” or “Plaintiff”) brings this action on behalf of itself and a proposed Class of VRDO issuers—mainly state and local public entities such as municipalities, agencies, public universities, and hospitals—to redress the harm inflicted by Defendants, which likely amounts to billions of dollars class-wide.
2. VRDOs are tax-exempt bonds with interest rates that are reset on a periodic basis, typically weekly. VDROs are issued by public entities to raise money to fund their operations, as well as critically important infrastructure and public services, such as neighborhood schools, water and wastewater systems, public power utilities, and transportation services. VRDOs are also issued by public entities on behalf of tax-exempt 501(c)(3) organizations—including schools, community organizations, and charities—which use the VRDOs to fund their operations and projects.
3. VRDOs allow issuers to borrow money for long periods of time while paying short-term interest rates. Investors find VRDOs attractive because the bonds include a built-in “put” feature that allows investors to redeem the bond at any periodic reset date, thus making VRDOs a low-risk and high-liquidity investment.
4. To manage the bond, VRDO issuers contract with banks—like Defendants here— to act as re-marketing agents (“RMAs”). RMAs have two primary jobs under the remarketing agreements. First, on each reset date, RMAs are required to reset the interest rate of the VRDO at the lowest possible rate that would permit the bonds to trade at par. For the vast majority of VRDOs, the reset date occurs on a weekly basis, typically every Tuesday or Wednesday. Second, when an existing investor exercises the “put” on the bonds and tenders the bond to RMAs, RMAs are required to “remarket” the VRDO to other investors at the lowest possible rate. For these ongoing services, issuers pay RMAs remarketing fees.
5. VRDO issuers are motivated to obtain the lowest interest rates for their debt. The higher the rates that VRDO issuers pay, the more costly it is for them to finance their operations and fund infrastructure projects. If an RMA cannot deliver low rates, issuers have the right to replace that RMA with another one who can. Thus, in a properly functioning market, RMAs would compete against each other for issuers’ business by actively working to set the best (i.e., the lowest) possible rate for their customers.
6. Defendants—which, collectively, served as RMAs for approximately 70% of all VRDOs in the United States from 2008 through 2016—did not work to set the lowest possible VRDO rates for Plaintiff and the Class, however.
7. Since about late 2015, various government authorities have been investigating Defendants’ practices in the market for VRDO remarketing services, based on facts that were first brought to their attention by a whistleblower. Among other things, the whistleblower alleges that RMAs (including Defendants here) were not actively and individually marketing and pricing VRDOs at the lowest possible interest rates, but instead were setting artificially high rates without regard to the individual characteristics of VRDOs, market conditions, or investor demand. The whistleblower also alleges that RMAs (including Defendants here) were improperly coordinating the rates they set for VRDOs. These allegations were based on the whistleblower’s extensive analysis of data available to the whistleblower due to that person’s role in the marketplace.
8. Starting in or about late 2015 and 2016, the whistleblower began to meet and share data and the whistleblower’s analysis of data with federal authorities, including the Antitrust Division of the U.S. Department of Justice (the “DOJ”). The DOJ subsequently opened a preliminary criminal investigation into Defendants’ remarketing practices in connection with VRDOs. That preliminary criminal investigation is ongoing.
9. Plaintiff counsel’s investigation of this matter has confirmed that there exists evidence of direct communications between competing banks concerning VRDO rate-setting. In these communications, senior personnel sitting within Defendants’ Municipal Securities Groups, which housed the Short-Term Products desks on which Defendants ran their VRDO operations, shared competitively sensitive information that was material to the setting and resetting of VRDO rates.
10. As a result of Plaintiff counsel’s investigation, Plaintiff has further learned that, as early as February 2008, Defendants were agreeing among themselves not to compete against each other in the market for remarketing services, and instead to keep VRDO rates artificially high, to the detriment of their customers, including Plaintiff here. Defendants conspired by communicating with each other in person, via telephone, and through electronic communications. In these inter-Defendant communications, they repeatedly shared highly sensitive information about the “base rates” that Defendants used to make initial determinations of the interest rates they set for VRDOs as well as the levels of VRDO inventory Defendants held on their books.
11. Defendants’ overarching objective was to ensure that the cartel members would keep VRDO rates artificially high in order to prevent investors from “putting” the bonds back to Defendants. When investors tender VRDOs back to RMAs, it triggers the RMAs’ obligation to remarket the VRDOs while also forcing the RMAs to carry the bonds in their inventory. By keeping rates high, Defendants ensured that investors would not exercise their put options on the bonds on a widespread basis. This allowed Defendants to continue to collect remarketing fees for doing, essentially, nothing.
12. Economic analysis provides strong support for the existence of this conspiracy. As detailed below, Plaintiff’s preliminary economic analysis demonstrates that VRDO interest rates were artificially inflated for several years starting as early as 2008 and continuing until late 2015 to early 2016. This economic analysis also demonstrates the existence of several historical patterns in VRDO rates that are each indicative of an agreement among Defendants not to compete in the market for VRDO remarketing services that began to break up in late 2015 to early 2016, around the same time that government authorities began investigating Defendants’ practices in the market for VRDO remarketing services.
13. Defendants’ conspiracy restrained competition in the market for VRDO remarketing services and inflicted significant financial harm on Plaintiff and the Class. Plaintiff and the Class paid billions of dollars in inflated interest rates during the Class Period due to Defendants’ conspiracy. By artificially increasing the rates paid by Plaintiff and the Class, Defendants’ conduct necessarily decreased the amount of funding available for critical public projects and services, as well as the operations of 501(c)(3) organizations. At the same time, Defendants banked hundreds of millions of dollars in the form of remarketing fees charged for services that Defendants never provided.
14. Free-market competition is, and has long been, the fundamental economic policy of the United States. As the Supreme Court has explained, this policy is enshrined in the Sherman Act,2 which makes it per se illegal for competitors (like Defendants here) to conspire and coordinate with each other to limit competition. Defendants’ conspiracy offends the very core of the antitrust laws. Defendants were supposed to be aggressively competing with each other for the business of their customers, but they secretly conspired not to compete against each other and instead to work together to keep rates high. Accordingly, Plaintiff brings this class action to hold Defendants accountable for the injuries they have caused.
Full Complaint at https://images.law.com/contrib/content/uploads/documents/402/36507/2019.02.20-Philly-VRDO-complaint.pdf
Editorial from the CPPC: State AGs Must Protect Consumers and Fill The Void to Challenge PBM Misconduct
February 21, 2019
Last fall’s meeting between the Department of Justice and several State Attorneys General reminds us that sound antitrust enforcement is not just a federal affair. While the Department of Justice called the meeting to discuss the antitrust concerns regarding the consolidation of information and data on technology platforms, the State Attorneys Generals turned the focus of the meeting to consumer protection and data privacy issues. Although they did not see eye to eye on all the issues, the states were clear that they will not stand on the sidelines. Indeed, the states appear to be taking the lead and will coordinate a multi-state antitrust and consumer protection inquiry into the practices of the tech platforms.
Many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals. State Attorneys Generals have used the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.
Much of the recent attention to escalating drug prices has focused on Pharmacy Benefit Managers (“PBMs”), the drug middlemen, who are driving up drug prices and reducing consumer choice. Appropriately the President’s May 2018 Blueprint to Reduce Drug Prices is focusing attention on how the lack of PBM competition and transparency permits PBMs to use their market power to drive up drug prices. In many cases, PBM customers such as states, health plans and employers do not receive the full benefit of these rebates because PBMs do not always classify certain fees as rebates.
Unfortunately, federal antitrust enforcement has simply dropped the ball on PBM competition. The recent approval of the CVS/Aetna deal makes that crystal clear. Over the past decade, the PBM industry has gotten stronger as it has undergone significant horizontal and vertical consolidation, leaving the market with just three large participants – Express Scripts, CVS Health, and OptumRx – that cover more than 85 percent of the PBM market. And the FTC has opposed efforts by states to adopt sensible regulations.
PBM rebate schemes also interfere in the relationship between doctors and their patients. PBMs often prevent consumers from getting the drugs they need or force consumers to switch drugs so they can secure higher rebates. Consumers lose through higher prices, less choice and threatened health care.
In short, the current system is broken, federal enforcers are passive and we need strong enforcement by state attorneys generals to protect competition and consumers.
States have significant advantages over federal enforcers. They are closer to the market and recognize the direct harm to consumers. They have the ability to secure monetary damages. States are often customers and victims of anticompetitive schemes. State enforcers can bring combined antitrust and consumer protection cases. And although each state has limited antitrust and consumer protection resources, states increasingly are using multistate task forces to investigate and prosecute unlawful conduct.
The strategic advantages of State Attorneys General are substantial. They have the authority to investigate and challenge mergers as well as the practices of PBMs under various federal and state laws including the False Claims Act (most states have enacted analogous false claims acts), state law deceptive trade practices acts, and the antitrust laws.
The states have begun to take matters into their own hands. In 2018, over 80 bills related to PBM regulation were introduced in state legislatures across the country and dozens of them were signed into law. Some of this legislation relates to requiring PBMs to have a fiduciary duty to its health plans, prohibiting gag clauses or PBM contract provisions that limit a pharmacist’s ability to inform customers about the least expensive way for customers to purchase prescription drugs; prohibiting a PBM from setting patient copays at a higher level than the health plan’s cost of the drug; requiring rebate transparency; and limiting PBM requirements on independent pharmacies.
There are clear precedents for state action. In the past decade a coalition of over 20 State Attorneys General brought a series of cases against the three major PBMs for manipulating the rebate process – switching patients to less safe, more expensive drugs in order to secure greater rebates. Thousands of consumers were prevented from using the drugs they needed and that worked. Ultimately the state cases were settled with penalties and damages of over $370 million.
The orders in these cases have expired and it seems that the PBMs have returned to their playbooks of misleading consumers and preventing them from getting the drugs they need. State AGs can obtain huge healthcare fraud settlements and judgments, which can provide an additional source of revenue for the states. As PBMs are increasingly scrutinized by the federal and state authorities, State AG investigations and complaints are likely to increase.
While historically State AGs typically coordinate with the federal government, they can certainly act alone or along with other states. Some State AGs with active enforcement agendas have sought to elevate their enforcement levels during periods when they have anticipated or perceived a reduction in federal enforcement. The DOJ and FTC have had a light hand in terms of scrutinizing PBM conduct so State AGs seem to be filling the void. Such an uptick in state level PBM enforcement is now in play and PBMs should take note of the resulting enhanced risk.
Indeed, Ohio and other states are increasing their enforcement activities due to the slow progress by the federal government. In July, then Ohio Attorney General and current Ohio Governor Mike DeWine put “PBMs on notice that their conduct is being heavily scrutinized, and any action that can be taken and proven in court will be filed to protect Ohio taxpayers and the millions of Ohioans who rely on the pharmacy benefits provided.” Ohio’s investigation began at the end of 2017.
And just this week, the new Ohio Attorney General Dave Yost announced he is seeking repayment of nearly $16 million paid to the OptumRx by the Bureau of Workers’ Compensation. A report found that the PBM overcharged the state and violated its contract by failing to adhere to agreed discounts on generic drugs. Yost will take OptumRx to nonbinding mediation, and that fails, the dispute will be taken to court. He has also promised further action against PBMs, saying “they took our money.”
In February 2018, Arkansas Attorney General Leslie Rutledge opened an investigation into CVS Caremark’s reimbursement practices after reviewing complaints of plummeting prescription medication reimbursement rates paid to local pharmacies. She is concerned that the PBM’s “reimbursements do not cover the actual cost of the medications.” If the local pharmacies’ prescription reimbursement rates are lower than their costs to purchase the drugs, they may eventually have to close their doors, which in turn, harms patients.
Fortunately, state AGs are there to protect consumers and competition and they have tremendous interest in controlling drug spending. States are clearly victims of these PBM schemes as significant drug price increases take a substantial amount out of state budgets. State AGs have the tools and need to use their enforcement powers to stop the egregious practices that are currently harming consumers. They are essential to protecting consumers and making the market work. Other State AGs should follow the examples of Arkansas and Ohio, and launch investigations and enforcement actions to stop abuses and ensure that PBMs are actually lowering drug costs.
From:https://www.thecppc.com/single-post/2019/02/21/State-AGs-Must-Protect-Consumers-and-Fill-The-Void-to-Challenge-PBM-Misconduct?utm_campaign=4f29d95c-84d4-42a2-9746-c5c44d551d91&utm_source=so
February 21, 2019
Last fall’s meeting between the Department of Justice and several State Attorneys General reminds us that sound antitrust enforcement is not just a federal affair. While the Department of Justice called the meeting to discuss the antitrust concerns regarding the consolidation of information and data on technology platforms, the State Attorneys Generals turned the focus of the meeting to consumer protection and data privacy issues. Although they did not see eye to eye on all the issues, the states were clear that they will not stand on the sidelines. Indeed, the states appear to be taking the lead and will coordinate a multi-state antitrust and consumer protection inquiry into the practices of the tech platforms.
Many of the seminal antitrust cases including cases creating key principles of monopolization and merger law were brought by state attorneys generals. State Attorneys Generals have used the power under federal and their own state statutes to protect consumers against anticompetitive and fraudulent conduct in credit card, pharmaceutical, computer and many other markets crucial to consumers.
Much of the recent attention to escalating drug prices has focused on Pharmacy Benefit Managers (“PBMs”), the drug middlemen, who are driving up drug prices and reducing consumer choice. Appropriately the President’s May 2018 Blueprint to Reduce Drug Prices is focusing attention on how the lack of PBM competition and transparency permits PBMs to use their market power to drive up drug prices. In many cases, PBM customers such as states, health plans and employers do not receive the full benefit of these rebates because PBMs do not always classify certain fees as rebates.
Unfortunately, federal antitrust enforcement has simply dropped the ball on PBM competition. The recent approval of the CVS/Aetna deal makes that crystal clear. Over the past decade, the PBM industry has gotten stronger as it has undergone significant horizontal and vertical consolidation, leaving the market with just three large participants – Express Scripts, CVS Health, and OptumRx – that cover more than 85 percent of the PBM market. And the FTC has opposed efforts by states to adopt sensible regulations.
PBM rebate schemes also interfere in the relationship between doctors and their patients. PBMs often prevent consumers from getting the drugs they need or force consumers to switch drugs so they can secure higher rebates. Consumers lose through higher prices, less choice and threatened health care.
In short, the current system is broken, federal enforcers are passive and we need strong enforcement by state attorneys generals to protect competition and consumers.
States have significant advantages over federal enforcers. They are closer to the market and recognize the direct harm to consumers. They have the ability to secure monetary damages. States are often customers and victims of anticompetitive schemes. State enforcers can bring combined antitrust and consumer protection cases. And although each state has limited antitrust and consumer protection resources, states increasingly are using multistate task forces to investigate and prosecute unlawful conduct.
The strategic advantages of State Attorneys General are substantial. They have the authority to investigate and challenge mergers as well as the practices of PBMs under various federal and state laws including the False Claims Act (most states have enacted analogous false claims acts), state law deceptive trade practices acts, and the antitrust laws.
The states have begun to take matters into their own hands. In 2018, over 80 bills related to PBM regulation were introduced in state legislatures across the country and dozens of them were signed into law. Some of this legislation relates to requiring PBMs to have a fiduciary duty to its health plans, prohibiting gag clauses or PBM contract provisions that limit a pharmacist’s ability to inform customers about the least expensive way for customers to purchase prescription drugs; prohibiting a PBM from setting patient copays at a higher level than the health plan’s cost of the drug; requiring rebate transparency; and limiting PBM requirements on independent pharmacies.
There are clear precedents for state action. In the past decade a coalition of over 20 State Attorneys General brought a series of cases against the three major PBMs for manipulating the rebate process – switching patients to less safe, more expensive drugs in order to secure greater rebates. Thousands of consumers were prevented from using the drugs they needed and that worked. Ultimately the state cases were settled with penalties and damages of over $370 million.
The orders in these cases have expired and it seems that the PBMs have returned to their playbooks of misleading consumers and preventing them from getting the drugs they need. State AGs can obtain huge healthcare fraud settlements and judgments, which can provide an additional source of revenue for the states. As PBMs are increasingly scrutinized by the federal and state authorities, State AG investigations and complaints are likely to increase.
While historically State AGs typically coordinate with the federal government, they can certainly act alone or along with other states. Some State AGs with active enforcement agendas have sought to elevate their enforcement levels during periods when they have anticipated or perceived a reduction in federal enforcement. The DOJ and FTC have had a light hand in terms of scrutinizing PBM conduct so State AGs seem to be filling the void. Such an uptick in state level PBM enforcement is now in play and PBMs should take note of the resulting enhanced risk.
Indeed, Ohio and other states are increasing their enforcement activities due to the slow progress by the federal government. In July, then Ohio Attorney General and current Ohio Governor Mike DeWine put “PBMs on notice that their conduct is being heavily scrutinized, and any action that can be taken and proven in court will be filed to protect Ohio taxpayers and the millions of Ohioans who rely on the pharmacy benefits provided.” Ohio’s investigation began at the end of 2017.
And just this week, the new Ohio Attorney General Dave Yost announced he is seeking repayment of nearly $16 million paid to the OptumRx by the Bureau of Workers’ Compensation. A report found that the PBM overcharged the state and violated its contract by failing to adhere to agreed discounts on generic drugs. Yost will take OptumRx to nonbinding mediation, and that fails, the dispute will be taken to court. He has also promised further action against PBMs, saying “they took our money.”
In February 2018, Arkansas Attorney General Leslie Rutledge opened an investigation into CVS Caremark’s reimbursement practices after reviewing complaints of plummeting prescription medication reimbursement rates paid to local pharmacies. She is concerned that the PBM’s “reimbursements do not cover the actual cost of the medications.” If the local pharmacies’ prescription reimbursement rates are lower than their costs to purchase the drugs, they may eventually have to close their doors, which in turn, harms patients.
Fortunately, state AGs are there to protect consumers and competition and they have tremendous interest in controlling drug spending. States are clearly victims of these PBM schemes as significant drug price increases take a substantial amount out of state budgets. State AGs have the tools and need to use their enforcement powers to stop the egregious practices that are currently harming consumers. They are essential to protecting consumers and making the market work. Other State AGs should follow the examples of Arkansas and Ohio, and launch investigations and enforcement actions to stop abuses and ensure that PBMs are actually lowering drug costs.
From:https://www.thecppc.com/single-post/2019/02/21/State-AGs-Must-Protect-Consumers-and-Fill-The-Void-to-Challenge-PBM-Misconduct?utm_campaign=4f29d95c-84d4-42a2-9746-c5c44d551d91&utm_source=so
Rebecca Sandefur on access to justice. Her article: “Access to What?” https://www.mitpressjournals.org/doi/full/10.1162/daed_a_00534
Journalists tend to focus on Rebecca Sandefur’s observation that people seeking solutions to civil justice problems may do just as well on their own as with the help of a lawyer. See https://www.nytimes.com/2019/02/13/opinion/legal-issues.html
Sandefur does start her recent article with the point that “resolving justice problems lawfully does not always require lawyer assistance. . . .” But Sandefur’s main point is deeper, and thought provoking. It is that justice is about just resolutions, not necessarily about access to legal services. A broader understanding of what just resolutions entail will help lawyers to work with problem solvers who are not lawyers to craft an array of approaches to achieving just results.
Civil justice problems Sandefur has in mind for solution include a broad array: wage theft, eviction, debt collection, bankruptcy, domestic violence, foreclosure, access to medical treatment, and care and custody of children and dependent adults.
Following is an excerpt from Sandefur’s article (citations omitted):
When a system is broken, the solution is systemic reform. Consider consumer debt. Today, small-claims and lower-civil-court dockets are flooded with debt claims against consumers. These claims have usually been sold by the original debtor, such as a credit-card company, to a third-party debt buyer in a bundle of hundreds or thousands of debts. Such claims against consumers are often based on “bad paper,” insufficient documentation to sustain the debt owners’ claim to the amount demanded. Courts spend scarce time and money processing hundreds of thousands of baseless claims. This situation persists because, in most states, courts do not require creditor-plaintiffs to show that they have documentation of ownership for the debt when they file lawsuits; individual debtors must appear in court and contest the documentation for each debt. In 2014, New York State's then–Chief Judge Jonathan Lippman issued an order requiring debt-owners to produce documentation of the amount claimed at the time of filing. The number of debt lawsuits against New York consumers dropped dramatically.
These are just a few examples from growing evidence that the current course of focusing narrowly on lawyers’ services is wrong, whether the goal is understanding the access problem or taking action to fix it. Looking only at the civil justice activity processed by lawyers or the court system misses most of the action. Focusing on existing programs that deliver legal services and on court cases will never provide a picture of all of the other civil justice activity that never makes it to the justice system–and that is the majority of civil justice activity. Practically speaking, it would be impossible for the nation's existing courts, administrative agencies, and other forums that resolve disputes to process the estimated more than one hundred million justice problems that Americans experience every year. There is no reason to want them to. The rule of law means that most people can rely on most others to be basically compliant with legal norms most of the time, with a fair and accessible legal system as backup.
The access-to-justice crisis is a crisis of exclusion and inequality, for which legal services will sometimes provide a solution. At other times, lawyers’ services will be too expensive and much more than necessary. At other times still, systemic reforms will be the right solution, not providing costly and inefficient assistance to individuals. Lawyers and social scientists have a limited understanding of how to determine which justice problems of the public need lawyers’ services and which do not.
Journalists tend to focus on Rebecca Sandefur’s observation that people seeking solutions to civil justice problems may do just as well on their own as with the help of a lawyer. See https://www.nytimes.com/2019/02/13/opinion/legal-issues.html
Sandefur does start her recent article with the point that “resolving justice problems lawfully does not always require lawyer assistance. . . .” But Sandefur’s main point is deeper, and thought provoking. It is that justice is about just resolutions, not necessarily about access to legal services. A broader understanding of what just resolutions entail will help lawyers to work with problem solvers who are not lawyers to craft an array of approaches to achieving just results.
Civil justice problems Sandefur has in mind for solution include a broad array: wage theft, eviction, debt collection, bankruptcy, domestic violence, foreclosure, access to medical treatment, and care and custody of children and dependent adults.
Following is an excerpt from Sandefur’s article (citations omitted):
When a system is broken, the solution is systemic reform. Consider consumer debt. Today, small-claims and lower-civil-court dockets are flooded with debt claims against consumers. These claims have usually been sold by the original debtor, such as a credit-card company, to a third-party debt buyer in a bundle of hundreds or thousands of debts. Such claims against consumers are often based on “bad paper,” insufficient documentation to sustain the debt owners’ claim to the amount demanded. Courts spend scarce time and money processing hundreds of thousands of baseless claims. This situation persists because, in most states, courts do not require creditor-plaintiffs to show that they have documentation of ownership for the debt when they file lawsuits; individual debtors must appear in court and contest the documentation for each debt. In 2014, New York State's then–Chief Judge Jonathan Lippman issued an order requiring debt-owners to produce documentation of the amount claimed at the time of filing. The number of debt lawsuits against New York consumers dropped dramatically.
These are just a few examples from growing evidence that the current course of focusing narrowly on lawyers’ services is wrong, whether the goal is understanding the access problem or taking action to fix it. Looking only at the civil justice activity processed by lawyers or the court system misses most of the action. Focusing on existing programs that deliver legal services and on court cases will never provide a picture of all of the other civil justice activity that never makes it to the justice system–and that is the majority of civil justice activity. Practically speaking, it would be impossible for the nation's existing courts, administrative agencies, and other forums that resolve disputes to process the estimated more than one hundred million justice problems that Americans experience every year. There is no reason to want them to. The rule of law means that most people can rely on most others to be basically compliant with legal norms most of the time, with a fair and accessible legal system as backup.
The access-to-justice crisis is a crisis of exclusion and inequality, for which legal services will sometimes provide a solution. At other times, lawyers’ services will be too expensive and much more than necessary. At other times still, systemic reforms will be the right solution, not providing costly and inefficient assistance to individuals. Lawyers and social scientists have a limited understanding of how to determine which justice problems of the public need lawyers’ services and which do not.
From Paul Levy:
Consumer Warning: Copyright Trolling by Higbee and Associates
Excerpt:
Over the past few years, the law firm Higbee and Associates (based in Los Angeles, although it pretentiously labels itself a "National Law Firm") has become identified with a pattern of making aggressive and, in many cases, unsupportable demands for the payment of significant sums of money by individuals and nonprofits whose web sites feature copyrighted graphics, and especially photographs, that they saw online but have never tried to license. The firm’s principal, Mathew Higbee, revels in his reputation for aggressive enforcement. (The interview linked above, for example, is featured on his own firm’s web site.)
Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures as well —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”
The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.
The Demand to Homeless United for Friendship and Freedom (“HUFF”)
As it happens, I had heard recently from colleagues in the copyright law community about threats that Higbee was making to nonprofits when I was contacted by Thomas Leavitt, a former client in a free speech case, about a Higbee demand to Homeless United for Friendship and Freedom (“HUFF”). HUFF is a loose-knit activist group in Santa Cruz, Calif
Consumer Warning: Copyright Trolling by Higbee and Associates
Excerpt:
Over the past few years, the law firm Higbee and Associates (based in Los Angeles, although it pretentiously labels itself a "National Law Firm") has become identified with a pattern of making aggressive and, in many cases, unsupportable demands for the payment of significant sums of money by individuals and nonprofits whose web sites feature copyrighted graphics, and especially photographs, that they saw online but have never tried to license. The firm’s principal, Mathew Higbee, revels in his reputation for aggressive enforcement. (The interview linked above, for example, is featured on his own firm’s web site.)
Either in concert with a specialized search firm or using his own firm’s software, this firm patrols the Internet looking for graphics (especially photographs) that have been copied improperly from online sources. The firm then sends a demand letter bearing Higbee's signature, threatening to seek up to $150,000 in statutory damages as well as attorney fees unless the target of the letter promptly agrees to pay a specified amount. Deploying a tactic that is all too familiar from the depredations of Evan Stone and Prenda Law, the specified amount is low enough – usually in the low four figures, but I have seen high three figures as well —that it is not likely to be cost-effective for the target to hire a knowledgeable copyright lawyer to litigate an infringement lawsuit, even if the claim is bunk or, at least, if there is good reason to believe that the claim can easily be defended. The letter encloses a document identifying the allegedly infringing use as well as the online location where the work was found; another document that purports to authorize the firm to represent the copyright holder in seeking damages in connection with the work; a proposed “settlement agreement”; and a credit card payment form. If the target of the letter does not respond, or responds without agreeing to pay, then the Higbee firm increases the pressure: a non-lawyer who calls herself a “claim resolution specialist” sends an email warning that the claim is going to be “escalated to the attorneys,” at which point “[t]claim gets more stressful and expensive,” and an assurance that “my goal is to not let that happen to you.”
The documents linked above all relate to a single Higbee demand to a single target, but I have seen a number of other demand letters and ensuing emails from this firm, and spoken to several other copyright lawyers who have helped clients respond to Higbee’s blustering and threats, and it appears to me that these are pretty standard exemplars. Indeed, when I was reaching out to some other copyright lawyers to try to get their sense of some of the documents I was reviewing, a number of them guessed that it was Higbee based only on what I said I wanted to ask about, based on work they had done for their clients trying to address his threats against them. Plainly, this is a copyright troll with an outsized reputation.
The Demand to Homeless United for Friendship and Freedom (“HUFF”)
As it happens, I had heard recently from colleagues in the copyright law community about threats that Higbee was making to nonprofits when I was contacted by Thomas Leavitt, a former client in a free speech case, about a Higbee demand to Homeless United for Friendship and Freedom (“HUFF”). HUFF is a loose-knit activist group in Santa Cruz, Calif