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Discussion of On Corruption in America (Knopf, 2020), by Sarah Chayes
By Don Allen Resnikoff
Is US prosecution of official corruption too lax?
Writing in the New York Times, Ryan C. Crocker, ambassador to Afghanistan under President Barack Obama, explains that a major problem in Afghanistan has been the corruption of their political leaders. Crocker points out that U.S. sufferance of corruption in Afghanistan has precedent in the U.S.: “Corruption was endemic in New York, Boston and Chicago through much of the 19th and into the 20th centuries.”[i]
Journalist and former military advisor Sarah Chayes’ makes essentially the same points as Crocker in her book , On Corruption in America (Alfred a Knopf, 2020). When Chayes was in Afghanistan, she saw that theft of government money was rife. There have been networks of privileged people in and out of the Afghan government who have had access to government decision makers, and misused that access.
Chayes offers many examples of the same thing happening in America. One example among many concerns the well-connected Steven Mnuchin. His Capmark Financial Group was a leading originator of shaky real estate loans and collateralized debt arrangements in the lead up to the financial crash of 2008. When Mnuchin bought IndyMac Bank in 2009, the FDIC assumed nearly 80% of loan losses. It “enriched him on homeowners’ distress,” according to Chayes.
Mnuchin was subsequently appointed to head the U.S. Treasury during the Trump Administration.
Another example involves Senate leader Mitch McConnell, his wife Elaine Chao, and Russian and Chinese business people. Chayes alleges that a network of McConnell’s relatives, and Russian and Chinese cronies, conspired to divert public money that should have benefitted Kentucky mineworkers. The diversion was to an aluminum plant in Kentucky that benefitted well connected individuals. Chayes says that what happened was “a distorted sequence of events typical of today’s era of transnational kleptocratic networks.”
Chayes believes that U.S. laws on official corruption need to be strengthened in a number of ways, including legislative reversal of decisions of the U.S. Supreme Court on what constitutes official corruption. Chayes defies conventional wisdom when she argues against the unanimous decision of the Court overturning the corruption conviction of Virginia’s former Governor Bob McDonnell.
The Governor accepted valuable benefits from a wealthy corporate leader and then put pressure on the University of Virginia to run studies of a questionable pharmaceutical product being promoted by the wealthy benefactor.
The federal bribery statute, 18 U.S.C. § 201, makes it a crime for a public official to “receive or accept anything of value” in exchange for being “influenced in the performance of any official act.” An "official act" is a decision or action on a "question, matter, cause, suit, proceeding or controversy." The Court said that the “question” or “matter” must involve a formal exercise of government authority, and must also be something specific and focused that is "pending" or "may by law be brought" before a public official. To qualify as an "official act," the public official must make a decision to take an action on that question or matter, or agree to do so. Setting up a meeting, talking to another official, or organizing an event -- without more -- does not fit that definition of "official act." Because jury instructions in the McDonnell trial did not follow those requirements, the U.S. Supreme Court found that there was trial error requiring reversal of the McDonnell conviction.[ii]
Chayes disparages the U.S. Supreme Court’s decision as making routine corrupt politics legal and acceptable. Chayes argues that the U.S. Supreme Court managed to “transform a broad, commonsense definition of bribery into something narrow and technical.” Lawyers understand the fairness rationale of the Court’s reasoning, but such understanding does not address Chayes’ point that ordinary citizens may expect that behavior like McDonnell’s should be considered corrupt and prosecutable.
Chayes’ point about political corruption is straightforward: When well-connected networks of business and government people act corruptly to enrich themselves at the expense of ordinary people, those ordinary people will lose confidence in their government.
[i] Ryan Croccker, America Lost Patience in Afghanista, https://www.nytimes.com/2021/08/21/opinion/us-afghanistan
[ii] McDonnell v. United States, 579 U.S. ___,2915
Slate: Is Joe Manchin about ideology or self-serving?
A recent article in Slate magazine points out:
• A summer sting operation by Greenpeace had an Exxon Mobil lobbyist reveal that he met with Manchin weekly to try to persuade him to weaken Biden’s climate agenda (and he’s not the only rich guy who gets Manchin regularly on the line).
• An August piece in Harper’s noted that the West Virginia Democratic Party, which the senator played no small role in gutting, remains entirely under Manchin’s influence and control. It also mentions how Manchin leveraged his influence within the Senate to get plush government appointments for people close to him, including his wife.
• A September report from Type Investigations and the Intercept revealed that Manchin is currently invested in multiple coal companies that are run by his son, and that, even though the elder Manchin’s investments are in a blind trust, he has personally made $4.5 million from them during the time he has spent in the Senate (11 years to date).
Also: "In this remaining time, he seems to be simply looking out for his sources of wealth, including the ones that come from his son’s coal incinerators. It wouldn’t be the first time a Manchin family member used conflicts of interest to their advantage. Joe’s wife, Gayle, previously served as head of the West Virginia Board of Education and used her position to try to require the state’s schools to purchase EpiPens. EpiPens are manufactured by the Big Pharma juggernaut Mylan, whose former CEO was Heather Bresch—Manchin’s daughter, who stepped down after it was revealed she helped fix the prices of EpiPens in collusion with Pfizer. Family helping family: It’s a highly lucrative graft."
See https://slate.com/news-and-politics/2021/10/joe-manchin-coal-climate-change.html?sid=5ff8d8b261bfa546dd075a83&email=f7bf73e2d7ca47c65c9df513d4f1a2ad486611b90e9f78b92689312edf5b4e16&utm_medium=email&utm_source=newsletter&utm_content=TheSlatest&utm_campaign=traffic
Another among other articles with a similar point: Joe Manchin’s Dirty Empire (theintercept.com) https://theintercept.com/2021/09/03/joe-manchin-coal-fossil-fuels-pollution/
Posting by Don Allen Resnikoff
Judge Sotomayor finds her colleagues approach to procedural issues to be "Stunning:"
Cite as: 594 U. S. ____ (2021) 1 SOTOMAYOR, J., dissenting SUPREME COURT OF THE UNITED STATES No. 21A24 WHOLE WOMAN’S HEALTH ET AL. v. AUSTIN REEVE JACKSON, JUDGE, ET AL. ON APPLICATION FOR INJUNCTIVE RELIEF [September 1, 2021] JUSTICE SOTOMAYOR, with whom JUSTICE BREYER and JUSTICE KAGAN join, dissenting.
The Court’s order is stunning. Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny, a majority of Justices have opted to bury their heads in the sand. Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents. Today, the Court belatedly explains that it declined to grant relief because of procedural complexities of the State’s own invention. Ante, at 1. Because the Court’s failure to act rewards tactics designed to avoid judicial review and inflicts significant harm on the applicants and on women seeking abortions in Texas, I dissent
The whole of the opinion is here: 21A24 Whole Woman's Health v. Jackson (09/01/2021) (supremecourt.gov) https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf
Posting by Don Allen Resnikoff
Cite as: 594 U. S. ____ (2021) 1 SOTOMAYOR, J., dissenting SUPREME COURT OF THE UNITED STATES No. 21A24 WHOLE WOMAN’S HEALTH ET AL. v. AUSTIN REEVE JACKSON, JUDGE, ET AL. ON APPLICATION FOR INJUNCTIVE RELIEF [September 1, 2021] JUSTICE SOTOMAYOR, with whom JUSTICE BREYER and JUSTICE KAGAN join, dissenting.
The Court’s order is stunning. Presented with an application to enjoin a flagrantly unconstitutional law engineered to prohibit women from exercising their constitutional rights and evade judicial scrutiny, a majority of Justices have opted to bury their heads in the sand. Last night, the Court silently acquiesced in a State’s enactment of a law that flouts nearly 50 years of federal precedents. Today, the Court belatedly explains that it declined to grant relief because of procedural complexities of the State’s own invention. Ante, at 1. Because the Court’s failure to act rewards tactics designed to avoid judicial review and inflicts significant harm on the applicants and on women seeking abortions in Texas, I dissent
The whole of the opinion is here: 21A24 Whole Woman's Health v. Jackson (09/01/2021) (supremecourt.gov) https://www.supremecourt.gov/opinions/20pdf/21a24_8759.pdf
Posting by Don Allen Resnikoff
Does current labor unrest offer an opportunity for a resurgence of labor unions?
By DAR: The context for current labor-management disputes is that union power has declined over recent decades. In 2019, only 10.8 percent of U.S. workers were union members, according to the Bureau of Labor Statistics.
27 states have “right to work” laws that require unions to represent all workers, not just those that join or pay union dues. That holds down the number of union workers and weakens unions financially.
Most employees can be fired for any reason, and do not have the advantage of union representation on issues such a wage levels, working conditions, and health and other benefits.
Current pandemic related labor unrest may be an opportunity for union organizing, but perhaps not. Amazon famously beat back attempts to unionize its workers. The Biden administration has promoted legislation to aid unions and expand employee bargaining rights, but the fate of that legislation is uncertain. For a description of the legislation see 2021-02-04 PRO Act of 2021 Fact Sheet.pdf (house.gov)
By DAR: The context for current labor-management disputes is that union power has declined over recent decades. In 2019, only 10.8 percent of U.S. workers were union members, according to the Bureau of Labor Statistics.
27 states have “right to work” laws that require unions to represent all workers, not just those that join or pay union dues. That holds down the number of union workers and weakens unions financially.
Most employees can be fired for any reason, and do not have the advantage of union representation on issues such a wage levels, working conditions, and health and other benefits.
Current pandemic related labor unrest may be an opportunity for union organizing, but perhaps not. Amazon famously beat back attempts to unionize its workers. The Biden administration has promoted legislation to aid unions and expand employee bargaining rights, but the fate of that legislation is uncertain. For a description of the legislation see 2021-02-04 PRO Act of 2021 Fact Sheet.pdf (house.gov)
Some believe there may be a resurgence of labor unions
A New Republic magazine article is optimistic. The article argues that “workers across the country are standing up for basic dignity and respect on the job in a historic way.” America Is in the Midst of a Dramatic Labor Resurgence | The New Republic https://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgencehttps://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgence
The article offers some statistics: The Bureau of Labor Statistics tracks “large strikes,” meaning strikes of over 1,000 workers. In 2020, there were a total of nine such strikes, involving 28,800 workers. In 2021 so far, the total number is already at 12 strikes, involving 22,300 workers. There are three large pending strike authorizations that could add to that tally: IATSE-affiliated Hollywood production workers (60–65,000 workers), Kaiser Permanente workers (37,000), and UAW-affiliated John Deere workers (roughly 10,000).
The article also offers statistics about strikes that are not “large strikes.” either. In 2020, the Federal Mediation & Conciliation Service, a government agency that handles labor disputes, recorded under 50 official strikes resulting from union labor disputes. So far in 2021, the Cornell ILR Labor Action Tracker has recorded over 100 such strikes—and it’s only October.
A New Republic magazine article is optimistic. The article argues that “workers across the country are standing up for basic dignity and respect on the job in a historic way.” America Is in the Midst of a Dramatic Labor Resurgence | The New Republic https://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgencehttps://newrepublic.com/article/163936/america-midst-dramatic-labor-resurgence
The article offers some statistics: The Bureau of Labor Statistics tracks “large strikes,” meaning strikes of over 1,000 workers. In 2020, there were a total of nine such strikes, involving 28,800 workers. In 2021 so far, the total number is already at 12 strikes, involving 22,300 workers. There are three large pending strike authorizations that could add to that tally: IATSE-affiliated Hollywood production workers (60–65,000 workers), Kaiser Permanente workers (37,000), and UAW-affiliated John Deere workers (roughly 10,000).
The article also offers statistics about strikes that are not “large strikes.” either. In 2020, the Federal Mediation & Conciliation Service, a government agency that handles labor disputes, recorded under 50 official strikes resulting from union labor disputes. So far in 2021, the Cornell ILR Labor Action Tracker has recorded over 100 such strikes—and it’s only October.
The number of workers on strike hits the highest since the 1980s
Excerpt from https://www.cnbc.com/2019/10/21/the-number-of-workers-on-strike-hits-the-highest-since-the-1980s.html
PUBLISHED MON, OCT 21 20191:20 PM EDTUPDATED MON, OCT 21 20191:57 PM EDT
Olivia Raimonde
The number of striking workers balloons to nearly 500,000 in 2018, up from about 25,000 in 2017, according to the Bureau of Labor Statistics.
This is the largest number of people who have walked out on work since the mid-1980s.
As the labor market tightens, workers are becoming more confident about striking for better salaries and benefits.
In September, workers for General Motors walked out in what has now become the company’s longest strike in decades. The strike began after the auto manufacturer could not reach a contract agreement with labor union United Auto Workers. The walkout is estimated to have cost General Motors upwards of $2 billion, according to Bank of America.
Not only are people striking, but the number of people who have voluntarily quit their job, which can be viewed as a measure of job market confidence, hit an all-time high in July. The percentage of striking workers in the total workforce is currently at about 0.3%, compared with 0.4% in the mid-1980s.
As the gap between executive salaries and worker pay expands, more people are becoming discontent. In the recovery, corporate profits stabilized long before household income, acting as a spark for the surge in strikes.
General Motors workers aren’t the only ones walking out on the job. About 3,500 Mack Truck employees, who are also UAW members, are currently striking across three states for the first time in 35 years over their contracts. The union is seeking better contract terms on issues ranging from wage increases and holiday schedules to health care coverage and retirement benefits.
Among other notable actions, Chicago public school teachers are in their third day of a strike, demanding higher salaries, better benefits and more resources for the classroom. The strike has effectively canceled classes for approximately 361,000 students.
DAR Note: John Deere workers are also striking.
Record numbers of people are quitting their jobs-
About 4.3 million Americans, or 2.9% of the workforce, left their jobs in August, with many citing a career change and better hours as reasons why.
See Video Record number of people are quitting their jobs - ABC News (go.com) https://abcnews.go.com/GMA/News/video/record-number-people-quitting-jobs-80554144#:~:text=Record%20number%20of%20people%20are%20quitting%20their%20jobs,career%20change%20and%20better%20hours%20as%20reasons%20why.
Excerpt from https://www.cnbc.com/2019/10/21/the-number-of-workers-on-strike-hits-the-highest-since-the-1980s.html
PUBLISHED MON, OCT 21 20191:20 PM EDTUPDATED MON, OCT 21 20191:57 PM EDT
Olivia Raimonde
The number of striking workers balloons to nearly 500,000 in 2018, up from about 25,000 in 2017, according to the Bureau of Labor Statistics.
This is the largest number of people who have walked out on work since the mid-1980s.
As the labor market tightens, workers are becoming more confident about striking for better salaries and benefits.
In September, workers for General Motors walked out in what has now become the company’s longest strike in decades. The strike began after the auto manufacturer could not reach a contract agreement with labor union United Auto Workers. The walkout is estimated to have cost General Motors upwards of $2 billion, according to Bank of America.
Not only are people striking, but the number of people who have voluntarily quit their job, which can be viewed as a measure of job market confidence, hit an all-time high in July. The percentage of striking workers in the total workforce is currently at about 0.3%, compared with 0.4% in the mid-1980s.
As the gap between executive salaries and worker pay expands, more people are becoming discontent. In the recovery, corporate profits stabilized long before household income, acting as a spark for the surge in strikes.
General Motors workers aren’t the only ones walking out on the job. About 3,500 Mack Truck employees, who are also UAW members, are currently striking across three states for the first time in 35 years over their contracts. The union is seeking better contract terms on issues ranging from wage increases and holiday schedules to health care coverage and retirement benefits.
Among other notable actions, Chicago public school teachers are in their third day of a strike, demanding higher salaries, better benefits and more resources for the classroom. The strike has effectively canceled classes for approximately 361,000 students.
DAR Note: John Deere workers are also striking.
Record numbers of people are quitting their jobs-
About 4.3 million Americans, or 2.9% of the workforce, left their jobs in August, with many citing a career change and better hours as reasons why.
See Video Record number of people are quitting their jobs - ABC News (go.com) https://abcnews.go.com/GMA/News/video/record-number-people-quitting-jobs-80554144#:~:text=Record%20number%20of%20people%20are%20quitting%20their%20jobs,career%20change%20and%20better%20hours%20as%20reasons%20why.
A judge on Friday issued a temporary restraining order against the Chicago police union president, prohibiting him from making public statements that encourage members not to report their COVID-19 vaccine status to the city.
Cook County Circuit Judge Cecilia Horan ruled there was potential irreparable harm if local Fraternal Order of Police President John Catanzara persisted in making such statements. City attorneys argued they were tantamount to him advocating “sedition” and “anarchy” because he was directing members to disobey an order from their superiors.https://www.chicagotribune.com/news/breaking/ct-fop-john-catanzara-vaccine-mandate-20211015-egsrqzbzvzefrk4thcbxfqwpxi-story.html
The City of Chicago's litigation Complaint requesting injunction against discouraging COVID vaccine mandate requirements is here:
https://news.wttw.com/sites/default/files/article/file-attachments/1%202021-10-14%20Verified%20Complaint%20(FOP).pdf
Excerpt:
If Catanzara and the FOP are allowed to continue with these extortionate demands ... the City will be faced with an unlawful and untenable Hobson’s Choice: either exempt the FOP membership from complying with reasonable and necessary directives needed to combat the COVID-19 pandemic and thereby jeopardize the health and safety of both CPD employees and citizens with whom they interact, or be left without a police force sufficient to keep the peace and combat the pandemic of violent crime plaguing the City. . . .
Cook County Circuit Judge Cecilia Horan ruled there was potential irreparable harm if local Fraternal Order of Police President John Catanzara persisted in making such statements. City attorneys argued they were tantamount to him advocating “sedition” and “anarchy” because he was directing members to disobey an order from their superiors.https://www.chicagotribune.com/news/breaking/ct-fop-john-catanzara-vaccine-mandate-20211015-egsrqzbzvzefrk4thcbxfqwpxi-story.html
The City of Chicago's litigation Complaint requesting injunction against discouraging COVID vaccine mandate requirements is here:
https://news.wttw.com/sites/default/files/article/file-attachments/1%202021-10-14%20Verified%20Complaint%20(FOP).pdf
Excerpt:
If Catanzara and the FOP are allowed to continue with these extortionate demands ... the City will be faced with an unlawful and untenable Hobson’s Choice: either exempt the FOP membership from complying with reasonable and necessary directives needed to combat the COVID-19 pandemic and thereby jeopardize the health and safety of both CPD employees and citizens with whom they interact, or be left without a police force sufficient to keep the peace and combat the pandemic of violent crime plaguing the City. . . .
Legislation to bar internet companies from favoring their own products on their platforms is gaining more support, in what could be a potential threat to the business models of tech giants like Amazon.com Inc. and Apple Inc.
Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.
In particular, the bill would prohibit a range of practices that are harmful to businesses and consumers, such as requiring a business to buy a dominant platform’s goods or services in exchange for preferred placement; misusing a business’s data in order to compete against it; biasing search results in favor of the dominant firm; and unfairly preventing another business’s product from inter-operating with the dominant platform.
The House Judiciary Committee passed a similar bill earlier this year, although in some respects the Senate bill would be somewhat tougher.
The Senate bill is being sponsored by Sens. Amy Klobuchar (D., Minn.), the chairwoman of the Senate antitrust subcommittee, and Chuck
Grassley of Iowa, the Judiciary Committee’s top Republican.
Excerpt from WSJ [paywall] Effort to Bar Tech Companies From ‘Self-Preferencing’ Gains Traction - WSJhttps://www.wsj.com/articles/effort-to-bar-tech-companies-from-self-preferencing-gains-traction-11634202000?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
An excerpt from the House version of the bill follows [https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1]:
SECTION 1. SHORT TITLE.
This Act may be cited as the “American Choice and Innovation Online Act”.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that--
(1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user;
(2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware and software features that are available to the covered platform operator’s own products, services, or lines of business;
(2) condition access to the covered platform or preferred status or placement on the covered platform on the purchase or use of other products or services offered by the covered platform operator;
(3) use non-public data obtained from or generated on the platform by the activities of a business user or its customers that is generated through an interaction with the business user’s products or services to offer or support the offering of the covered platform operator’s own products or services;
(4) restrict or impede a business user from accessing data generated on the platform by the activities of the business user or its customers through an interaction with the business user’s products or services, such as contractual or technical restrictions that prevent the portability of such data by the business user to other systems or applications;
(5) restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;
(6) restrict or impede businesses users from communicating information or providing hyperlinks on the covered platform to covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including search or ranking functionality offered by the covered platform, treat the covered platform operator’s own products, services, or lines of business more favorably than those of another business user;
(8) interfere or restrict a business user’s pricing of its goods or services;
(9) restrict or impede a business user, or a business user’s customers or users, from interoperating or connecting to any product or service; and
(10) retaliate against any business user or covered platform user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.
(c) Affirmative Defense.--
(1) IN GENERAL.—Subsection (a) and (b) shall not apply if the defendant establishes by clear and convincing evidence that the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive process by restricting or impeding legitimate activity by business users; or
(B) was narrowly tailored, could not be achieved through a less discriminatory means, was nonpretextual, and was necessary to--
(i) prevent a violation of, or comply with, Federal or State law; or
(ii) protect user privacy or other non-public data.
Bipartisan Senate legislation set to be unveiled on Thursday would prohibit dominant platforms from favoring their own products or services, a practice known as self-preferencing. It would also bar these dominant platforms from discriminating among business users in a way that materially harms competition.
In particular, the bill would prohibit a range of practices that are harmful to businesses and consumers, such as requiring a business to buy a dominant platform’s goods or services in exchange for preferred placement; misusing a business’s data in order to compete against it; biasing search results in favor of the dominant firm; and unfairly preventing another business’s product from inter-operating with the dominant platform.
The House Judiciary Committee passed a similar bill earlier this year, although in some respects the Senate bill would be somewhat tougher.
The Senate bill is being sponsored by Sens. Amy Klobuchar (D., Minn.), the chairwoman of the Senate antitrust subcommittee, and Chuck
Grassley of Iowa, the Judiciary Committee’s top Republican.
Excerpt from WSJ [paywall] Effort to Bar Tech Companies From ‘Self-Preferencing’ Gains Traction - WSJhttps://www.wsj.com/articles/effort-to-bar-tech-companies-from-self-preferencing-gains-traction-11634202000?cx_testId=3&cx_testVariant=cx_2&cx_artPos=3&mod=WTRN#cxrecs_s
An excerpt from the House version of the bill follows [https://www.congress.gov/bill/117th-congress/house-bill/3816/text?r=43&s=1]:
SECTION 1. SHORT TITLE.
This Act may be cited as the “American Choice and Innovation Online Act”.
SEC. 2. UNLAWFUL DISCRIMINATORY CONDUCT.
(a) Violation.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to engage in any conduct in connection with the operation of the covered platform that--
(1) advantages the covered platform operator’s own products, services, or lines of business over those of another business user;
(2) excludes or disadvantages the products, services, or lines of business of another business user relative to the covered platform operator’s own products, services, or lines of business; or
(3) discriminates among similarly situated business users.
(b) Other Discriminatory Conduct.—It shall be unlawful for a person operating a covered platform, in or affecting commerce, to--
(1) restrict or impede the capacity of a business user to access or interoperate with the same platform, operating system, hardware and software features that are available to the covered platform operator’s own products, services, or lines of business;
(2) condition access to the covered platform or preferred status or placement on the covered platform on the purchase or use of other products or services offered by the covered platform operator;
(3) use non-public data obtained from or generated on the platform by the activities of a business user or its customers that is generated through an interaction with the business user’s products or services to offer or support the offering of the covered platform operator’s own products or services;
(4) restrict or impede a business user from accessing data generated on the platform by the activities of the business user or its customers through an interaction with the business user’s products or services, such as contractual or technical restrictions that prevent the portability of such data by the business user to other systems or applications;
(5) restrict or impede covered platform users from un-installing software applications that have been preinstalled on the covered platform or changing default settings that direct or steer covered platform users to products or services offered by the covered platform operator;
(6) restrict or impede businesses users from communicating information or providing hyperlinks on the covered platform to covered platform users to facilitate business transactions;
(7) in connection with any user interfaces, including search or ranking functionality offered by the covered platform, treat the covered platform operator’s own products, services, or lines of business more favorably than those of another business user;
(8) interfere or restrict a business user’s pricing of its goods or services;
(9) restrict or impede a business user, or a business user’s customers or users, from interoperating or connecting to any product or service; and
(10) retaliate against any business user or covered platform user that raises concerns with any law enforcement authority about actual or potential violations of State or Federal law.
(c) Affirmative Defense.--
(1) IN GENERAL.—Subsection (a) and (b) shall not apply if the defendant establishes by clear and convincing evidence that the conduct described in subsections (a) or (b)--
(A) would not result in harm to the competitive process by restricting or impeding legitimate activity by business users; or
(B) was narrowly tailored, could not be achieved through a less discriminatory means, was nonpretextual, and was necessary to--
(i) prevent a violation of, or comply with, Federal or State law; or
(ii) protect user privacy or other non-public data.
_______________
Last July, the Senate Commerce Commottee issued a press release which anticipated the scheduling disaster that hit Southwest Air this past weekend. The press release complained that the airlines had not applied the taxpayer funds given to them to maintain an effective workforce. The press release follows:
As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov)As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustrations, Chair Cantwell Calls on Airlines for AnswersAs Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov) https://www.commerce.senate.gov/2021/7/as-workforce-shortages-force-flight-cancellations-delays-and-passenger-frustrations-chair-cantwell-calls-on-airlines-for-answers
A headline in the Senate Commerce Committee press release says:
An excerpt from the letters sent to several airlines, including Southwest Air, which cancelled many flights last weekend:
I am deeply concerned by recent reports highlighting [Airline] workforce shortages that have caused flight cancellations and generated delays for passengers. These shortages come in the wake of unprecedented federal funding that Congress appropriated, at the airlines’ request, to support the airline industry during the COVID-19 pandemic. Congress issued this funding with the express purpose of keeping the workforce on payroll to ensure an easier ramp up when air travel returned. I am concerned that, at best, [Airline] poorly managed its marketing of flights and workforce as more people are traveling, and, at worst, it failed to meet the intent of tax payer funding and prepare for the surge in travel that we are now witnessing. In light of reported airline cancellations and delays, and recognizing that [Airline] was one of the largest recipients of payroll support funding, I write to request information regarding [Airline] efforts to comply with the terms of its payroll support agreements with the federal government as well as the origin of recent workforce shortages and the subsequent effect on passengers.
Congress recognized the need to ensure that airline workers, including pilots, flight attendants, baggage crews, customer service professionals, contractors, and others could retain their jobs and, in turn, keep the airline industry operating safely for the American public. To accomplish this, Congress created the Payroll Support Program (“PSP”) to protect the jobs of thousands of airline workers, ensure that essential travel would continue uninterrupted, and guarantee that the airline industry would remain viable not just for passenger flight, but for cargo flight as well. At the urging of industry, the PSP was initially created by the CARES Act to help the industry as air traffic sharply dropped and was subsequently extended by the 2021 Consolidated Appropriations Act and the American Rescue Plan Act, and provided $63 billion to passenger carriers, cargo carriers, and contractors, including $54 billion in relief to passenger airlines. Under the CARES Act, to further assist the airline industry, Congress also provided up to $46 billion in loans, including up to $25 billion for passenger air carriers.
In exchange for funding, aviation companies were required to refrain from conducting involuntary layoffs, furloughs, or instituting pay or benefit reductions. These companies were also required to file periodic reports with Treasury, documenting, among other things, the amount of PSP funds expended and any changes in employee headcount each quarter.[1]
Over the past year, there have been reports of U.S. airlines seeking to reduce the size of their workforce by encouraging employees to accept early retirements, voluntary furloughs, buyouts, and leaves of absence. This is in addition to reports projecting an impending, massive pilot shortage. As passenger travel has boomed in recent weeks, new reports also suggest that some airlines are now unprepared to meet the increased demand that they scheduled for, and have resorted to delaying or canceling flights. This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand. Additionally, these disruptions in air travel have harmed U.S. consumers just as the American economy is rebounding, and the existing airline workforce is being placed under immense pressure to meet demand.
To assist the Committee in examining these issues, please provide written responses to the following questions by July 30, 2021:
Last July, the Senate Commerce Commottee issued a press release which anticipated the scheduling disaster that hit Southwest Air this past weekend. The press release complained that the airlines had not applied the taxpayer funds given to them to maintain an effective workforce. The press release follows:
As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov)As Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustrations, Chair Cantwell Calls on Airlines for AnswersAs Workforce Shortages Force Flight Cancellations, Delays, and Passenger Frustra... (senate.gov) https://www.commerce.senate.gov/2021/7/as-workforce-shortages-force-flight-cancellations-delays-and-passenger-frustrations-chair-cantwell-calls-on-airlines-for-answers
A headline in the Senate Commerce Committee press release says:
An excerpt from the letters sent to several airlines, including Southwest Air, which cancelled many flights last weekend:
I am deeply concerned by recent reports highlighting [Airline] workforce shortages that have caused flight cancellations and generated delays for passengers. These shortages come in the wake of unprecedented federal funding that Congress appropriated, at the airlines’ request, to support the airline industry during the COVID-19 pandemic. Congress issued this funding with the express purpose of keeping the workforce on payroll to ensure an easier ramp up when air travel returned. I am concerned that, at best, [Airline] poorly managed its marketing of flights and workforce as more people are traveling, and, at worst, it failed to meet the intent of tax payer funding and prepare for the surge in travel that we are now witnessing. In light of reported airline cancellations and delays, and recognizing that [Airline] was one of the largest recipients of payroll support funding, I write to request information regarding [Airline] efforts to comply with the terms of its payroll support agreements with the federal government as well as the origin of recent workforce shortages and the subsequent effect on passengers.
Congress recognized the need to ensure that airline workers, including pilots, flight attendants, baggage crews, customer service professionals, contractors, and others could retain their jobs and, in turn, keep the airline industry operating safely for the American public. To accomplish this, Congress created the Payroll Support Program (“PSP”) to protect the jobs of thousands of airline workers, ensure that essential travel would continue uninterrupted, and guarantee that the airline industry would remain viable not just for passenger flight, but for cargo flight as well. At the urging of industry, the PSP was initially created by the CARES Act to help the industry as air traffic sharply dropped and was subsequently extended by the 2021 Consolidated Appropriations Act and the American Rescue Plan Act, and provided $63 billion to passenger carriers, cargo carriers, and contractors, including $54 billion in relief to passenger airlines. Under the CARES Act, to further assist the airline industry, Congress also provided up to $46 billion in loans, including up to $25 billion for passenger air carriers.
In exchange for funding, aviation companies were required to refrain from conducting involuntary layoffs, furloughs, or instituting pay or benefit reductions. These companies were also required to file periodic reports with Treasury, documenting, among other things, the amount of PSP funds expended and any changes in employee headcount each quarter.[1]
Over the past year, there have been reports of U.S. airlines seeking to reduce the size of their workforce by encouraging employees to accept early retirements, voluntary furloughs, buyouts, and leaves of absence. This is in addition to reports projecting an impending, massive pilot shortage. As passenger travel has boomed in recent weeks, new reports also suggest that some airlines are now unprepared to meet the increased demand that they scheduled for, and have resorted to delaying or canceling flights. This reported workforce shortage runs counter to the objective and spirit of the PSP, which was to enable airlines to endure the pandemic and keep employees on payroll so that the industry was positioned to capture a rebound in demand. Additionally, these disruptions in air travel have harmed U.S. consumers just as the American economy is rebounding, and the existing airline workforce is being placed under immense pressure to meet demand.
To assist the Committee in examining these issues, please provide written responses to the following questions by July 30, 2021:
Austin Real Estate Firm Files Antitrust Suit Against Zillow
There is a new antitrust lawsuit against Zillow, reported Axios.
Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings. REX’s listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure “other listings” tab on the Zillow website, rather than the default tab.
Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
The dispute stems from Zillow’s recent move to go beyond listing homes for sale and create a brokerage to hire agents itself. The company announced last fall it would employ agents for its house-flipping service Zillow Offers in several states and would join the National Association of Realtors.
As part of that move, Zillow changed the way it collects listings of houses for sale. Zillow now gathers listings directly from multiple listing services, the databases of listings provided by real-estate brokers. (The Northwest Multiple Listing Service, for example, catalogues listings across more than two dozen counties in Washington.)
Along with that came the change that hit Rex: Zillow now categorizes listings under two tabs when people search for homes for sale: “agent listings” (where homes listed on multiple listing services show up) and “other listings.” To enforce National Association of Realtors rules, certain multiple listing services require that separation, according to the complaint. See https://www.axios.com/local/austin/2021/10/11/austin-real-estate-tech-zillow-rex-lawsuit
Source:Axios
There is a new antitrust lawsuit against Zillow, reported Axios.
Austin-based REX, a tech-based real estate broker, alleges Zillow unfairly marginalized its listings. REX’s listings, along with others that don’t list with a realtor — such as sale by owner — are now found on an obscure “other listings” tab on the Zillow website, rather than the default tab.
Zillow officials say they are complying with National Association of Realtors rules that call for the separation of agent-listed homes from those not represented by agents. The NAR is also a defendant in the REX lawsuit.
The dispute stems from Zillow’s recent move to go beyond listing homes for sale and create a brokerage to hire agents itself. The company announced last fall it would employ agents for its house-flipping service Zillow Offers in several states and would join the National Association of Realtors.
As part of that move, Zillow changed the way it collects listings of houses for sale. Zillow now gathers listings directly from multiple listing services, the databases of listings provided by real-estate brokers. (The Northwest Multiple Listing Service, for example, catalogues listings across more than two dozen counties in Washington.)
Along with that came the change that hit Rex: Zillow now categorizes listings under two tabs when people search for homes for sale: “agent listings” (where homes listed on multiple listing services show up) and “other listings.” To enforce National Association of Realtors rules, certain multiple listing services require that separation, according to the complaint. See https://www.axios.com/local/austin/2021/10/11/austin-real-estate-tech-zillow-rex-lawsuit
Source:Axios
Bonus: SNL news summary 10-16-2021
https://youtu.be/QQP_IMxtfBM
https://youtu.be/QQP_IMxtfBM
Is China Shooting Its Private Entrepreneurs in the Foot (Or Worse)?
by Don Allen Resnikoff
Even advocates of aggressive business regulation in the U.S. often recognize that excessive government restraints hobble entrepreneurial innovation. Former USDOJ Antitrust chief Delharim observed that while certain kinds of regulation are necessary, regulation was never intended to be without appropriate limits. Delharim pointed out that Thomas Jefferson said that "a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." [Public Roundtable on Anticompetitive Regulations Transcript Part One (justice.gov) https://www.justice.gov/atr/page/file/1073936/download]
It is hardly surprising that the Chinese government, which has Communist ideological roots, would depart from the advice of Thomas Jefferson and seek to control private Chinese companies in a way that risks seriously undermining those companies.
It is surprising that some U.S. commenters, including a prestigious New York Times columnist, suggest that the Chinese government’s recent crackdown on its private entrepreneurs will make them more threatening competitors, so much so that antitrust enforcement against companies like Facebook should be relaxed: “Mark Zuckerberg was right. . . .[he pointed to] the growing dangers from China across the digital landscape. He argued that [U.S.] tech companies like his needed to be large, if only to fend off challenges from the Asian giant and its ever-more-powerful government-controlled companies.” [https://www.nytimes.com/2021/07/20/opinion/china-xi-didi-biden-facebook.html]
Japan’s experience with keiretsu and government control of business in the 1970s and 1980s suggests that excessive government control undermines private entrepreneurs. One Japanese observer says that during those years “the Japanese economy caught up with other industrial economies in the world. . . . Japanese business and household sectors should have changed their behavior from the one based on collective actions to the more autonomous one of coping with their own risks under a more competitive environment. . . . .Collective business practices and government interventions largely remained.” The effects on the Japanese economy were dire. See https://www.gsid.nagoya-u.ac.jp/sotsubo/Postwar_Development_of_the_Japanese%20Economy(Otsubo_NagoyaU).pdf
There are important parallels between Japan’s earlier strategies and China’s current strategies for economic growth, despite obvious differences such as different population size and political ideology. In both situations governments’ political influence over business activities is very important. Growth is important as a government goal. In Japan’s earlier strategy and China’s recent strategy there is deliberate targeting of specific industry sectors for growth.
The experience in Japan suggests that the time came when the Japanese government needed to step out of the way and let successful private companies mature and succeed and let weaker companies fail. Instead, Japanese government bureaucrats continued to protect weaker companies.
The question for China is the extent to which it will allow government bureaucrats to meddle in the business of private companies in a way that suits perceived political purposes, but interferes with the operation of an open commercial market that rewards strong companies. If there is too much meddling by government bureaucrats,, China may face a decline for its companies in a manner similar to Japan.
It is possible to argue that because China has a non-democratic government its leaders may be in a position to avoid Japan’s error of failing to release the entrepreneurial energy of its successful companies. But that argument ignores the strong bent of Chinese bureaucrats to exercise political control over business, to the possible great detriment to those businesses. (See Benjamin Bracher’s perceptive student honors thesis written years ago and comparing Japan and China economies, at https://www.southwestern.edu/live/news/9466-benjamin-bracher-13-the-economic-rise-of-japan
What will happen after the Chinese government’s current crackdown on its private entrepreneurs is a matter of speculation, of course. I see merit in the observation that while the Chinese government’s goal is to fix structural problems, like excess debt and inequality, and generate more balanced growth, “economists warn that authoritarian governments have a shaky record with this type of transformation.” See The End of a ‘Gilded Age’: China Is Bringing Business to Heel - The New York Times (nytimes.com) https://www.nytimes.com/2021/10/05/business/china-businesses.html
The recent comments of Raghuram G. Rajan, professor of economics, are in the same vein. He observes that “[B]ecause China’s past cavalier treatment of intellectual property rights has made advanced economies increasingly wary of sharing research and know-how, China now must create more of its own IP. And while it has universities and sophisticated private corporations that can do this, the key question is whether these entities will have incentive to innovate freely despite the recent crackdown. From https://www.project-syndicate.org/commentary/china-risky-business-crackdown-common-prosperity-campaign-by-raghuram-rajan-2021-_2021&utm_medium=email&utm_term=0_73bad5b7d8-38b81a0552-107280365&mc_cid=38b81a0552&mc_eid=1ddc269de8}
So, it may be that the Chinese government policy of cracking down on its private entrepreneurs will shoot the Chinese economy in the foot, or worse. The implications for U.S. economic policy are complex, but appear to include cautions about the U.S. countering the Chinese by emulating a misguided policy of authoritarian government controls over business.
by Don Allen Resnikoff
Even advocates of aggressive business regulation in the U.S. often recognize that excessive government restraints hobble entrepreneurial innovation. Former USDOJ Antitrust chief Delharim observed that while certain kinds of regulation are necessary, regulation was never intended to be without appropriate limits. Delharim pointed out that Thomas Jefferson said that "a wise and frugal government, which shall restrain men from injuring one another, shall leave them otherwise free to regulate their own pursuits of industry and improvement, and shall not take from the mouth of labor the bread it has earned." [Public Roundtable on Anticompetitive Regulations Transcript Part One (justice.gov) https://www.justice.gov/atr/page/file/1073936/download]
It is hardly surprising that the Chinese government, which has Communist ideological roots, would depart from the advice of Thomas Jefferson and seek to control private Chinese companies in a way that risks seriously undermining those companies.
It is surprising that some U.S. commenters, including a prestigious New York Times columnist, suggest that the Chinese government’s recent crackdown on its private entrepreneurs will make them more threatening competitors, so much so that antitrust enforcement against companies like Facebook should be relaxed: “Mark Zuckerberg was right. . . .[he pointed to] the growing dangers from China across the digital landscape. He argued that [U.S.] tech companies like his needed to be large, if only to fend off challenges from the Asian giant and its ever-more-powerful government-controlled companies.” [https://www.nytimes.com/2021/07/20/opinion/china-xi-didi-biden-facebook.html]
Japan’s experience with keiretsu and government control of business in the 1970s and 1980s suggests that excessive government control undermines private entrepreneurs. One Japanese observer says that during those years “the Japanese economy caught up with other industrial economies in the world. . . . Japanese business and household sectors should have changed their behavior from the one based on collective actions to the more autonomous one of coping with their own risks under a more competitive environment. . . . .Collective business practices and government interventions largely remained.” The effects on the Japanese economy were dire. See https://www.gsid.nagoya-u.ac.jp/sotsubo/Postwar_Development_of_the_Japanese%20Economy(Otsubo_NagoyaU).pdf
There are important parallels between Japan’s earlier strategies and China’s current strategies for economic growth, despite obvious differences such as different population size and political ideology. In both situations governments’ political influence over business activities is very important. Growth is important as a government goal. In Japan’s earlier strategy and China’s recent strategy there is deliberate targeting of specific industry sectors for growth.
The experience in Japan suggests that the time came when the Japanese government needed to step out of the way and let successful private companies mature and succeed and let weaker companies fail. Instead, Japanese government bureaucrats continued to protect weaker companies.
The question for China is the extent to which it will allow government bureaucrats to meddle in the business of private companies in a way that suits perceived political purposes, but interferes with the operation of an open commercial market that rewards strong companies. If there is too much meddling by government bureaucrats,, China may face a decline for its companies in a manner similar to Japan.
It is possible to argue that because China has a non-democratic government its leaders may be in a position to avoid Japan’s error of failing to release the entrepreneurial energy of its successful companies. But that argument ignores the strong bent of Chinese bureaucrats to exercise political control over business, to the possible great detriment to those businesses. (See Benjamin Bracher’s perceptive student honors thesis written years ago and comparing Japan and China economies, at https://www.southwestern.edu/live/news/9466-benjamin-bracher-13-the-economic-rise-of-japan
What will happen after the Chinese government’s current crackdown on its private entrepreneurs is a matter of speculation, of course. I see merit in the observation that while the Chinese government’s goal is to fix structural problems, like excess debt and inequality, and generate more balanced growth, “economists warn that authoritarian governments have a shaky record with this type of transformation.” See The End of a ‘Gilded Age’: China Is Bringing Business to Heel - The New York Times (nytimes.com) https://www.nytimes.com/2021/10/05/business/china-businesses.html
The recent comments of Raghuram G. Rajan, professor of economics, are in the same vein. He observes that “[B]ecause China’s past cavalier treatment of intellectual property rights has made advanced economies increasingly wary of sharing research and know-how, China now must create more of its own IP. And while it has universities and sophisticated private corporations that can do this, the key question is whether these entities will have incentive to innovate freely despite the recent crackdown. From https://www.project-syndicate.org/commentary/china-risky-business-crackdown-common-prosperity-campaign-by-raghuram-rajan-2021-_2021&utm_medium=email&utm_term=0_73bad5b7d8-38b81a0552-107280365&mc_cid=38b81a0552&mc_eid=1ddc269de8}
So, it may be that the Chinese government policy of cracking down on its private entrepreneurs will shoot the Chinese economy in the foot, or worse. The implications for U.S. economic policy are complex, but appear to include cautions about the U.S. countering the Chinese by emulating a misguided policy of authoritarian government controls over business.
States Allowed To Seek Disgorgement (Money Payment) Order In Martin Shkreli Antitrust Case-
New York and other states will be allowed to seek a nationwide disgorgement (money payment) order if they win at trial on their claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim.
US District Judge Denise Cote in Manhattan federal court said in her ruling on Friday, September 24, that New York law permitted the state to move to recoup alleged ill-gotten corporate gains nationally. The Cote decision is at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
New York and other states will be allowed to seek a nationwide disgorgement (money payment) order if they win at trial on their claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim.
US District Judge Denise Cote in Manhattan federal court said in her ruling on Friday, September 24, that New York law permitted the state to move to recoup alleged ill-gotten corporate gains nationally. The Cote decision is at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
Federal Trade Commission chief Lina Khan is resurrecting a review of Zillow Group's (Z, ZG) $500 million acquisition of ShowingTime -
Zillow had come to the deal in February for the online scheduling platform for real estate showings.
In the Spring, FTC lawyers told the companies they had no concerns about it. But now the FTC is asking for more information.
https://seekingalpha.com/news/3660803-zillow-acquiring-home-showing-platfor-showingtime-for-500m
Zillow had come to the deal in February for the online scheduling platform for real estate showings.
In the Spring, FTC lawyers told the companies they had no concerns about it. But now the FTC is asking for more information.
https://seekingalpha.com/news/3660803-zillow-acquiring-home-showing-platfor-showingtime-for-500m
Are the Authors of Consumer Reviews Protected by Anti-SLAPP Laws?
EXCERPT FROM Public Citizen Consumer Law & Policy Blog
Posted: 01 Oct 2021 09:02 AM PDT
by Paul Alan Levy
Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.
The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio. The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.
Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.
Last year, New York updated its antiSLAPP law by expanding coverage from speech about “public permittees and licensees” to “speech on an issue of public interest,” as well as by toughening both the standards for justifying SLAPP suits and the remedies afforded to the victims of SLAPPs. Curiously enough, the defamation suit was filed a mere eight days before the effective date of the new law; it was served four days before the effective date, potentially raising the question whether the new law would be held to be applicable to cases still pending when the law came into effect. (all the courts that have addressed that issue so far have found that anti-SLAPP amendments do apply). But the trial judge denied the motion to dismiss on the ground that, because the consumer reviews addressed only a single problem encountered with a single local business, it was a review about a “private beef” rather than an issue of public interest.
This holding threatens all consumers and, indeed, most people who write publicly about the actions of companies that affect them. After all, most people post reviews only about incidents that affect them, and usually they write about their own particular experiences. Does that make these postings “private beefs”? And the holding raises a problem far beyond New York because anti-SLAPP laws in many states have similar language defining the scope of the speech protected. We took the case, therefore, to establish the principle that, when a consumer speaks up about his or her experiences with a single company, the common interest of all consumers in learning about corporate wrongdoing is sufficient to make the review a matter of public interest within the meaning of anti-SLAPP laws. And the legal issues are squarely presented on this appeal because the plaintiff pet grooming business chose to stand on its complaint, along with its argument that the anti-SLAPP law did not apply, rather than submitting any affidavits purporting to show that the review contained false statements of fact.
Our brief draws both on the language of the New York anti-SLAPP law, which is particularly useful because it defines “public interest” as including everything but “a purely private matter,” but also on cases applying anti-SLAPP laws in other states as well as interpretations of “matter of public concern,”which is a common concept in First Amendment law that affects defamation law particularly but other kinds of controversies as well.
The appeal will likely be argued next year.
https://pubcit.typepad.com/clpblog/2021/10/are-the-authors-of-consumer-reviews-protected-by-anti-slapp-laws.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
EXCERPT FROM Public Citizen Consumer Law & Policy Blog
Posted: 01 Oct 2021 09:02 AM PDT
by Paul Alan Levy
Today we entered an important case that will determine whether New York’s new and improved anti-SLAPP law protects the authors of consumer reviews against being sued for defamation when they reveal publicly that they were less than thrilled with a business’s services or products.
The case arose from the horrible experience of the Sproule family in early March 2020, when they traveled from their home in the Chicago suburbs to Sarah Sproule’s hometown, Wantagh, New York, to attend her father’s funeral. They brought along their daughter’s brand-new puppy (her Christmas present!) and took him in for grooming at a local business, VIP Pet Grooming Studio. The precise course of events is disputed, but the bottom line is that the grooming was interrupted because the puppy reacted badly; water accumulated in the dog’s lungs; and after two days on a ventilator at a local animal hospital, at a cost of more than $10,000, the dog had to be put down.
Compounding the family’s misery, the grooming outfit refused to take any responsibility for what had happened. So Robert Sproule posted reviews on both Yelp and Google, and both he and his wife sued the grooming company for negligence once the courts reopened as the pandemic eased. On the same day that it responded to the negligence complaint, VIP Pet Grooming sued for defamation. In a particularly sleazy move, the company sued both Robert and Sarah Sproule, even though only Robert Sproule had posted the reviews. Was this punishment for Sarah Sproule’s having sued for negligence? Was it just extra pressure on the family as a whole? VIP's lawyer has ignored that question so far.
Last year, New York updated its antiSLAPP law by expanding coverage from speech about “public permittees and licensees” to “speech on an issue of public interest,” as well as by toughening both the standards for justifying SLAPP suits and the remedies afforded to the victims of SLAPPs. Curiously enough, the defamation suit was filed a mere eight days before the effective date of the new law; it was served four days before the effective date, potentially raising the question whether the new law would be held to be applicable to cases still pending when the law came into effect. (all the courts that have addressed that issue so far have found that anti-SLAPP amendments do apply). But the trial judge denied the motion to dismiss on the ground that, because the consumer reviews addressed only a single problem encountered with a single local business, it was a review about a “private beef” rather than an issue of public interest.
This holding threatens all consumers and, indeed, most people who write publicly about the actions of companies that affect them. After all, most people post reviews only about incidents that affect them, and usually they write about their own particular experiences. Does that make these postings “private beefs”? And the holding raises a problem far beyond New York because anti-SLAPP laws in many states have similar language defining the scope of the speech protected. We took the case, therefore, to establish the principle that, when a consumer speaks up about his or her experiences with a single company, the common interest of all consumers in learning about corporate wrongdoing is sufficient to make the review a matter of public interest within the meaning of anti-SLAPP laws. And the legal issues are squarely presented on this appeal because the plaintiff pet grooming business chose to stand on its complaint, along with its argument that the anti-SLAPP law did not apply, rather than submitting any affidavits purporting to show that the review contained false statements of fact.
Our brief draws both on the language of the New York anti-SLAPP law, which is particularly useful because it defines “public interest” as including everything but “a purely private matter,” but also on cases applying anti-SLAPP laws in other states as well as interpretations of “matter of public concern,”which is a common concept in First Amendment law that affects defamation law particularly but other kinds of controversies as well.
The appeal will likely be argued next year.
https://pubcit.typepad.com/clpblog/2021/10/are-the-authors-of-consumer-reviews-protected-by-anti-slapp-laws.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+ConsumerLawPolicyBlog+%28Consumer+Law+%26+Policy+Blog%29
SIRM: EEOC Guidance on when Employers can require COVID vaccination
An SIRM article explains:
As mandatory COVID-19 vaccines become more widespread, many employers are asking what they can do if workers refuse. Some employers are firing workers who won't take the vaccine and others are requiring unvaccinated employees to submit to weekly testing and take other safety precautions.
The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don't prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC.
Explanation is at the full SIRM article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/if-workers-refuse-a-covid-19-vaccination.aspx
An SIRM article explains:
As mandatory COVID-19 vaccines become more widespread, many employers are asking what they can do if workers refuse. Some employers are firing workers who won't take the vaccine and others are requiring unvaccinated employees to submit to weekly testing and take other safety precautions.
The Equal Employment Opportunity Commission (EEOC) has weighed in with guidance that answers some workplace vaccination questions. For example, the agency said that federal anti-discrimination laws don't prohibit employers from requiring all employees who physically enter the workplace to be vaccinated for COVID-19. Employers that encourage or require vaccinations, however, must comply with the Americans with Disabilities Act (ADA), Title VII of the Civil Rights Act of 1964 and other workplace laws, according to the EEOC.
Explanation is at the full SIRM article: https://www.shrm.org/resourcesandtools/legal-and-compliance/employment-law/pages/if-workers-refuse-a-covid-19-vaccination.aspx
Fed Corruption Maybe: Second Fed president leaves amid fallout from trading controversy
from article by Zachary Halaschak https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
Mon, September 27, 2021
Federal Reserve Bank of Dallas President Robert Kaplan announced his retirement from the central bank just hours after another top official at the central bank announced he was stepping down amid controversy over personal trades they made while on the job.
Kaplan, a former Goldman Sachs executive, announced his resignation on Monday, citing fallout from a series of trades he made last year while the Fed embarked upon an expansive asset-buying program. The resignation comes the same day that Federal Reserve Bank of Boston President Eric Rosengren, who was also facing public scrutiny, announced his retirement for health reasons.
“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said in a statement. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”
Kaplan reiterated that his personal trades did not violate Fed policies or the central bank’s ethical standards. His retirement from the central bank is effective on Oct. 8, and Rosengren will be departing the Fed on Friday.
***
Earlier this month, disclosures revealed that Kaplan executed high-value trades in large corporations such as Apple and Amazon.
The individual security holdings prompted Fed Chairman Jerome Powell to call for changes to the Fed’s rules during a press briefing last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” the chairman said on Wednesday.
***
from article by Zachary Halaschak https://news.yahoo.com/second-fed-president-leaves-amid-204500090.html
Mon, September 27, 2021
Federal Reserve Bank of Dallas President Robert Kaplan announced his retirement from the central bank just hours after another top official at the central bank announced he was stepping down amid controversy over personal trades they made while on the job.
Kaplan, a former Goldman Sachs executive, announced his resignation on Monday, citing fallout from a series of trades he made last year while the Fed embarked upon an expansive asset-buying program. The resignation comes the same day that Federal Reserve Bank of Boston President Eric Rosengren, who was also facing public scrutiny, announced his retirement for health reasons.
“The Federal Reserve is approaching a critical point in our economic recovery as it deliberates the future path of monetary policy,” Kaplan said in a statement. “Unfortunately, the recent focus on my financial disclosure risks becoming a distraction to the Federal Reserve’s execution of that vital work.”
Kaplan reiterated that his personal trades did not violate Fed policies or the central bank’s ethical standards. His retirement from the central bank is effective on Oct. 8, and Rosengren will be departing the Fed on Friday.
***
Earlier this month, disclosures revealed that Kaplan executed high-value trades in large corporations such as Apple and Amazon.
The individual security holdings prompted Fed Chairman Jerome Powell to call for changes to the Fed’s rules during a press briefing last week. Powell said that the Fed has begun a “comprehensive review of the ethics rules around permissible financial holdings and activity by Fed officials.”
“We need to make changes, and we’re going to do that as a consequence of this,” the chairman said on Wednesday.
***
Auto seat safety bill now before Congress may be in peril
Recent news suggests that a bill to improve auto seat safety may currently be in jeopardy because of Congressional wrangling. The article below is from some weeks ago and discusses the merits of the propsed legislation.
From article By Megan Towey, Kris Van Cleave
Updated on: April 26, 2021 / 7:09 PM / CBS News
Following a series of CBS News reports that revealed potential safety dangers in vehicle seats, Senators Ed Markey and Richard Blumenthal will reintroduce legislation that would require a new strength standard.
"Seatback strength standards have not been substantially updated since 1967, allowing thousands to be injured and killed when their car's front seats collapse after a crash," Markey, a Democrat from Massachusetts, told CBS News. "That's why I'm reintroducing legislation to require the modernization of our seatback safety standards moving forward. We must end these entirely unacceptable and preventable tragedies."
The Modernizing Seatback Safety Act would require automakers and the National Highway Traffic Safety Administration to strengthen seat standards within two years.
In a series of stories that began airing in 2015, CBS News revealed that when hit from behind, car front seats may break and their occupants can be propelled – forcefully – into the rear seats where children usually sit.
CBS News identified more than 100 people, mostly children, who were severely injured or killed in alleged seatback failures over the past 30 years. The number is likely higher: In 2016, then-NHTSA administrator Mark Rosekind acknowledged that such crashes were not closely tracked.
Crash tests have shown the risks associated with seatback failures for decades, with problems existing in many different car makes and models. Auto safety experts blame a seatback safety standard that dates back to the 1960s.
The cost to fix the problem could be small - as little as on a dollar or so per seat, according to a deposition with an auto company engineer reviewed by CBS News.
"It is the moral obligation of a society to use available, affordable, science-based solutions to limit risks that can kill or severely injure unsuspecting individuals," said Jason Levine, executive director of the Center for Auto Safety. "The Modernizing Seatback Safety Act can finally bring closure to an embarrassing half-century of an unwillingness to upgrade a safety standard that can be passed with the average dining room chair."
***
The measure on seat strength is one of four auto-safety bills Markey and Blumenthal are introducing Monday.
One would offer grants to states to use for notifying registered vehicle owners of safety recalls and establish annual report cards on how effectively automakers are completing open recalls. Another would require automakers to provide more information about incidents involving death or serious injuries and then have NHTSA make that data available to the public in a user-friendly format.
The third would require the Department of Transportation to study how driver-monitoring systems can prevent distraction and misuse of advanced driver assistance systems – including Tesla's Autopilot – and calls for regulations requiring the installation of driver-monitoring systems based on the agency's findings.
The Senators hope to include the package in President Biden's infrastructure bill.
See https://www.cbsnews.com/news/seatback-strength-legislation-reintroduced-after-cbs-news-investigation/
Recent news suggests that a bill to improve auto seat safety may currently be in jeopardy because of Congressional wrangling. The article below is from some weeks ago and discusses the merits of the propsed legislation.
From article By Megan Towey, Kris Van Cleave
Updated on: April 26, 2021 / 7:09 PM / CBS News
Following a series of CBS News reports that revealed potential safety dangers in vehicle seats, Senators Ed Markey and Richard Blumenthal will reintroduce legislation that would require a new strength standard.
"Seatback strength standards have not been substantially updated since 1967, allowing thousands to be injured and killed when their car's front seats collapse after a crash," Markey, a Democrat from Massachusetts, told CBS News. "That's why I'm reintroducing legislation to require the modernization of our seatback safety standards moving forward. We must end these entirely unacceptable and preventable tragedies."
The Modernizing Seatback Safety Act would require automakers and the National Highway Traffic Safety Administration to strengthen seat standards within two years.
In a series of stories that began airing in 2015, CBS News revealed that when hit from behind, car front seats may break and their occupants can be propelled – forcefully – into the rear seats where children usually sit.
CBS News identified more than 100 people, mostly children, who were severely injured or killed in alleged seatback failures over the past 30 years. The number is likely higher: In 2016, then-NHTSA administrator Mark Rosekind acknowledged that such crashes were not closely tracked.
Crash tests have shown the risks associated with seatback failures for decades, with problems existing in many different car makes and models. Auto safety experts blame a seatback safety standard that dates back to the 1960s.
The cost to fix the problem could be small - as little as on a dollar or so per seat, according to a deposition with an auto company engineer reviewed by CBS News.
"It is the moral obligation of a society to use available, affordable, science-based solutions to limit risks that can kill or severely injure unsuspecting individuals," said Jason Levine, executive director of the Center for Auto Safety. "The Modernizing Seatback Safety Act can finally bring closure to an embarrassing half-century of an unwillingness to upgrade a safety standard that can be passed with the average dining room chair."
***
The measure on seat strength is one of four auto-safety bills Markey and Blumenthal are introducing Monday.
One would offer grants to states to use for notifying registered vehicle owners of safety recalls and establish annual report cards on how effectively automakers are completing open recalls. Another would require automakers to provide more information about incidents involving death or serious injuries and then have NHTSA make that data available to the public in a user-friendly format.
The third would require the Department of Transportation to study how driver-monitoring systems can prevent distraction and misuse of advanced driver assistance systems – including Tesla's Autopilot – and calls for regulations requiring the installation of driver-monitoring systems based on the agency's findings.
The Senators hope to include the package in President Biden's infrastructure bill.
See https://www.cbsnews.com/news/seatback-strength-legislation-reintroduced-after-cbs-news-investigation/
New York and other states will be allowed to seek a nationwide disgorgement order based on the claim that Vyera Pharmaceuticals and its former chief executive Martin Shkreli participated in an anticompetitive scheme to maintain a price boost for the life-saving drug Daraprim
From the ruling by DENISE COTE, District Judge:
Defendants Vyera Pharmaceuticals, LLC and its parent company Phoenixus, AG (together, “Vyera”), Martin Shkreli, and
Kevin Mulleady have moved for partial summary judgment on the scope of the plaintiffs’ claim for disgorgement. They contend
that the seven State plaintiffs may only pursue such relief where the defendants’ net profits are tied to sales that have
victimized citizens of their States. The State plaintiffs have cross-moved for summary judgment and a preclusion order. For
the following reasons, the defendants’ motion is denied. The States’ cross-motion is granted.
The opinion can be read at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
From the ruling by DENISE COTE, District Judge:
Defendants Vyera Pharmaceuticals, LLC and its parent company Phoenixus, AG (together, “Vyera”), Martin Shkreli, and
Kevin Mulleady have moved for partial summary judgment on the scope of the plaintiffs’ claim for disgorgement. They contend
that the seven State plaintiffs may only pursue such relief where the defendants’ net profits are tied to sales that have
victimized citizens of their States. The State plaintiffs have cross-moved for summary judgment and a preclusion order. For
the following reasons, the defendants’ motion is denied. The States’ cross-motion is granted.
The opinion can be read at https://fingfx.thomsonreuters.com/gfx/legaldocs/zdvxodjgopx/FTC%20et%20al%20v%20Vyera%20Pharmaceuticals%20et%20al%20decision%20(1).pdf
FTC Chair Kahn's recent memo to Staff and Commissioners
Viatris, Joe Manchin, and the problem with overseas production of generic pharmaceuticals
In an earlier posting we noted that although the Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 it’s closed down and laid workers off -- moving manufacture to India and Australia. We pointed out the disturbing involvement of Senator Joe Manchin. Viatris was formed through a merger between two pharmaceutical companies, Mylan and Upjohn. Mylan’s chief executive, Manchin’s daughter Heather Bresch, got a $31 million payout as a result of the corporate consolidation before the new company set about cutting costs, including the closure of the Morgantown plant. Joseph Gouzd, president of United Steelworkers of America Local 8-957 and a worker at the plant, said that Viatris gave little reason for the closure except to say the company is looking to “maximize the best interests of the shareholders.” Investigative journalist Katherine Eban says moving pharmaceutical production overseas contradicts the recommendations of numerous reports that have found major safety lapses in drug manufacturing abroad, as well as concern from lawmakers about keeping a key industry within the United States. “This is pure insanity,” Eban says. “It seems like it is both pharmaceutical and national security suicide to close this plant.”
Now a new NYT article points out that when production of generics shifts overseas, it’s harder for the Food and Drug Administration to inspect factories: "Major companies have been caught faking and manipulating the data that is supposed to prove that drugs are effective and safe. Probable carcinogens have been discovered in the drug supply. During the pandemic, which caused several countries to ban the export of medical supplies, a new fear has arisen: that faraway factories might one day cut Americans off from their drugs. Dozens of lifesaving medications are made with ingredients no longer manufactured in the United States."
The new article reiterates the past promises by Presidents Donald Trump and Joe Biden to encourage more drug production on U.S. soil. But the Viatris experience suggests that these promises are not being fulfilled.
See https://www.nytimes.com/2021/09/18/opinion/drug-market-prescription-generic.html
In an earlier posting we noted that although the Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 it’s closed down and laid workers off -- moving manufacture to India and Australia. We pointed out the disturbing involvement of Senator Joe Manchin. Viatris was formed through a merger between two pharmaceutical companies, Mylan and Upjohn. Mylan’s chief executive, Manchin’s daughter Heather Bresch, got a $31 million payout as a result of the corporate consolidation before the new company set about cutting costs, including the closure of the Morgantown plant. Joseph Gouzd, president of United Steelworkers of America Local 8-957 and a worker at the plant, said that Viatris gave little reason for the closure except to say the company is looking to “maximize the best interests of the shareholders.” Investigative journalist Katherine Eban says moving pharmaceutical production overseas contradicts the recommendations of numerous reports that have found major safety lapses in drug manufacturing abroad, as well as concern from lawmakers about keeping a key industry within the United States. “This is pure insanity,” Eban says. “It seems like it is both pharmaceutical and national security suicide to close this plant.”
Now a new NYT article points out that when production of generics shifts overseas, it’s harder for the Food and Drug Administration to inspect factories: "Major companies have been caught faking and manipulating the data that is supposed to prove that drugs are effective and safe. Probable carcinogens have been discovered in the drug supply. During the pandemic, which caused several countries to ban the export of medical supplies, a new fear has arisen: that faraway factories might one day cut Americans off from their drugs. Dozens of lifesaving medications are made with ingredients no longer manufactured in the United States."
The new article reiterates the past promises by Presidents Donald Trump and Joe Biden to encourage more drug production on U.S. soil. But the Viatris experience suggests that these promises are not being fulfilled.
See https://www.nytimes.com/2021/09/18/opinion/drug-market-prescription-generic.html
California lawmakers recently approved the Garment Worker Protection Act, which would eliminate the piece rate system and ensure workers are paid an hourly minimum wage.
The bill would also expand who is liable for stolen wages – meaning a brand like Charlotte Russe, for example, would share responsibility for paying out wage theft claims filed by workers who make their clothing in factories such as the ones in downtown LA. Right now, those claims are filed against the factories themselves but can languish for years before being paid out, if they ever are.
from Garment workers in America’s fashion capital may make just $6 an hour. A new law could change that (msn.com) https://www.msn.com/en-us/news/us/garment-workers-in-america-s-fashion-capital-may-make-just-6-an-hour-a-new-law-could-change-that/ar-AAOzWgP?ocid=msedgdhp&pc=U531
The bill would also expand who is liable for stolen wages – meaning a brand like Charlotte Russe, for example, would share responsibility for paying out wage theft claims filed by workers who make their clothing in factories such as the ones in downtown LA. Right now, those claims are filed against the factories themselves but can languish for years before being paid out, if they ever are.
from Garment workers in America’s fashion capital may make just $6 an hour. A new law could change that (msn.com) https://www.msn.com/en-us/news/us/garment-workers-in-america-s-fashion-capital-may-make-just-6-an-hour-a-new-law-could-change-that/ar-AAOzWgP?ocid=msedgdhp&pc=U531
SCOTUS BLOG's Amy Howe discusses the upcoming US Supreme Court term, including abortion and gun related issues
Amy Howe's interview on the weekend PBS Newshour discusses the upcoming US Supreme Court term, which is likely to include abortion and gun rights cases. Among other things, Amy Howe offers her expertise on questions such as the Court's use of the "shadow docket" in denying an emergency stay against the Texas law limiting abortions. She also discusses the impact of recent changes in the Court's membership.
See:
https://www.pbs.org/newshour/show/gun-laws-abortion-rights-upcoming-scotus-hearings-to-be-impacted-by-rbgs-death
Amy Howe's interview on the weekend PBS Newshour discusses the upcoming US Supreme Court term, which is likely to include abortion and gun rights cases. Among other things, Amy Howe offers her expertise on questions such as the Court's use of the "shadow docket" in denying an emergency stay against the Texas law limiting abortions. She also discusses the impact of recent changes in the Court's membership.
See:
https://www.pbs.org/newshour/show/gun-laws-abortion-rights-upcoming-scotus-hearings-to-be-impacted-by-rbgs-death
Abortion, the death penalty, and the shadow docket By Lee Kovarsky
on Sep 6, 2021 at 12:03 pm
FacebookLinkedInTwitterEmail
PrintFriendlyShareLee Kovarsky is the Bryant Smith chair in law and co-director of Capital Punishment Center at the University of Texas at Austin.
Most people following the litigation over S.B. 8 — the new Texas ban on nearly all abortions after the sixth week of pregnancy — have heard some version of the argument. The Supreme Court could neither enjoin the flagrantly unconstitutional abortion restrictions nor lift the circuit court’s unexplained order pausing lower-court litigation, the “rule-of-law story” goes, because the Supreme Court’s hands were tied. In this telling, the Supreme Court’s procedural doctrines required that it refuse emergency relief unless the party seeking it is reasonably certain to prevail in the litigation. And procedural uncertainties admittedly lurked. Sovereign immunity precluded suit against Texas itself, S.B. 8 privatized enforcement and circuit precedent foreclosed suits against state executive-branch officers, and there were lingering questions about whether the plaintiffs could sue the judicial personnel named in the complaint. But this ode to rule-of-law values sounds some pretty false notes.
The Supreme Court issued its S.B. 8 order on the so-called “shadow docket,” where it hands down orders and summary decisions that did not receive full briefing and oral argument. In the past several years — and especially in the past 18 months — the court has increasingly used its shadow docket to award emergency relief in politically charged cases. I have niche expertise in one category of shadow-docket activity: the death penalty. There were 13 federal executions during the last six months of the Trump administration, and the pertinent shadow-docket interventions disclose anything but a court abstaining in close cases.
I have written about the “Trump executions” at length elsewhere, and a little background is in order here. Before the summer of 2020, the federal government hadn’t executed anyone since 2003. President Donald Trump’s Justice Department decided to get the federal government back in the execution business, and it began announcing execution dates during the summer of 2019. The federal lethal-injection protocol called for the use of a single drug, pentobarbital, that was developed to euthanize animals. The first volley of planned executions took place in July 2020, with the possibility of a Trump-to-Biden transition looming six months later. There is usually 11th-hour litigation in the shadow of executions, and the relevant federal law ensures that the Supreme Court will almost always receive applications for execution stays (from prisoners) or applications to vacate them (from the government).
The Supreme Court granted emergency relief to the government, on the shadow docket and pursuant to the same norms about restricting relief to reasonably certain litigation winners, in seven of the 13 Trump execution cases. In each of these cases, the Supreme Court’s intervention overturned a lower-court disposition on a contested legal question. As a practical matter, the relief allowed the executions to go forward while the cases were pending, and courts dismissed the litigation as moot after the prisoners were dead. Let me tell you a bit more about how “certain” the government’s success was in those cases.
Start with Eighth Amendment litigation over the use of pentobarbital, which culminated in a shadow-docket order vacating a lower-court injunction affecting four of the 13 prisoners (Daniel Lee, Wesley Purkey, Dustin Honken, and Keith Nelson). In Barr v. Lee, the Supreme Court grounded its decision to vacate that injunction on an earlier case involving a materially different issue that the Supreme Court nonetheless seemed to read as a categorical rule that the Eighth Amendment permitted pentobarbital-only executions. Several months later, however, the U.S. Court of Appeals for the District of Columbia Circuit squarely held that a claimant could state an Eighth Amendment claim against such executions. The legal rule forming the basis for the Supreme Court’s intervention was anything but settled.
Next consider the Orlando Hall execution. Hall asserted that the use of un-prescribed pentobarbital violated the Food, Drug, and Cosmetic Act. The district court stayed his execution after a D.C. Circuit decision that such use of pentobarbital was in fact an FDCA violation. The Supreme Court vacated the stay. What bears emphasis is that the Supreme Court granted emergency relief on its shadow docket not just when the party seeking it had uncertain prospects for success, but when that party would almost certainly lose on the underlying legal question — and even though likelihood of success on the merits is supposed to be a necessary condition for such relief.
Perhaps the most shocking of all the shadow-docket orders was the last one, in the Dustin Higgs case. The federal death-penalty statute has a provision requiring that federal sentence implementation mimic that of the state in which the federal court sits. In situations where the federal court sits in a state that has abolished the death penalty, the statute directs the sentencer, at the time of sentence, to designate some other state for implementation-parity purposes. Higgs had been sentenced by the U.S. District Court for the District of Maryland in 2001, at a time when Maryland retained the death penalty, and so there was no other-state designation in the sentencing judgment. But Maryland abolished the death penalty in 2013; the implementation parity rule would thus have mooted the capital sentence.
At the very least, Higgs raised a novel question about how the statute should apply in such a case. As Higgs’ execution date approached — which also coincided with the very end of Trump’s term — the federal government rather sloppily (and tardily) asked that the non-designating judgment be amended or “supplemented” (whatever that means) so that a practicing state could be designated retroactively. The (exasperated) district judge held that he had no power to alter the judgment in that way, and the government appealed to the U.S. Court of Appeals for the 4th Circuit, which aggressively expedited the appellate calendar so that oral argument could take place on Jan. 22 (two days after President Joe Biden’s inauguration). Without offering any substantive reasoning, the Supreme Court used its shadow docket to vacate the lower-court stay, grant certiorari before judgment, summarily reverse on the merits, and order the lower courts to retroactively designate Indiana. I have been able to locate no comparable maneuver (a summary merits decision on a petition for certiorari before judgment) before or since, and neither has my colleague Professor Steve Vladeck, who meticulously tracks the court’s shadow-docket activity. (Vladeck also has argued persuasively that the Supreme Court’s handling of the Texas abortion law is inconsistent with its recent shadow-docket practice in another area: emergency requests related to religious liberty.)
I should mention that the Supreme Court’s criteria for adjudicating stays and those for adjudicating injunctions have some meaningful differences. There is express statutory authority for stays, whereas the authority for court injunctions traces to a more general authority specified in the All Writs Act. Those differences notwithstanding, both require the party seeking emergency relief to establish some elevated likelihood of prevailing on the merits alongside the injury justifying immediate intervention. Uncertainty, whether procedural or substantive, is supposed to be a powerful weight against shadow-docket relief.
The comparison between the Supreme Court’s federal-execution interventions and its S.B. 8 abstention exposes the problems with the rule-of-law story. The court’s treatment of the death-penalty litigation was less about the clear merits of the government’s claims than it was about the justices’ frustration with execution delays and their desire to prevent the Biden administration from influencing sentence implementation. (The Biden administration later declared an execution moratorium.) There is a reasonable debate to be had about whether considerations like those justify more aggressive shadow-docket intervention, and two wrongs don’t make a right. But nobody can reasonably argue that the court’s federal-execution interventions sided with a party that would clearly prevail on the underlying claims, at least based on existing law. The rule-of-law storytelling flooding cable news and social media is therefore farcical. The court refused to enjoin S.B. 8 because five justices chose not to; not because the modern law and norms of shadow-docket practice foreclosed it from doing so.
Posted in Featured, Emergency appeals and applications
on Sep 6, 2021 at 12:03 pm
FacebookLinkedInTwitterEmail
PrintFriendlyShareLee Kovarsky is the Bryant Smith chair in law and co-director of Capital Punishment Center at the University of Texas at Austin.
Most people following the litigation over S.B. 8 — the new Texas ban on nearly all abortions after the sixth week of pregnancy — have heard some version of the argument. The Supreme Court could neither enjoin the flagrantly unconstitutional abortion restrictions nor lift the circuit court’s unexplained order pausing lower-court litigation, the “rule-of-law story” goes, because the Supreme Court’s hands were tied. In this telling, the Supreme Court’s procedural doctrines required that it refuse emergency relief unless the party seeking it is reasonably certain to prevail in the litigation. And procedural uncertainties admittedly lurked. Sovereign immunity precluded suit against Texas itself, S.B. 8 privatized enforcement and circuit precedent foreclosed suits against state executive-branch officers, and there were lingering questions about whether the plaintiffs could sue the judicial personnel named in the complaint. But this ode to rule-of-law values sounds some pretty false notes.
The Supreme Court issued its S.B. 8 order on the so-called “shadow docket,” where it hands down orders and summary decisions that did not receive full briefing and oral argument. In the past several years — and especially in the past 18 months — the court has increasingly used its shadow docket to award emergency relief in politically charged cases. I have niche expertise in one category of shadow-docket activity: the death penalty. There were 13 federal executions during the last six months of the Trump administration, and the pertinent shadow-docket interventions disclose anything but a court abstaining in close cases.
I have written about the “Trump executions” at length elsewhere, and a little background is in order here. Before the summer of 2020, the federal government hadn’t executed anyone since 2003. President Donald Trump’s Justice Department decided to get the federal government back in the execution business, and it began announcing execution dates during the summer of 2019. The federal lethal-injection protocol called for the use of a single drug, pentobarbital, that was developed to euthanize animals. The first volley of planned executions took place in July 2020, with the possibility of a Trump-to-Biden transition looming six months later. There is usually 11th-hour litigation in the shadow of executions, and the relevant federal law ensures that the Supreme Court will almost always receive applications for execution stays (from prisoners) or applications to vacate them (from the government).
The Supreme Court granted emergency relief to the government, on the shadow docket and pursuant to the same norms about restricting relief to reasonably certain litigation winners, in seven of the 13 Trump execution cases. In each of these cases, the Supreme Court’s intervention overturned a lower-court disposition on a contested legal question. As a practical matter, the relief allowed the executions to go forward while the cases were pending, and courts dismissed the litigation as moot after the prisoners were dead. Let me tell you a bit more about how “certain” the government’s success was in those cases.
Start with Eighth Amendment litigation over the use of pentobarbital, which culminated in a shadow-docket order vacating a lower-court injunction affecting four of the 13 prisoners (Daniel Lee, Wesley Purkey, Dustin Honken, and Keith Nelson). In Barr v. Lee, the Supreme Court grounded its decision to vacate that injunction on an earlier case involving a materially different issue that the Supreme Court nonetheless seemed to read as a categorical rule that the Eighth Amendment permitted pentobarbital-only executions. Several months later, however, the U.S. Court of Appeals for the District of Columbia Circuit squarely held that a claimant could state an Eighth Amendment claim against such executions. The legal rule forming the basis for the Supreme Court’s intervention was anything but settled.
Next consider the Orlando Hall execution. Hall asserted that the use of un-prescribed pentobarbital violated the Food, Drug, and Cosmetic Act. The district court stayed his execution after a D.C. Circuit decision that such use of pentobarbital was in fact an FDCA violation. The Supreme Court vacated the stay. What bears emphasis is that the Supreme Court granted emergency relief on its shadow docket not just when the party seeking it had uncertain prospects for success, but when that party would almost certainly lose on the underlying legal question — and even though likelihood of success on the merits is supposed to be a necessary condition for such relief.
Perhaps the most shocking of all the shadow-docket orders was the last one, in the Dustin Higgs case. The federal death-penalty statute has a provision requiring that federal sentence implementation mimic that of the state in which the federal court sits. In situations where the federal court sits in a state that has abolished the death penalty, the statute directs the sentencer, at the time of sentence, to designate some other state for implementation-parity purposes. Higgs had been sentenced by the U.S. District Court for the District of Maryland in 2001, at a time when Maryland retained the death penalty, and so there was no other-state designation in the sentencing judgment. But Maryland abolished the death penalty in 2013; the implementation parity rule would thus have mooted the capital sentence.
At the very least, Higgs raised a novel question about how the statute should apply in such a case. As Higgs’ execution date approached — which also coincided with the very end of Trump’s term — the federal government rather sloppily (and tardily) asked that the non-designating judgment be amended or “supplemented” (whatever that means) so that a practicing state could be designated retroactively. The (exasperated) district judge held that he had no power to alter the judgment in that way, and the government appealed to the U.S. Court of Appeals for the 4th Circuit, which aggressively expedited the appellate calendar so that oral argument could take place on Jan. 22 (two days after President Joe Biden’s inauguration). Without offering any substantive reasoning, the Supreme Court used its shadow docket to vacate the lower-court stay, grant certiorari before judgment, summarily reverse on the merits, and order the lower courts to retroactively designate Indiana. I have been able to locate no comparable maneuver (a summary merits decision on a petition for certiorari before judgment) before or since, and neither has my colleague Professor Steve Vladeck, who meticulously tracks the court’s shadow-docket activity. (Vladeck also has argued persuasively that the Supreme Court’s handling of the Texas abortion law is inconsistent with its recent shadow-docket practice in another area: emergency requests related to religious liberty.)
I should mention that the Supreme Court’s criteria for adjudicating stays and those for adjudicating injunctions have some meaningful differences. There is express statutory authority for stays, whereas the authority for court injunctions traces to a more general authority specified in the All Writs Act. Those differences notwithstanding, both require the party seeking emergency relief to establish some elevated likelihood of prevailing on the merits alongside the injury justifying immediate intervention. Uncertainty, whether procedural or substantive, is supposed to be a powerful weight against shadow-docket relief.
The comparison between the Supreme Court’s federal-execution interventions and its S.B. 8 abstention exposes the problems with the rule-of-law story. The court’s treatment of the death-penalty litigation was less about the clear merits of the government’s claims than it was about the justices’ frustration with execution delays and their desire to prevent the Biden administration from influencing sentence implementation. (The Biden administration later declared an execution moratorium.) There is a reasonable debate to be had about whether considerations like those justify more aggressive shadow-docket intervention, and two wrongs don’t make a right. But nobody can reasonably argue that the court’s federal-execution interventions sided with a party that would clearly prevail on the underlying claims, at least based on existing law. The rule-of-law storytelling flooding cable news and social media is therefore farcical. The court refused to enjoin S.B. 8 because five justices chose not to; not because the modern law and norms of shadow-docket practice foreclosed it from doing so.
Posted in Featured, Emergency appeals and applications
Are gun rights vulnerable to the Texas approach to abortion rights?
From the NYT (by law professors Jon Michaels and David Noll):
"Perhaps though, what’s good for the goose will be good for the gander, and blue states will use these same tools [as the Texas legislature] to suppress rights they dislike. Massachusetts could authorize citizens to seek damages from houses of worship that refuse to follow Covid safety protocols; California could give citizens the right to sue neighbors who recklessly keep guns in their homes."
DAR Comment: Do you think that the US Supreme Court would use a shadow docket ruling to allow a California vigilante law against guns to go forward as it has the Texas vigilante law against abortion rights? If your reaction to this thought experiment is no, then you could be thinking that the US Supreme Court decision is ideological and political, not legal. If yes, you may have confidence that the US Supreme Court will follow the law consistently without regard to whether the substantive effect on Constitutional rights pleases "the left" or "the right."
See https://www.nytimes.com/2021/09/04/opinion/texas-abortion-law.html
From the NYT (by law professors Jon Michaels and David Noll):
"Perhaps though, what’s good for the goose will be good for the gander, and blue states will use these same tools [as the Texas legislature] to suppress rights they dislike. Massachusetts could authorize citizens to seek damages from houses of worship that refuse to follow Covid safety protocols; California could give citizens the right to sue neighbors who recklessly keep guns in their homes."
DAR Comment: Do you think that the US Supreme Court would use a shadow docket ruling to allow a California vigilante law against guns to go forward as it has the Texas vigilante law against abortion rights? If your reaction to this thought experiment is no, then you could be thinking that the US Supreme Court decision is ideological and political, not legal. If yes, you may have confidence that the US Supreme Court will follow the law consistently without regard to whether the substantive effect on Constitutional rights pleases "the left" or "the right."
See https://www.nytimes.com/2021/09/04/opinion/texas-abortion-law.html
AAI Podcasts: What’s the Beef? How the Beef Packing Cartel Hurts Producers and Consumers and How Independent Cattle Producers and Processors Can Help Restore Competition and Choice
July 13, 2021 | Diana L. Moss , Mike Callicrate , Patrick Robinette
Food & Agriculture
See https://www.antitrustinstitute.org/work-products/type/podcasts/
From the AAI website: In this podcast, AAI President Diana Moss sits down with two leaders in the independent sector to discuss the fallout from decades of massive consolidation and rising concentration in beef packing. Her guests, Mike Callicrate and Patrick Robinette, run innovative, independent business operations in two different parts of the US. They discuss the state of competition in U.S. beef packing, which is dominated by four packing firms that control over 80% of the market. Next, they turn to problems of market access for smaller ranchers and processors and deceptive labeling that deprives consumers of informed choices. The conversation reveals that an industrial food system with little competition packs significant inefficiency and susceptibility to shocks like COVID-19. On the other hand, smaller operations provide needed competition and resiliency in the beef supply. Moss, Callicrate, and Robinette close with the importance of stronger antitrust enforcement in the beef packing sector and USDA initiatives that promote competition, price transparency, and the importance of alternative supply systems.
Related AAI Work
Public Comments and TestimonyAAI Encourages USDA to Take More Aggressive Role in Crafting Competition Policies to Combat Concentration and Supply Chain Instability in Food and Agriculture https://www.antitrustinstitute.org/work-product/aai-encourages-usda-to-take-more-aggressive-role-in-crafting-competition-policies-to-combat-concentration-and-supply-chain-instability-in-food-and-agriculture/
June 21, 2021 | Diana L. Moss
July 13, 2021 | Diana L. Moss , Mike Callicrate , Patrick Robinette
Food & Agriculture
See https://www.antitrustinstitute.org/work-products/type/podcasts/
From the AAI website: In this podcast, AAI President Diana Moss sits down with two leaders in the independent sector to discuss the fallout from decades of massive consolidation and rising concentration in beef packing. Her guests, Mike Callicrate and Patrick Robinette, run innovative, independent business operations in two different parts of the US. They discuss the state of competition in U.S. beef packing, which is dominated by four packing firms that control over 80% of the market. Next, they turn to problems of market access for smaller ranchers and processors and deceptive labeling that deprives consumers of informed choices. The conversation reveals that an industrial food system with little competition packs significant inefficiency and susceptibility to shocks like COVID-19. On the other hand, smaller operations provide needed competition and resiliency in the beef supply. Moss, Callicrate, and Robinette close with the importance of stronger antitrust enforcement in the beef packing sector and USDA initiatives that promote competition, price transparency, and the importance of alternative supply systems.
Related AAI Work
Public Comments and TestimonyAAI Encourages USDA to Take More Aggressive Role in Crafting Competition Policies to Combat Concentration and Supply Chain Instability in Food and Agriculture https://www.antitrustinstitute.org/work-product/aai-encourages-usda-to-take-more-aggressive-role-in-crafting-competition-policies-to-combat-concentration-and-supply-chain-instability-in-food-and-agriculture/
June 21, 2021 | Diana L. Moss
Who loves the Apple settlement with App Developers? Not everyone.
Apple has reached a settlement with a group of app developers represented by the Hagens, Berman law firm. Apple's description of the settlement is that it would allow developers to urge customers to pay them outside their iPhone apps. The New York Times explained that "The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with its control over mobile apps, including strict policies designed to force developers to pay it a cut of their sales." https://www.nytimes.com/2021/08/26/technology/apple-settles-app-store-lawsuit.html
The Hagens, Berman press release says that the settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices. Also, "small and other U.S. iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency. Small U.S. iOS developers also will benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Program." And, "Apple will permit all U.S. iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase (IAP) system. Apple also will remove the prohibition against U.S. developers using information obtained within their apps to communicate with their customers outside their apps about the use of purchasing methods other than IAP, subject to consumer consent and opt-out safeguards." https://www.hbsslaw.com/press/apple-ios-app-developers/us-ios-developers-to-benefit-from-100-million-apple-small-developer-assistance-fund-and-changes-to-app-store-policies-in-developer-antitrust-class-action-settlement
Not everyone thinks the settlement is great news for app developers. David Heinemeier Hansson writes that "Apple's new settlement is a corrupt joke." https://world.hey.com/dhh/apple-s-new-settlement-is-a-corrupt-joke-bd8b9c1e
Here is part of what he says:
This new Apple settlement with a group of class-action legal vultures . . . [is] a pointless settlement that reaffirm existing provisions and then asks for a couple of [trivial improvements resembling a change to] cornflower blue icons. Let's take it step by step again:
1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that "at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, ...". So part of this settlement is that Apple says it'll continue to do search like it's done so far, and that it won't make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that's not actually what's happening! Apple is simply "clarifying" that companies can send an email to their customers, if they've gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this "clarification". It draws a thicker line, asserts Apple's right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that's part of the deal.
3) The cynicism of this performance drips in every other sentence of Apple's press release about the matter. Like the aforementioned sentence about how "At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics". Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won't care, we don't care, this is all a performance of compliance!
4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple's monopoly power over the years, and now they'll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer's behalf but are really just paid to collude with Apple.
If the developer community had any hopes riding on this class-action lawsuit, this outcome would have been a dagger in the heart. Far worse than if no suit has been undertaken at all. If anything, this settlement cements the tremendous power that Apple has and wields. Even when a class-action lawsuit gets underway, it can be bought with bromides and bribes.
A question about the settlement is how it affects ongoing litigation between app developer Epic and Apple, if at all. Epic and Apple are waiting for a decision from federal judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California.in a separate lawsuit that was filed by Epic Games. Epic is the maker of the popular game Fortnite. Epic wants to force Apple to allow app developers to avoid App Store commissions altogether.
Apple has reached a settlement with a group of app developers represented by the Hagens, Berman law firm. Apple's description of the settlement is that it would allow developers to urge customers to pay them outside their iPhone apps. The New York Times explained that "The move would allow app makers to avoid paying Apple a commission on their sales and could appease developers and regulators concerned with its control over mobile apps, including strict policies designed to force developers to pay it a cut of their sales." https://www.nytimes.com/2021/08/26/technology/apple-settles-app-store-lawsuit.html
The Hagens, Berman press release says that the settlement will result in the creation of a $100 million Small Developer Assistance Fund and important changes to App Store policies and practices. Also, "small and other U.S. iOS developers will benefit from changes to App Store policies and practices as they relate to App Store search results, app and in-app product price points, appeals from rejections of apps and transparency. Small U.S. iOS developers also will benefit from a pledge that for at least three years following court approval of the settlement, Apple will not raise the 15% commission rate that applies for those participating in its Small Business Program." And, "Apple will permit all U.S. iOS developers to communicate with their customers outside their apps about purchasing methods other than Apple’s in-app purchase (IAP) system. Apple also will remove the prohibition against U.S. developers using information obtained within their apps to communicate with their customers outside their apps about the use of purchasing methods other than IAP, subject to consumer consent and opt-out safeguards." https://www.hbsslaw.com/press/apple-ios-app-developers/us-ios-developers-to-benefit-from-100-million-apple-small-developer-assistance-fund-and-changes-to-app-store-policies-in-developer-antitrust-class-action-settlement
Not everyone thinks the settlement is great news for app developers. David Heinemeier Hansson writes that "Apple's new settlement is a corrupt joke." https://world.hey.com/dhh/apple-s-new-settlement-is-a-corrupt-joke-bd8b9c1e
Here is part of what he says:
This new Apple settlement with a group of class-action legal vultures . . . [is] a pointless settlement that reaffirm existing provisions and then asks for a couple of [trivial improvements resembling a change to] cornflower blue icons. Let's take it step by step again:
1) The plaintiffs – here being the actual lawyers in the class-action proceeding, not the interests of the developers they supposedly represent – have justified their pursuit for loot mainly by getting Apple to reaffirm existing policies. Like having them affirm that "at the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics like downloads, star ratings, ...". So part of this settlement is that Apple says it'll continue to do search like it's done so far, and that it won't make it worse for users and developers by corrupting it with self-dealings and sold preferences, but only for the next three years? What a concession to extract!
It keeps going on like this, such as the pointless concession that pricing can now be $40.99 and $41.99, in addition to the normal $39.99 and $44.99, or any other number out of a predetermined 500 price points instead of the previous 100. Talk about the many hues of cornflower blue.
But it gets worse, because the trophy of this settlement, as presented in the press, is supposedly that developers can now tell their customers where to buy services outside the app. Except no, that's not actually what's happening! Apple is simply "clarifying" that companies can send an email to their customers, if they've gotten permission to do so, on an opt-in basis. That email may include information about how to buy outside the app.
So the steering provisions of the App Store, that developers are not allowed to tell users inside their app or on the signup screen about other purchasing choices than IAP – the only places that actually matter! – is being cemented with this "clarification". It draws a thicker line, asserts Apple's right to steer in the first place, and offers the meaningless concession of opt-in email, which was something developers had already been doing.
2) The legal vultures running this class-action suit knew that all these clarifications and agreements were cornflower blue requests from the outset. The point of the negotiation was never to extract any meaningful change of policy or behavior, but to provide cover for the process, such that they could claim to have performed their judicial duties to the underlying plaintiffs (developers). While walking away with $30M in fees that they took from an Apple-administered charity provision that's part of the deal.
3) The cynicism of this performance drips in every other sentence of Apple's press release about the matter. Like the aforementioned sentence about how "At the request of developers, Apple has agreed that its Search results will continue to be based on objective characteristics". Yes, you can have your search results in cornflower blue. Because they already were! But also, we may change the color in three years. Of course you legal vultures will be long gone by then. You won't care, we don't care, this is all a performance of compliance!
4) Since the entire game was rigged for the outcome of having the class-action vultures taking a third cut of whatever settlement sum is included from the outset, Apple knew this too. Negotiating around the specific but meaningless points of the deal was just a way to justify that final outcome: Apple pays these lawyers $30m, such that they can print a press release that gullible journalists will try to spin as having some larger meaning, because that story travels better.
5) The only human response is to show our blood-soaked teeth in disdain for such a blatantly corrupt deal. Developers have suffered a litany of indignities under Apple's monopoly power over the years, and now they'll suffer a few more. The twist being that they now come from the hands of a group of legal vultures pretending to advocate on developer's behalf but are really just paid to collude with Apple.
If the developer community had any hopes riding on this class-action lawsuit, this outcome would have been a dagger in the heart. Far worse than if no suit has been undertaken at all. If anything, this settlement cements the tremendous power that Apple has and wields. Even when a class-action lawsuit gets underway, it can be bought with bromides and bribes.
A question about the settlement is how it affects ongoing litigation between app developer Epic and Apple, if at all. Epic and Apple are waiting for a decision from federal judge Yvonne Gonzalez Rogers of U.S. District Court for the Northern District of California.in a separate lawsuit that was filed by Epic Games. Epic is the maker of the popular game Fortnite. Epic wants to force Apple to allow app developers to avoid App Store commissions altogether.
Elizabeth Holmes and her company Theranos: The Boies law firm and lessons about aggressive lawyering
As the trial of Elizabeth Holmes for promoting a sham blood analysis device begins, it is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
As the trial of Elizabeth Holmes for promoting a sham blood analysis device begins, it is timely to revisit John Carreyrou’s book Bad Blood: Secrets and Lies in a Silicon Valley Startup (Knopf). In that book Wall Street Journal reporter John Carreyrou reviewed his investigative reporting about the bad behavior of Elizabeth Holmes and her company Theranos. It was Carreyrou who broke the story in the Wall Street Journal that Theranos was essentially a scam, falsely promising new technology that yielded valuable analytical results from a pin prick of blood. In fact the new technique was not reliable. Elizabeth Holmes ended up being charged by the SEC with defrauding investors.
Theranos board members included some famous people, such as Henry Kissinger and George Shultz. When Theranos needed legal counsel, Elizabeth Holmes hired the well known firm of Boies, Schiller, and Flexner, led by David Boies.
An interesting aspect of the Carreyrou book is its focus on the tactics of David Boies and his firm. Author Carreyrou, who apparently is not a lawyer himself, expresses surprise and dismay about aggressive tactics used by the Boies firm.
What Carreyrou seems to find most upsetting is the Boies firm’s aggressive behavior toward whistle-blowers who exposed Theranos, including Tyler Shultz, the grandson of George Shultz. Tyler was an important early source for Carreyrou’s investigative reporting.
In a book chapter called “The Ambush,” Carreyrou recounts how Tyler visited his grandfather to discuss the grandfather’s concern that Tyler was speaking to the press and saying unflattering things about Theranos. Tyler had specifically asked that no lawyers be present for the meeting, but grandfather George Shultz had two Boies partners waiting out of sight in an upstairs room.
After some conversation with Tyler that George Shultz found unsatisfactory, the grandfather brought the lawyers downstairs. The lawyers told Tyler that they had identified him as the person who had leaked Theranos information to the Wall Street Journal. The lawyers handed Tyler a temporary restraining order, a notice to appear in court, and a letter saying that Theranos believed Tyler had violated confidentiality obligations. The lawyers communicated that Theranos was prepared to file a law suit.
The next day Tyler met again with a Boies firm lawyer, who asked Tyler to sign an affidavit swearing he had not spoken to a reporter, and to name anyone he knew who did. Tyler did not sign. Instead he ended the meeting and consulted with a lawyer of his own.
Tyler then engaged in some days of lawyer-led negotiations. The topics were the affidavit the Boies firm asked for, and the threats of litigation. Tyler eventually agreed to sign an affidavit saying he had spoken to the press, but he refused to include any information about other press sources.
What happened next, says Carreyrou, is that Boies Schiller resorted to the “bare-knuckles tactics it had become notorious for. Brille [the Boies firm attorney] let it be known that if Tyler didn’t sign the affidavit and name the Journal’s sources, the firm would make sure to bankrupt his entire family when it took him to court. Tyler also received a tip that he was being surveilled by private investigators.”
Boies Schiller also put pressure on other sources for Carreyrou’s reporting about Theranos: “Boies Schiller’s Mike Brille sent a letter to Rochelle Gibbons threatening to sue her if she didn’t cease making what he termed ‘false and defamatory’ statements” about Theranos.
The Wall Street Journal itself was the target of legal hardball. The Journal received a formal letter from David Boies: “Citing several California statutes, the letter sternly demanded that the Journal 'destroy or return all Theranos trade secrets and confidential information in its possession.’” That was followed a few days later by a 23 page letter from Boies to the Journal threatening a lawsuit.
The day came when David Boies met with Wall Street Journal people in an effort to squelch publication of Carreyrou’s investigative article about Theranos. The Boies effort was unsuccessful. The Carreyrou article on Theranos’ bad behavior ran on October 15, 2015.
For Tyler Shultz, the price for being a whistle blower included $400,000 in legal bills, estrangement from his famous grandfather, and much personal anguish.
What lessons can be drawn from Carreyrou’s description of the Boies firm’s practices? Not that Boies or his firm’s lawyers necessarily did anything illegal or unethical. The Carreyrou book does not provide enough information to justify that conclusion. It may be, for example, that David Boies and his firm had great faith in Theranos technology.
But even in the absence of clear evidence of illegality or unethical lawyer behavior there is significance in Carreyrou’s sense of outrage. Careyrou feels that “bare-knuckles” lawyering was used on behalf of Theranos in an effort to suppress information from Tyler Shultz and Carreyrou’s other sources of information. Also, that aggressive lawyering was used in an effort to squelch publication of his reporting. A main element of the bare-knuckles lawyering described by Carreyrou is the threat of legal liability and litigation expense.
Even where it is legal and ethical, such aggressive lawyer behavior should be examined further by those interested in legal policy. The behavior suggests a problem: that the complexity of laws and legal proceedings may have the unintended side effect of facilitating bullying by parties with deep legal resources. The targets of such bullying may be individuals like Tyler Shultz, or small companies. Bullying based on unmatched deep resources can occur, for example, in the context of landlord-tenant disputes involving small commercial tenants, and franchisor-franchisee disputes where the franchisees have limited resources.
Bare-knuckles bullying by lawyers that is within the bounds of legality and permissible ethics is nevertheless concerning. Among other bad effects, bullying may result in information about wrongdoing being suppressed, inappropriate financial burdens being imposed on targets of bullying, and failure to fairly resolve disputes among parties.
This posting is by Don Allen Resnikoff, who takes full responsibility for its contents
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Why Federal Antitrust Enforcers Should Pursue a Policy of Blocking More Harmful Mergers
July 29, 2021 | Diana L. Moss Excerpt from AAI website: This week, the Antitrust Division of the U.S. Department of Justice (DOJ) forced global insurance behemoths Aon and Willis Towers Watson to abandon their proposed mega-merger. The deal would have reduced competition in insurance brokerage markets from three to only two players, harming American businesses and consumers through higher prices and lower quality for health and retirement benefits products and services. This bold and needed move is a credit to the experienced, acting leadership at the Antitrust Division. It clearly recognizes the trend of declining competition, rising concentration, and growing evidence of harm from decades of weak enforcement. AAI encourages Federal Trade Commission (FTC) Chair, Lina Khan, and nominee for Assistant Attorney General, Jonathan Kanter, to adopt a policy of moving to block more mergers, rather than settling them with remedies such as divestitures and conduct requirements and prohibitions. https://www.antitrustinstitute.org/work-product/why-federal-antitrust-enforcers-should-pursue-a-policy-of-blocking-more-harmful-mergers/ |
Mylan and Upjohn merger result: Joe Manchin scandal -- pharma jobs from WV to India, $31M for family
- The story in Vanity Fair: "'We Can't Reach Him': Joe Manchin Is Ghosting the West Virginia Union Workers Whose Jobs His Daughter -- https://www.vanityfair.com/news/2021/07/joe-manchin-is-ghosting-the-west-virginia-union-workers
- From "Democracy Now" https://www.democracynow.org/2021/7/28/joe_manchin_west_virginia_heather_bresch
ACLED on state “Anti-protest” Legislation
Since June 2020, state officials have introduced at least 100 proposals that would restrict the right to free assembly (PEN America, 13 May 2021). Republican lawmakers have proposed 81 bills in over 30 states during the 2021 legislative session alone, more than double the number introduced in any other year, according to the International Center for Not-for-Profit Law (New York Times, 21 April 2021; International Center for Not-for-Profit Law, 22 April 2021). These bills have become law in states like Oklahoma and Florida, with new legislation increasing the penalties for “unlawful protesting” and “granting immunity to drivers whose vehicles strike and injure protesters in public streets” (New York Times, 21 April 2021).
Although officials have cited instances of protest violence over the past year to justify this new legislative push — with Governor Ron DeSantis labelling Florida’s law “the strongest anti-looting, anti-rioting, pro-law-enforcement piece of legislation in the country” (New York Times, 21 April 2021) — most of these states have experienced low levels of violent or destructive demonstration activity (see map below). ACLED data show that, on average, the states in which strict “anti-protest” laws have been proposed have the same rate of peaceful protests as states that have not pursued such legislation, meaning that violent demonstrations do not feature more prominently in the former than the latter. States like Florida and Oklahoma, which have promulgated some of the most restrictive new laws, have actually seen a lower proportion of demonstrations involving violent or destructive activity than most other states in the country.
excerpt from A Year of Racial Justice Protests: Key Trends in Demonstrations Supporting the BLM Movement | ACLED (acleddata.com)
The popular press covers antitrust reform
A recent New York Times article says that “Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.The administration has quietly supported legislation working its way through the House.” https://www.nytimes.com/2021/07/24/business/biden-antitrust-amazon-google.html
A dedicated reader of this blog [dcconsumerrightscolaition.org] points out a WSJ article by Greg Ip [https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424 -- pay wall] that provides a succinct, if opinionated, summary of the quandary that faces advocates of antitrust reform. In recent decades the antitrust laws have failed to discourage market dominance by a series of gigantic companies. Notwithstanding the comment in the New York Times, in some areas –agriculture for example – large companies mean elevated prices for consumers. In other areas, companies like Google and Facebook offer low prices to consumers, but arguably squelch competition and facilitate disinformation. Many blame the failures of antitrust enforcement on the idea that prosecutors and courts blindly followed the lead of Judge Robert Bork and narrowly applied a vision of a consumer welfare standard focused largely on lprotecting low consumer prices. Greg Ip points out that many antitrust reformers draw on the broader ideas of Louis Brandeis, who believed that vigorous government action against large companies enlivened democracy.
Greg Ip notes that Brandeis “feared that as the corporations became large and powerful, they took on a life of their own, becoming increasingly insensitive to humanity’s wants and fears,” according to Columbia University law professor and National Economic Council member Tim Wu’s 2008 book [https://globalreports.columbia.edu/books/the-curse-of-bigness/]
Alternatives for reforming the antitrust laws include legislation that would correct perceived shortcomings in court decisions narrowly applying Robert Bork style thinking and narrowly applying consumer welfare principles focused largely on consumer prices. Professor Andy Gavil wrote a brief article on antitrust reform that focused on monopolization law and suggested a relatively simple approach to law reform. See https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/ Gavil said:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of [Sherman Act] Section 2. Such a modern framework could:
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
It is relevant to the Gavil approach that Greg Ip writes that “A federal judge dismissed a lawsuit by the FTC and most state attorneys-general for failing to establish that Facebook Inc. is a monopoly. Legislation proposed by Democrats in the House of Representatives would lower the bar for winning such suits, but their fate is unclear.”
Another and more complex approach to antitrust reform is what might be called an “all of government” approach, where behaviors of large companies, like Facebook, Google, and Amazon, is addressed by an array of new laws and regulations that draw on the Brandeisian impulse to enhance efficiency and support democratic values. It may be difficult to argue against increased efficiency and support for democracy, but Greg Ip worries that the effort to promote new regulation and laws may be difficult. He argues that a (possibly improved version) of the traditional consumer welfare standard is “less at risk of politicization than [new laws based on] beliefs about what’s good or bad for democracy.”
It should be noted that Greg Ip is not at all supportive of the “big is bad” approach to antitrust enforcement. He is biased in favor of big. He writes: “Barring firms from getting big could deprive consumers of the benefits that only big firms can deliver.” That bias would seem to affect his judgment on matters of law reform.
A recent New York Times article says that “Outside groups and ideological allies of the administration warn that if Mr. Biden hopes to truly follow in the footsteps of his antitrust idols, Presidents Theodore Roosevelt and Franklin D. Roosevelt, he will need to push for sweeping legislation to grant new powers to federal regulators, particularly in the tech sector. The core federal antitrust laws, which were written more than a century ago, did not envision the kind of commerce that exists today, where big companies may offer customers low prices but at the expense of competition.The administration has quietly supported legislation working its way through the House.” https://www.nytimes.com/2021/07/24/business/biden-antitrust-amazon-google.html
A dedicated reader of this blog [dcconsumerrightscolaition.org] points out a WSJ article by Greg Ip [https://www.wsj.com/articles/antitrusts-new-mission-preserving-democracy-not-efficiency-11625670424 -- pay wall] that provides a succinct, if opinionated, summary of the quandary that faces advocates of antitrust reform. In recent decades the antitrust laws have failed to discourage market dominance by a series of gigantic companies. Notwithstanding the comment in the New York Times, in some areas –agriculture for example – large companies mean elevated prices for consumers. In other areas, companies like Google and Facebook offer low prices to consumers, but arguably squelch competition and facilitate disinformation. Many blame the failures of antitrust enforcement on the idea that prosecutors and courts blindly followed the lead of Judge Robert Bork and narrowly applied a vision of a consumer welfare standard focused largely on lprotecting low consumer prices. Greg Ip points out that many antitrust reformers draw on the broader ideas of Louis Brandeis, who believed that vigorous government action against large companies enlivened democracy.
Greg Ip notes that Brandeis “feared that as the corporations became large and powerful, they took on a life of their own, becoming increasingly insensitive to humanity’s wants and fears,” according to Columbia University law professor and National Economic Council member Tim Wu’s 2008 book [https://globalreports.columbia.edu/books/the-curse-of-bigness/]
Alternatives for reforming the antitrust laws include legislation that would correct perceived shortcomings in court decisions narrowly applying Robert Bork style thinking and narrowly applying consumer welfare principles focused largely on consumer prices. Professor Andy Gavil wrote a brief article on antitrust reform that focused on monopolization law and suggested a relatively simple approach to law reform. See https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/ Gavil said:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of [Sherman Act] Section 2. Such a modern framework could:
- Embrace today’s structured approach to the rule of reason, as did the Court in Microsoft
- Fully integrate a more sophisticated understanding of exclusionary conduct, market power, and anti-competitive effects.
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
It is relevant to the Gavil approach that Greg Ip writes that “A federal judge dismissed a lawsuit by the FTC and most state attorneys-general for failing to establish that Facebook Inc. is a monopoly. Legislation proposed by Democrats in the House of Representatives would lower the bar for winning such suits, but their fate is unclear.”
Another and more complex approach to antitrust reform is what might be called an “all of government” approach, where behaviors of large companies, like Facebook, Google, and Amazon, is addressed by an array of new laws and regulations that draw on the Brandeisian impulse to enhance efficiency and support democratic values. It may be difficult to argue against increased efficiency and support for democracy, but Greg Ip worries that the effort to promote new regulation and laws may be difficult. He argues that a (possibly improved version) of the traditional consumer welfare standard is “less at risk of politicization than [new laws based on] beliefs about what’s good or bad for democracy.”
It should be noted that Greg Ip is not at all supportive of the “big is bad” approach to antitrust enforcement. He is biased in favor of big. He writes: “Barring firms from getting big could deprive consumers of the benefits that only big firms can deliver.” That bias would seem to affect his judgment on matters of law reform.
DC AG RACINE: Addressing Violent Crime in the District
July 23, 2021
Gun violence and violent crime are impacting the entire District, and residents deserve a thoughtful and long-term response.
Last Friday, six-year-old Niyah Courtney was shot and killed. The next day, tens of thousands of fans at Nationals Park dove for cover thinking that they were in the middle of an active shooter situation. Yesterday, residents near Logan Circle ran for cover as shots were fired and two men were shot.
These are appalling and gut-wrenching events. My heart goes out to the victims and loved ones of those directly impacted by these incidents and the community members shaken by the trauma of this violence in our city.
Gun violence is hurting our whole community, ripping apart families, and creating fear and trauma. No one wants to fear for their children’s lives as they go to school or walk down the street. But in parts of the District, that is a daily reality. Violence has long plagued neighborhoods that too often get overlooked—particularly low-income communities of color. District residents deserve to feel safe in their homes and their neighborhoods, and when they are walking down the street with their families.
It is our job as elected leaders to do everything we can to stop gun violence and violent crime, prevent more senseless deaths, and make every part of the District safer. I may not have all the answers, but my office is doing everything we can to stop the gun violence and violent crime in our community now and in the future.
Our city needs a proactive, comprehensive plan. It needs a clear, consistent, and all-hands-on-deck approach. Some of these steps include action my office is already taking, and some are bigger than my office alone. But we must work together to make meaningful progress.
First, we need aggressive gun safety reform. There are too many guns flooding our city, and there are too many loopholes that enable the floodgates to remain open. We need federal legislation that closes these loopholes, mandates background checks, and helps stop the flow of guns across our country and into our city. My office is fighting the prevalence of illegal ghost guns in the District, which lack serial numbers and can’t be traced. We are suing Polymer80—a leading manufacturer of ghost guns in the United States and the company that manufactured the majority of deadly ghost guns recovered in DC—for illegally advertising and selling them to DC consumers. And we have advocated for strong federal regulation of these firearms.
Second, we must fully invest in community-driven, evidence-based violence interruption programs. We know based on research and data that empowering communities to interrupt violence, intervening with those most likely to commit or be victims of violence, and changing norms around violence can have a long-lasting impact. That’s why we launched Cure the Streets in several neighborhoods that have historically experienced some of the highest rates of gun violence. This public health approach to treating violence is working in these neighborhoods. We’re asking the DC Council to fund an expansion of Cure the Streets so it can operate in more neighborhoods. We’re grateful that the Council took the first steps to expanding the program by adding one additional site in its budget vote earlier this week. But more neighborhoods would benefit from a site. There are also other important violence interruption programs operating around the city that deserve support and investment as well.
Third, we need to hold individuals accountable when they commit crimes and change their behavior so they are less likely to reoffend in the future. As the prosecutor for crime perpetrated by young people in the District, when a case is referred to my office for prosecution, we assess the needs of the victim and the impact of the conduct on public safety. Then, we work to achieve a resolution that supports victims while doing what needs to be done to change the behavior of the youth. This approach helps reduce recidivism and makes our communities safer. We do this so they do not become future violent offenders and instead become contributing members of our communities. And, when appropriate, we prosecute.
Finally, we need to address the root causes of crime in our communities, including poverty, hopelessness, and trauma – to break the cycle of violence. This is a public health crisis as much as it is a public safety crisis. We know there are two Washington, DCs – and our communities east of the river, where most of the gun violence is happening, need investment and support. But too often they are not even part of the conversation. Only when we address the challenges these communities face every day can we make real progress now and in the future.
These are critical steps, but they are not the only solutions. We need more ideas for making the District a safer, more equitable place. We must be thoughtful about our efforts and careful to avoid reactionary tough-on-crime approaches that we know do not actually improve public safety.
Violent crime is on the rise across the country. The District is not immune from it. But that doesn’t excuse us from tackling our problem locally. Unfortunately, the response to gun violence, especially when it happens in Black and brown communities, follows a familiar pattern: thoughts and prayers, vigils, and calls for reform, and then a return to the status quo. All of us have a role to play in stopping this violence, and I will continue to work with the mayor, our law enforcement partners, the Council, advocates, and others to marshal resources, ingenuity, and bold ideas to bring about change.
Read my full statement from earlier this week on my new Medium page.[https://medium.com/@AttorneyGeneralKarlRacine/the-district-needs-a-clear-and-comprehensive-plan-to-combat-violent-crime-bb82ae5c0280]
Karl A. Racine
Attorney General
The Viatris plant in West Virginia has been making generic pharmaceuticals since 1965 – but it’s closing down and laying workers off -- moving manufacture to India and Australia
Michael Sainato
Sun 20 Jun 2021 03.00 EDT “Disbelief. Distraught and traumatized.”
Just some of the words the United Steelworkers Local 8-957 president, Joe Gouzd, used to describe how he and hundreds of other workers felt after their 56-year-old pharmaceutical plant in West Virginia was shut down, sending between 1,500 and 2,000 jobs to India and Australia.
The Viatris plant at Chestnut Ridge, just outside Morgantown, has been in operation since 1965, providing well-paid jobs in one of America’s poorer states. And the timing of the closure has workers furious.
“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?” said Gouzd.
It is also causing a political row, with Congress accused of inaction and workers denouncing profits before people.
“When is this going to end, losing American jobs? Every politician you hear, part of their political platform is: jobs, domestic jobs, domestic manufacturing, bringing jobs and manufacturing back to America,” said Gouzd.
The offshoring of jobs has taken on new political weight since Donald Trump was elected. But his record in office was just as poor as his predecessors’.
While the US does not track all jobs lost to offshoring, the labor department does count the number of workers who petition for help under a federal law designed to aid those harmed by trade.
According to Reuters, during the four years of Trump, those petitions covered 202,151 workers whose jobs moved overseas, only slightly less than the 209,735 workers covered under Obama.
Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful. Viatris may prove his first big test.
DAR comment: The article is clear on the point that the political rhetoric of repatriating jobs to the U.S. rings hollow when large companies offshore jobs in the interests of improved profits. DR
Michael Sainato
Sun 20 Jun 2021 03.00 EDT “Disbelief. Distraught and traumatized.”
Just some of the words the United Steelworkers Local 8-957 president, Joe Gouzd, used to describe how he and hundreds of other workers felt after their 56-year-old pharmaceutical plant in West Virginia was shut down, sending between 1,500 and 2,000 jobs to India and Australia.
The Viatris plant at Chestnut Ridge, just outside Morgantown, has been in operation since 1965, providing well-paid jobs in one of America’s poorer states. And the timing of the closure has workers furious.
“This is the last generic pharmaceutical manufacturing giant in the US, and executives are offshoring our jobs to India for more profits. What is this going to do to us if we have another pandemic?” said Gouzd.
It is also causing a political row, with Congress accused of inaction and workers denouncing profits before people.
“When is this going to end, losing American jobs? Every politician you hear, part of their political platform is: jobs, domestic jobs, domestic manufacturing, bringing jobs and manufacturing back to America,” said Gouzd.
The offshoring of jobs has taken on new political weight since Donald Trump was elected. But his record in office was just as poor as his predecessors’.
While the US does not track all jobs lost to offshoring, the labor department does count the number of workers who petition for help under a federal law designed to aid those harmed by trade.
According to Reuters, during the four years of Trump, those petitions covered 202,151 workers whose jobs moved overseas, only slightly less than the 209,735 workers covered under Obama.
Biden has proposed taxing companies that offshore jobs, but it remains to be seen whether he will be successful. Viatris may prove his first big test.
DAR comment: The article is clear on the point that the political rhetoric of repatriating jobs to the U.S. rings hollow when large companies offshore jobs in the interests of improved profits. DR
U.S. Equal Employment Opportunity Commission
guidance on employer mandates on vaccinations
(from www.eeoc.gov/newsroom/eeoc-issues-updated-covid-19-technical-assistance)
- Federal EEO laws do not prevent an employer from requiring all employees physically entering the workplace to be vaccinated for COVID-19, so long as employers comply with the reasonable accommodation provisions of the ADA and Title VII of the Civil Rights Act of 1964 and other EEO considerations. Other laws, not in EEOC’s jurisdiction, may place additional restrictions on employers. From an EEO perspective, employers should keep in mind that because some individuals or demographic groups may face greater barriers to receiving a COVID-19 vaccination than others, some employees may be more likely to be negatively impacted by a vaccination requirement.
- Federal EEO laws do not prevent or limit employers from offering incentives to employees to voluntarily provide documentation or other confirmation of vaccination obtained from a third party (not the employer) in the community, such as a pharmacy, personal health care provider, or public clinic. If employers choose to obtain vaccination information from their employees, employers must keep vaccination information confidential pursuant to the ADA.
- Employers that are administering vaccines to their employees may offer incentives for employees to be vaccinated, as long as the incentives are not coercive. Because vaccinations require employees to answer pre-vaccination disability-related screening questions, a very large incentive could make employees feel pressured to disclose protected medical information.
- Employers may provide employees and their family members with information to educate them about COVID-19 vaccines and raise awareness about the benefits of vaccination. The technical assistance highlights federal government resources available to those seeking more information about how to get vaccinated.
ep. Ken Buck (Colo.), the top Republican on the House Judiciary antitrust subcommittee, is forming a new “Freedom From Big Tech Caucus”
He will be joined by some other GOP lawmakers who supported antitrust bills advanced by the committee last month.
Rep. Lance Gooden (R-Texas) will serve as co-chairman of the caucus. Other founding members of the caucus include Reps. Madison Cawthorn (R-N.C.), Burgess Owens (R-Utah) and Paul Gosar (R-Ariz.).
The caucus will aim to unite Republicans in Congress to “rein in Big Tech” through “legislation, education, and awareness.”
The announcement outlines a focus on antitrust reform, including restoring “the free and dynamic digital economy,” promoting “competition and innovation,” and supporting small businesses.
Additionally, the caucus said it will aim to protect privacy and data rights, protect children from harmful content online and “end political censorship.”
“Big Tech has abused its market power for decades, and Congress must act to hold these companies accountable and preserve the free market, promote competition and innovation, protect the freedom of speech, and foster a thriving digital economy,” Buck said in a statement.
The formation of the caucus comes as rifts within the House GOP deepen amid the push to pass the six antitrust bills the Judiciary Committee advanced that aim to reform antitrust power and target tech giants.
Rep. Jim Jordan (R-Ohio), ranking member of the Judiciary Committee, opposed the bills, and House Minority Leader Kevin McCarthy (R-Calif.) has also voiced criticism of the legislative package.
Amid the backlash, Jordan last week unveiled his own strategy for taking on Big Tech companies. Jordan’s agenda differed from the bills put forward by the committee, notably by calling for the Federal Trade Commission to be stripped of its antitrust enforcement authority.
Democrats face their own challenges on the bills, especially among a group of California lawmakers who have opposed the bills that target the companies based in their Bay Area districts.
From: https://thehill.com/policy/technology/563344-top-house-antitrust-republican-forms-freedom-from-big-tech-caucus
He will be joined by some other GOP lawmakers who supported antitrust bills advanced by the committee last month.
Rep. Lance Gooden (R-Texas) will serve as co-chairman of the caucus. Other founding members of the caucus include Reps. Madison Cawthorn (R-N.C.), Burgess Owens (R-Utah) and Paul Gosar (R-Ariz.).
The caucus will aim to unite Republicans in Congress to “rein in Big Tech” through “legislation, education, and awareness.”
The announcement outlines a focus on antitrust reform, including restoring “the free and dynamic digital economy,” promoting “competition and innovation,” and supporting small businesses.
Additionally, the caucus said it will aim to protect privacy and data rights, protect children from harmful content online and “end political censorship.”
“Big Tech has abused its market power for decades, and Congress must act to hold these companies accountable and preserve the free market, promote competition and innovation, protect the freedom of speech, and foster a thriving digital economy,” Buck said in a statement.
The formation of the caucus comes as rifts within the House GOP deepen amid the push to pass the six antitrust bills the Judiciary Committee advanced that aim to reform antitrust power and target tech giants.
Rep. Jim Jordan (R-Ohio), ranking member of the Judiciary Committee, opposed the bills, and House Minority Leader Kevin McCarthy (R-Calif.) has also voiced criticism of the legislative package.
Amid the backlash, Jordan last week unveiled his own strategy for taking on Big Tech companies. Jordan’s agenda differed from the bills put forward by the committee, notably by calling for the Federal Trade Commission to be stripped of its antitrust enforcement authority.
Democrats face their own challenges on the bills, especially among a group of California lawmakers who have opposed the bills that target the companies based in their Bay Area districts.
From: https://thehill.com/policy/technology/563344-top-house-antitrust-republican-forms-freedom-from-big-tech-caucus
Protecting the Independence of Public Broadcasting, by Don Allen Resnikoff
https://www.mediaethicsmagazine.com/index.php/browse-back-issues/216-spring-2021-vol-32-no-2/3999344-protecting-the-independence-of-public-broadcasting
Comment by Don Allen Resnikoff:
In my recent article in Media Ethics Magazine [see citation above], I say that U.S. publicly funded broadcasting should be protected from being turned into a partisan or ideological tool. The most effective protection for the independence of public broadcasting is the support of U.S. Presidents, and a Supreme Court that does not unduly limit the permissible delegation of authority to government agencies.
Protecting the autonomy of public broadcasters is complicated by a U.S. Supreme Court decision that reflects a shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the case of Seila Law LLC v. Consumer Financial Protection Bureau the Supreme Court determined that the structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could be removed from office only “for cause,” violated the requirements of the Constitution for the separation of powers. The Court explained, in its 5-4 decision, that, as a general matter, leaders of federal agencies serve at the discretion of the President. The President can fire them at his/her discretion.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the established idea that Congress has the power to allow agencies to operate independently of the President. Harvard Law professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” And, of course, public broadcasting.
In a recent opinion issued shortly before publication of my Media Ethics article, Collins et al. v. Yellen, et al., 594 U.S. ____ (2021), the U.S. Supreme Court confirmed its adherence to the principles of the Seila case concerning the independence of government agencies. While the Court reiterated the idea that certain agencies may retain independence because of special circumstances, it decided the Collins case in a way that suggests a possible lack of Court flexibility in responding to the special circumstances of public broadcasting that support agency independence.
Note: My shorter related article on protecting the independence of public broadcasting previously appeared in the DC Bar Washington Lawyer Magazine
Don Allen Resnikoff
https://www.mediaethicsmagazine.com/index.php/browse-back-issues/216-spring-2021-vol-32-no-2/3999344-protecting-the-independence-of-public-broadcasting
Comment by Don Allen Resnikoff:
In my recent article in Media Ethics Magazine [see citation above], I say that U.S. publicly funded broadcasting should be protected from being turned into a partisan or ideological tool. The most effective protection for the independence of public broadcasting is the support of U.S. Presidents, and a Supreme Court that does not unduly limit the permissible delegation of authority to government agencies.
Protecting the autonomy of public broadcasters is complicated by a U.S. Supreme Court decision that reflects a shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the case of Seila Law LLC v. Consumer Financial Protection Bureau the Supreme Court determined that the structure of the Consumer Financial Protection Bureau (CFPB), with a single director who could be removed from office only “for cause,” violated the requirements of the Constitution for the separation of powers. The Court explained, in its 5-4 decision, that, as a general matter, leaders of federal agencies serve at the discretion of the President. The President can fire them at his/her discretion.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the established idea that Congress has the power to allow agencies to operate independently of the President. Harvard Law professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” And, of course, public broadcasting.
In a recent opinion issued shortly before publication of my Media Ethics article, Collins et al. v. Yellen, et al., 594 U.S. ____ (2021), the U.S. Supreme Court confirmed its adherence to the principles of the Seila case concerning the independence of government agencies. While the Court reiterated the idea that certain agencies may retain independence because of special circumstances, it decided the Collins case in a way that suggests a possible lack of Court flexibility in responding to the special circumstances of public broadcasting that support agency independence.
Note: My shorter related article on protecting the independence of public broadcasting previously appeared in the DC Bar Washington Lawyer Magazine
Don Allen Resnikoff
Picadio on the 2nd Amendment,
and the true history of militias and guns
Anthony Picadio’s thoughtful article in the July, 2021 Pennsylvania Bar Association Quarterly explains that in the near future the Supreme Court will address the gun rights case New York State Rifle & Pistol Association v. Corlett. This case involves a Constitutional Second Amendment challenge to New York State’s concealed carry law.
Author Picadio reminds us that the U.S. Supreme Court’s Heller case held in 2008, by a 5-4 vote, that the Second Amendment protects an individual’s right to possess a firearm, unconnected to service in a militia. Justice Antonin Scalia wrote the majority opinion in Heller. The opinion reflects Scalia’s dedication to an “originalist” style of Constitutional interpretation, the ostensible goal of which is a careful and deferential approach to the Constitution’s language as it was understood at the time of ratification.
Picadio’s article discusses the views of the three new U.S. Supreme Court Justices, Gorsuch, Kavanaugh and Coney-Barrett. They are all avowed originalists and apparent supporters of an expansive view of personal gun rights.
Picadio argues, among other things, that originalist Constitutional interpretation has not lived up to its promise of neutral, predictable decisions unaffected by a justice’s personal views. Picadio shows how originalism has increased the level of politicization in our judicial system. He writes:
Perhaps the most pernicious effect of originalism has been the politicization of history itself. We now have the situation where a one-vote majority Supreme Court opinion [in Heller] has decided our history. Does it no longer matter what history scholars say about the history of gun regulation in 18th Century England and early America? Does the concept of stare decisis foreclose consideration of further scholarly research? Just posing these questions shows how preposterous it is for a court to re solve, as a matter of law, disputed and contested historical issues.
What is the history of 18th Century gun regulation that Picadio believes has been obscured? A main aspect is that gun regulation was closely related to and supportive of oppression of black Americans. Following is an excerpt from his article on that particular point [footnotes omitted]:
Scalia’s idea that the Second Amendment was not understood as connecting gun ownership to service in a militia is not persuasive. His statement that another reason for the Second Amendment was to protect gun ownership/use for self-defense, is just wrong. To believe that, one would have to believe that James Madison, who sat on the Virginia committee which specifically rejected what Scalia called a Second Amendment analogue [that did not discriminate against blacks], and who was conscious of his state’s history of denying arms to free blacks, had a complete change of heart and drafted a Second Amendment which he knew would conflict with state laws such as Virginia’s [which limited gun ownership by blacks].The more likely conclusion is that Madison wrote the militia clause with the understanding that it would limit the interpretation of the operative clause and that was surely the understanding of those in the slave states which ratified the Second Amendment. Only by limiting the right to bear arms to members of all white militias could Madison ensure that guns would not be available to free blacks.
To be clear, the points discussed here are just a part of Anthony Picadio’s discussion of what lies ahead in the U.S. Supreme Court’s consideration of Second Amendment issues.
NOTE: Picadio’s article will also appear in the Transpartisan Review at: transpartisanreview.org
This posting is by Don Allen Resnikoff, who takes full responsibility for its content
The challenges to new FTC Chair Khan in plain sight
From https://newsupdate.uk/one-of-big-techs-biggest-critics-is-now-its-regulator/
“She brings to the job what I would call the boldest vision for the agency in its history,” William Kovacic, a former chairman of the agency, said of her approach to competition law. “So in that respect, she is a potentially transformative figure.”
The question is how much she will be able to accomplish.
Her fast ascent from researcher to leader of a large federal agency underscores the growing concerns about the power of the big tech companies — and big business in general — in Washington. In her new job, she will command more than 1,000 investigators, lawyers and economists who are responsible for policing the American economy.
Her reach will extend far beyond the tech giants and the antitrust legal critiques where she made her name. The F.T.C. investigates unfair or deceptive practices by companies in addition to antitrust violations. This year alone, it has challenged the merger of two cement producers in Pennsylvania, cracked down on unsupported statements about treatments for Covid-19 and reached a deal with two liquor companies over a merger it said would hurt competition for cheap sparkling wine.
But Ms. Khan will also confront her share of limits. In order to create new rules or take major actions against companies, she will need to persuade at least two of the four other commissioners to agree with her. She will also need to make decisions that can hold up in the courts, which have tended to push back against aggressive antitrust enforcement.
“If you want your vision to endure,” Mr. Kovacic said, “you have to change law and policy, and you can’t do that by yourself.”
From https://newsupdate.uk/one-of-big-techs-biggest-critics-is-now-its-regulator/
“She brings to the job what I would call the boldest vision for the agency in its history,” William Kovacic, a former chairman of the agency, said of her approach to competition law. “So in that respect, she is a potentially transformative figure.”
The question is how much she will be able to accomplish.
Her fast ascent from researcher to leader of a large federal agency underscores the growing concerns about the power of the big tech companies — and big business in general — in Washington. In her new job, she will command more than 1,000 investigators, lawyers and economists who are responsible for policing the American economy.
Her reach will extend far beyond the tech giants and the antitrust legal critiques where she made her name. The F.T.C. investigates unfair or deceptive practices by companies in addition to antitrust violations. This year alone, it has challenged the merger of two cement producers in Pennsylvania, cracked down on unsupported statements about treatments for Covid-19 and reached a deal with two liquor companies over a merger it said would hurt competition for cheap sparkling wine.
But Ms. Khan will also confront her share of limits. In order to create new rules or take major actions against companies, she will need to persuade at least two of the four other commissioners to agree with her. She will also need to make decisions that can hold up in the courts, which have tended to push back against aggressive antitrust enforcement.
“If you want your vision to endure,” Mr. Kovacic said, “you have to change law and policy, and you can’t do that by yourself.”
NJ Governor Murphy Signs Landmark Legislation to Permanently Establish the Community College Opportunity Grant Program
02/26/2021
New Law Will Continue to Guarantee Tuition-Free Community College Education to More than 50,000 New Jersey Students Each Academic Year
JERSEY CITY – Fulfilling his promise to make tuition-free community college a reality, Governor Phil Murphy today signed A4410, permanently establishing the Community College Opportunity Grant Program (CCOG), which will allow qualified students to attend any New Jersey community college without tuition or educational fees.
“For far too long, higher education has been out of reach for countless New Jerseyans due to its high cost,” said Governor Murphy. “Today’s bill signing underscores our continued commitment to college affordability, ensuring that our young people and working adults have the opportunity to earn post-secondary degrees and advance their promising careers.”
“Today represents a huge win for college affordability and a transformative moment in our state’s history. In the years to come, CCOG will continue offering thousands more eligible students equitable access to a college education for free,” said Dr. Brian Bridges, Secretary of Higher Education. “To emerge stronger and fairer from the COVID-19 pandemic, we are investing in future generations today by expanding affordable options to ensure students’ lifelong success.”
“New Jersey now sends a clear message: county college is tuition-free for students with family incomes of $65,000 or below,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Governor Murphy has enabled HESAA to back up that promise by filling students’ remaining financial aid gaps with more than 25,000 Community College Opportunity Grants since the spring 2019 semester. The impact of this commitment reaches still further, by making an up-front, tuition-free price guarantee that enables tens of thousands of additional students to focus on their postsecondary education without concern about paying the tuition sticker price. Many students can now consider enrolling in college with full confidence that their entire county college tuition will be covered by the State of New Jersey. By raising awareness that college is more affordable, we can encourage more students to pursue courses of study that will enhance their lives and careers here in the Garden State.”
CCOG, which will be administered by the Higher Education Student Assistance Authority (HESAA), will provide last-dollar grants to eligible county college students for those tuition costs and fees not already covered by any other State, federal, and institutional need-based grants and merit scholarships. Students with adjusted gross incomes of $65,000 or less will be eligible to receive this financial grant for a total of five (5) semesters. This legislation also directs the Legislature to appropriate funding for the “Student Success Incentive” to the Office of the Secretary of Higher Education, for distribution to each county college. This funding will be used to support outreach and student success initiatives to further the goals of the CCOG grant program.
From https://www.nj.gov/governor/news/news/562021/20210226a.shtml
DAR Comment: When I attended New Jersey's Rutgers University some years ago, the tuition and room and board were not free, but close to it. My family had no money to contribute, but with a small home town newspaper scholarship and part time work I lived comfortably at college, and graduated without debt. I later attended law school on a partial scholarship. As a consequence of the opportunities extended to me I have enjoyed an interesting legal career, lived comfortably, and provided a comfortable upbringing for my children. I've attended reunions at Rutgers where I've chatted with others from poor families who were able to pursue satisfying careers because of the minimal tuition and room and board costs they experienced at Rutgers. In recent years opportunities for excellent and low-cost college education have melted away for students from families with small financial resources--costs for tuition and room and board at Rutgers have increased dramatically. The New Jersey initiative, while limited to community colleges, is a welcome step to restoring advanced education opportunities for students from poor families.
02/26/2021
New Law Will Continue to Guarantee Tuition-Free Community College Education to More than 50,000 New Jersey Students Each Academic Year
JERSEY CITY – Fulfilling his promise to make tuition-free community college a reality, Governor Phil Murphy today signed A4410, permanently establishing the Community College Opportunity Grant Program (CCOG), which will allow qualified students to attend any New Jersey community college without tuition or educational fees.
“For far too long, higher education has been out of reach for countless New Jerseyans due to its high cost,” said Governor Murphy. “Today’s bill signing underscores our continued commitment to college affordability, ensuring that our young people and working adults have the opportunity to earn post-secondary degrees and advance their promising careers.”
“Today represents a huge win for college affordability and a transformative moment in our state’s history. In the years to come, CCOG will continue offering thousands more eligible students equitable access to a college education for free,” said Dr. Brian Bridges, Secretary of Higher Education. “To emerge stronger and fairer from the COVID-19 pandemic, we are investing in future generations today by expanding affordable options to ensure students’ lifelong success.”
“New Jersey now sends a clear message: county college is tuition-free for students with family incomes of $65,000 or below,” said David Socolow, Executive Director of the New Jersey Higher Education Student Assistance Authority (HESAA). “Governor Murphy has enabled HESAA to back up that promise by filling students’ remaining financial aid gaps with more than 25,000 Community College Opportunity Grants since the spring 2019 semester. The impact of this commitment reaches still further, by making an up-front, tuition-free price guarantee that enables tens of thousands of additional students to focus on their postsecondary education without concern about paying the tuition sticker price. Many students can now consider enrolling in college with full confidence that their entire county college tuition will be covered by the State of New Jersey. By raising awareness that college is more affordable, we can encourage more students to pursue courses of study that will enhance their lives and careers here in the Garden State.”
CCOG, which will be administered by the Higher Education Student Assistance Authority (HESAA), will provide last-dollar grants to eligible county college students for those tuition costs and fees not already covered by any other State, federal, and institutional need-based grants and merit scholarships. Students with adjusted gross incomes of $65,000 or less will be eligible to receive this financial grant for a total of five (5) semesters. This legislation also directs the Legislature to appropriate funding for the “Student Success Incentive” to the Office of the Secretary of Higher Education, for distribution to each county college. This funding will be used to support outreach and student success initiatives to further the goals of the CCOG grant program.
From https://www.nj.gov/governor/news/news/562021/20210226a.shtml
DAR Comment: When I attended New Jersey's Rutgers University some years ago, the tuition and room and board were not free, but close to it. My family had no money to contribute, but with a small home town newspaper scholarship and part time work I lived comfortably at college, and graduated without debt. I later attended law school on a partial scholarship. As a consequence of the opportunities extended to me I have enjoyed an interesting legal career, lived comfortably, and provided a comfortable upbringing for my children. I've attended reunions at Rutgers where I've chatted with others from poor families who were able to pursue satisfying careers because of the minimal tuition and room and board costs they experienced at Rutgers. In recent years opportunities for excellent and low-cost college education have melted away for students from families with small financial resources--costs for tuition and room and board at Rutgers have increased dramatically. The New Jersey initiative, while limited to community colleges, is a welcome step to restoring advanced education opportunities for students from poor families.
Book review by Don Allen Resnikoff
The Twilight of Democracy: The Seductive Lure of Authoritarianism
Anne Applebaum. Doubleday (224p) 2020
Anne Applebaum’s book The Twilight of Democracy describes how a significant number of well-educated and sophisticated people in countries around the world are supporting anti-democratic movements and opposing democracy. Instead, they support autocracy. The reasoning of such people is not ideology so much as support for the status quo, a continuation of a social hierarchy where the established insider group is preserved, and groups perceived as outsiders are quashed.
Applebaum makes subordinate but important points about the role of false narratives in advancing anti-democratic movements. Often the false narratives used by anti-democratic movements involve conspiracy theories, where people perceived as outsiders are accused of conspiring against the established insider group. False narratives are a particularly interesting phenomena because they are, Applebaum argues, relevant even in countries like the U.S., where responsible journalists can present the truth about false narratives.
A question raised by the false narratives story is what journalists and ordinary citizens can do to counter false narratives. In a world where the media and citizens sometimes isolate themselves in “echo chambers” of limited information, simply presenting the truth may not be enough.
Turning to Applebaum’s stories, she tells us that when Poland’s right-wing Law and Justice Party gained political control in 2015, it took over the state’s public radio and TV outlets. The new government fired established reporters and replaced them with right-wing political loyalists.
Applebaum reports that the state public broadcaster programming became “straightforward ruling party propaganda” and “lies.” There were “twisted news reports” and “extensive vendettas against people and organizations whom the ruling party didn’t like.” In Poland the tradition of privately operated broadcasting was weak, so state control of the public broadcasting gave the government a very powerful voice.
Applebaum reports that the state broadcaster’s vendettas had lethal effects. On one occasion the state broadcaster’s persistent (and, according to Applebaum, incorrect and unfair) attacks on a town’s mayor inspired a deranged person to kill the mayor.
In her book, and in a Washington Post Op-Ed, Applebaum tells how the Polish government concocted a conspiracy theory that had great political benefits to the right-wing government, and that achieved acceptance among the Polish people because of Polish government control of broadcasting.[i] She offers the story as a warning to U.S. citizens about the path for an autocratic government in the United States. Applebaum’s intention is to provide a preview of possible bad political developments in the United States – the growth of anti-democratic movements.
The lesson Anne Applebaum offers is that propagation of false conspiratorial narratives provides groundwork for undermining the rule of law. In conspiracy theories the conspirators are characterized as evil, allowing the anti-democratic forces to argue that extra-legal and autocratic strategies to crush them are appropriate. Applebaum believes that such autocratic strategies and related opposition to the rule of law are a threat in the United States
The genesis of the conspiracy story pressed by the right-wing Polish government was the crash of a plane that had carried the Polish president, Lech Kaczynski, and other high level officials. Several dozen senior military figures and politicians were on the plane. All died.
The president’s twin brother, Jaroslaw Kaczynski, began to promote a false conspiracy theory. At the core of the conspiracy idea was the thought that the crash was not an accident, but the work of secret forces, particularly elite groups manipulated by foreigners. The alleged “conspirators” were “left wing” people with ties to Western democracies.
Applebaum reports that the use of the concocted conspiracy theory was a successful political strategy. It propelled the right-wing nationalist-populist party, Law and Justice, to political successes.
The conspiracy theory about the plane crash was plainly false, according to Applebaum. Applebaum says that the truth is that within hours of the crash, forensic experts were on the ground. They immediately obtained the black boxes and transcribed them meticulously. The cockpit tape can be heard online, and it is strong evidence, in Applebaum’s view. “The president was late; . . . When Russian air traffic controllers wanted to divert the plane because of heavy fog, he did not agree. The chief of the Air Force sat in the cockpit during the final minutes of the flight and pushed the pilots to land: ‘Be bold, you’ll make it,’ he told them. According to the official report, written by the country’s top aviation experts, the plane hit a tree, then the ground, and then broke up.”[ii]
It is significant that the ability of the right-wing Polish government to successfully promote a false narrative of a conspiracy of foreign-influenced left-wing forces depended not only on the government’s control of government-run broadcasting, but also on lack of alternate information sources. The Polish government wielded effective autocratic control over all dissemination of information. That is different than the situation in the United States, where there are multiple and sometimes competing source of information.
Despite the differences between Poland and the U.S. with regard to journalistic freedom, Anne Applebaum’s message is clear. Autocratic government tendencies are aided by use of fake narratives about political enemies. That is true even in the United States, where there is alternate media that is independent of government and can report the facts.
The political harm that can be caused in the United States by false conspiratorial narratives is clear, according to Anne Applebaum: undermining democracy and the rule of law.
i https://www.washingtonpost.com/opinions/global-opinions/in-poland-a-preview-of-what-trump-could-do-to-america/2016/09/19/71515d02-7e86-11e6-8d13-d7c704ef9fd9_story.html
[ii] ibid
The Twilight of Democracy: The Seductive Lure of Authoritarianism
Anne Applebaum. Doubleday (224p) 2020
Anne Applebaum’s book The Twilight of Democracy describes how a significant number of well-educated and sophisticated people in countries around the world are supporting anti-democratic movements and opposing democracy. Instead, they support autocracy. The reasoning of such people is not ideology so much as support for the status quo, a continuation of a social hierarchy where the established insider group is preserved, and groups perceived as outsiders are quashed.
Applebaum makes subordinate but important points about the role of false narratives in advancing anti-democratic movements. Often the false narratives used by anti-democratic movements involve conspiracy theories, where people perceived as outsiders are accused of conspiring against the established insider group. False narratives are a particularly interesting phenomena because they are, Applebaum argues, relevant even in countries like the U.S., where responsible journalists can present the truth about false narratives.
A question raised by the false narratives story is what journalists and ordinary citizens can do to counter false narratives. In a world where the media and citizens sometimes isolate themselves in “echo chambers” of limited information, simply presenting the truth may not be enough.
Turning to Applebaum’s stories, she tells us that when Poland’s right-wing Law and Justice Party gained political control in 2015, it took over the state’s public radio and TV outlets. The new government fired established reporters and replaced them with right-wing political loyalists.
Applebaum reports that the state public broadcaster programming became “straightforward ruling party propaganda” and “lies.” There were “twisted news reports” and “extensive vendettas against people and organizations whom the ruling party didn’t like.” In Poland the tradition of privately operated broadcasting was weak, so state control of the public broadcasting gave the government a very powerful voice.
Applebaum reports that the state broadcaster’s vendettas had lethal effects. On one occasion the state broadcaster’s persistent (and, according to Applebaum, incorrect and unfair) attacks on a town’s mayor inspired a deranged person to kill the mayor.
In her book, and in a Washington Post Op-Ed, Applebaum tells how the Polish government concocted a conspiracy theory that had great political benefits to the right-wing government, and that achieved acceptance among the Polish people because of Polish government control of broadcasting.[i] She offers the story as a warning to U.S. citizens about the path for an autocratic government in the United States. Applebaum’s intention is to provide a preview of possible bad political developments in the United States – the growth of anti-democratic movements.
The lesson Anne Applebaum offers is that propagation of false conspiratorial narratives provides groundwork for undermining the rule of law. In conspiracy theories the conspirators are characterized as evil, allowing the anti-democratic forces to argue that extra-legal and autocratic strategies to crush them are appropriate. Applebaum believes that such autocratic strategies and related opposition to the rule of law are a threat in the United States
The genesis of the conspiracy story pressed by the right-wing Polish government was the crash of a plane that had carried the Polish president, Lech Kaczynski, and other high level officials. Several dozen senior military figures and politicians were on the plane. All died.
The president’s twin brother, Jaroslaw Kaczynski, began to promote a false conspiracy theory. At the core of the conspiracy idea was the thought that the crash was not an accident, but the work of secret forces, particularly elite groups manipulated by foreigners. The alleged “conspirators” were “left wing” people with ties to Western democracies.
Applebaum reports that the use of the concocted conspiracy theory was a successful political strategy. It propelled the right-wing nationalist-populist party, Law and Justice, to political successes.
The conspiracy theory about the plane crash was plainly false, according to Applebaum. Applebaum says that the truth is that within hours of the crash, forensic experts were on the ground. They immediately obtained the black boxes and transcribed them meticulously. The cockpit tape can be heard online, and it is strong evidence, in Applebaum’s view. “The president was late; . . . When Russian air traffic controllers wanted to divert the plane because of heavy fog, he did not agree. The chief of the Air Force sat in the cockpit during the final minutes of the flight and pushed the pilots to land: ‘Be bold, you’ll make it,’ he told them. According to the official report, written by the country’s top aviation experts, the plane hit a tree, then the ground, and then broke up.”[ii]
It is significant that the ability of the right-wing Polish government to successfully promote a false narrative of a conspiracy of foreign-influenced left-wing forces depended not only on the government’s control of government-run broadcasting, but also on lack of alternate information sources. The Polish government wielded effective autocratic control over all dissemination of information. That is different than the situation in the United States, where there are multiple and sometimes competing source of information.
Despite the differences between Poland and the U.S. with regard to journalistic freedom, Anne Applebaum’s message is clear. Autocratic government tendencies are aided by use of fake narratives about political enemies. That is true even in the United States, where there is alternate media that is independent of government and can report the facts.
The political harm that can be caused in the United States by false conspiratorial narratives is clear, according to Anne Applebaum: undermining democracy and the rule of law.
i https://www.washingtonpost.com/opinions/global-opinions/in-poland-a-preview-of-what-trump-could-do-to-america/2016/09/19/71515d02-7e86-11e6-8d13-d7c704ef9fd9_story.html
[ii] ibid
Five recent proposed antitrust reform bills
From: https://deadline.com/2021/06/house-antitrust-apple-amazon-facebook-google-1234773904/
With links to the text of proposed bills
-The Platform Competition and Opportunity Act: prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.
Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.
https://www.congress.gov/bill/117th-congress/house-bill/3826
–The Ending Platform Monopolies Act: eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition.
This would lead breakups of Amazon and other big tech companies by prohibiting them from owning a business that uses the platform “for the sale or provision of products or services” or that sells services as a condition of accessing the platform. Companies couldn’t own businesses that create conflicts of interest, where the platform has incentive and ability to advantage its own products over competitors. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.
https://www.congress.gov/bill/117th-congress/house-bill/3825
-The American Innovation and Choice Online Act: prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”
https://www.congress.gov/bill/117th-congress/house-bill/3816
–The Merger Filing Fee Modernization Act: updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.
https://www.congress.gov/bill/117th-congress/senate-bill/228
--The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements.
https://www.congress.gov/bill/116th-congress/senate-bill/2658/all-info
From: https://deadline.com/2021/06/house-antitrust-apple-amazon-facebook-google-1234773904/
With links to the text of proposed bills
-The Platform Competition and Opportunity Act: prohibits acquisitions of competitive threats by dominant platforms, as well acquisitions that expand or entrench the market power of online platforms.
Facebook in particular has been taken to task for buying Instagram and other smaller rivals to maintain its social media dominance.
https://www.congress.gov/bill/117th-congress/house-bill/3826
–The Ending Platform Monopolies Act: eliminates the ability of dominant platforms to leverage their control over across multiple business lines to self-preference and disadvantage competitors in ways that undermine free and fair competition.
This would lead breakups of Amazon and other big tech companies by prohibiting them from owning a business that uses the platform “for the sale or provision of products or services” or that sells services as a condition of accessing the platform. Companies couldn’t own businesses that create conflicts of interest, where the platform has incentive and ability to advantage its own products over competitors. Retailers on Amazon’s marketplace have accused the company of mining their data to undercut them.
https://www.congress.gov/bill/117th-congress/house-bill/3825
-The American Innovation and Choice Online Act: prohibits discriminatory conduct by dominant platforms, including a ban on self-preferencing “and picking winners and losers online.”
https://www.congress.gov/bill/117th-congress/house-bill/3816
–The Merger Filing Fee Modernization Act: updates filing fees for mergers for the first time in two decades to ensure that Department of Justice and Federal Trade Commission have the resources they need to aggressively enforce the antitrust laws. It raises the fees for mergers valued at over $1 billion and lowers them for deals of under $500,000.
https://www.congress.gov/bill/117th-congress/senate-bill/228
--The Augmenting Compatibility and Competition by Enabling Service Switching (ACCESS) Act: promotes competition online by lowering barriers to entry and switching costs for businesses and consumers through interoperability and data portability requirements.
https://www.congress.gov/bill/116th-congress/senate-bill/2658/all-info
AAI Has Allergic Reaction to Misguided Decision in EpiPen Monopolization Case (Sanofi v. Mylan)
AAI filed an amicus brief urging the Tenth Circuit Court of Appeals to reverse a district court order granting summary judgment to the defendant Mylan in a closely watched monopolization case involving the ubiquitous EpiPen, a device used to treat allergy patients who suffer from life-threatening anaphylaxis.
The AAI brief argues that the district court failed to account for Mylan’s overwhelming monopoly power in assessing the likelihood that its conduct would have anticompetitive effects in the EAI market. Although the district court accurately cited language from a different case emphasizing that exclusive dealing is common in the economy and can often be procompetitive, it neglected to account for the economic realities of the EAI market, in which Mylan was eliminating its only capable rival. Because the court failed to appreciate that competition cannot exist without competitors, it did not recognize that conduct eliminating the Auvi-Q on some basis other than efficiency was all but assured of causing cognizable harm under the antitrust laws.
Read More - https://www.antitrustinstitute.org/work-product/aai-has-allergic-reaction-to-misguided-decision-in-epipen-monopolization-case-sanofi-v-mylan/
AAI filed an amicus brief urging the Tenth Circuit Court of Appeals to reverse a district court order granting summary judgment to the defendant Mylan in a closely watched monopolization case involving the ubiquitous EpiPen, a device used to treat allergy patients who suffer from life-threatening anaphylaxis.
The AAI brief argues that the district court failed to account for Mylan’s overwhelming monopoly power in assessing the likelihood that its conduct would have anticompetitive effects in the EAI market. Although the district court accurately cited language from a different case emphasizing that exclusive dealing is common in the economy and can often be procompetitive, it neglected to account for the economic realities of the EAI market, in which Mylan was eliminating its only capable rival. Because the court failed to appreciate that competition cannot exist without competitors, it did not recognize that conduct eliminating the Auvi-Q on some basis other than efficiency was all but assured of causing cognizable harm under the antitrust laws.
Read More - https://www.antitrustinstitute.org/work-product/aai-has-allergic-reaction-to-misguided-decision-in-epipen-monopolization-case-sanofi-v-mylan/
Statute advocated by Maryland Consumer Rights Coalition becomes law -- protects people with medical bills they can't pay
the Medical Debt Protection Act (HB565/SB514) is now law. The legislation, sponsored by Del. Lorig Charkoudian and Sen. Brian Feldman offers the strongest protections for patients with medical debt in the country. Among its many strong provisions, it prohibits liens on homes for anyone with medical debt, prohibits wage garnishment for patients who qualify for free or reduced-cost care, prohibits the use of body attachments for any medical debt collection efforts, creates an income-based repayment plan of no more than 5% of a person’s gross monthly income for all patients with medical debt, and establishes a moratorium on medical debt collection from June through January 2022.
Source: MCRC
the Medical Debt Protection Act (HB565/SB514) is now law. The legislation, sponsored by Del. Lorig Charkoudian and Sen. Brian Feldman offers the strongest protections for patients with medical debt in the country. Among its many strong provisions, it prohibits liens on homes for anyone with medical debt, prohibits wage garnishment for patients who qualify for free or reduced-cost care, prohibits the use of body attachments for any medical debt collection efforts, creates an income-based repayment plan of no more than 5% of a person’s gross monthly income for all patients with medical debt, and establishes a moratorium on medical debt collection from June through January 2022.
Source: MCRC
DC AG Newsletter on Amazon suit
New Antitrust Lawsuit Against Amazon
May was quite the month.
* * *
And at the end of the month, my office announced a new antitrust lawsuit against Amazon. Through this suit, we’re seeking to end Amazon’s anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of District law.
For years, Amazon has controlled online retail prices through its restrictive contracts and policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online–including their own websites–for a lower price than on Amazon.
These agreements result in an artificially high price across the online retail marketplace. They ensure that high fees charged to third-party sellers by Amazon–as much as 40% of the product price–are incorporated not only in the price charged on Amazon, but also in the prices charged on competing platforms across the online retail sales market.
Amazon has used its dominant position in the online retail market to win at all costs. My office filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
To learn more about the case, read this New York Times article. [Amazon Accused of Manipulating Prices by D.C. Attorney General - The New York Times (nytimes.com), https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsuit.html]
To learn more about the significance of the case, read this other New York Times article. [The Big Deal in Amazon’s Antitrust Case - The New York Times (nytimes.com),https://www.nytimes.com/2021/05/25/technology/amazon-antitrust-lawsuit.html]
Thank you.
Karl A. Racine
Attorney General
New Antitrust Lawsuit Against Amazon
May was quite the month.
* * *
And at the end of the month, my office announced a new antitrust lawsuit against Amazon. Through this suit, we’re seeking to end Amazon’s anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of District law.
For years, Amazon has controlled online retail prices through its restrictive contracts and policies. Amazon requires third-party sellers to agree that they won’t offer their products anywhere else online–including their own websites–for a lower price than on Amazon.
These agreements result in an artificially high price across the online retail marketplace. They ensure that high fees charged to third-party sellers by Amazon–as much as 40% of the product price–are incorporated not only in the price charged on Amazon, but also in the prices charged on competing platforms across the online retail sales market.
Amazon has used its dominant position in the online retail market to win at all costs. My office filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.
To learn more about the case, read this New York Times article. [Amazon Accused of Manipulating Prices by D.C. Attorney General - The New York Times (nytimes.com), https://www.nytimes.com/2021/05/25/business/amazon-dc-lawsuit.html]
To learn more about the significance of the case, read this other New York Times article. [The Big Deal in Amazon’s Antitrust Case - The New York Times (nytimes.com),https://www.nytimes.com/2021/05/25/technology/amazon-antitrust-lawsuit.html]
Thank you.
Karl A. Racine
Attorney General
Amazon will rely on high burden of proof – experts
In a lawsuit filed May 25 in Washington, D.C., Superior Court, Washington, D.C.'s Attorney General Karl Racine claimed Amazon artificially inflated prices across the entire online retail market by prohibiting merchants that sell on Amazon's site from charging lower prices for the same products elsewhere. The lawsuit seeks to stop Amazon’s use of the price agreements, recover damages and impose penalties to discourage similar conduct by Amazon and other companies.
But experts say the suit is limited in scope because any judgment would apply to the district alone. A lack of successfully litigated cases focused on this issue could also pose an obstacle.
"There isn't a body of litigation that has looked at this in detail, in this setting, in trial proceedings," said former Federal Trade Commission Chair William Kovacic. "Without the benefit of cases that have said 'this practice is anti-competitive,' you have to explore some new terrain. The burden is always on the plaintiff to show anti-competitive effects."
Meanwhile, Amazon will likely bring an expert forward who argues that the company's pricing practices are pro-competitive or have no competitive effect, said Kovacic, who currently serves as a law professor at George Washington University. "Amazon will say 'this hasn't been condemned in the United States before,'" Kovacic said.
In an email statement to S&P Global Market Intelligence June 1, an Amazon spokesperson said sellers set their own prices for the products they offer in its store.
"Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store, we reserve the right not to highlight offers to customers that are not priced competitively," the spokesperson said. "The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The suit takes on extra significance given that independent third-party merchants account for a majority of physical gross merchandise sales on Amazon's site, at 60% as of 2019, according to data from Marketplace Pulse, a firm that collects data on e-commerce companies, including Amazon.
Many Amazon sellers are increasingly diversifying to online platforms run by Walmart Inc., eBay Inc., Target Corp. and others to reach new consumers in the wake of the pandemic. Despite this, Amazon remains the dominant source for many of these sales.
"The perception is that they have almost zero negotiating leverage" when it comes to price, said Tuna Amobi, media and entertainment analyst with CFRA Research.
The suit rekindles some antitrust concerns with Amazon's price parity provision under its "most favored nation" agreements in which the company previously prohibited sellers from offering products at lower prices on competing platforms, Amobi said.
Amazon replaced the provision in 2019 with a "fair pricing policy," which has the same effect of blocking sellers from offering lower prices to consumers on other retail sites, Amobi said.
"The argument now is that Amazon really didn't follow through with the spirit of [removing the price parity provision] and kept enforcing it indirectly," Amobi said.
Under Amazon's fair pricing policy, third-party sellers can be sanctioned or removed from Amazon if they offer their products for lower prices or under better terms on a competing platform, according to the Washington, D.C., suit.
The lawsuit adds to increasing scrutiny over Amazon's relationship with its third-party sellers, including a probe launched by the FTC in concert with the attorneys general in New York and California.
But the district lawsuit's relatively limited scope, coupled with a high bar to prove fault, means little near-term material risk, Amobi said.
"It just seems to be a high bar to prove that these merchants had actually suffered direct losses," Amobi said. "Amazon has said merchants had the discretion to set their own prices. They are just requiring them to not offer lower prices elsewhere."
Kovacic said the plaintiff can, however, point to substantial academic literature that supports the theory of the district's case along with cases in Europe, where competition authorities in the United Kingdom and Germany launched investigations into whether Amazon’s price parity provision is anti-competitive.
According to the suit, Amazon informed European regulators in 2013 that it would abandon the provision across the European Union, but the provision "remained in place for years longer in the United States and elsewhere."
From: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/dc-s-antitrust-suit-against-amazon-will-rely-on-high-burden-of-proof-8211-experts-64539029
- Author Katie Arcieri
In a lawsuit filed May 25 in Washington, D.C., Superior Court, Washington, D.C.'s Attorney General Karl Racine claimed Amazon artificially inflated prices across the entire online retail market by prohibiting merchants that sell on Amazon's site from charging lower prices for the same products elsewhere. The lawsuit seeks to stop Amazon’s use of the price agreements, recover damages and impose penalties to discourage similar conduct by Amazon and other companies.
But experts say the suit is limited in scope because any judgment would apply to the district alone. A lack of successfully litigated cases focused on this issue could also pose an obstacle.
"There isn't a body of litigation that has looked at this in detail, in this setting, in trial proceedings," said former Federal Trade Commission Chair William Kovacic. "Without the benefit of cases that have said 'this practice is anti-competitive,' you have to explore some new terrain. The burden is always on the plaintiff to show anti-competitive effects."
Meanwhile, Amazon will likely bring an expert forward who argues that the company's pricing practices are pro-competitive or have no competitive effect, said Kovacic, who currently serves as a law professor at George Washington University. "Amazon will say 'this hasn't been condemned in the United States before,'" Kovacic said.
In an email statement to S&P Global Market Intelligence June 1, an Amazon spokesperson said sellers set their own prices for the products they offer in its store.
"Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store, we reserve the right not to highlight offers to customers that are not priced competitively," the spokesperson said. "The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law."
The suit takes on extra significance given that independent third-party merchants account for a majority of physical gross merchandise sales on Amazon's site, at 60% as of 2019, according to data from Marketplace Pulse, a firm that collects data on e-commerce companies, including Amazon.
Many Amazon sellers are increasingly diversifying to online platforms run by Walmart Inc., eBay Inc., Target Corp. and others to reach new consumers in the wake of the pandemic. Despite this, Amazon remains the dominant source for many of these sales.
"The perception is that they have almost zero negotiating leverage" when it comes to price, said Tuna Amobi, media and entertainment analyst with CFRA Research.
The suit rekindles some antitrust concerns with Amazon's price parity provision under its "most favored nation" agreements in which the company previously prohibited sellers from offering products at lower prices on competing platforms, Amobi said.
Amazon replaced the provision in 2019 with a "fair pricing policy," which has the same effect of blocking sellers from offering lower prices to consumers on other retail sites, Amobi said.
"The argument now is that Amazon really didn't follow through with the spirit of [removing the price parity provision] and kept enforcing it indirectly," Amobi said.
Under Amazon's fair pricing policy, third-party sellers can be sanctioned or removed from Amazon if they offer their products for lower prices or under better terms on a competing platform, according to the Washington, D.C., suit.
The lawsuit adds to increasing scrutiny over Amazon's relationship with its third-party sellers, including a probe launched by the FTC in concert with the attorneys general in New York and California.
But the district lawsuit's relatively limited scope, coupled with a high bar to prove fault, means little near-term material risk, Amobi said.
"It just seems to be a high bar to prove that these merchants had actually suffered direct losses," Amobi said. "Amazon has said merchants had the discretion to set their own prices. They are just requiring them to not offer lower prices elsewhere."
Kovacic said the plaintiff can, however, point to substantial academic literature that supports the theory of the district's case along with cases in Europe, where competition authorities in the United Kingdom and Germany launched investigations into whether Amazon’s price parity provision is anti-competitive.
According to the suit, Amazon informed European regulators in 2013 that it would abandon the provision across the European Union, but the provision "remained in place for years longer in the United States and elsewhere."
From: https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/dc-s-antitrust-suit-against-amazon-will-rely-on-high-burden-of-proof-8211-experts-64539029
NYT Dealbook: “New York May Change How America Does Antitrust”
Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.
You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.
What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)
Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.
The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.
Credit: Matt Stoller
Last year, Gianaris introduced a bill to update New York state’s antitrust law, with the goal being to move away from the monopoly friendly standard judges use right now to understand what constitutes a market power, which is known as the ‘consumer welfare’ standard. This week, the updated bill is likely to pass the full state Senate, and will be headed for the New York Assembly. It is a serious effort. Gianaris is a powerful player in New York politics, and the legislation has the support of New York’s Attorney General, Letitia James, who is also leading one of the key antitrust cases against Facebook.
You can tell it matters because the New York Times’s Dealbook - read by investors - reported on it last week.
What would this bill do? It would change standards for how a firm is considered to be too powerful. While changing standards seems technical and wonky, such a change would in fact be a revolutionary act to break the power that dominant firms have over our economy. (I testified on behalf of the bill last year, and my organization has written an explainer of the legislation.)
Right now, to be considered subject to monopolization law, a firm has to have 70-90% of a market, plus it has to engage in egregious behavior that economists measure as inefficient. This bill would blow up that entire framework. First, a firm would only have to have 40% of a market to be considered dominant. Plus, firms that are powerful enough to set wages across an industry, ahem Amazon, would also be considered dominant. It wouldn’t be illegal to be dominant, but under this legislative framework, dominant firms would no longer be allowed to engage in predatory conduct or block competitors from the market.
The legislation would also expand what would be considered anti-competitive behavior. A bunch of stuff that is now dead-letter law, like predatory pricing or selling below cost to capture market share, could come back. The bill would also let private actors sue under these new standards, so it would allow newspapers, grocery stores, pharmacists, manufacturer and employees to sue if they are being abused by a powerful buyer, seller, and/or distributor.
Credit: Matt Stoller
AAI Urges Ninth Circuit to Reinstate Conspiracy Case Against the National Association of Realtors (The PLS.com v. NAR, et al.)
June 2, 2021 | Laura Alexander , Joshua P. Davis , John B. Kirkwood
Private Enforcement , Section 1 of the Sherman Act , Collusion
AAI submitted an amicus brief asking the Ninth Circuit Court of Appeals to overturn the dismissal of a complaint from pocket-listing network PLS.com against the National Association of Realtors (NAR) and several of its affiliated multiple listing (MLS) services.
NAR has long dominated the market for residential real estate transactions and its affiliated MLSs have held a comparable monopoly on residential real estate listing networks. NAR has been the subject of multiple consent decrees from the Department of Justice over the years, including related to its MLS listing policies. PLS is a recent entrant to the residential real estate listing market, which sought to provide a nationwide electronic platform for pocket listings. Pocket listings are listings that contain less information about a property than a traditional MLS listing, and they are desired by buyers and sellers who wish to maintain privacy.
PLS alleged that, faced with the threat of competition from PLS’s nationwide pocket listing network, NAR and its affiliated MLSs conspired to enact a Clear Cooperation Policy that, effectively, excluded PLS from the market entirely. The district court, after hearing oral argument, dismissed PLS’s complaint for lack of antitrust standing and denied PLS leave to amend.
AAI’s brief argues that reversal is warranted because the district court baselessly imposed an “ultimate consumer harm” requirement for plaintiffs to establish antitrust standing and wrongly concluded the Clear Competition Policy was “competitively neutral” because the court did not understand the nature of platform competition. The brief points out that an “ultimate consumer harm” requirement contravenes the logic and purpose of the direct purchaser rule and would needlessly hamper private antitrust enforcement and burden courts. In the brief, AAI also argues that far from being competitively neutral, the Clear Competition Policy seeks to eliminate the ability of realtors and brokers to use more than one listing network, which reinforces the barriers to entry in this market from network effects.
The brief was written by AAI Vice President of Policy Laura Alexander. A group of law and economics professors, including Professors and AAI Board Members Josh Davis and John Kirkwood, filed a separate amicus brief in support of PLS.
AAI Amicus Brief https://www.antitrustinstitute.org/wp-content/uploads/2021/06/2021-06-02-Amicus-Brief-iso-PLS-FINAL.pdf
June 2, 2021 | Laura Alexander , Joshua P. Davis , John B. Kirkwood
Private Enforcement , Section 1 of the Sherman Act , Collusion
AAI submitted an amicus brief asking the Ninth Circuit Court of Appeals to overturn the dismissal of a complaint from pocket-listing network PLS.com against the National Association of Realtors (NAR) and several of its affiliated multiple listing (MLS) services.
NAR has long dominated the market for residential real estate transactions and its affiliated MLSs have held a comparable monopoly on residential real estate listing networks. NAR has been the subject of multiple consent decrees from the Department of Justice over the years, including related to its MLS listing policies. PLS is a recent entrant to the residential real estate listing market, which sought to provide a nationwide electronic platform for pocket listings. Pocket listings are listings that contain less information about a property than a traditional MLS listing, and they are desired by buyers and sellers who wish to maintain privacy.
PLS alleged that, faced with the threat of competition from PLS’s nationwide pocket listing network, NAR and its affiliated MLSs conspired to enact a Clear Cooperation Policy that, effectively, excluded PLS from the market entirely. The district court, after hearing oral argument, dismissed PLS’s complaint for lack of antitrust standing and denied PLS leave to amend.
AAI’s brief argues that reversal is warranted because the district court baselessly imposed an “ultimate consumer harm” requirement for plaintiffs to establish antitrust standing and wrongly concluded the Clear Competition Policy was “competitively neutral” because the court did not understand the nature of platform competition. The brief points out that an “ultimate consumer harm” requirement contravenes the logic and purpose of the direct purchaser rule and would needlessly hamper private antitrust enforcement and burden courts. In the brief, AAI also argues that far from being competitively neutral, the Clear Competition Policy seeks to eliminate the ability of realtors and brokers to use more than one listing network, which reinforces the barriers to entry in this market from network effects.
The brief was written by AAI Vice President of Policy Laura Alexander. A group of law and economics professors, including Professors and AAI Board Members Josh Davis and John Kirkwood, filed a separate amicus brief in support of PLS.
AAI Amicus Brief https://www.antitrustinstitute.org/wp-content/uploads/2021/06/2021-06-02-Amicus-Brief-iso-PLS-FINAL.pdf
Letter from Senators Rounds and Smith on meat packers "stranglehold"
May 27, 2021
The Honorable Merrick Garland Attorney General
U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
Dear Attorney General Garland,
The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.
For over 100 years, the purpose of antitrust laws in our country has been to preserve the process of fair competition for the benefit of consumers. Too much market power often yields less competition and is ripe for market abuse. Yet as you know, four large meat packing companies control over 80% of the processing market in today’s economy and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.
In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.
These difficulties faced by consumers and producers are not experienced by meatpackers. For example, in the past decade, there have been repeated instances in the market which demonstrates a disconnection between the price of live cattle purchased by meatpackers and the value of choice beef cutout sold by meatpackers (see chart 1; the gap between these two values is isolated and displayed in chart 3).
These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry.
One potential explanation for this disparity may be the ability of meatpackers to import beef from foreign countries, either through external sources or their own vertically integrated sources. Based on data from the United States Department of Agriculture (USDA) Global Agricultural Trade System (GATS), as the price increases for live cattle, there is a subsequent and consistent increase experienced in beef importation (see chart 2). Furthermore, the initiation of plummeting prices in the live cattle market appears to correspond almost exactly with the repeal of Mandatory Country of Origin Labeling, which demonstrates the negative impact of imports on domestic beef prices (also chart 2).These trends indicate a potential existence of collaborative price-fixing activity or other anticompetitive behavior on behalf of the largest beef meatpacking companies in the United States. These issues deserve meaningful investigation, especially given the unprecedented consolidation of this industry.
The U.S. meatpacking industry is more consolidated today, than it was in 1921 when the Packers and Stockyards Act was enacted. Four companies operate 18 of the top 20 beef slaughter facilities in the country, which constitutes 94% of this capacity. Ironically, two of the four giant domestic processors are foreign owned. In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price.
As stated by Congress, the purpose of the Packers and Stockyards Act is, "to assure fair competition and fair trade practices, to safeguard farmers and ranchers...to protect consumers...and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices................ " It is truly
unfortunate that exactly 100 years later, the problem is actually worse.
In the last 30 years, there has been no major expansion of beef packing capacity in the United States. Beef packers continue to bring foreign beef into their facilities and place “Product of the U.S.A.” on the final product. This is, at the very least, highly misleading and undermines the price and quality of U.S. beef. Without mandatory country of origin labeling for beef – packers are provided a federal sanction to undercut American producers and dupe American consumers.
U.S. meatpackers also take advantage of their vast resources to hold what is known in the industry as a captive supply. Through forward contracting and formula based sales, packers, collectively, can easily predict their needs many months in advance. These captive supply practices allow meatpackers to exert more control, limit competition and depress sales in the live cash market.
Additionally, legalizing the sale of state inspected meat in interstate commerce has been thwarted, forcing local producers to bottleneck their beef processing at major U.S. meat packing facilities to get the federal stamp of approval.
Arguably, every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.
From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists. This is where we need to work together. In the past 18 months, the Department of Justice has received multiple letters raising these concerns, and collectively, we urge your department to take decisive action.
President Biden prioritizes “Buy American” policies that would benefit both consumers and producers and we believe our requests outlined here today support that mission. Unfortunately, the current situation involves multi-national meatpacking companies that continue to get fat off of the high price they impose on retailers and consumers, and the low price they set for producers.
This needs to change.
Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix. If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.
We look forward to your response.
Sincerely,
M. Michael Rounds
United States Senator
Tina Smith
United States Senator
CC: President Biden, Secretary Vilsack
May 27, 2021
The Honorable Merrick Garland Attorney General
U.S. Department of Justice 950 Pennsylvania Avenue, NW Washington, DC 20530
Dear Attorney General Garland,
The time has come for the government to determine whether the stranglehold large meatpackers have over the beef processing market violate our antitrust laws and principles of fair competition.
For over 100 years, the purpose of antitrust laws in our country has been to preserve the process of fair competition for the benefit of consumers. Too much market power often yields less competition and is ripe for market abuse. Yet as you know, four large meat packing companies control over 80% of the processing market in today’s economy and are seemingly able to control prices at their will, or even defy expectations of market fundamentals.
In the last several years, the price of live cattle in the United States market has plummeted, while the price of boxed beef has significantly increased, raising consumer prices at the grocery store. Concurrently, the major packing companies realized significant profits, while both U.S. beef consumers and independent cattle producers paid the price. These large price disparities are leading independent cattle producers to go broke and causing consumers to pay an unnecessary, over-inflated premium on beef.
These difficulties faced by consumers and producers are not experienced by meatpackers. For example, in the past decade, there have been repeated instances in the market which demonstrates a disconnection between the price of live cattle purchased by meatpackers and the value of choice beef cutout sold by meatpackers (see chart 1; the gap between these two values is isolated and displayed in chart 3).
These persistent irregularities reveal an unfairness in the producer-meatpacker relationship and possibly anticompetitive behavior in the beef industry.
One potential explanation for this disparity may be the ability of meatpackers to import beef from foreign countries, either through external sources or their own vertically integrated sources. Based on data from the United States Department of Agriculture (USDA) Global Agricultural Trade System (GATS), as the price increases for live cattle, there is a subsequent and consistent increase experienced in beef importation (see chart 2). Furthermore, the initiation of plummeting prices in the live cattle market appears to correspond almost exactly with the repeal of Mandatory Country of Origin Labeling, which demonstrates the negative impact of imports on domestic beef prices (also chart 2).These trends indicate a potential existence of collaborative price-fixing activity or other anticompetitive behavior on behalf of the largest beef meatpacking companies in the United States. These issues deserve meaningful investigation, especially given the unprecedented consolidation of this industry.
The U.S. meatpacking industry is more consolidated today, than it was in 1921 when the Packers and Stockyards Act was enacted. Four companies operate 18 of the top 20 beef slaughter facilities in the country, which constitutes 94% of this capacity. Ironically, two of the four giant domestic processors are foreign owned. In our opinion, that concentration has caused a market disconnect, resulting in tangible market manipulation that has economically disadvantaged American ranchers and ultimately, American consumers who want to buy U.S. beef at an affordable price.
As stated by Congress, the purpose of the Packers and Stockyards Act is, "to assure fair competition and fair trade practices, to safeguard farmers and ranchers...to protect consumers...and to protect members of the livestock, meat, and poultry industries from unfair, deceptive, unjustly discriminatory and monopolistic practices................ " It is truly
unfortunate that exactly 100 years later, the problem is actually worse.
In the last 30 years, there has been no major expansion of beef packing capacity in the United States. Beef packers continue to bring foreign beef into their facilities and place “Product of the U.S.A.” on the final product. This is, at the very least, highly misleading and undermines the price and quality of U.S. beef. Without mandatory country of origin labeling for beef – packers are provided a federal sanction to undercut American producers and dupe American consumers.
U.S. meatpackers also take advantage of their vast resources to hold what is known in the industry as a captive supply. Through forward contracting and formula based sales, packers, collectively, can easily predict their needs many months in advance. These captive supply practices allow meatpackers to exert more control, limit competition and depress sales in the live cash market.
Additionally, legalizing the sale of state inspected meat in interstate commerce has been thwarted, forcing local producers to bottleneck their beef processing at major U.S. meat packing facilities to get the federal stamp of approval.
Arguably, every piece of beef legislation introduced before Congress is the direct result of our attempts to put a band-aid on the real issue: packer concentration.
Exactly 100 years ago, the United States saw fit to break up the packing industry because of concentration and market manipulation. Since that time, packer concentration and foreign influence has significantly grown and until the question of whether consolidation of power in the meatpacking industry has amounted to violations of our antitrust laws is fully answered, this market will continue to suffer for both the consumer and the producer.
From our perspective, the anticompetitive practices occurring in the industry today are unambiguous and either our antitrust laws are not being enforced or they are not capable of addressing the apparent oligopoly that so plainly exists. This is where we need to work together. In the past 18 months, the Department of Justice has received multiple letters raising these concerns, and collectively, we urge your department to take decisive action.
President Biden prioritizes “Buy American” policies that would benefit both consumers and producers and we believe our requests outlined here today support that mission. Unfortunately, the current situation involves multi-national meatpacking companies that continue to get fat off of the high price they impose on retailers and consumers, and the low price they set for producers.
This needs to change.
Our American ranchers work hard every day to produce the best beef in the world. They battle the wind, the rain, the snow and the sun. They shouldn’t have to battle a problem their government has an obligation to fix. If we do not take action, current U.S. policies will be identified as the cause for the demise of the American rancher and American consumers will be forced to pay a higher price for a much lower quality product. The time has come to either enforce or examine our antitrust laws to restore fairness to the marketplace. American producers and consumers depend on us.
We look forward to your response.
Sincerely,
M. Michael Rounds
United States Senator
Tina Smith
United States Senator
CC: President Biden, Secretary Vilsack
Fauci responds to attacks by Senator Josh Hawley and others concerning Fauci's role in investigation of pandemic source in China
https://www.rollingstone.com/politics/politics-news/fauci-calls-baseless-republican-attacks-on-him-anti-science-nonsense-1179115/
https://www.rollingstone.com/politics/politics-news/fauci-calls-baseless-republican-attacks-on-him-anti-science-nonsense-1179115/
Jeff Greenfield on PBS: How the recent rise in crime could impact Dems’ prospects in 2022
https://www.pbs.org/newshour/show/how-the-rise-in-crime-could-impact-dems-prospects-in-2022
Excerpts:
Hari Sreenivasan:
All through the '60s, crime rose sharply. The violent crime rate doubled in that decade. And then when you add in upheaval in the cities, upheaval on campus, the whole issue of disorder and lawlessness became a national political issue, particularly in 1968 in the campaigns of George Wallace and especially in the campaign of Richard Nixon.
And that issue hung around for decades. In 1986, there were three justices of the California Supreme Court removed by the voters for not being tough enough on crime. And I know you'll remember in 1988, Michael Dukakis' presidential campaign was hobbled by the issue that there had been a furlough program where convicted criminals were let out for a while and one of them went on a crime spree, which resulted in a major effort by the Bush campaign in its commercials.
Jeff Greenfield:
Bill Clinton, when he ran for president in 1992, made a point of appearing in front of police officers and presenting both as a candidate and as president, a very tough crime package supported in no small measure by then Senator Joe Biden.
The major thing that happened is that crime went down, nationally, it went down, and in some cases dramatically. In New York in 1990, there were some 2,200 murders. By 2018, there were fewer than 300. And when there's less crime, it's less on people's minds. Then you had the murder of George Floyd and the massive protests against police violence against Blacks so that in 2020, Biden was apologizing for the tough, draconian crime bills that he sponsored back in the '90s. There was also a demand on the part of some progressives to defund the police, although Biden himself opposed that. And at the same time, you began to see another rise in crime so that crime began to rear its ugly head again in the last election.
Hari Sreenivasan:
We saw, in effect, an effect in the November election about the topic of crime.
Jeff Greenfield:
Absolutely. Because of the violence that was on television screens, the occasional sporadic violence around protests and the fact that crime jumped in 2020. In many big cities, though, the murder rate, the homicide rate went up sharply. And what people like Jim Clyburn, one of the most influential Democrats in the House of Representatives, said after is that the whole issue of crime hurt congressional Democrats running in many purple districts. It may explain why Donald Trump, who ran a very, very strong law and order campaign, got more of the brown and Black votes in many parts of the country. These were middle class folks who were upset by violence.
And so now you have the specter of a president trying to run on what he's doing for the economy. Who could be politically threatened by the fact that when crime rises, it becomes a central issue to people because it is literally about their safety. And that's a very real possibility that will hinder Biden's attempt to win back reluctant Democrats to say, look what we're doing for you. Because if the response was, yeah, but I'm not safe in my neighborhood, that can be a powerful political tool. As you mentioned, we saw that a generation ago.
This posting is by Don Resnikoff, who takes responsibility for the posting
https://www.pbs.org/newshour/show/how-the-rise-in-crime-could-impact-dems-prospects-in-2022
Excerpts:
Hari Sreenivasan:
All through the '60s, crime rose sharply. The violent crime rate doubled in that decade. And then when you add in upheaval in the cities, upheaval on campus, the whole issue of disorder and lawlessness became a national political issue, particularly in 1968 in the campaigns of George Wallace and especially in the campaign of Richard Nixon.
And that issue hung around for decades. In 1986, there were three justices of the California Supreme Court removed by the voters for not being tough enough on crime. And I know you'll remember in 1988, Michael Dukakis' presidential campaign was hobbled by the issue that there had been a furlough program where convicted criminals were let out for a while and one of them went on a crime spree, which resulted in a major effort by the Bush campaign in its commercials.
Jeff Greenfield:
Bill Clinton, when he ran for president in 1992, made a point of appearing in front of police officers and presenting both as a candidate and as president, a very tough crime package supported in no small measure by then Senator Joe Biden.
The major thing that happened is that crime went down, nationally, it went down, and in some cases dramatically. In New York in 1990, there were some 2,200 murders. By 2018, there were fewer than 300. And when there's less crime, it's less on people's minds. Then you had the murder of George Floyd and the massive protests against police violence against Blacks so that in 2020, Biden was apologizing for the tough, draconian crime bills that he sponsored back in the '90s. There was also a demand on the part of some progressives to defund the police, although Biden himself opposed that. And at the same time, you began to see another rise in crime so that crime began to rear its ugly head again in the last election.
Hari Sreenivasan:
We saw, in effect, an effect in the November election about the topic of crime.
Jeff Greenfield:
Absolutely. Because of the violence that was on television screens, the occasional sporadic violence around protests and the fact that crime jumped in 2020. In many big cities, though, the murder rate, the homicide rate went up sharply. And what people like Jim Clyburn, one of the most influential Democrats in the House of Representatives, said after is that the whole issue of crime hurt congressional Democrats running in many purple districts. It may explain why Donald Trump, who ran a very, very strong law and order campaign, got more of the brown and Black votes in many parts of the country. These were middle class folks who were upset by violence.
And so now you have the specter of a president trying to run on what he's doing for the economy. Who could be politically threatened by the fact that when crime rises, it becomes a central issue to people because it is literally about their safety. And that's a very real possibility that will hinder Biden's attempt to win back reluctant Democrats to say, look what we're doing for you. Because if the response was, yeah, but I'm not safe in my neighborhood, that can be a powerful political tool. As you mentioned, we saw that a generation ago.
This posting is by Don Resnikoff, who takes responsibility for the posting
Is criminal justice reform to blame for the rise in crime in NYC
https://www.pbs.org/newshour/show/is-criminal-justice-reform-to-blame-for-the-rise-in-crime-in-nyc
Following up on Jeff Greenfield's comments that recent increases in urban crime are a political threat to Democrats, Jullian Harris-Calvin of the Vera Institute of Justice in New York argues that criminal justice reform is not to blame for the recent rise in crime in NYC. Also that the recent rise in crime is exaggerated -- even with the recent rise in crime the crime level is much lower than decades ago. Ms. Harris-Calvin argues a balanced approach to the legal issues: effective policing and appropriate reform in matters of policing and incarceration policies. DAR
https://www.pbs.org/newshour/show/is-criminal-justice-reform-to-blame-for-the-rise-in-crime-in-nyc
Following up on Jeff Greenfield's comments that recent increases in urban crime are a political threat to Democrats, Jullian Harris-Calvin of the Vera Institute of Justice in New York argues that criminal justice reform is not to blame for the recent rise in crime in NYC. Also that the recent rise in crime is exaggerated -- even with the recent rise in crime the crime level is much lower than decades ago. Ms. Harris-Calvin argues a balanced approach to the legal issues: effective policing and appropriate reform in matters of policing and incarceration policies. DAR
from https://www.reuters.com/business/sustainable-business/shareholder-activism-reaches-milestone-exxon-board-vote-nears-end-2021-05-26/
Exxon loses board seats to activist hedge fund in landmark climate vote
Jennifer HillerSvea Herbst-bayliss
The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.
Eight of Exxon's nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1's nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.
The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.
"Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts," Woods said in a statement. "We're well positioned to do that."
Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments.
"It's a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it's a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI.
The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund's stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million.
NEW DIRECTION
The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala.
"We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon's shareholder meeting.
Vote counting to determine the final two seats was continuing. That left the re-election of directors Steven Kandarian, Douglas Oberhelman, Samuel Palmisano and Wan Zulkiflee up in the air. Alexander Karsner, one of Engine No. 1's nominees, was still in the running, Exxon said.
Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet by investing in wind and solar energy. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon's future value to investors.
The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon's second-largest shareholder, who agreed to vote for three members of Engine No. 1's slate.
BlackRock said the three bring "fresh perspectives and relevant transformative energy experience" that would help Exxon evaluate "the risks and opportunities presented by the energy transition," according to a note posted on its website.
**
Woods had argued that Exxon's board understood the company's complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change.
However, in another signal of investor dissatisfaction with the company's approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts.
"Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state's pension fund backed Engine No. 1.
DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis.
Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy.
DAR Comment: Hedge fund Engine No. 1's leadership of dissident shareholders such as pension funds suggests further disruption of corporate governance for an array of companies. Potentially that suggests a path to a corporate governance model that better serves the consumer interest on matters like climate change. But that path is not at all clear. A main goal of a company like ExxonMobil is still about making money, and it is not at all clear that the Engine 1 hedge fund leaders or the new board members want to undermine that goal. Pension fund stockholders have a similar incentive to support profitability. On the other hand, disruption of the usual manner of electing directors does support hope for a governance model for corporations that is more responsive to public concerns on issues like climate change.
Exxon loses board seats to activist hedge fund in landmark climate vote
Jennifer HillerSvea Herbst-bayliss
- excerpts:
The success by hedge fund Engine No. 1 in its showdown with Exxon shocked an energy industry struggling to address growing investor concerns about global warming. It happened on the same day activists scored a big win against another oil major, Royal Dutch Shell - a Dutch court ordered the company to drastically deepen pledged cuts to greenhouse gas emissions.
Eight of Exxon's nominees including CEO Darren Woods were re-elected to its 12-member board of directors, along with two of Engine No. 1's nominees, the company said. The counting is not finished, so Engine No. 1 could potentially see three of its four nominees join the Exxon board.
The result will add to pressure on Woods, who campaigned to convince shareholders to shoot down the board challenge and argued the company was already advancing low carbon projects and improving profits.
"Today, we heard shareholders communicate a desire for ExxonMobil to further these efforts," Woods said in a statement. "We're well positioned to do that."
Under Woods, Exxon incurred a $22 billion loss last year as COVID-19 pandemic destroyed fuel demand worldwide. Exxon has lagged other oil majors in its response to climate change concerns, forecasting many more years of oil and gas demand growth and doubling down on spending to boost its output - in contrast to global rivals that have scaled back fossil fuel investments.
"It's a huge deal. It shows not just that there is more seriousness apparent in the thinking among investors about climate change, it's a rebuff of the whole attitude of the Exxon board," said Ric Marshall, executive director of ESG Research at MSCI.
The dissident shareholder group led by Engine No. 1 put up a slate of four nominees in the first big boardroom contest at an oil major that makes climate change the central issue. The fund's stake in Exxon - an energy behemoth with a market value of close to $250 billion - is worth just $50 million.
NEW DIRECTION
The two Engine No. 1 nominees elected were Gregory Goff, a 64-year-old former top executive at Marathon Petroleum (MPC.N) and Andeavor, and former Neste Oyj (NESTE.HE) executive Kaisa Hietala.
"We welcome the new directors, Gregory Goff and Kaisa Hietala, to the board and look forward to working with them constructively and collectively on behalf of all shareholders," CEO Woods said at the end of Exxon's shareholder meeting.
Vote counting to determine the final two seats was continuing. That left the re-election of directors Steven Kandarian, Douglas Oberhelman, Samuel Palmisano and Wan Zulkiflee up in the air. Alexander Karsner, one of Engine No. 1's nominees, was still in the running, Exxon said.
Governments and companies have moved to reduce emissions from fossil fuels that are warming the planet by investing in wind and solar energy. Investors led by Engine No. 1 have said Woods needed to make big changes to ensure Exxon's future value to investors.
The fund successfully rallied support from institutional investors and shareholder advisory firms upset with Irving, Texas-based Exxon for its weak financial performance in recent years. Among those were BlackRock Inc (BLK.N), Exxon's second-largest shareholder, who agreed to vote for three members of Engine No. 1's slate.
BlackRock said the three bring "fresh perspectives and relevant transformative energy experience" that would help Exxon evaluate "the risks and opportunities presented by the energy transition," according to a note posted on its website.
**
Woods had argued that Exxon's board understood the company's complexity and that Exxon supports a path toward carbon reductions in the Paris accord, the international agreement aimed at combating climate change.
However, in another signal of investor dissatisfaction with the company's approach to climate change, shareholders also approved measures calling on Exxon to provide more information on its climate and grassroots lobbying efforts.
"Exxon Mobil shareholders chose real action to address the climate crisis over business as usual in the fossil fuel industry," said New York State Comptroller Thomas DiNapoli, who in April said the state's pension fund backed Engine No. 1.
DiNapoli said that for years, investors have "received platitudes and gaslighting in response" from Exxon in response to concerns about the climate crisis.
Exxon had fought to keep climate activists at bay, spending tens of millions of dollars on a high-profile PR campaign, agreeing to publish more details of its emissions and coming out in support of carbon reduction. Activists said it was too little, too late, and that Exxon needs a less reactive strategy.
DAR Comment: Hedge fund Engine No. 1's leadership of dissident shareholders such as pension funds suggests further disruption of corporate governance for an array of companies. Potentially that suggests a path to a corporate governance model that better serves the consumer interest on matters like climate change. But that path is not at all clear. A main goal of a company like ExxonMobil is still about making money, and it is not at all clear that the Engine 1 hedge fund leaders or the new board members want to undermine that goal. Pension fund stockholders have a similar incentive to support profitability. On the other hand, disruption of the usual manner of electing directors does support hope for a governance model for corporations that is more responsive to public concerns on issues like climate change.
S. 3084
AN ACT To invest in innovation through research and development, and to improve the competitiveness of the United States. . . .
1. SHORT TITLE; TABLE OF CONTENTS. 1(a) SHORTTITLE.—This Act may be cited as the 2‘‘American Innovation and Competitiveness Act’’
A copy of the proposed Act is here: https://www.congress.gov/114/bills/s3084/BILLS-114s3084es.pdf
AN ACT To invest in innovation through research and development, and to improve the competitiveness of the United States. . . .
1. SHORT TITLE; TABLE OF CONTENTS. 1(a) SHORTTITLE.—This Act may be cited as the 2‘‘American Innovation and Competitiveness Act’’
A copy of the proposed Act is here: https://www.congress.gov/114/bills/s3084/BILLS-114s3084es.pdf
Can Americam mask makers survive Chinese competition? American mask makers speak.
The following letter from American mask makers to the President outlines the perceived problems of American manufacturers facing Chinese competition
The majority of U.S. Mask Manufacturing will go offline in 60 days; 2,647 jobs already lostUpdated: May 13
Dear President Biden:
We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts. Purchasing existing stockpiles from U.S. manufacturers and taking urgent regulatory action on procurement is needed for the continued health of our nation.
The American Mask Manufacturer’s Association (AMMA) represents the 26 small business Mask Manufacturers that answered America’s call for emergency PPE during the onset of the COVID-19 pandemic. While none of our members had made masks before this crisis, we refused to stand idly by while our nation's doctors, nurses, and neighbors were dying without the proper PPE that China hoarded from the rest of the world.
We responded in the most American way possible, as entrepreneurs and as builders. With no federal funding, our 26 member companies sprang into action—and in less than a year, created the manufacturing capacity for 3.69 billion surgical masks and 1.06 billion N95-style respirators. At the same time, we created 7,823 good-paying jobs.
Being entrepreneurs, we built our business models on pre-pandemic mask-market prices, creating companies that would serve our country long after the current crisis. With recent advances in robotics and automation, we proved our ability to make far higher quality and safer masks than China. These are masks that the U.S. Government and private healthcare organizations would prefer to purchase if prices were comparable.
Fearing America’s manufacturing independence, China has changed the rules and is effectively dumping masks on the U.S. market at well below actual costs. This has made it impossible for our U.S. manufacturers to compete—and as a result, 260 million American-made masks sit in U.S. warehouses unused today.
If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year.
There are $0.03 - $0.06 of raw materials in every surgical mask produced--that price is the same everywhere in the world. Yet somehow, we are seeing Chinese masks sold for less than $0.01 here in the United States.
And it’s not just masks. The entire supply chain is at risk.
For example, three of our members make their own meltblown, the key filtration material in N95 and Surgical masks that makes them effective. Meltblown is also the leading reason for production shortages and astronomical prices at the peak of the pandemic. Berry-Amendment compliant meltblown costs between $7-$12 per pound, but our members can make it for a cost of $3-$4 per pound. China is selling N95-quality meltblown at $1.22 per pound—12% cheaper than the cost of raw materials. Because of this, one of our members has stopped producing meltblown altogether. Other U.S. nonwoven manufacturers, like Cummins Filtration, are turning off their meltblown lines this month.
It is even more concerning to find that many of these cheaply sold Chinese products fail to meet American standards.
The National Personal Protective Technology Laboratory (NPPTL), a division of the CDC, recently completed a series of tests on KN95’s imported into the United States. Of 326 total masks tested, NPPTL found that 31.5%, or 103 masks, failed to meet the Chinese KN95 standard (GB 2626-2019) and the NIOSH standard (42 CFR Part 84) of 95% particulate filtration protection.
Additionally, the Emergency Care Research Institute (ERCI) found that 70% of Chinese KN95 masks tested failed to meet minimum standards, concluding that “U.S. hospitals bought hundreds of thousands of masks produced in China [that] aren’t safe and effective against the spread of COVID-19.”
As a result, U.S. state and national government and private healthcare systems have filled their warehouses with cheap, ineffective Chinese products that put our citizens at risk.
If China is allowed to continue dumping masks for a fraction of the costs of materials, we will be more dependent on China for PPE than before the pandemic--putting our healthcare workers at risk for current and future pandemics. These unfair trade practices threaten the viability of our industry and the welfare of every single American.
This is not only a matter of national security but of national pride. American industry responded to this crisis--please help us fight China’s unfair trade practices that are destroying what we have striven so hard to build.
In support of our shared interests, we ask that you strongly consider the following actions:
Our entire membership is made up of diverse women and men who believe strongly in the free market, and do not want a government handout. We did not ask for federal funds to build our factories here in America, and we are not asking for a bailout now. If not for unfair and potentially illegal trade practices, all our businesses would be thriving today. That said, if the government and your administration no longer need our factories to produce PPE, we would still mark the past 12 months as a success and triumph of American spirit in a time of need.
We know your administration is working hard to ensure the long-term survival of American PPE producers, and for that we are grateful. However, the tactics being employed against us by foreign manufacturers are immediate threats to our ability to stay in business. We have already had to lay off significant numbers of our workforce and the majority of production facilities will be forced to permanently shutter mask manufacturing in less than 60 days.
If America needs our production capabilities to protect the country in the future, we need swift and decisive action that only you can provide.
Thank you, Mr. President, and your Administration, for your strong leadership to protect the American public from this deadly virus. Through partnership and collaboration, we can end this pandemic and protect against the next.
Sincerely,
Lloyd Armbrust President, AMMA Founder, Armbrust Inc.
Luis Arguello, President, Demetech
Dan Izhaky, President, United Safety Technology
Brian Wolin, CEO, Protective Health Gear Howard Sherman, CEO, Premier Guard USA
Glenn Ferreri, President, Premier Guard USA Brian Goldmeier, Partner, Made In America PPE
Chet Desai, Partner, Made In America PPE Amir Tafreshi, Founder & CEO, Lutema USA
Eddie Phanichkul, Founder & CMO, Lutema USA
Paul Hickey, President & Co-Founder, PureVita
Lee Mornan, VP of Sales & Marketing, Altor Safety
Todd Raines, President, NFI Masks LLC J
ason Greene, Owner, Medicair Inc.
Avi Polischuk, Owner, Medicair Inc.
Jeremy A. Briggs, Esq., President, Luosh USA
Landon Morales, President, Armbrust Inc.
Brent Dillie, Chairman, AMMA, Managing Partner, Premium-PPE
Clayton Geye, CEO , Indiana Face Mask
James Wyner, CEO Shawmut Corporation
Matt Brandman, CEO, American Surgical Mask
Kahoru Watanabe, Co-Founder, American Surgical Mask
Tim Ziegenfus, CEO, ATI Corporation of North America
Richard Gehricke, COO, ATI Corporation of North America Connor Knapp, Founder, NYPPE LLC Thomas Allen Jr., COO, NYPPE LLC Charles Park, PZero Innovations Inc.
Ryan Gehricke, COO, Carolina Facemask and PPE
Rodney McAbery, Vice President, Guardsman Global
Adam Harmon, President, ALG Health
Dakota Hendrickson, Founder, Filti
George Tsatsos, VP of Sales,
Filti Kan Chou, President of CW Horizon LLC
Chris Dement, Co-Founder, Premium-PPE
Daniel C. Murphy, CEO, DediCare Medical Solutions, LLC
cc: Jeffrey Zients, Coordinator and Counselor to the President, COVID-19 Pandemic Response Timothy Manning, Supply Coordinator, White House COVID-19 Response Celeste Drake, Made in America Director, Office of Management and Budget
Sources:
Bradsher, Keith, and Liz Alderman. The World Needs Masks. China Makes Them, but Has Been Hoarding Them. New York Times, 2020. NY Times, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
Centers for Disease Control and Prevention. NPPTL Respirator Assessments to Support the COVID-19 Response. CDC, 2021. CDC, https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
ECRI. “Up to 70% of Chinese KN95 Masks Tested by ECRI Don’t Meet Minimum Standards.” ERCI.org, 2020, https://www.ecri.org/press/up-to-70-of-chinese-kn95-masks-tested-by-ecri-dont-meet-min imum-standards. Accessed 22 September 2020.
Kates, Graham. N95 mask shortage comes down to this key material: "The supply chain has gotten nuts". CBS News, 2020. CBS News, https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-filters/.
See https://www.ammaunited.org/post/the-majority-of-u-s-mask-manufacturing-will-go-offline-in-60-days-2-647-jobs-already-lost
The following letter from American mask makers to the President outlines the perceived problems of American manufacturers facing Chinese competition
The majority of U.S. Mask Manufacturing will go offline in 60 days; 2,647 jobs already lostUpdated: May 13
Dear President Biden:
We write to you with a request for immediate help against unfair trade practices by foreign nations that threaten the viability of the U.S. domestic PPE mask manufacturing industry, as well as future U.S. pandemic preparedness efforts. Purchasing existing stockpiles from U.S. manufacturers and taking urgent regulatory action on procurement is needed for the continued health of our nation.
The American Mask Manufacturer’s Association (AMMA) represents the 26 small business Mask Manufacturers that answered America’s call for emergency PPE during the onset of the COVID-19 pandemic. While none of our members had made masks before this crisis, we refused to stand idly by while our nation's doctors, nurses, and neighbors were dying without the proper PPE that China hoarded from the rest of the world.
We responded in the most American way possible, as entrepreneurs and as builders. With no federal funding, our 26 member companies sprang into action—and in less than a year, created the manufacturing capacity for 3.69 billion surgical masks and 1.06 billion N95-style respirators. At the same time, we created 7,823 good-paying jobs.
Being entrepreneurs, we built our business models on pre-pandemic mask-market prices, creating companies that would serve our country long after the current crisis. With recent advances in robotics and automation, we proved our ability to make far higher quality and safer masks than China. These are masks that the U.S. Government and private healthcare organizations would prefer to purchase if prices were comparable.
Fearing America’s manufacturing independence, China has changed the rules and is effectively dumping masks on the U.S. market at well below actual costs. This has made it impossible for our U.S. manufacturers to compete—and as a result, 260 million American-made masks sit in U.S. warehouses unused today.
If this remains unchanged, 54% of our production will go offline in 60 days and 84.6% in less than a year.
There are $0.03 - $0.06 of raw materials in every surgical mask produced--that price is the same everywhere in the world. Yet somehow, we are seeing Chinese masks sold for less than $0.01 here in the United States.
And it’s not just masks. The entire supply chain is at risk.
For example, three of our members make their own meltblown, the key filtration material in N95 and Surgical masks that makes them effective. Meltblown is also the leading reason for production shortages and astronomical prices at the peak of the pandemic. Berry-Amendment compliant meltblown costs between $7-$12 per pound, but our members can make it for a cost of $3-$4 per pound. China is selling N95-quality meltblown at $1.22 per pound—12% cheaper than the cost of raw materials. Because of this, one of our members has stopped producing meltblown altogether. Other U.S. nonwoven manufacturers, like Cummins Filtration, are turning off their meltblown lines this month.
It is even more concerning to find that many of these cheaply sold Chinese products fail to meet American standards.
The National Personal Protective Technology Laboratory (NPPTL), a division of the CDC, recently completed a series of tests on KN95’s imported into the United States. Of 326 total masks tested, NPPTL found that 31.5%, or 103 masks, failed to meet the Chinese KN95 standard (GB 2626-2019) and the NIOSH standard (42 CFR Part 84) of 95% particulate filtration protection.
Additionally, the Emergency Care Research Institute (ERCI) found that 70% of Chinese KN95 masks tested failed to meet minimum standards, concluding that “U.S. hospitals bought hundreds of thousands of masks produced in China [that] aren’t safe and effective against the spread of COVID-19.”
As a result, U.S. state and national government and private healthcare systems have filled their warehouses with cheap, ineffective Chinese products that put our citizens at risk.
If China is allowed to continue dumping masks for a fraction of the costs of materials, we will be more dependent on China for PPE than before the pandemic--putting our healthcare workers at risk for current and future pandemics. These unfair trade practices threaten the viability of our industry and the welfare of every single American.
This is not only a matter of national security but of national pride. American industry responded to this crisis--please help us fight China’s unfair trade practices that are destroying what we have striven so hard to build.
In support of our shared interests, we ask that you strongly consider the following actions:
- Immediately remove the FDA’s EUA for non-U.S. based manufacturers, as we have demonstrated that there is ample U.S. production and supply.
- Immediately require the federal government, and anyone receiving federal dollars for PPE reimbursement, to buy Berry-Amendment Compliant masks.
- Review the Strategic National Stockpile. Specifically, remove masks that fail to meet American standards and require private industry and state and local governments to do the same.
- A law or regulatory action requiring hospitals and organization that accept federal funds to purchase 40% of their PPE from domestic manufacturers by 2023. This will bring investment to every level of our industry and allow the market to do its job.
Our entire membership is made up of diverse women and men who believe strongly in the free market, and do not want a government handout. We did not ask for federal funds to build our factories here in America, and we are not asking for a bailout now. If not for unfair and potentially illegal trade practices, all our businesses would be thriving today. That said, if the government and your administration no longer need our factories to produce PPE, we would still mark the past 12 months as a success and triumph of American spirit in a time of need.
We know your administration is working hard to ensure the long-term survival of American PPE producers, and for that we are grateful. However, the tactics being employed against us by foreign manufacturers are immediate threats to our ability to stay in business. We have already had to lay off significant numbers of our workforce and the majority of production facilities will be forced to permanently shutter mask manufacturing in less than 60 days.
If America needs our production capabilities to protect the country in the future, we need swift and decisive action that only you can provide.
Thank you, Mr. President, and your Administration, for your strong leadership to protect the American public from this deadly virus. Through partnership and collaboration, we can end this pandemic and protect against the next.
Sincerely,
Lloyd Armbrust President, AMMA Founder, Armbrust Inc.
Luis Arguello, President, Demetech
Dan Izhaky, President, United Safety Technology
Brian Wolin, CEO, Protective Health Gear Howard Sherman, CEO, Premier Guard USA
Glenn Ferreri, President, Premier Guard USA Brian Goldmeier, Partner, Made In America PPE
Chet Desai, Partner, Made In America PPE Amir Tafreshi, Founder & CEO, Lutema USA
Eddie Phanichkul, Founder & CMO, Lutema USA
Paul Hickey, President & Co-Founder, PureVita
Lee Mornan, VP of Sales & Marketing, Altor Safety
Todd Raines, President, NFI Masks LLC J
ason Greene, Owner, Medicair Inc.
Avi Polischuk, Owner, Medicair Inc.
Jeremy A. Briggs, Esq., President, Luosh USA
Landon Morales, President, Armbrust Inc.
Brent Dillie, Chairman, AMMA, Managing Partner, Premium-PPE
Clayton Geye, CEO , Indiana Face Mask
James Wyner, CEO Shawmut Corporation
Matt Brandman, CEO, American Surgical Mask
Kahoru Watanabe, Co-Founder, American Surgical Mask
Tim Ziegenfus, CEO, ATI Corporation of North America
Richard Gehricke, COO, ATI Corporation of North America Connor Knapp, Founder, NYPPE LLC Thomas Allen Jr., COO, NYPPE LLC Charles Park, PZero Innovations Inc.
Ryan Gehricke, COO, Carolina Facemask and PPE
Rodney McAbery, Vice President, Guardsman Global
Adam Harmon, President, ALG Health
Dakota Hendrickson, Founder, Filti
George Tsatsos, VP of Sales,
Filti Kan Chou, President of CW Horizon LLC
Chris Dement, Co-Founder, Premium-PPE
Daniel C. Murphy, CEO, DediCare Medical Solutions, LLC
cc: Jeffrey Zients, Coordinator and Counselor to the President, COVID-19 Pandemic Response Timothy Manning, Supply Coordinator, White House COVID-19 Response Celeste Drake, Made in America Director, Office of Management and Budget
Sources:
Bradsher, Keith, and Liz Alderman. The World Needs Masks. China Makes Them, but Has Been Hoarding Them. New York Times, 2020. NY Times, https://www.nytimes.com/2020/03/13/business/masks-china-coronavirus.html.
Centers for Disease Control and Prevention. NPPTL Respirator Assessments to Support the COVID-19 Response. CDC, 2021. CDC, https://www.cdc.gov/niosh/npptl/respirators/testing/NonNIOSHresults.html.
ECRI. “Up to 70% of Chinese KN95 Masks Tested by ECRI Don’t Meet Minimum Standards.” ERCI.org, 2020, https://www.ecri.org/press/up-to-70-of-chinese-kn95-masks-tested-by-ecri-dont-meet-min imum-standards. Accessed 22 September 2020.
Kates, Graham. N95 mask shortage comes down to this key material: "The supply chain has gotten nuts". CBS News, 2020. CBS News, https://www.cbsnews.com/news/n95-mask-shortage-melt-blown-filters/.
See https://www.ammaunited.org/post/the-majority-of-u-s-mask-manufacturing-will-go-offline-in-60-days-2-647-jobs-already-lost
Matt Gaetz explains the 2nd Amendment
Matt Gaetz says the 2nd amendment is about “maintaining within the citizenry the ability to maintain an armed rebellion against the government”
https://twitter.com/i/status/1398058997312278528
https://www.washingtonpost.com/politics/2021/05/28/gaetz-silicon-valley-second-amendment/
Matt Gaetz says the 2nd amendment is about “maintaining within the citizenry the ability to maintain an armed rebellion against the government”
https://twitter.com/i/status/1398058997312278528
https://www.washingtonpost.com/politics/2021/05/28/gaetz-silicon-valley-second-amendment/
CA bill would help fast food workers
Excerpt from https://www.foodandpower.net/latest/fast-food-labor-standard-setting-2021
Last month workers rallied for the FAST Recovery Act, a California bill that would create a council of labor and business interests to set stronger wages and working conditions across the industry. It would also make fast food brands liable for labor violations at all their independently owned franchises.
Excerpt from https://www.foodandpower.net/latest/fast-food-labor-standard-setting-2021
Last month workers rallied for the FAST Recovery Act, a California bill that would create a council of labor and business interests to set stronger wages and working conditions across the industry. It would also make fast food brands liable for labor violations at all their independently owned franchises.
DC AG press release https://oag.dc.gov/release/ag-racine-files-antitrust-lawsuit-against-amazon
AG Racine Files Antitrust Lawsuit Against Amazon to End its Illegal Control of Prices Across Online Retail Market
May 25, 2021Amazon Has Illegally Used and Maintained its Monopoly Power, Raising Prices for Consumers & Stifling Competition in Online Retail Sales by Imposing Restrictive Agreements on Third-Party Sellers
WASHINGTON, D.C. – Attorney General Karl A. Racine today filed an antitrust lawsuit against Amazon.com, Inc., (Amazon) seeking to end its anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The Office of the Attorney General (OAG) alleges that Amazon fixed online retail prices through contract provisions and policies it previously and currently applies to third-party sellers on its platform. These provisions and policies, known as “most favored nation” (MFN) agreements, prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites. These agreements effectively require third-party sellers to incorporate the high fees charged by Amazon – as much as 40% of the total product price – not only into the price charged to customers on Amazon’s platform, but also on any other online retail platform. As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act. The effects of these agreements continue to be far-reaching as they harm consumers and third-party sellers, and suppress competition, choice, and innovation. OAG is seeking to put an end to Amazon’s control over online retail pricing, as well as damages, penalties, and attorney’s fees.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” said AG Racine. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon is the world’s largest online retailer, controlling 50-70% of the online market sales. Amazon sells its own products, and some products it sources wholesale from major manufacturers, through its online platform. It also allows independent third-party sellers to sell their own products on Amazon.com through what it calls “Amazon Marketplace.” Because of the company’s dominance and vast base of customers, over two million independent third-party sellers rely on Amazon Marketplace.
In 2019, Amazon claimed to have removed its price parity policy that explicitly prohibited third-party sellers from offering their products on a competing online retail sales platform, including the third-party sellers’ own website, at a lower price or on better terms than offered the products on Amazon. But in fact, Amazon quickly and quietly replaced the price parity policy with an effectively-identical substitute, its Fair Pricing Policy. Under the Fair Pricing Policy, third-party sellers can be sanctioned or removed from Amazon altogether if they offer their products for lower prices or under better terms on a competing online platform.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of the District of Columbia’s Antitrust Act. Specifically, the lawsuit alleges that Amazon:
The complaint, filed in D.C. Superior Court, is available here. https://oag.dc.gov/sites/default/files/2021-05/Amazon-Complaint-.pdf
AG Racine Files Antitrust Lawsuit Against Amazon to End its Illegal Control of Prices Across Online Retail Market
May 25, 2021Amazon Has Illegally Used and Maintained its Monopoly Power, Raising Prices for Consumers & Stifling Competition in Online Retail Sales by Imposing Restrictive Agreements on Third-Party Sellers
WASHINGTON, D.C. – Attorney General Karl A. Racine today filed an antitrust lawsuit against Amazon.com, Inc., (Amazon) seeking to end its anticompetitive practices that have raised prices for consumers and stifled innovation and choice across the entire online retail market.
The Office of the Attorney General (OAG) alleges that Amazon fixed online retail prices through contract provisions and policies it previously and currently applies to third-party sellers on its platform. These provisions and policies, known as “most favored nation” (MFN) agreements, prevent third-party sellers that offer products on Amazon.com from offering their products at lower prices or on better terms on any other online platform, including their own websites. These agreements effectively require third-party sellers to incorporate the high fees charged by Amazon – as much as 40% of the total product price – not only into the price charged to customers on Amazon’s platform, but also on any other online retail platform. As a result, these agreements impose an artificially high price floor across the online retail marketplace and allow Amazon to build and maintain monopoly power in violation of the District of Columbia’s Antitrust Act. The effects of these agreements continue to be far-reaching as they harm consumers and third-party sellers, and suppress competition, choice, and innovation. OAG is seeking to put an end to Amazon’s control over online retail pricing, as well as damages, penalties, and attorney’s fees.
“Amazon has used its dominant position in the online retail market to win at all costs. It maximizes its profits at the expense of third-party sellers and consumers, while harming competition, stifling innovation, and illegally tilting the playing field in its favor,” said AG Racine. “We filed this antitrust lawsuit to put an end to Amazon’s illegal control of prices across the online retail market. We need a fair online marketplace that expands options available to District residents and promotes competition, innovation, and choice.”
Amazon is the world’s largest online retailer, controlling 50-70% of the online market sales. Amazon sells its own products, and some products it sources wholesale from major manufacturers, through its online platform. It also allows independent third-party sellers to sell their own products on Amazon.com through what it calls “Amazon Marketplace.” Because of the company’s dominance and vast base of customers, over two million independent third-party sellers rely on Amazon Marketplace.
In 2019, Amazon claimed to have removed its price parity policy that explicitly prohibited third-party sellers from offering their products on a competing online retail sales platform, including the third-party sellers’ own website, at a lower price or on better terms than offered the products on Amazon. But in fact, Amazon quickly and quietly replaced the price parity policy with an effectively-identical substitute, its Fair Pricing Policy. Under the Fair Pricing Policy, third-party sellers can be sanctioned or removed from Amazon altogether if they offer their products for lower prices or under better terms on a competing online platform.
The lawsuit alleges that the pricing agreements Amazon imposes on third-party sellers are facially anticompetitive and allow Amazon to illegally build and maintain monopoly power in the online retail market in violation of the District of Columbia’s Antitrust Act. Specifically, the lawsuit alleges that Amazon:
- Raises prices for consumers: Amazon’s MFNs harm consumers by artificially inflating prices they pay for products purchased across the online retail market. When third-party sellers sell on Amazon, they must pass on the cost of Amazon’s high fees and commissions to consumers. While third-party sellers can sell their products for lower prices on other platforms and on their own websites, where fees are lower or non-existent, Amazon’s MFNs prevent sellers from passing on these savings to consumers. These agreements create an artificially high price “floor” across the entire online market and prevent other platforms from enticing consumers away from Amazon with lower prices and gaining market share. Without these restraints, products would be available to consumers at lower prices.
- Stifles competition in the online retail market: Amazon maintains its dominance in online retail by preventing other platforms from competing on price to win market share. The most important factor in online shoppers’ purchasing decisions is price. By ensuring that third-party sellers cannot offer lower prices elsewhere online, Amazon insulates itself from meaningful competition.
- Deprives consumers of choice: Amazon’s anticompetitive actions have resulted in less choice for consumers in the online retail market, suppressed innovation, and reduced investment in potentially-competing platforms.
The complaint, filed in D.C. Superior Court, is available here. https://oag.dc.gov/sites/default/files/2021-05/Amazon-Complaint-.pdf
Notable quote on the difficulties of bringing antitrust litigation
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the [Apple/Epic] case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
From article on Apple/EPic litigation https://www.nytimes.com/2021/05/24/technology/apple-epic-antitrust-trial.html
“To mount a credible antitrust campaign, you need to have a significant war chest,” said David Kesselman, an antitrust lawyer in Los Angeles who has followed the [Apple/Epic] case. “And the problem for many smaller companies and smaller businesses is that they don’t have the wherewithal to mount that type of a fight.”
From article on Apple/EPic litigation https://www.nytimes.com/2021/05/24/technology/apple-epic-antitrust-trial.html
The Department of Agriculture will distribute loan forgiveness funds to thousands of minority and disadvantaged farmers
The forgiveness funds are part of a program established under the American Rescue Plan.
The fund, which is meant to provide government aid to “socially disadvantaged farmers and ranchers,” marks a “major civil rights victory,” Agriculture Secretary Tom Vilsack said in a USA Today op-ed published Friday.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” he wrote. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
The law specifically directs the USDA to pay off the farm loans of nearly 16,000 minority farmers, and Vilsack told The Washington Post on Friday that those who will benefit include Black, American Indian, Hispanic, Alaskan Native, Asian American and Pacific Islander farmers.
“Today, after months of planning, USDA begins this historic debt relief program,” the secretary wrote in his op-ed.
Vilsack told the Post that farmers “will get a letter that advises them that their debt is in the process of being paid,” and eligible farmers and ranchers will receive an additional 20 percent of the loan as a cash payment to compensate for the burden that comes with a large debt relief.
The launch comes after Black farmers had accused the USDA of delaying its start to the program, while white farmers and some lawmakers have criticized it as being discriminatory, and banks have argued it could negatively harm lending institutions.
The program is currently facing multiple lawsuits, including from America First Legal (AFL), the legal group started by former President Trump aide Stephen Miller.
AFL argued in its lawsuit filed late last month that the USDA through its fund for disadvantaged farmers and ranchers is “actively and invidiously discriminating against American citizens solely based upon their race.”
“White farmers and ranchers are not included within the definition of ‘socially disadvantaged farmers and ranchers,’ making them ineligible for aid under these federal programs,” the lawsuit argued.
“These racial exclusions are patently unconstitutional, and the Court should permanently enjoin their enforcement,” the AFL added.
In another lawsuit, a group of white Midwestern farmers alleged they were denied participation in the loan forgiveness program because of their race, arguing that if they were considered eligible, “they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities.”
Credit: https://thehill.com/policy/finance/554807-usda-to-start-loan-forgiveness-for-thousands-of-farmers-of-color-in-june
The forgiveness funds are part of a program established under the American Rescue Plan.
The fund, which is meant to provide government aid to “socially disadvantaged farmers and ranchers,” marks a “major civil rights victory,” Agriculture Secretary Tom Vilsack said in a USA Today op-ed published Friday.
“For Black and minority farmers, the American Rescue Plan could represent one of the most significant pieces of civil rights legislation in decades,” he wrote. “That’s because deep within the law is a provision that responds to decades of systemic discrimination perpetrated against farmers and ranchers of color by the U.S. Department of Agriculture.”
The law specifically directs the USDA to pay off the farm loans of nearly 16,000 minority farmers, and Vilsack told The Washington Post on Friday that those who will benefit include Black, American Indian, Hispanic, Alaskan Native, Asian American and Pacific Islander farmers.
“Today, after months of planning, USDA begins this historic debt relief program,” the secretary wrote in his op-ed.
Vilsack told the Post that farmers “will get a letter that advises them that their debt is in the process of being paid,” and eligible farmers and ranchers will receive an additional 20 percent of the loan as a cash payment to compensate for the burden that comes with a large debt relief.
The launch comes after Black farmers had accused the USDA of delaying its start to the program, while white farmers and some lawmakers have criticized it as being discriminatory, and banks have argued it could negatively harm lending institutions.
The program is currently facing multiple lawsuits, including from America First Legal (AFL), the legal group started by former President Trump aide Stephen Miller.
AFL argued in its lawsuit filed late last month that the USDA through its fund for disadvantaged farmers and ranchers is “actively and invidiously discriminating against American citizens solely based upon their race.”
“White farmers and ranchers are not included within the definition of ‘socially disadvantaged farmers and ranchers,’ making them ineligible for aid under these federal programs,” the lawsuit argued.
“These racial exclusions are patently unconstitutional, and the Court should permanently enjoin their enforcement,” the AFL added.
In another lawsuit, a group of white Midwestern farmers alleged they were denied participation in the loan forgiveness program because of their race, arguing that if they were considered eligible, “they would have the opportunity to make additional investments in their property, expand their farms, purchase equipment and supplies, and otherwise support their families and local communities.”
Credit: https://thehill.com/policy/finance/554807-usda-to-start-loan-forgiveness-for-thousands-of-farmers-of-color-in-june
Banker groups oppose U.S. Dept. of Agriculture loan relief to African-American Socially Disadvantaged Farmers
DAR Comment: The core of the bankers objection is this (quoting from the Bankers' letter):
This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments. The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs.
The Bankers' letter and materials follow:
April 9, 2021
The Honorable Tom Vilsack Secretary of Agriculture
U.S. Department of Agriculture 1400 Independence Avenue, SW Washington, D.C. 20250
Dear Secretary Vilsack:
On behalf of the commercial banking industry and the more than 52,000 bank locations serving American citizens, we write to share our recommendations on USDA’s implementation of Section 1005 of the American Rescue Plan Act related to Socially Disadvantaged Farmers and Ranchers (SDA). This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments.
The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs. Second, purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted. The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to SDA and other borrowers. Finally, USDA could consider assuming the payments of those loans that are not delinquent and have not been associated with previous legal challenges.
Please see the attachment for an explanation of these recommendations which we would be pleased to further discuss with USDA officials. The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with all farm and ranch borrowers and USDA. Our recommendations will help ensure these partnerships remain intact.
Sincerely,
American Bankers Association
Independent Community Bankers of America National Rural Lenders Association
Attachment
Recommendations on Relieving Indebtedness of SDA Borrowers
Implementing Section 1005 of the American Rescue Plan Act
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 12, 2021. Section 1005 of the Act requires USDA to pay off all direct and guaranteed loans to Socially Disadvantaged Farmers and Ranchers (SDA) that existed as of January 1, 2021. Each SDA borrower is eligible to receive up to 120 percent of their outstanding loan indebtedness. The sudden, abrupt payoff of any category of guaranteed loans could result in an interest income loss to banks holding these loans and a loss on the premiums paid by secondary market purchasers/investors. To ensure lenders continue using USDA guaranteed loans to meet future guaranteed borrower demand, USDA should incorporate the following recommendations.
Recognize lenders’ costs of funding, maintaining, and servicing loans and ensure lenders are made whole by being compensated for lost income due to the loan payoffs.
For example, a large community bank which has an SDA farm/ranch portfolio of over $200 million calculates they could lose millions of dollars in net income per year if their portfolio of SDA loans is quickly paid off. A $200mm-plus loan balance going to zero will have a significant financial impact on the bank’s balance sheet, capital position and income statements alarming bank regulators. Such a loss will also undoubtedly reduce the bank’s ability to retain employees.
Another example is a smaller community bank with over $10 million in SDA farm/ranch loans comprising over ten percent of their portfolio. This bank estimates the sudden payoff of these loans will cause an annual loss of net income of over $300,000 per year for several years and raise concerns alluded to above.
Providing agricultural loans involves a substantial cost for lenders related to the costs of securing funding for loan-making and underwriting activities which include analyzing producers’ creditworthiness and ability to cash flow and correctly assessing the value of the farm/ranch assets. Loans must be approved by a loan review committee and lenders’ staff must monitor loan payments and asset quality, often with on-site inspections and periodic follow-up and consultation with borrowers and in some cases pursue collection efforts.
If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including SDA farmers/ranchers.
Other than the additional twenty percent to pay SDA taxes, USDA could assume payment of loans that are not delinquent or were not part of previous legal challenges.
Payments of existing loan terms on loans that were not part of the previous court challenges ensures SDA farmers/ranchers who are not delinquent are also immediately relieved from the burden of repaying their guaranteed loans while maintaining the payment schedule originally set up by the bank and agreed to by the farm or ranch customer. Instead, USDA would make the payments. This process protects the banks’ investment in loan-making to guaranteed borrowers and would be similar to how some PPP loan payments were made by the SBA.
Purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted.
The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to farmers and ranchers. Commercial lenders have, over several decades, partnered with USDA to build this reliable and vibrant secondary market to serve all guaranteed loan borrowers. However, there is real concern about the ability of both lenders and investors to continue to facilitate credit availability in the secondary market going forward should consideration not be given to their considerable existing investments.
Presently, lenders can sell the guaranteed portion of their USDA loans to secondary market purchasers, including Farmer Mac, regional brokers, and loan aggregators. By selling the guarantees, lenders replenish their funds when liquidity is tight, allowing them to subsequently make new loans. The secondary market also allows lenders to provide long-term fixed rate loans resulting in longer terms at lower interest rates, reducing costs for farm and ranch borrowers.
Additionally, secondary market purchasers pay a premium for these guarantees based on the expectation of a dependable income stream over a multi-year period (typically 8-10 years). Due to the perception of reliability of payments, the guarantees are considered tradable, thus generating premiums from interested purchasers. The premiums on these loan purchases could disappear overnight with demand for purchasing USDA guarantees drying up.
In sum, the secondary market for USDA guaranteed farm loans provides favorable terms for farm borrowers, needed liquidity for lenders, and consistent, predictable yield for investors. The government guarantees help provide a market for these loans and mitigates credit risk in a vitally important sector filled with great uncertainty. The guarantees also provide bank regulators with assurance of limited risks to the financial institution which made the loan(s). However, if paying off entire categories of guarantee borrowers is not implemented properly, USDA’s actions could severely damage the secondary market by making the market unreliable and pricing unpredictable. This would cause a significant loss of available capital for lending under the USDA programs harming all guaranteed borrowers as well as the overall integrity of USDA’s guaranteed programs.
Conclusion
The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with SDA borrowers as active partners sharing in the risks of keeping their operations viable for their families and their futures. Commercial lenders should not be hindered from continuing to work with all guaranteed loan borrowers. We urge USDA to assist both SDA farmers/ranchers as required by statute and their lenders who have worked so diligently on their behalf.
Finally, USDA should consider the necessity of maintaining the integrity of their guaranteed loan programs, which can only be accomplished if those lenders dealing with USDA loan guarantees are protected from the sudden, unexpected loss of income from abrupt loan payoffs and detrimental disruptions to the secondary market. Adopting the above recommendations will help accomplish these objectives.
https://www.icba.org/docs/default-source/icba/advocacy-documents/letters-to-regulators/letter-to-usda-on-sda-loan-payoffs.pdf?sfvrsn=1e780e17_0
DAR Comment: The core of the bankers objection is this (quoting from the Bankers' letter):
This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments. The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs.
The Bankers' letter and materials follow:
April 9, 2021
The Honorable Tom Vilsack Secretary of Agriculture
U.S. Department of Agriculture 1400 Independence Avenue, SW Washington, D.C. 20250
Dear Secretary Vilsack:
On behalf of the commercial banking industry and the more than 52,000 bank locations serving American citizens, we write to share our recommendations on USDA’s implementation of Section 1005 of the American Rescue Plan Act related to Socially Disadvantaged Farmers and Ranchers (SDA). This provision requires USDA to pay off direct and guaranteed farm loans in existence as of January 1, 2021 by providing up to 120 percent of the outstanding indebtedness for each SDA borrower. USDA has sent a letter to all guaranteed lenders noting the agency is establishing a process for these loan payments.
The sudden, abrupt payoff of any category of guaranteed loans could have adverse consequences if not implemented in a manner that minimizes disruptions to lenders participating in USDA’s guaranteed loan programs or acting as secondary market purchasers of the loan guarantees. USDA’s implementation of this provision should help ensure lenders are incentivized to continue meeting guaranteed loan demand in the future while ensuring the overall reliability and predictability of USDA guaranteed loan programs.
Recognizing lenders’ costs of funding and servicing loans, USDA should ensure lenders are made whole by being compensated for lost income due to these loan payoffs. Second, purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted. The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to SDA and other borrowers. Finally, USDA could consider assuming the payments of those loans that are not delinquent and have not been associated with previous legal challenges.
Please see the attachment for an explanation of these recommendations which we would be pleased to further discuss with USDA officials. The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with all farm and ranch borrowers and USDA. Our recommendations will help ensure these partnerships remain intact.
Sincerely,
American Bankers Association
Independent Community Bankers of America National Rural Lenders Association
Attachment
Recommendations on Relieving Indebtedness of SDA Borrowers
Implementing Section 1005 of the American Rescue Plan Act
The American Rescue Plan Act of 2021 (ARPA) was signed into law on March 12, 2021. Section 1005 of the Act requires USDA to pay off all direct and guaranteed loans to Socially Disadvantaged Farmers and Ranchers (SDA) that existed as of January 1, 2021. Each SDA borrower is eligible to receive up to 120 percent of their outstanding loan indebtedness. The sudden, abrupt payoff of any category of guaranteed loans could result in an interest income loss to banks holding these loans and a loss on the premiums paid by secondary market purchasers/investors. To ensure lenders continue using USDA guaranteed loans to meet future guaranteed borrower demand, USDA should incorporate the following recommendations.
Recognize lenders’ costs of funding, maintaining, and servicing loans and ensure lenders are made whole by being compensated for lost income due to the loan payoffs.
For example, a large community bank which has an SDA farm/ranch portfolio of over $200 million calculates they could lose millions of dollars in net income per year if their portfolio of SDA loans is quickly paid off. A $200mm-plus loan balance going to zero will have a significant financial impact on the bank’s balance sheet, capital position and income statements alarming bank regulators. Such a loss will also undoubtedly reduce the bank’s ability to retain employees.
Another example is a smaller community bank with over $10 million in SDA farm/ranch loans comprising over ten percent of their portfolio. This bank estimates the sudden payoff of these loans will cause an annual loss of net income of over $300,000 per year for several years and raise concerns alluded to above.
Providing agricultural loans involves a substantial cost for lenders related to the costs of securing funding for loan-making and underwriting activities which include analyzing producers’ creditworthiness and ability to cash flow and correctly assessing the value of the farm/ranch assets. Loans must be approved by a loan review committee and lenders’ staff must monitor loan payments and asset quality, often with on-site inspections and periodic follow-up and consultation with borrowers and in some cases pursue collection efforts.
If USDA does not compensate lenders for such disruptions or avoid sudden loan payoffs, the likely result will be less access to credit for those seeking USDA guaranteed loans in the future, including SDA farmers/ranchers.
Other than the additional twenty percent to pay SDA taxes, USDA could assume payment of loans that are not delinquent or were not part of previous legal challenges.
Payments of existing loan terms on loans that were not part of the previous court challenges ensures SDA farmers/ranchers who are not delinquent are also immediately relieved from the burden of repaying their guaranteed loans while maintaining the payment schedule originally set up by the bank and agreed to by the farm or ranch customer. Instead, USDA would make the payments. This process protects the banks’ investment in loan-making to guaranteed borrowers and would be similar to how some PPP loan payments were made by the SBA.
Purchasers of USDA loan guarantees in the secondary market should be paid for lost premium values and the loans’ multi-year payment streams being halted.
The Secondary market provides liquidity to lenders allowing additional guarantees to be extended to farmers and ranchers. Commercial lenders have, over several decades, partnered with USDA to build this reliable and vibrant secondary market to serve all guaranteed loan borrowers. However, there is real concern about the ability of both lenders and investors to continue to facilitate credit availability in the secondary market going forward should consideration not be given to their considerable existing investments.
Presently, lenders can sell the guaranteed portion of their USDA loans to secondary market purchasers, including Farmer Mac, regional brokers, and loan aggregators. By selling the guarantees, lenders replenish their funds when liquidity is tight, allowing them to subsequently make new loans. The secondary market also allows lenders to provide long-term fixed rate loans resulting in longer terms at lower interest rates, reducing costs for farm and ranch borrowers.
Additionally, secondary market purchasers pay a premium for these guarantees based on the expectation of a dependable income stream over a multi-year period (typically 8-10 years). Due to the perception of reliability of payments, the guarantees are considered tradable, thus generating premiums from interested purchasers. The premiums on these loan purchases could disappear overnight with demand for purchasing USDA guarantees drying up.
In sum, the secondary market for USDA guaranteed farm loans provides favorable terms for farm borrowers, needed liquidity for lenders, and consistent, predictable yield for investors. The government guarantees help provide a market for these loans and mitigates credit risk in a vitally important sector filled with great uncertainty. The guarantees also provide bank regulators with assurance of limited risks to the financial institution which made the loan(s). However, if paying off entire categories of guarantee borrowers is not implemented properly, USDA’s actions could severely damage the secondary market by making the market unreliable and pricing unpredictable. This would cause a significant loss of available capital for lending under the USDA programs harming all guaranteed borrowers as well as the overall integrity of USDA’s guaranteed programs.
Conclusion
The fact there are thousands of guaranteed loans from commercial lenders to SDA borrowers demonstrates an ongoing willingness to partner with SDA borrowers as active partners sharing in the risks of keeping their operations viable for their families and their futures. Commercial lenders should not be hindered from continuing to work with all guaranteed loan borrowers. We urge USDA to assist both SDA farmers/ranchers as required by statute and their lenders who have worked so diligently on their behalf.
Finally, USDA should consider the necessity of maintaining the integrity of their guaranteed loan programs, which can only be accomplished if those lenders dealing with USDA loan guarantees are protected from the sudden, unexpected loss of income from abrupt loan payoffs and detrimental disruptions to the secondary market. Adopting the above recommendations will help accomplish these objectives.
https://www.icba.org/docs/default-source/icba/advocacy-documents/letters-to-regulators/letter-to-usda-on-sda-loan-payoffs.pdf?sfvrsn=1e780e17_0
Doctors Now Must Provide Patients Their Health Data, Online and On Demand
By Sarah Kwon
MAY 18, 2021
Excerpts:
On April 5, a federal rule went into effect that requires health care providers to give patients electronic access to their health information without delay upon request, at no cost. Many patients may now find their doctors’ clinical notes, test results and other medical data posted to their electronic portal as soon as they are available.
Advocates herald the rule as a long-awaited opportunity for patients to control their data and health. “This levels the playing field,” said Jan Walker, co-founder of OpenNotes, a group that has pushed for providers to share notes with patients. “A decade ago, the medical record belonged to the physician.”
But the rollout of the rule has hit bumps, as doctors learn that patients might see information before they do. Like Ramsey, some patients have felt distressed when seeing test results dropped into their portal without a physician’s explanation. And doctors’ groups say they are confused and concerned about whether the notes of adolescent patients who don’t want their parents to see sensitive information can be exempt — or if they will have to breach their patients’ trust.
Patients have long had a legal right to their medical records but often have had to pay fees, wait weeks or sift through reams of paper to see them. The rule aims not only to remove these barriers, but also to enable patients to access their health records through smartphone apps, and prevent health care providers from withholding information from other providers and health IT companies when a patient wants it to be shared. Privacy rules under the Health Insurance Portability and Accountability Act, which limit sharing of personal health information outside a clinic, remain in place, although privacy advocates have warned that patients who choose to share their data with consumer apps will put their data at risk.
Studies have shown numerous benefits of note sharing. Patients who read their notes understand more about their health, better remember their treatment plan and are more likely to stick to their medication regimen. Non-white, older or less educated patients report even greater benefits than others.
While most doctors who have shared notes with patients think it’s a good idea, the policy has drawbacks. One recent study found that half of doctors reported writing their notes less candidly after they were opened to patients. Another study, published in February, found that 1 in 10 patients had ever felt offended or judged after reading a note. The study’s lead author, Dr. Leonor Fernandez, of Beth Israel Deaconess Medical Center, said there is a “legacy of certain ways of expressing things in medicine that didn’t really take into account how it reads when you’re a patient.”
The AMA is advocating for “tweaks” to the rule, he said, like allowing brief delays in releasing results for a few of the highest-stakes tests, like those diagnosing cancer, and more clarity on whether the harm exception applies to adolescent patients who might face emotional distress if their doctor breached their trust by sharing sensitive information with their parents. The Office of the National Coordinator for Health Information Technology, the federal agency overseeing the rule, responded in an email that it has heard these concerns, but has also heard from clinicians that patients value receiving this information in a timely fashion, and that patients can decide whether they want to look at results once they receive them or wait until they can review them with their doctor. It added that the rule does not require giving parents access to protected health information if they did not already have that right under HIPAA.
Patient advocate Cynthia Fisher believes there should be no exceptions to immediately releasing results, noting that many patients want and need test results as soon as possible, and that delays can lead to worse health outcomes. Instead of facing long wait times to discuss diagnoses with their doctors, she said, patients can now take their results elsewhere. “We can’t assume the consumer is ignorant and unresourceful,” she said. In the meantime, hospitals and doctors are finding ways to adapt, and their tactics could have lasting implications for patient knowledge and physician workload. At Massachusetts General Hospital, a guide for patients on how to interpret medical terminology in radiology reports is being developed, said Dr. William Mehan, a neuroradiologist. An internal survey run after radiology results became immediately available to patients found that some doctors were monitoring their inbox after hours in case results arrived. “Burnout has come up in this conversation,” Mehan said. Some electronic health records enable doctors to withhold test results at the time they are ordered, said Jodi Daniel, a partner at the law firm Crowell & Moring. Doctors who can do this could ask patients whether they want their results released immediately or if they want their doctor to communicate the result, assuming they meet certain criteria for exceptions under the rule, she said. Chantal Worzala, a health technology policy consultant, said more is to come. “There will be a lot more conversation about the tools that individuals want and need in order to access and understand their health information,” she said.
This story was produced by KHN, which publishes California Healthline, an editorially independent service of the California Health Care Foundation.
AAI: Study Finds Private Equity Investment Accelerates Concentration and Undermines a Stable, Competitive Healthcare Industry
May 18, 2021 | Laura Alexander , Dr. Richard Scheffler
Health & Pharmaceuticals , Competition Policy https://www.antitrustinstitute.org/issues/competition-policy
A decade’s worth of evidence supports troubling findings that private equity business practices have a negative impact on competition in healthcare and on patients. A new white paper, produced by experts at the American Antitrust Institute (AAI) and UC Berkeley, calls for immediate attention to the role that private equity investment plays in harming patients and impairing the functioning of the healthcare industry. In this groundbreaking new white paper, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk, AAI’s Laura Alexander and Professor Richard Scheffler of The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health at UC Berkeley detail the emerging threat posed by private equity investment in healthcare markets.
“The report documents the astronomical growth of private equity’s investment in healthcare, which focuses on short-term profits and not the wellbeing of patients, and its consequences” says UC Berkeley School of Public Health Professor and Petris Center Director Richard Scheffler.
The paper’s major conclusions include:
“The ramifications of private equity investment in healthcare are still unfolding,” says study co-author and AAI Vice President of Policy Laura Alexander. “But given the speed with which private equity is transforming healthcare markets and the implications for competition, patients, and public health, the time to act is now.”
Media Contacts:Laura Alexander
American Antitrust Institute
lalexander@antitrustinstitute.org
(202) 276-4050
Dr. Richard Scheffler
Petris Center
rscheff@berkeley.edu
(510) 508-5079
AAI Private Equity Healthcare Report -- https://www.antitrustinstitute.org/wp-content/uploads/2021/05/Private-Equity-I-Healthcare-Report-FINAL.pdf
May 18, 2021 | Laura Alexander , Dr. Richard Scheffler
Health & Pharmaceuticals , Competition Policy https://www.antitrustinstitute.org/issues/competition-policy
A decade’s worth of evidence supports troubling findings that private equity business practices have a negative impact on competition in healthcare and on patients. A new white paper, produced by experts at the American Antitrust Institute (AAI) and UC Berkeley, calls for immediate attention to the role that private equity investment plays in harming patients and impairing the functioning of the healthcare industry. In this groundbreaking new white paper, Soaring Private Equity Investment in the Healthcare Sector: Consolidation Accelerated, Competition Undermined, and Patients at Risk, AAI’s Laura Alexander and Professor Richard Scheffler of The Nicholas C. Petris Center on Health Care Markets and Consumer Welfare in the School of Public Health at UC Berkeley detail the emerging threat posed by private equity investment in healthcare markets.
“The report documents the astronomical growth of private equity’s investment in healthcare, which focuses on short-term profits and not the wellbeing of patients, and its consequences” says UC Berkeley School of Public Health Professor and Petris Center Director Richard Scheffler.
The paper’s major conclusions include:
- Private equity investment in healthcare has grown dramatically—to nearly $750 billion in the last decade—and is poised to increase even further due to the COVID-19 pandemic’s impact on the healthcare sector and its projected growth.
- The private equity business model is fundamentally incompatible with a stable, competitive healthcare system that serves patients and promotes the health and wellbeing of the population.
- Private equity’s focus on short-term revenue generation and consolidation undermines competition and destabilizes healthcare markets.
- Private equity acts as an anticompetitive catalyst in healthcare markets, amplifying and accelerating concentration and anticompetitive practices.
- Private equity funds operate under the public and regulatory “radar,” leaving the vast majority of private equity deals in healthcare unreported, unreviewed, and unregulated.
- Urgent action is needed to oversee, investigate, and understand the impact of private equity on patients and healthcare markets, including changes to antitrust reporting requirements, withdrawal of the Department of Justice’s guidance on remedies, and study of additional oversight of healthcare mergers by the Department of Health and Human Services.
“The ramifications of private equity investment in healthcare are still unfolding,” says study co-author and AAI Vice President of Policy Laura Alexander. “But given the speed with which private equity is transforming healthcare markets and the implications for competition, patients, and public health, the time to act is now.”
Media Contacts:Laura Alexander
American Antitrust Institute
lalexander@antitrustinstitute.org
(202) 276-4050
Dr. Richard Scheffler
Petris Center
rscheff@berkeley.edu
(510) 508-5079
AAI Private Equity Healthcare Report -- https://www.antitrustinstitute.org/wp-content/uploads/2021/05/Private-Equity-I-Healthcare-Report-FINAL.pdf
"Pay-day" high interest lenders have made big money from desperate borrowers during the pandemic
It is one of the cruel ironies of the pandemic: At a time of great suffering for millions of working-class Americans, the odd financial rhythms of the past year—with its waves of job layoffs, followed by unprecedented government stimulus and a sharp economic rebound—have helped some of these high-interest lenders rake in record earnings. That the windfall for these companies came just as the Federal Reserve was making near zero-rate loans available for corporate America and the wealthy only further riles up the industry’s biggest critics.
“Debt collectors had a big year, and so did predatory lenders,” said Lauren Saunders, associate director at the National Consumer Law Center, a non-profit that advocates for low-income borrowers. “The idea that any company could keep charging 100% or 200% interest or more during this time of crisis is really outrageous.”
What’s more, consumer advocates point to studies that show Black and Latino communities are disproportionately targeted by providers of high-cost loans.
In Michigan, areas that are more than a quarter Black and Latino have 7.6 payday stores for every 100,000 people, or about 50% more than elsewhere, according to data collected by the Center for Responsible Lending. A forthcoming study from the University of Houston that was provided to Bloomberg shows similar disparities when it comes to online advertising.
From: Bloomberg Payday, Predatory Lenders Racked Up Record Profits in 2020 (bloomberg.com) https://www.bloomberg.com/graphics/2021-payday-loan-lenders/?cmpid=BBD051721_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210517&utm_campaign=bloombergdaily
It is one of the cruel ironies of the pandemic: At a time of great suffering for millions of working-class Americans, the odd financial rhythms of the past year—with its waves of job layoffs, followed by unprecedented government stimulus and a sharp economic rebound—have helped some of these high-interest lenders rake in record earnings. That the windfall for these companies came just as the Federal Reserve was making near zero-rate loans available for corporate America and the wealthy only further riles up the industry’s biggest critics.
“Debt collectors had a big year, and so did predatory lenders,” said Lauren Saunders, associate director at the National Consumer Law Center, a non-profit that advocates for low-income borrowers. “The idea that any company could keep charging 100% or 200% interest or more during this time of crisis is really outrageous.”
What’s more, consumer advocates point to studies that show Black and Latino communities are disproportionately targeted by providers of high-cost loans.
In Michigan, areas that are more than a quarter Black and Latino have 7.6 payday stores for every 100,000 people, or about 50% more than elsewhere, according to data collected by the Center for Responsible Lending. A forthcoming study from the University of Houston that was provided to Bloomberg shows similar disparities when it comes to online advertising.
From: Bloomberg Payday, Predatory Lenders Racked Up Record Profits in 2020 (bloomberg.com) https://www.bloomberg.com/graphics/2021-payday-loan-lenders/?cmpid=BBD051721_BIZ&utm_medium=email&utm_source=newsletter&utm_term=210517&utm_campaign=bloombergdaily
Expanding citations from Matt Stoller's blog on U.S. waiving IP protections for Covid vaccines
FTC releases a report about repair restrictions and how they limit your ability to fix products that break.
by
Emily Wu, May 6, 2021
Attorney, Federal Trade Commission
When you buy a new smartphone, computer, home appliance, or other product, you may not always think about whether it can be fixed if it breaks or has an issue. But here’s the thing: some manufacturers prevent you from fixing the things you buy. They might do things like gluing in batteries, limiting the availability of spare parts, and not giving you the repair instructions and software to help figure out the problem.
The FTC released a report today about repair restrictions and how they limit your ability to fix products that break. The report suggests what the FTC, lawmakers, and manufacturers can do to make it easier for you to fix the things that you own.
But there are some things that you can do yourself. Before you buy, do some research online to find out:
If you’re told that your warranty was voided or that it will be voided because of independent repair, we want to hear about it. Report it to the FTC at ReportFraud.ftc.gov.
by
Emily Wu, May 6, 2021
Attorney, Federal Trade Commission
When you buy a new smartphone, computer, home appliance, or other product, you may not always think about whether it can be fixed if it breaks or has an issue. But here’s the thing: some manufacturers prevent you from fixing the things you buy. They might do things like gluing in batteries, limiting the availability of spare parts, and not giving you the repair instructions and software to help figure out the problem.
The FTC released a report today about repair restrictions and how they limit your ability to fix products that break. The report suggests what the FTC, lawmakers, and manufacturers can do to make it easier for you to fix the things that you own.
But there are some things that you can do yourself. Before you buy, do some research online to find out:
- What is the average lifespan of the product?
- What is likely to go wrong with it if it breaks?
- How hard will it be to fix the problem?
If you’re told that your warranty was voided or that it will be voided because of independent repair, we want to hear about it. Report it to the FTC at ReportFraud.ftc.gov.
Spotify’s Joe Rogan encouraged “healthy” 21-year-olds not to get a coronavirus vaccine
From: https://www.mediamatters.org/joe-rogan-experience/spotifys-joe-rogan-encourages-healthy-21-year-olds-not-get-coronavirus-vaccine
WRITTEN BY ALEX PATERSON
On the April 23 edition of his Spotify podcast, Joe Rogan encouraged healthy young people not to get a COVID-19 vaccine, saying, “If you're like 21 years old, and you say to me, should I get vaccinated? I'll go no.”
Experts estimate that in order to achieve herd immunity, society may need to get to a critical mass of 70% to 90% of people vaccinated.
Rogan is one of the most influential podcast hosts in the world. His show is broadcast exclusively on Spotify and is the most popular podcast on the platform. He has frequently used his podcast to spread conspiracy theories, espouse dangerous COVID-19 misinformation, and attack trans people.
DAR Comment: Joe Ragan is plainly not a medical expert. He did graduate from Newton South High School in Massachusetts in 1985. He started college at the University of Massachusetts Boston, but dropped out. He may have taken courses in advanced biology and immunology, but maybe not. His main professional accomplishments include stand-up comedian and podcast blogger. His anti-vax opinions are arguably blatantly wrong and misleading. Does Spotify have the legal right to censor or refuse to post Regan's comments, as YouTube previously did? If yes, is a company's blocking of his comments an offensive example of "cancel culture," or a common sense effort by an independent, non-government business to limit patently wrong and harmful ranting by a right-wing nut?
Why would anyone accept comedian and blogger Joe Rogan's information about the utility of a COVID vaccine?
Assuming for the purpose of argument that Joe Rogan's information about lack of purpose for a Covid vaccicnation is blatantly wrong and misleading, why would anyone credit his expertise when ample information suggesting the contrary is available through newspapers, broadcast journalism, and the internet? The common sense response is that people are often imperfect in absorbing information, particularly information that is not congenial to their prejudices. Here is a snippet from the abstract of a recent scholarly article that reflects that thought:
An emerging research consensus finds that corrective information is typically at least somewhat effective at increasing belief accuracy when received by respondents. However, the research that I review suggests that the accuracy-increasing effects of corrective information like fact checks often do not last or accumulate; instead, they frequently seem to decay or be overwhelmed by cues from elites and the media promoting more congenial but less accurate claims. As a result, misperceptions typically persist in public opinion for years after they have been debunked. Given these realities, the primary challenge for scientific communication is not to prevent backfire effects but instead, to understand how to target corrective information better and to make it more effective. Ultimately, however, the best approach is to disrupt the formation of linkages between group identities and false claims and to reduce the flow of cues reinforcing those claims from elites and the media. Doing so will require a shift from a strategy focused on providing information to the public to one that considers the roles of intermediaries in forming and maintaining belief systems.
From the Abstract, Why the backfire effect does not explain the durability of political misperceptions by Brendan Nyhan
https://www.pnas.org/content/118/15/e1912440117
Assuming for the purpose of argument that Joe Rogan's information about lack of purpose for a Covid vaccicnation is blatantly wrong and misleading, why would anyone credit his expertise when ample information suggesting the contrary is available through newspapers, broadcast journalism, and the internet? The common sense response is that people are often imperfect in absorbing information, particularly information that is not congenial to their prejudices. Here is a snippet from the abstract of a recent scholarly article that reflects that thought:
An emerging research consensus finds that corrective information is typically at least somewhat effective at increasing belief accuracy when received by respondents. However, the research that I review suggests that the accuracy-increasing effects of corrective information like fact checks often do not last or accumulate; instead, they frequently seem to decay or be overwhelmed by cues from elites and the media promoting more congenial but less accurate claims. As a result, misperceptions typically persist in public opinion for years after they have been debunked. Given these realities, the primary challenge for scientific communication is not to prevent backfire effects but instead, to understand how to target corrective information better and to make it more effective. Ultimately, however, the best approach is to disrupt the formation of linkages between group identities and false claims and to reduce the flow of cues reinforcing those claims from elites and the media. Doing so will require a shift from a strategy focused on providing information to the public to one that considers the roles of intermediaries in forming and maintaining belief systems.
From the Abstract, Why the backfire effect does not explain the durability of political misperceptions by Brendan Nyhan
https://www.pnas.org/content/118/15/e1912440117
Can employers mandate employees to take fully approved (not emergency approved) vaccines? Probably yes
Pfizer has announced that it will seek full authorization for its COVID vaccine, superseding its current emergency authorization. Moderna is likely to follow.
There has been a lot of speculation about whether employers can require employees to take COVID vaccine when the authorization is merely and emergency authorization. But the issue is different when the vaccine is fully approved by the FDA, as explained in a blog by Brownstein Hyatt Farber Schreck (see https://www.jdsupra.com/legalnews/can-employers-mandate-covid-19-vaccines-6532002/). The blog explains, among other things, that:
Employers generally can mandate “ordinary” vaccines, subject to business considerations, taking into account accommodations that may be required under the American with Disabilities Act, or due to certain medical conditions (such as pregnancy or strong allergies to vaccine components), or for religious reasons. Requests for religious accommodation may be based on objections to the concept of vaccines generally, or specific to a particular vaccine (e.g., gene-based vaccines). This analysis applies in the context of vaccines approved by the FDA through its formal process under which, after consideration of evidence from human studies, the agency determines that vaccines are safe and effective. For example, the FDA has formally approved many influenza vaccines, which in turn have been mandated by some employers (such as health care providers) in accordance with EEOC guidance.
In addition, the The FDCA is a federal regulatory statute that preempts conflicting state laws. This preemptive force should include the individual’s right of refusal of a fully authorized vaccine.
Pfizer has announced that it will seek full authorization for its COVID vaccine, superseding its current emergency authorization. Moderna is likely to follow.
There has been a lot of speculation about whether employers can require employees to take COVID vaccine when the authorization is merely and emergency authorization. But the issue is different when the vaccine is fully approved by the FDA, as explained in a blog by Brownstein Hyatt Farber Schreck (see https://www.jdsupra.com/legalnews/can-employers-mandate-covid-19-vaccines-6532002/). The blog explains, among other things, that:
Employers generally can mandate “ordinary” vaccines, subject to business considerations, taking into account accommodations that may be required under the American with Disabilities Act, or due to certain medical conditions (such as pregnancy or strong allergies to vaccine components), or for religious reasons. Requests for religious accommodation may be based on objections to the concept of vaccines generally, or specific to a particular vaccine (e.g., gene-based vaccines). This analysis applies in the context of vaccines approved by the FDA through its formal process under which, after consideration of evidence from human studies, the agency determines that vaccines are safe and effective. For example, the FDA has formally approved many influenza vaccines, which in turn have been mandated by some employers (such as health care providers) in accordance with EEOC guidance.
In addition, the The FDCA is a federal regulatory statute that preempts conflicting state laws. This preemptive force should include the individual’s right of refusal of a fully authorized vaccine.
Mayor Bowser Announces $350 Million Rent and Utility Assistance Program for DC Residents
https://mayor.dc.gov/release/mayor-bowser-announces-350-million-rent-and-utility-assistance-program-dc-residents
Monday, April 12, 2021
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents
(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
https://mayor.dc.gov/release/mayor-bowser-announces-350-million-rent-and-utility-assistance-program-dc-residents
Monday, April 12, 2021
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
Stronger Together by Assisting You (STAY DC) and Other Efforts Will Provide Support to DC Residents
(WASHINGTON, DC) – Today, Mayor Muriel Bowser launched a new program to provide financial assistance to DC residents struggling to make rent and utility payments due to the COVID-19 pandemic. Through the Stronger Together by Assisting You (STAY DC) program, renters and housing providers can apply for grant funding to cover past and future rental payments in addition to utilities like water, gas, and electricity.
“A strong recovery starts with ensuring everyone in our community has safe and stable housing. This is about getting Washingtonians the money they need to pay their bills now so that they can stay in their homes once the public health emergency ends,” said Mayor Bowser. “We are grateful that the Biden Administration recognized the need for this investment and delivered on providing the resources necessary to address unprecedented levels of housing instability.”
To qualify for STAY DC, you must be a renter or housing provider in the District who is at risk, or has a tenant at risk, of not paying rent or utilities on a residential dwelling. An applicant’s total 2020 annual household income, as set by the U.S. Department of Housing and Urban Development, may not exceed designated levels according to household size. For example, a family of four must make less than $82,300. Eligible households may receive up to 12 months of assistance going back to April 1, 2020, and 3 months of assistance for future payments at a time for a total of 18 months of assistance.
“Since the beginning of this pandemic, the District has prioritized meeting the needs of our neighbors who have been negatively impacted by our public health emergency,” said Deputy Mayor for Planning and Economic Development John Falcicchio. “STAY DC will help us prevent housing instability by ensuring District residents can keep a roof over their heads and their utilities on, without sacrificing other basic needs.”
Renters and housing providers can begin submitting applications for rental and utility assistance today at stay.dc.gov, a user-friendly portal that provides a seamless and accessible process for renters and housing providers to facilitate requests for aid, as well as manage and track applications. Applicants can call the STAY DC Call Center at 833-4-STAYDC for support throughout their application process, Monday through Friday from 7 am to 7pm. Residents will also be able to work with Community Based Organizations (CBO) to submit paper applications.
“We want to take this opportunity to thank our robust network of Community Based Organizations who spread the word and assist residents with applying for assistance as only they know how,” said Department of Housing and Community Development (DHCD) Director Polly Donaldson. “With this new program we build on our year-long rental assistance efforts to date and are expanding our communications and outreach efforts so our residents can STAY in DC.”
The STAY DC program will be administered by the Department of Human Services (DHS) in collaboration with the Office of the Deputy Mayor for Planning and Economic Development (DMPED), the Office of the Deputy Mayor for Health and Human Services (DMHHS), and the Department of Housing and Community Development (DHCD). STAY DC replaces the District’s COVID-19 Housing Assistance Program (CHAP) and will augment the Emergency Rental Assistance Program (ERAP) and Low-Income Home Energy Assistance Program (LIHEAP).
“STAY DC provides an essential resource for residents in the District,” said DHS Director Laura Zeilinger. “We understand how important housing stability is to the wellbeing of our neighbors, especially during this unprecedented time, and STAY DC is a critical resource to help families who have suffered financially, keep their homes and meet their financial needs.”
Funding for the program comes from the December Congressional Appropriations Act that made available $25 billion to States, U.S. Territories, local governments, and Indian tribes. The District’s share of the allocation is $200 million which is the minimum amount states may receive under the legislation. Additionally, the American Rescue Plan Act makes an additional $21.5 billion available with the District’s share of the allocation at $152 million meaning a total of $352 million is available for STAY DC and related efforts.
More information, including eligibility requirements, can be found at stay.dc.gov.
The NYT questions the ethics of the Trump campaign’s automatic donation multiplier clauses, but are the clauses illegal? Should they be?
A New York Times expose' finds ethically questionable behavior in the Trump campaign’s use of clauses that automatically multiply a donor’s contribution. The NYT article explains that he campaign set up recurring donations by default for online donors. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As time went on, the Trump team made that disclaimer increasingly opaque. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.
See https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html
The Times writers are careful not to charge that the Trump campaign’s strategies are illegal under state or federal law, and whether they are illegal is a point that could be debated. Several States have statutes that limit automatic renewals in certain contexts. For example, New York, somewhat like California, has a statute that requires, among other things, that companies present “automatic renewal offer terms” in a “clear and conspicuous manner before the subscription or purchasing agreement is fulfilled” and that no consumers’ credit card be changed for renewal without “affirmative consent.” See https://www.natlawreview.com/article/new-york-s-broad-automatic-renewal-law-and-accompanying-compliance-issues-coming
An FTC statement explains that companies have an obligation to explain the details of the deal up front, clearly disclose any automatic renewal terms, get consumers’ express consent before billing, and offer simple ways to cancel. The FTC entered into a $10 million settlement with online learning company ABCmouse for allegedly violating those established consumer protection principles. “The case offers lessons for subscription-based businesses about the perils of snaring customers in a negative option trap.” See https://ftc.gov/news-events/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle
There is a law reform point implied in the New York Times expose'. Arguably, there ought to be a legislative proposal from a member of Congress clearly prohibiting what the Trump campaign did, if the practice is as unfair and onerous as the Times expose' suggests.
A New York Times expose' finds ethically questionable behavior in the Trump campaign’s use of clauses that automatically multiply a donor’s contribution. The NYT article explains that he campaign set up recurring donations by default for online donors. Contributors had to wade through a fine-print disclaimer and manually uncheck a box to opt out. As time went on, the Trump team made that disclaimer increasingly opaque. It introduced a second prechecked box, known internally as a “money bomb,” that doubled a person’s contribution. Eventually its solicitations featured lines of text in bold and capital letters that overwhelmed the opt-out language.
See https://www.nytimes.com/2021/04/03/us/politics/trump-donations.html
The Times writers are careful not to charge that the Trump campaign’s strategies are illegal under state or federal law, and whether they are illegal is a point that could be debated. Several States have statutes that limit automatic renewals in certain contexts. For example, New York, somewhat like California, has a statute that requires, among other things, that companies present “automatic renewal offer terms” in a “clear and conspicuous manner before the subscription or purchasing agreement is fulfilled” and that no consumers’ credit card be changed for renewal without “affirmative consent.” See https://www.natlawreview.com/article/new-york-s-broad-automatic-renewal-law-and-accompanying-compliance-issues-coming
An FTC statement explains that companies have an obligation to explain the details of the deal up front, clearly disclose any automatic renewal terms, get consumers’ express consent before billing, and offer simple ways to cancel. The FTC entered into a $10 million settlement with online learning company ABCmouse for allegedly violating those established consumer protection principles. “The case offers lessons for subscription-based businesses about the perils of snaring customers in a negative option trap.” See https://ftc.gov/news-events/press-releases/2020/09/childrens-online-learning-program-abcmouse-pay-10-million-settle
There is a law reform point implied in the New York Times expose'. Arguably, there ought to be a legislative proposal from a member of Congress clearly prohibiting what the Trump campaign did, if the practice is as unfair and onerous as the Times expose' suggests.
A Sober Look at SPACs - Investors beware
Yale Journal on Regulation, Forthcoming
Stanford Law and Economics Olin Working Paper No. 559
NYU Law and Economics Research Paper No. 20-48
57 Pages Posted: 16 Nov 2020 Last revised: 6 Mar 2021
Michael KlausnerStanford Law School; European Corporate Governance Institute (ECGI)
Michael OhlroggeNew York University School of Law
Emily Ruanaffiliation not provided to SSRN
Date Written: October 28, 2020
Abstract:
A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.
Keywords: SPAC, Securities Law
Suggested Citation:
Klausner, Michael D. and Ohlrogge, Michael and Ruan, Emily, A Sober Look at SPACs (October 28, 2020). Yale Journal on Regulation, Forthcoming, Stanford Law and Economics Olin Working Paper No. 559, NYU Law and Economics Research Paper No. 20-48, Available at SSRN: https://ssrn.com/abstract=3720919 or http://dx.doi.org/10.2139/ssrn.3720919
Download This Paper https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1
Open PDF in Browser https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1&type=2
See also https://www.nytimes.com/2021/03/31/business/dealbook/spac-sponsors.html
Yale Journal on Regulation, Forthcoming
Stanford Law and Economics Olin Working Paper No. 559
NYU Law and Economics Research Paper No. 20-48
57 Pages Posted: 16 Nov 2020 Last revised: 6 Mar 2021
Michael KlausnerStanford Law School; European Corporate Governance Institute (ECGI)
Michael OhlroggeNew York University School of Law
Emily Ruanaffiliation not provided to SSRN
Date Written: October 28, 2020
Abstract:
A Special Purpose Acquisition Company (“SPAC”) is a publicly listed firm with a two-year lifespan during which it is expected to find a private company with which to merge and thereby bring public. SPACs have been touted as a cheaper way to go public than an IPO. This paper analyzes the structure of SPACs and the costs built into their structure. We find that costs built into the SPAC structure are subtle, opaque, and far higher than has been previously recognized. Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public. We question whether this is a sustainable situation. We nonetheless propose regulatory measures that would eliminate preferences SPACs enjoy and make them more transparent, and we suggest alternative means by which companies can go public that retain the benefits of SPACs without the costs.
Keywords: SPAC, Securities Law
Suggested Citation:
Klausner, Michael D. and Ohlrogge, Michael and Ruan, Emily, A Sober Look at SPACs (October 28, 2020). Yale Journal on Regulation, Forthcoming, Stanford Law and Economics Olin Working Paper No. 559, NYU Law and Economics Research Paper No. 20-48, Available at SSRN: https://ssrn.com/abstract=3720919 or http://dx.doi.org/10.2139/ssrn.3720919
Download This Paper https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1
Open PDF in Browser https://papers.ssrn.com/sol3/Delivery.cfm/SSRN_ID3771578_code2160765.pdf?abstractid=3720919&mirid=1&type=2
See also https://www.nytimes.com/2021/03/31/business/dealbook/spac-sponsors.html
PBS segment on "Renters hit by pandemic juggle assistance, eviction laws"
See PBS NewsHour | Renters hit by pandemic juggle assistance, eviction laws | Season 2021 | PBS
Posting by Don ALlen Resnikoff
PBS reporter John Yang explores the operation of a landlord-tenant court diversion program in Franklin County, Ohio, where an eviction defendant has the benefit of a diversion program which provides landlords and tenants with an alternative to court actions against tenants. The program provides emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.
As I pointed out in an earlier article, a number of jurisdictions have similar programs.
Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
See PBS NewsHour | Renters hit by pandemic juggle assistance, eviction laws | Season 2021 | PBS
Posting by Don ALlen Resnikoff
PBS reporter John Yang explores the operation of a landlord-tenant court diversion program in Franklin County, Ohio, where an eviction defendant has the benefit of a diversion program which provides landlords and tenants with an alternative to court actions against tenants. The program provides emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.
As I pointed out in an earlier article, a number of jurisdictions have similar programs.
Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
Should local regulations require that vehicles commonly used on city streets be equipped with technology that protects pedestrians?
The adult daughter of a family friend was hit by a motor vehicle while she was carefully and legally crossing a street. Tragically, she died as a result. A question that comes to mind is whether there are safety features of vehicles that could avoid such deaths. What are those features, and should they be required on all vehicles, or at least on vehicles commonly used on city streets, such as delivery vehicles.
A GAO report from a few years ago says this:
Automakers have developed vehicle features intended to avoid pedestrian crashes and mitigate the extent of injury to pedestrians. Crash avoidance features (also known as “active” safety features) rely on cameras, radar, and other devices to detect a pedestrian and then act to alert a driver to take action, or automatically apply a vehicle’s brakes to slow or stop the vehicle to avoid striking a pedestrian. One pedestrian crash avoidance system is referred to as pedestrian automatic emergency braking, which uses a camera, radar, or a combination, to automatically apply brakes to avoid a collision.
Crash mitigation features (also known as “passive” safety features) generally involve the use of pedestrian-friendly vehicle components that are designed to reduce the severity of injuries should a pedestrian be hit. Passive safety features can include energy absorbing bumper material, hoods that provide space between the hood and the hard components in the engine compartment, and contoured vehicle front-ends intended to reduce harm to pedestrians.
See https://www.gao.gov/assets/gao-20-419.pdf
The GAO recommends that the National Highway Traffic Safety Administration (NHTSA) have clear testing standards for pedestrian safety technology. A related idea that comes to mind is local regulation that requires vehicles commonly used on city streets to be equipped with technology that protects pedestrians. Taxis and delivery vehicles are examples.
Posting by Don Allen Resnikoff
The adult daughter of a family friend was hit by a motor vehicle while she was carefully and legally crossing a street. Tragically, she died as a result. A question that comes to mind is whether there are safety features of vehicles that could avoid such deaths. What are those features, and should they be required on all vehicles, or at least on vehicles commonly used on city streets, such as delivery vehicles.
A GAO report from a few years ago says this:
Automakers have developed vehicle features intended to avoid pedestrian crashes and mitigate the extent of injury to pedestrians. Crash avoidance features (also known as “active” safety features) rely on cameras, radar, and other devices to detect a pedestrian and then act to alert a driver to take action, or automatically apply a vehicle’s brakes to slow or stop the vehicle to avoid striking a pedestrian. One pedestrian crash avoidance system is referred to as pedestrian automatic emergency braking, which uses a camera, radar, or a combination, to automatically apply brakes to avoid a collision.
Crash mitigation features (also known as “passive” safety features) generally involve the use of pedestrian-friendly vehicle components that are designed to reduce the severity of injuries should a pedestrian be hit. Passive safety features can include energy absorbing bumper material, hoods that provide space between the hood and the hard components in the engine compartment, and contoured vehicle front-ends intended to reduce harm to pedestrians.
See https://www.gao.gov/assets/gao-20-419.pdf
The GAO recommends that the National Highway Traffic Safety Administration (NHTSA) have clear testing standards for pedestrian safety technology. A related idea that comes to mind is local regulation that requires vehicles commonly used on city streets to be equipped with technology that protects pedestrians. Taxis and delivery vehicles are examples.
Posting by Don Allen Resnikoff
In April, 2020, SCOTUS decided that nonunanimous jury convictions in criminal cases are unconstitutional. A recent PBS program tells the stories of people previously convicted by nonunanimous juries.
Posting by Don Allen Resnikoff
In April, 2020, The Supreme Court of the United States ruled in Ramos v. Louisiana, 590 U.S. ___ (2020) [see https://supreme.justia.com/cases/federal/us/590/18-5924/] that nonunanimous jury convictions are unconstitutional. At the time, Oregon and Louisiana, were the only two states which still allowed nonunanimous jury convictions.
From Justice Gorsuch’s opinion for the majority in Ramos v. Louisiana:
Why do Louisiana and Oregon allow nonunanimous convictions? Though it’s hard to say why these laws persist, their origins are clear. Louisiana first endorsed nonunanimous verdicts for serious crimes at a constitutional convention in 1898. According to one committee chairman, the avowed purpose of that convention was to “establish the supremacy of the white race,” and the resulting document included many of the trappings of the Jim Crow era: a poll tax, a combined literacy and property ownership test, and a grandfather clause that in practice exempted white residents from the most onerous of these requirements.1 Nor was it only the prospect of African-Americans voting that concerned the delegates. Just a week before the convention, the U. S. Senate passed a resolution calling for an investigation into whether Louisiana was systemically excluding African-Americans from juries. Seeking to avoid unwanted national attention, and aware that this Court would strike down any policy of overt discrimination against African-American jurors as a violation of the Fourteenth Amendment, the delegates sought to undermine African-American participation on juries in another way. With a careful eye on racial demographics, the convention delegates sculpted a “facially race-neutral” rule permitting 10-to-2 verdicts in order “to ensure that African-American juror service would be meaningless.” Adopted in the 1930s, Oregon’s rule permitting nonunanimous verdicts can be similarly traced to the rise of the Ku Klux Klan and efforts to dilute “the influence of racial, ethnic, and religious minorities on Oregon juries.”
With regard to hardship caused in Louisiana and Oregon to State government burdened with retrials of nonunanimous jury convictions, Justice Gorsuch wrote:
[P]rior convictions in only two States are potentially affected by our judgment. Those States credibly claim that the number of nonunanimous felony convictions still on direct appeal are somewhere in the hundreds, and retrying or plea bargaining these cases will surely impose a cost. But new rules of criminal procedures usually do . . . .
So, what are the stories of people previously convicted by nonunanimous juries? That is the focus of a recently broadcast PBS segment:
https://www.thirteen.org/programs/pbs-newshour/non-unanimous-juries-were-outlawed-why-two-states-used-them-1616964936/
Capital requirements for banks: Is the Fed pruning its magic money tree?
Current news headlines are that the Fed has decided to end temporary exemptions from capital requirements for banks. See https://www.nytimes.com/2021/03/19/business/economy/federal-reserve-bank-leverage.html
That news is just one development in a long simmering controversy about whether regulators should impose stringent capital requirements on banks in order to preserve bank stability, that is, to avoid the sort of instability that affected banks in the 2008 financial crisis.
In their book The Bankers New Clothes, authors Admati and Hellwig argued that string capital requirements are crucial. See http://bankersnewclothes.com/ That website includes two videos of Ms. Admati explaining her views.
The New York Times very briefly summarized Ms. Admati's views as follows:
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.
Her solution is to make banks behave more like other companies by forcing them to reduce sharply their reliance on borrowed money. That would likely make the banking industry more stodgy and less profitable — reducing the economic risks, the executive bonuses and, for shareholders, both the risks and the profits. https://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html#after-story-ad-1
It is important to note that the Admati view about substantial capital requirements for banks is opposed by some. Some opposition comes from what may be called the "magic money tree" theory about banking: "All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment." The magic money tree idea is discussed, and rebutted, in an article at https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=6ffaa3883073
Posting by Don Allen Resnikoff
Current news headlines are that the Fed has decided to end temporary exemptions from capital requirements for banks. See https://www.nytimes.com/2021/03/19/business/economy/federal-reserve-bank-leverage.html
That news is just one development in a long simmering controversy about whether regulators should impose stringent capital requirements on banks in order to preserve bank stability, that is, to avoid the sort of instability that affected banks in the 2008 financial crisis.
In their book The Bankers New Clothes, authors Admati and Hellwig argued that string capital requirements are crucial. See http://bankersnewclothes.com/ That website includes two videos of Ms. Admati explaining her views.
The New York Times very briefly summarized Ms. Admati's views as follows:
Ms. Admati’s simple message is that the government is overlooking the best way to strengthen the financial system. Regulators, she says, need to worry less about what banks do with their money, and more about where the money comes from.
Companies other than banks get money mostly by selling shares to investors or by reinvesting profits. Banks, by contrast, can rely almost entirely on borrowed funds, including the money they get from depositors. Ms. Admati argues that banks are taking larger risks than other kinds of companies because they use other people’s money, and the results are that they keep crashing the economy.
Her solution is to make banks behave more like other companies by forcing them to reduce sharply their reliance on borrowed money. That would likely make the banking industry more stodgy and less profitable — reducing the economic risks, the executive bonuses and, for shareholders, both the risks and the profits. https://www.nytimes.com/2014/08/10/business/when-she-talks-banks-shudder.html#after-story-ad-1
It is important to note that the Admati view about substantial capital requirements for banks is opposed by some. Some opposition comes from what may be called the "magic money tree" theory about banking: "All money comes from a magic tree, in the sense that money is spirited from thin air. There is no gold standard. Banks do not work to a money-multiplier model, where they extend loans as a multiple of the deposits they already hold. Money is created on faith alone, whether that is faith in ever-increasing housing prices or any other given investment." The magic money tree idea is discussed, and rebutted, in an article at https://www.forbes.com/sites/francescoppola/2017/10/31/how-bank-lending-really-creates-money-and-why-the-magic-money-tree-is-not-cost-free/?sh=6ffaa3883073
Posting by Don Allen Resnikoff
The NY AG suit against Amazon for failing to provide workplace safety
ViewDocument (state.ny.us) https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=muvelgaOEvSt6Yc1gGqzAg==V
excerpt:
3. Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities JFK8, a Staten Island fulfillment center, and DBK1, a Queens distribution center. Amazon’s flagrant disregard for health and safety requirements has threatened serious illness and grave harm to the thousands of workers in these facilities and poses a continued substantial and specific danger to the public health.
4. Since at least March 2020 when the COVID-19 outbreak began to devastate New York City, Amazon failed to comply with requirements for cleaning and disinfection when infected workers had been present in its facilities; Amazon failed to adequately identify and notify potential contacts of such infected workers; and Amazon failed to ensure that its discipline and productivity policies, and productivity rates automated by line-speeds, permitted its employees to take the time necessary to engage in hygiene, sanitation, social-distancing, and necessary cleaning practices.
5. When Amazon employees began to object to Amazon’s inadequate practices and to make complaints to Amazon management, government agencies, and the media, Amazon took swift retaliatory action to silence workers’ complaints. In late-March 2020, Amazon fired employee Christian Smalls, and in early-April 2020, Amazon issued a final written warning to employee Derrick Palmer. Amazon’s actions against these visible critics who advocated for Amazon to fully comply with legal health requirements sent a chilling message to other Amazon employees.
6. Amazon’s response to the pandemic continues to be deficient.
ViewDocument (state.ny.us) https://iapps.courts.state.ny.us/nyscef/ViewDocument?docIndex=muvelgaOEvSt6Yc1gGqzAg==V
excerpt:
3. Throughout the historic pandemic, Amazon has repeatedly and persistently failed to comply with its obligation to institute reasonable and adequate measures to protect its workers from the spread of the virus in its New York City facilities JFK8, a Staten Island fulfillment center, and DBK1, a Queens distribution center. Amazon’s flagrant disregard for health and safety requirements has threatened serious illness and grave harm to the thousands of workers in these facilities and poses a continued substantial and specific danger to the public health.
4. Since at least March 2020 when the COVID-19 outbreak began to devastate New York City, Amazon failed to comply with requirements for cleaning and disinfection when infected workers had been present in its facilities; Amazon failed to adequately identify and notify potential contacts of such infected workers; and Amazon failed to ensure that its discipline and productivity policies, and productivity rates automated by line-speeds, permitted its employees to take the time necessary to engage in hygiene, sanitation, social-distancing, and necessary cleaning practices.
5. When Amazon employees began to object to Amazon’s inadequate practices and to make complaints to Amazon management, government agencies, and the media, Amazon took swift retaliatory action to silence workers’ complaints. In late-March 2020, Amazon fired employee Christian Smalls, and in early-April 2020, Amazon issued a final written warning to employee Derrick Palmer. Amazon’s actions against these visible critics who advocated for Amazon to fully comply with legal health requirements sent a chilling message to other Amazon employees.
6. Amazon’s response to the pandemic continues to be deficient.
The FCC approves emergency program to bring high speed internet to the underserved - local implementation required
DAR Comment: The FCC's emergency program establishes the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic. The Order explains that virtual learning, telemedicine, and telework have increased every household’s need for access to broadband services. The cost of broadband services can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
The Washington Post explains that many will see their Internet bills reduced by as much as $50 a month in credits paid to their Internet service providers, and residents of tribal areas are eligible for even larger discounts. However, "It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints." See https://www.washingtonpost.com/technology/2021/02/26/broadband-internet-subsidies-coronavirus/
The Post reports that AT&T has said that it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules.
The FCC has announced that it is mobilizing people and organizations to help share important consumer information about the Emergency Broadband Benefit. Since iImplementation of the FCC emergency internet program turns on efforts of btoadband providers, one thing that public interest organizations might do is to encourage and applaud efforts by broadband providers to participate in and supplement the FCC initiative on broadband for the underserved.
The FCC Order: https://docs.fcc.gov/public/attachments/FCC-21-29A1.pdf
From the Introduction:
In this Order, we establish the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic.1 Efforts to slow the spread of COVID-19 have resulted in the dramatic disruption of many aspects of Americans’ lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses and schools across the country for indefinite periods of times, which in turn has caused millions of Americans to become newly unemployed or unable to find work. These closures have also led people to turn to virtual learning, telemedicine, and telework to enable social distancing measures, which has only increased every household’s need for access to broadband services. The cost of broadband services, however, can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
Excerpt from Provider Election Process to Participate in the Emergency Broadband Benefit Program
21. We direct USAC, under the supervision of and in coordination with the Bureau, to establish and administer a process to enable all participating EBB Program [broadband service] providers to file election notices containing information sufficient to effectively administer the program. We direct USAC to collect information in such notices that includes: (1) the states in which the provider plans to participate in the EBB Program; (2) a statement that, in each such state, the provider was a “broadband provider” as of December 1, 2020; (3) a list of states where the provider is an existing ETC, if any; (4) a list of states where the provider received FCC approval, whether automatic or expedited, to participate, if any; (5) whether the provider intends to distribute connected devices under the EBB Program; (6) a description of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state; (7) documentation demonstrating the standard rates for those services; and (8) any other administrative information necessary for USAC to establish participating providers in the EBB Program.
DAR Comment: It makes sense for local government and citizen groups to follow up with local broadband providers concerning utilization of the FCC initiative
DAR Comment: The FCC's emergency program establishes the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic. The Order explains that virtual learning, telemedicine, and telework have increased every household’s need for access to broadband services. The cost of broadband services can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
The Washington Post explains that many will see their Internet bills reduced by as much as $50 a month in credits paid to their Internet service providers, and residents of tribal areas are eligible for even larger discounts. However, "It may take up to two months before Americans can take advantage of it; the government must still fine-tune its systems so that families can apply for, and providers can receive, the emergency benefits. That task is likely to be a tall one for Washington, which historically has struggled to deploy complicated technology under tight time constraints." See https://www.washingtonpost.com/technology/2021/02/26/broadband-internet-subsidies-coronavirus/
The Post reports that AT&T has said that it intends to participate. CenturyLink, Charter, Comcast, Frontier, T-Mobile and Verizon did not immediately commit to accepting the emergency benefits, although many companies and their trade groups have said in recent days they support the FCC’s work and intend to review its new implementing rules.
The FCC has announced that it is mobilizing people and organizations to help share important consumer information about the Emergency Broadband Benefit. Since iImplementation of the FCC emergency internet program turns on efforts of btoadband providers, one thing that public interest organizations might do is to encourage and applaud efforts by broadband providers to participate in and supplement the FCC initiative on broadband for the underserved.
The FCC Order: https://docs.fcc.gov/public/attachments/FCC-21-29A1.pdf
From the Introduction:
In this Order, we establish the Emergency Broadband Benefit Program to support broadband services and devices to help low-income households stay connected during the COVID-19 pandemic.1 Efforts to slow the spread of COVID-19 have resulted in the dramatic disruption of many aspects of Americans’ lives, including social distancing measures to prevent person-to-person transmission that have required the closure of businesses and schools across the country for indefinite periods of times, which in turn has caused millions of Americans to become newly unemployed or unable to find work. These closures have also led people to turn to virtual learning, telemedicine, and telework to enable social distancing measures, which has only increased every household’s need for access to broadband services. The cost of broadband services, however, can be difficult to overcome for lowincome families and for families that have been struggling during the pandemic.
Excerpt from Provider Election Process to Participate in the Emergency Broadband Benefit Program
21. We direct USAC, under the supervision of and in coordination with the Bureau, to establish and administer a process to enable all participating EBB Program [broadband service] providers to file election notices containing information sufficient to effectively administer the program. We direct USAC to collect information in such notices that includes: (1) the states in which the provider plans to participate in the EBB Program; (2) a statement that, in each such state, the provider was a “broadband provider” as of December 1, 2020; (3) a list of states where the provider is an existing ETC, if any; (4) a list of states where the provider received FCC approval, whether automatic or expedited, to participate, if any; (5) whether the provider intends to distribute connected devices under the EBB Program; (6) a description of the Internet service offerings for which the provider plans to seek reimbursement from the EBB Program in each state; (7) documentation demonstrating the standard rates for those services; and (8) any other administrative information necessary for USAC to establish participating providers in the EBB Program.
DAR Comment: It makes sense for local government and citizen groups to follow up with local broadband providers concerning utilization of the FCC initiative
Before Boulder shooting, NRA victory blocking local gun control
A Colorado judge blocked Boulder from enforcing its two-year-old assault rifle ban on March 12, ruling it violated a 2003 state law prohibiting municipalities from enacting their own firearms regulations. Boulder city spokeswoman Shannon Aulabaugh said city attorneys would meet to decide on whether to appeal the ruling by Boulder County District Court Judge Andrew Hartman, The Denver Post reported March 18, but in the meantime, the Boulder Police Department wouldn't enforce the ban on AR-15-style rifles and large-capacity magazines.
The National Rifle Association celebrated the ruling last Tuesday, noting its supporting role in striking down the ban. A week later, a gunman opened fire in a Boulder supermarket, killing 10 people, including a Boulder Police officer.
Source: Yahoo News
A Colorado judge blocked Boulder from enforcing its two-year-old assault rifle ban on March 12, ruling it violated a 2003 state law prohibiting municipalities from enacting their own firearms regulations. Boulder city spokeswoman Shannon Aulabaugh said city attorneys would meet to decide on whether to appeal the ruling by Boulder County District Court Judge Andrew Hartman, The Denver Post reported March 18, but in the meantime, the Boulder Police Department wouldn't enforce the ban on AR-15-style rifles and large-capacity magazines.
The National Rifle Association celebrated the ruling last Tuesday, noting its supporting role in striking down the ban. A week later, a gunman opened fire in a Boulder supermarket, killing 10 people, including a Boulder Police officer.
Source: Yahoo News
To get rich, become a doctor or a lawyer. My mother said it years ago, and now David Brooks of the NYT says it -- Don Allen Resnikoff
Excerpt from Brooks NYT column:
So what profession is most likely to get you rich? Medicine! You get to save lives and make bank all at once! One third of doctors overall, including about 58.6 percent of surgeons, are in the top one percent of earners. There are more doctors and surgeons in the top one percent than any other job category. According to Rothwell’s book, in Spain, Sweden and Iceland, doctors earn twice as much as the average worker, but in the United States physicians and surgeons earn nearly five times as much.
Why is that? First, there’s our screwed-up health care system in which nearly 18 percent of gross domestic product flows into medicine and disproportionately toward a relatively small number of doctors. Second, there are huge barriers of entry into that profession — including, of course, the strenuous education that’s required. The number of medical school students is limited. In 2018-2019, only 41 percent of applicants who applied to medical school actually got into one. Plus, a 1997 federal law capped the number of residency slots that Medicare funds would support.
It typically takes a minimum of 11 years of difficult training to become a doctor, costing hundreds of thousands of dollars. Once you’re a doctor, you are protected by state laws from competition from lower cost workers. Rothwell cites research suggesting that nurse practitioners and dental hygienists can perform many duties now done by doctors and dentists, at lower cost.
If you’re squeamish around blood, you can go into law. Census data for 2019 shows that about 14.5 percent of lawyers are in the top one percent of earners. And for some of the same reasons: high barriers to entry, limits on competition from less costly alternatives and limits on innovation. For example, in most states it’s illegal for a nonlawyer to own a law firm. If some MBA has an innovative idea for how to streamline practices, she is not allowed to start a firm and use that idea.
https://www.nytimes.com/2021/02/25/opinion/inequality-medicine-law.html?
Don Resnikoff comment:
I won't comment about being a doctor, but since I've worked as a lawyer for many years I will comment about that. For starters, I am not now and have never been within the top 1% of earners, or even close. I am financially comfortable, as they say, at a modest level.
Next, while I have had a good career as a lawyer, mostly in public service, with stints in private practice, I've had to take the bad with the good. I'll mention just one bad here, because it has been on my mind recently. It is that cases I've worked on tend to go on for a very long time. Working on those cases has been interesting for me, but protracted litigation can disserve the goal of achieving a just result.
One famous example is US v IBM. The case took roughly 700 trial days over seven years. I was not on the case for all seven years, just the last few after the Government rested its affirmative case. A 1981 New York Times article says "The judge presiding over the Federal Government's antitrust case against the International Business Machines Corporation set a June 1 deadline yesterday for the six-year-old trial to end. . . . He indicated yesterday that since the trial was near its end, both sides should be able to meet the deadline easily. Thomas D. Barr, I.B.M.'s lead attorney, said I.B.M. would have no trouble meeting the deadline. Donald A. Resnikoff, of the Justice Department, agreed the deadline was desirable but expressed reservations."
I can't now recall what my reservations were, and I haven't gone back to check the transcript.
Much later, after I retired from USDOJ, I worked for the DC AG's Office on antitrust matters, and was assigned to assist one of the State groups working on the US and State AG case against Microsoft. The suit began on May 18, 1998, with the U.S. Department of Justice and the AGs of twenty U.S. states and the District of Columbia suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. In June, 2004, a U.S. appeals court unanimously approved settlement of the case, rejecting objections of the District of Columbia, among others, that the settlement sanctions were inadequate. (See Wikipedia for a short summary.)
My private practice experience has been similar with regard to long cases. In 2011 I was one of two attorneys who signed a Complaint concerning bank and payment system practices affecting the ATM industry. The case is still in active litigation 10 years later, although I no longer work on it.
In 2014 I began work on a case for a gasoline station operator concerning disputed franchise arrangements. Litigation began in 2016, and is still ongoing. Again, I will not work on the litigation through to the end. A younger lawyer will do that.
The long cases I've mentioned have been extremely interesting to me, and arguably even somewhat important. But the time required to bring them to conclusion is frustrating . Delay means expense for the litigants, with a just result being deferred, or worse. In both the government IBM and Microsoft cases, the disadvantaged competitors and their technologies that were at issue when the litigations began were no longer available for rescue by the time the cases ended.
Excerpt from Brooks NYT column:
So what profession is most likely to get you rich? Medicine! You get to save lives and make bank all at once! One third of doctors overall, including about 58.6 percent of surgeons, are in the top one percent of earners. There are more doctors and surgeons in the top one percent than any other job category. According to Rothwell’s book, in Spain, Sweden and Iceland, doctors earn twice as much as the average worker, but in the United States physicians and surgeons earn nearly five times as much.
Why is that? First, there’s our screwed-up health care system in which nearly 18 percent of gross domestic product flows into medicine and disproportionately toward a relatively small number of doctors. Second, there are huge barriers of entry into that profession — including, of course, the strenuous education that’s required. The number of medical school students is limited. In 2018-2019, only 41 percent of applicants who applied to medical school actually got into one. Plus, a 1997 federal law capped the number of residency slots that Medicare funds would support.
It typically takes a minimum of 11 years of difficult training to become a doctor, costing hundreds of thousands of dollars. Once you’re a doctor, you are protected by state laws from competition from lower cost workers. Rothwell cites research suggesting that nurse practitioners and dental hygienists can perform many duties now done by doctors and dentists, at lower cost.
If you’re squeamish around blood, you can go into law. Census data for 2019 shows that about 14.5 percent of lawyers are in the top one percent of earners. And for some of the same reasons: high barriers to entry, limits on competition from less costly alternatives and limits on innovation. For example, in most states it’s illegal for a nonlawyer to own a law firm. If some MBA has an innovative idea for how to streamline practices, she is not allowed to start a firm and use that idea.
https://www.nytimes.com/2021/02/25/opinion/inequality-medicine-law.html?
Don Resnikoff comment:
I won't comment about being a doctor, but since I've worked as a lawyer for many years I will comment about that. For starters, I am not now and have never been within the top 1% of earners, or even close. I am financially comfortable, as they say, at a modest level.
Next, while I have had a good career as a lawyer, mostly in public service, with stints in private practice, I've had to take the bad with the good. I'll mention just one bad here, because it has been on my mind recently. It is that cases I've worked on tend to go on for a very long time. Working on those cases has been interesting for me, but protracted litigation can disserve the goal of achieving a just result.
One famous example is US v IBM. The case took roughly 700 trial days over seven years. I was not on the case for all seven years, just the last few after the Government rested its affirmative case. A 1981 New York Times article says "The judge presiding over the Federal Government's antitrust case against the International Business Machines Corporation set a June 1 deadline yesterday for the six-year-old trial to end. . . . He indicated yesterday that since the trial was near its end, both sides should be able to meet the deadline easily. Thomas D. Barr, I.B.M.'s lead attorney, said I.B.M. would have no trouble meeting the deadline. Donald A. Resnikoff, of the Justice Department, agreed the deadline was desirable but expressed reservations."
I can't now recall what my reservations were, and I haven't gone back to check the transcript.
Much later, after I retired from USDOJ, I worked for the DC AG's Office on antitrust matters, and was assigned to assist one of the State groups working on the US and State AG case against Microsoft. The suit began on May 18, 1998, with the U.S. Department of Justice and the AGs of twenty U.S. states and the District of Columbia suing Microsoft for illegally thwarting competition in order to protect and extend its software monopoly. In June, 2004, a U.S. appeals court unanimously approved settlement of the case, rejecting objections of the District of Columbia, among others, that the settlement sanctions were inadequate. (See Wikipedia for a short summary.)
My private practice experience has been similar with regard to long cases. In 2011 I was one of two attorneys who signed a Complaint concerning bank and payment system practices affecting the ATM industry. The case is still in active litigation 10 years later, although I no longer work on it.
In 2014 I began work on a case for a gasoline station operator concerning disputed franchise arrangements. Litigation began in 2016, and is still ongoing. Again, I will not work on the litigation through to the end. A younger lawyer will do that.
The long cases I've mentioned have been extremely interesting to me, and arguably even somewhat important. But the time required to bring them to conclusion is frustrating . Delay means expense for the litigants, with a just result being deferred, or worse. In both the government IBM and Microsoft cases, the disadvantaged competitors and their technologies that were at issue when the litigations began were no longer available for rescue by the time the cases ended.
WashPost on right to counsel in civil cases
editorial excerpt:
Most European countries have long-standing rules granting a right to counsel to litigants in property and monetary cases, as well as ones in which life and liberty hang in the balance. In England, Parliament acted more than 500 years ago to ensure that paupers would be provided lawyers when suing in King Henry VII’s courts; that right found its way into laws in some of the original 13 colonies.
In today’s United States, lawmakers and judges have carved out a hodgepodge, varying wildly from state to state and even by locality, under which certain at-risk individuals may qualify for court-appointed counsel in some types of civil matters. In most states, for instance, that’s the case when authorities seek to remove children permanently from their parents and send them to foster care, owing to alleged neglect or abuse. In a handful of big cities, other laws enacted in recent years grant a right to counsel to tenants facing eviction, an event that often triggers a cascade of other problems, such as homelessness.
Far more often, however, poor people unversed in the law are on their own when states have not specified a right to counsel and judges cannot or will not provide one. That produces appalling results across a range of legal disputes.
https://www.washingtonpost.com/opinions/2021/02/26/noncriminal-cases-right-to-lawyer-representation/?arc404=true
editorial excerpt:
Most European countries have long-standing rules granting a right to counsel to litigants in property and monetary cases, as well as ones in which life and liberty hang in the balance. In England, Parliament acted more than 500 years ago to ensure that paupers would be provided lawyers when suing in King Henry VII’s courts; that right found its way into laws in some of the original 13 colonies.
In today’s United States, lawmakers and judges have carved out a hodgepodge, varying wildly from state to state and even by locality, under which certain at-risk individuals may qualify for court-appointed counsel in some types of civil matters. In most states, for instance, that’s the case when authorities seek to remove children permanently from their parents and send them to foster care, owing to alleged neglect or abuse. In a handful of big cities, other laws enacted in recent years grant a right to counsel to tenants facing eviction, an event that often triggers a cascade of other problems, such as homelessness.
Far more often, however, poor people unversed in the law are on their own when states have not specified a right to counsel and judges cannot or will not provide one. That produces appalling results across a range of legal disputes.
https://www.washingtonpost.com/opinions/2021/02/26/noncriminal-cases-right-to-lawyer-representation/?arc404=true
Public Citizen wants WTO to waive IP protections to aid international distribution of vaccines
EXCERPT from https://www.citizen.org/article/rethinking-trade-podcast-u-s-officials-are-blocking-global-covid-19-vaccine-access-at-the-wto/
World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives. But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?
EXCERPT from https://www.citizen.org/article/rethinking-trade-podcast-u-s-officials-are-blocking-global-covid-19-vaccine-access-at-the-wto/
World Trade Organization (WTO) rules undermine access to COVID-19 vaccines and medicines. That’s why scores of countries are demanding that the WTO’s monopoly protections for pharmaceutical corporations be temporarily waived so COVID-19 vaccines and treatments can be produced worldwide. This is essential to ensure enough affordable doses to end the pandemic and save lives. But U.S. trade officials are blocking the waiver, insisting that even during this deadly global pandemic, Big Pharma profits should come first. The question is: Will this position change under a Biden administration?
Lori Wallach of Public Citizen on US reliance on overseas production for COVID gear
EXCERPT from https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf:
As production of key parts and assembly of goods in diverse sectors has become both geographically concentrated and concentrated in fewer companies,whenproduction in a key country, region or company is disrupted –whether by illness in the current instance or natural disaster, war or other calamity–world supplies are affected. Experts have warned about the perils of hyperglobalized supply chains for years. As Barry Lynn’s 2005 book “End of the Line”warned: “In September 1999, an earthquake devastated much of Taiwan, toppling buildings, knocking out electricity, and killing 2,500 people. Within days, factories as far away as California and Texas began to close. Cut off from their supplies of semiconductor chips, companies like Dell and Hewlett-Packard began to shutter assembly lines and send workers home. A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis. The quake, in an instant, illustrated just how closely connected the world had become and just how radically different are the risks we all now face.”1The COVID-19 crisis forced people throughout the United States to recognize a problem previously mainly experienced by those in venues hurt by outsourcing and trade-related job loss: The United States no longer can make many basic goods it needs.
https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf
EXCERPT from https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf:
As production of key parts and assembly of goods in diverse sectors has become both geographically concentrated and concentrated in fewer companies,whenproduction in a key country, region or company is disrupted –whether by illness in the current instance or natural disaster, war or other calamity–world supplies are affected. Experts have warned about the perils of hyperglobalized supply chains for years. As Barry Lynn’s 2005 book “End of the Line”warned: “In September 1999, an earthquake devastated much of Taiwan, toppling buildings, knocking out electricity, and killing 2,500 people. Within days, factories as far away as California and Texas began to close. Cut off from their supplies of semiconductor chips, companies like Dell and Hewlett-Packard began to shutter assembly lines and send workers home. A disaster that only a decade earlier would have been mainly local in nature almost cascaded into a grave global crisis. The quake, in an instant, illustrated just how closely connected the world had become and just how radically different are the risks we all now face.”1The COVID-19 crisis forced people throughout the United States to recognize a problem previously mainly experienced by those in venues hurt by outsourcing and trade-related job loss: The United States no longer can make many basic goods it needs.
https://www.citizen.org/wp-content/uploads/Public-Citizen-Written-Testimony-Covid-and-trade-with-Add-Submission.pdf
WSJ:WeWork’s Adam Neumann to Get Extra $50 Million Payout in SoftBank SettlementDeal
By
Maureen Farrell
and
Eliot Brown
Updated Feb. 24, 2021 10:13 pm ET
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.
The settlement between SoftBank, Mr. Neumann and the other shareholders isn’t final and the terms could still change, the people cautioned. Should the parties reach agreement, potentially in the next few days, it would avert an early-March trial.
WeWork is separately negotiating a combination with a special-purpose acquisition company called BowX Acquisition Corp. that would provide the startup with a public listing, people familiar with the discussions said. While the talks could still fall apart and other options are being considered, WeWork and BowX could reach agreement as soon as next week, some of the people said.
_
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
By
Maureen Farrell
and
Eliot Brown
Updated Feb. 24, 2021 10:13 pm ET
WeWork co-founder and former Chief Executive Adam Neumann is set to reap an extra $50 million windfall and other benefits as part of an agreement that would settle a bitter dispute he and other early investors in the shared-office-space provider have waged with SoftBank Group Corp., according to people familiar with the matter.
As The Wall Street Journal reported earlier this week, the parties are closing in on a deal in which SoftBank, WeWork’s majority shareholder, would buy about $1.5 billion of stock from other investors, including nearly $500 million from Mr. Neumann. That is about half as much as it previously planned to buy.
But part of the deal not previously reported sets Mr. Neumann apart from other shareholders. It calls for SoftBank to give the 41-year-old the $50 million special payout and extend by five years a $430 million loan it made to him in late 2019, the people said. SoftBank is also slated to pay $50 million for Mr. Neumann’s legal fees. It isn’t clear how much it is paying for the other shareholders’ legal fees.
The settlement between SoftBank, Mr. Neumann and the other shareholders isn’t final and the terms could still change, the people cautioned. Should the parties reach agreement, potentially in the next few days, it would avert an early-March trial.
WeWork is separately negotiating a combination with a special-purpose acquisition company called BowX Acquisition Corp. that would provide the startup with a public listing, people familiar with the discussions said. While the talks could still fall apart and other options are being considered, WeWork and BowX could reach agreement as soon as next week, some of the people said.
_
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Annals of the law: "viewed in context, Mr. Carlson cannot be understood to have been stating facts"
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK KAREN MCDOUGAL, Plaintiff, -againstFOX NEWS NETWORK, LLC Defendant. 1:19-cv-11161 (MKV) OPINION AND ORDER GRANTING MOTION TO DISMISS MARY KAY VYSKOCIL, United States District Judge 9/24/2020:
Excerpts:
Fox News first argues that, viewed in context, Mr. Carlson cannot be understood to have been stating facts, but instead that he was delivering an opinion using hyperbole for effect. See Def. Br. at 12-15. Fox News cites to a litany of cases which hold that accusing a person of “extortion” or “blackmail” simply is “rhetorical hyperbole,” incapable of being defamatory.
* * *
Plaintiff Karen McDougal filed this action asserting a single claim of slander per se after she allegedly was defamed by a segment on the popular program “Tucker Carlson Tonight,” which is produced by Defendant Fox News Network, LLC (“Fox News”) and airs on Fox News Channel. Specifically, Ms. McDougal alleges that the host of the show, Tucker Carlson, accused her of extorting now-President Donald J. Trump out of approximately $150,000 in exchange for her silence about an alleged affair between Ms. McDougal and President Trump. After the case was removed from New York state court, Fox News moved to dismiss Ms. McDougal’s claim on the grounds that Mr. Carlson’s statements were not statements of fact and that she failed adequately to allege actual malice. For the reasons stated herein, Fox News’s Motion to Dismiss is GRANTED.
https://images.law.com/contrib/content/uploads/documents/389/116288/McDougal-Defamation-Dismiss.pdf
UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK KAREN MCDOUGAL, Plaintiff, -againstFOX NEWS NETWORK, LLC Defendant. 1:19-cv-11161 (MKV) OPINION AND ORDER GRANTING MOTION TO DISMISS MARY KAY VYSKOCIL, United States District Judge 9/24/2020:
Excerpts:
Fox News first argues that, viewed in context, Mr. Carlson cannot be understood to have been stating facts, but instead that he was delivering an opinion using hyperbole for effect. See Def. Br. at 12-15. Fox News cites to a litany of cases which hold that accusing a person of “extortion” or “blackmail” simply is “rhetorical hyperbole,” incapable of being defamatory.
* * *
Plaintiff Karen McDougal filed this action asserting a single claim of slander per se after she allegedly was defamed by a segment on the popular program “Tucker Carlson Tonight,” which is produced by Defendant Fox News Network, LLC (“Fox News”) and airs on Fox News Channel. Specifically, Ms. McDougal alleges that the host of the show, Tucker Carlson, accused her of extorting now-President Donald J. Trump out of approximately $150,000 in exchange for her silence about an alleged affair between Ms. McDougal and President Trump. After the case was removed from New York state court, Fox News moved to dismiss Ms. McDougal’s claim on the grounds that Mr. Carlson’s statements were not statements of fact and that she failed adequately to allege actual malice. For the reasons stated herein, Fox News’s Motion to Dismiss is GRANTED.
https://images.law.com/contrib/content/uploads/documents/389/116288/McDougal-Defamation-Dismiss.pdf
Slate/Mark Joseph Stern on the SCOTUS "Shadow Docket"
EXCERPT:
Over the past few years, the Supreme Court has dramatically altered the way it decides most cases—without acknowledging or justifying this radical shift. More and more often, the justices forgo the usual appeals procedure in favor of rushed decision-making behind closed doors in what’s known as “the shadow docket.” They issue late-night opinions on the merits of a case without hearing arguments or receiving full briefing, and often refuse to reveal who authored the opinion, or even how each justice voted. The public is then left to guess why or how the law has changed and what reasoning the court has embraced. These emergency orders are supposed to be a rare exception; today, however, the court regularly uses them to make law in hugely controversial cases, including disputes over the border wall, COVID-19 restrictions, and executions. On Thursday, the House Judiciary Committee held a hearing to decide what, if anything, Congress can do to address a problem that’s spiraling out of control.
https://slate.com/news-and-politics/2021/02/supreme-court-shadow-docket-house-hearing.html?
EXCERPT:
Over the past few years, the Supreme Court has dramatically altered the way it decides most cases—without acknowledging or justifying this radical shift. More and more often, the justices forgo the usual appeals procedure in favor of rushed decision-making behind closed doors in what’s known as “the shadow docket.” They issue late-night opinions on the merits of a case without hearing arguments or receiving full briefing, and often refuse to reveal who authored the opinion, or even how each justice voted. The public is then left to guess why or how the law has changed and what reasoning the court has embraced. These emergency orders are supposed to be a rare exception; today, however, the court regularly uses them to make law in hugely controversial cases, including disputes over the border wall, COVID-19 restrictions, and executions. On Thursday, the House Judiciary Committee held a hearing to decide what, if anything, Congress can do to address a problem that’s spiraling out of control.
https://slate.com/news-and-politics/2021/02/supreme-court-shadow-docket-house-hearing.html?
COVID variants and life after vaccination
DAR comment:
Many sources, like the Economist article excerpted below, predict that people currently vaccinated against COVID may remain susceptible to emerging mutant strains. For the elderly and other susceptible people, vaccination may not mean that precautions should be dropped. Such measures as social distancing will remain important. The hopeful news within that bad news is that mutants may not spread as rapidly as feared, and vaccines can be tweaked in the future to address mutant COVID strains, and even current vaccines are likely to deter life-threatening illness from mutants. DAR
EXCERPTS:
Another reason for covid-19’s persistence is that, even as vaccines are making sars-cov-2 less infectious and protecting people against death, new viral variants are undoing some of their good work. For one thing, successful variants are more infectious—anything from 25-40% in the case of b.1.1.7 which was first found in Britain. Infection is governed by the dizzying mathematics of exponential growth, so cases and deaths accumulate rapidly even if the variant is no more deadly. To get a given level of viral suppression, more onerous social distancing is needed.
In addition, new variants may withstand current vaccines. The ones found in Brazil and South Africa may also be defeating the immunity acquired from a previous covid-19 infection. The hope is that such cases will be milder, because the immune system has been primed by the first encounter with the disease. Even if that is true, the virus will continue to circulate, finding unprotected people and—because that is what viruses do—evolving new strains, some of which will be better at evading the defences that societies have mounted against them.
For all these reasons, governments need to start planning for covid-19 as an endemic disease. . . . The adjustment to living with covid-19 begins with medical science. Work has already started on tweaking vaccines to confer protection against variants. That should go along with more surveillance of mutations that are spreading and accelerated regulatory approval for booster shots. Meanwhile treatments will be required to save more of those who contract the disease from death or serious illness. The best outcome would be for a combination of acquired immunity, regular booster jabs of tweaked vaccines and a menu of therapies to ensure that covid-19 need rarely be life-threatening. But that outcome is not guaranteed.
To the extent that medicine alone cannot prevent lethal outbreaks of covid-19, the burden will also fall on behaviour, just as it has in most of the pandemic. But rather than national lockdowns and months-long school closures, which come at a huge price, the responsibility should fall more heavily on individuals. Habits like mask-wearing may become part of everyday life. Vaccine passports and restrictions in crowded spaces could become mandatory. Vulnerable people will have to maintain great vigilance.
https://www.economist.com/leaders/2021/02/13/how-well-will-vaccines-work
Similarly from WSJ
Research by Dr. Lessells and his colleagues showed that the B.1.351 variant had initially spread most rapidly in the South African province of Eastern Cape, where many residents had already contracted Covid-19 and recovered. He and his colleagues also showed in a series of lab experiments that antibodies from previously infected individuals were less effective against B.1.351 than earlier coronavirus variants.
Data from another study in South Africa seemed to back those findings, suggesting that previous infection may not fully protect against infection by the variant.
from:https://www.wsj.com/articles/covid-19-vaccination-delays-could-bring-more-virus-variants-impede-efforts-to-end-pandemic-11613817002?mod=hp_lead_pos1
DAR comment:
Many sources, like the Economist article excerpted below, predict that people currently vaccinated against COVID may remain susceptible to emerging mutant strains. For the elderly and other susceptible people, vaccination may not mean that precautions should be dropped. Such measures as social distancing will remain important. The hopeful news within that bad news is that mutants may not spread as rapidly as feared, and vaccines can be tweaked in the future to address mutant COVID strains, and even current vaccines are likely to deter life-threatening illness from mutants. DAR
EXCERPTS:
Another reason for covid-19’s persistence is that, even as vaccines are making sars-cov-2 less infectious and protecting people against death, new viral variants are undoing some of their good work. For one thing, successful variants are more infectious—anything from 25-40% in the case of b.1.1.7 which was first found in Britain. Infection is governed by the dizzying mathematics of exponential growth, so cases and deaths accumulate rapidly even if the variant is no more deadly. To get a given level of viral suppression, more onerous social distancing is needed.
In addition, new variants may withstand current vaccines. The ones found in Brazil and South Africa may also be defeating the immunity acquired from a previous covid-19 infection. The hope is that such cases will be milder, because the immune system has been primed by the first encounter with the disease. Even if that is true, the virus will continue to circulate, finding unprotected people and—because that is what viruses do—evolving new strains, some of which will be better at evading the defences that societies have mounted against them.
For all these reasons, governments need to start planning for covid-19 as an endemic disease. . . . The adjustment to living with covid-19 begins with medical science. Work has already started on tweaking vaccines to confer protection against variants. That should go along with more surveillance of mutations that are spreading and accelerated regulatory approval for booster shots. Meanwhile treatments will be required to save more of those who contract the disease from death or serious illness. The best outcome would be for a combination of acquired immunity, regular booster jabs of tweaked vaccines and a menu of therapies to ensure that covid-19 need rarely be life-threatening. But that outcome is not guaranteed.
To the extent that medicine alone cannot prevent lethal outbreaks of covid-19, the burden will also fall on behaviour, just as it has in most of the pandemic. But rather than national lockdowns and months-long school closures, which come at a huge price, the responsibility should fall more heavily on individuals. Habits like mask-wearing may become part of everyday life. Vaccine passports and restrictions in crowded spaces could become mandatory. Vulnerable people will have to maintain great vigilance.
https://www.economist.com/leaders/2021/02/13/how-well-will-vaccines-work
Similarly from WSJ
Research by Dr. Lessells and his colleagues showed that the B.1.351 variant had initially spread most rapidly in the South African province of Eastern Cape, where many residents had already contracted Covid-19 and recovered. He and his colleagues also showed in a series of lab experiments that antibodies from previously infected individuals were less effective against B.1.351 than earlier coronavirus variants.
Data from another study in South Africa seemed to back those findings, suggesting that previous infection may not fully protect against infection by the variant.
from:https://www.wsj.com/articles/covid-19-vaccination-delays-could-bring-more-virus-variants-impede-efforts-to-end-pandemic-11613817002?mod=hp_lead_pos1
Real estate agents caught on tape steering buyers away from homes with less commission
“I’m not even going to show it to them, to be honest with you,” the real estate agent said. “I can’t help you to sell something that’s wiping out my profession.”
In recording after recording, Houston real estate agents are heard saying they will not show certain homes to their clients — even though the houses meet all the buyers’ desires. Conversations recorded by California-based discount brokerage REX show that many actually steer clients away from homes that offer less lucrative commissions. See Houston real estate agents caught on tape steering buyers away from homes with less commission - Coque Nexus 5
When Stephens Research hosted am investors conference about REX, it described REX his way: REX was created in 2015 to bring residential real estate into line with today's expectations by using AI and big data to push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at lower costs. In general, the REX fee is 70% less than traditional agent commissions, which usually totals 5-6%. REX is also unique in that it operates outside of the standard MLS system, which allows the Company to control/minimalize both the sell side and buy side fees (ex. Redfin charges 1.0%-1.5% on the sell side but the consumer typically still pays the standard 2.5%-3.0% for the buy side agent). See https://www.stephens.com/institutional-equities-and-research/research/events/a-conversation-with-rex-homes/
Here are excerpts from the USDOJ press release reflecting a settlement with the NAR this past November that relates to broker practices concerning buyer brokers:
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers. See https://www.justice.gov/opa/pr/justice-department-files-antitrust-case-and-simultaneous-settlement-requiring-national
“I’m not even going to show it to them, to be honest with you,” the real estate agent said. “I can’t help you to sell something that’s wiping out my profession.”
In recording after recording, Houston real estate agents are heard saying they will not show certain homes to their clients — even though the houses meet all the buyers’ desires. Conversations recorded by California-based discount brokerage REX show that many actually steer clients away from homes that offer less lucrative commissions. See Houston real estate agents caught on tape steering buyers away from homes with less commission - Coque Nexus 5
When Stephens Research hosted am investors conference about REX, it described REX his way: REX was created in 2015 to bring residential real estate into line with today's expectations by using AI and big data to push past the outmoded practices of traditional real estate brokers to provide a superior outcome for both buyers and sellers at lower costs. In general, the REX fee is 70% less than traditional agent commissions, which usually totals 5-6%. REX is also unique in that it operates outside of the standard MLS system, which allows the Company to control/minimalize both the sell side and buy side fees (ex. Redfin charges 1.0%-1.5% on the sell side but the consumer typically still pays the standard 2.5%-3.0% for the buy side agent). See https://www.stephens.com/institutional-equities-and-research/research/events/a-conversation-with-rex-homes/
Here are excerpts from the USDOJ press release reflecting a settlement with the NAR this past November that relates to broker practices concerning buyer brokers:
The Department of Justice today filed a civil lawsuit against the National Association of REALTORS® (NAR) alleging that NAR established and enforced illegal restraints on the ways that REALTORS® compete.
The Antitrust Division simultaneously filed a proposed settlement that requires NAR to repeal and modify its rules to provide greater transparency to home buyers about the commissions of brokers representing home buyers (buyer brokers), cease misrepresenting that buyer broker services are free, eliminate rules that prohibit filtering multiple listing services (MLS) listings based on the level of buyer broker commissions, and change its rules and policy which limit access to lockboxes to only NAR-affiliated real estate brokers.
According to the complaint, NAR’s anticompetitive rules, policies, and practices include: (i) prohibiting MLSs that are affiliated with NAR from disclosing to prospective buyers the commission that the buyer broker will earn; (ii) allowing buyer brokers to misrepresent to buyers that a buyer broker’s services are free; (iii) enabling buyer brokers to filter MLS listings based on the level of buyer broker commissions offered; and (iv) limiting access to the lockboxes that provide licensed brokers with access to homes for sale to brokers who work for a NAR-affiliated MLS. These NAR rules, policies, practices have been widely adopted by NAR-affiliated MLSs resulting in decreased competition among real estate brokers. See https://www.justice.gov/opa/pr/justice-department-files-antitrust-case-and-simultaneous-settlement-requiring-national
Confused COVID vaccine scheduling blamed on inadequate Maryland State computer software by Montgomery County Executive Elrich
On a recent radio program, hosted by Harold Fisher, Montgomery County Executive Marc Elrich indicated that a software problem was allowing Montgomery County teachers and staff to sign up for vaccine appointments, even though they are not yet eligible in Montgomery County. Elrich said the state's website was unable to set criteria that would differentiate counties and their current vaccine priority groups.
See https://www.wusa9.com/article/news/local/maryland-vaccine-appointments-for-teachers-some-turned-away/65-fdaf261f-b839-44b0-ab04-98c1721c940b
Similarly, Elrich explained in a recent public video report that because the state's website softeware was unable to set criteria that would differentiate current vaccine priority groups, people are sometimes able to use shared computer links to sign up for vaccinations out of the priority order set by the County. He asked that people not do that. He expressed hope that the State would develop software that can differentiate between priority groups.
See https://www.youtube.com/watch?v=_nlr04wV5n0&feature=youtu.be -- beginning at minute 7.00
--
NYT Opinion https://www.nytimes.com/section/opinion
Yes, It Matters That People Are Jumping the Vaccine Line
By Elisabeth Rosenthal
EXCERPT:
For weeks Americans have watched those who are well connected, wealthy or crafty “jump the line” to get a vaccine, while others are stuck, endlessly waiting on hold to get an appointment, watching sign-up websites crash or loitering outside clinics in the often-futile hope of getting a shot.
To eliminate this knock-out-your-neighbor race to score a vaccine, the administration needs to find ways to build trust in the system. It will take more than “more people, more places, more supply” to end the Darwinian competition and restore confidence and order.
That’s in part because, desperate to end their own pandemic nightmare, many of our most respected institutions and politicians have behaved badly.
Yes, It Matters That People Are Jumping the Vaccine Line
By Elisabeth Rosenthal
EXCERPT:
For weeks Americans have watched those who are well connected, wealthy or crafty “jump the line” to get a vaccine, while others are stuck, endlessly waiting on hold to get an appointment, watching sign-up websites crash or loitering outside clinics in the often-futile hope of getting a shot.
To eliminate this knock-out-your-neighbor race to score a vaccine, the administration needs to find ways to build trust in the system. It will take more than “more people, more places, more supply” to end the Darwinian competition and restore confidence and order.
That’s in part because, desperate to end their own pandemic nightmare, many of our most respected institutions and politicians have behaved badly.
Matt Stiller: big pharma chains= slow vaccine rollout
(From his newsletter BIG)
The government partnered with chains CVS and Walgreens to deploy the vaccine, and these chains have done a bad job. There’s a natural experiment showing how independently owned pharmacies have outperformed the chains. Roughly 35% of pharmacies are independent, so we can look at where there are a lot of chain pharmacies, and where there aren’t, and then compare the two. A lot of the places dominated by chains, like Virginia and California, are blue states with significant public health systems and expertise, while red states like South Dakota and Alaska tend to have more suspicion of government and have more independent pharmacies.
And what do we find? Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out (based on the percentage of supply used). Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. Who is doing well? The leading states are rural, South Dakota, West Virginia, and New Mexico. Now, rolling out this kind of campaign is difficult, and the type of drug store ownership structure is only one factor. State leadership and public institutional make-up matters. But private infrastructure is key as well. And in fact, if you look at one state that has been leading since the beginning of the roll-out - West Virginia - one reason it has done a better job is precisely because it doesn’t really have very many chain pharmacies.
West Virginia is poor and rural, precisely what would make it harder to organize a vaccine strategy. And yet, the state, with its strategy based on independent pharmacies, managed to offer vaccines to every nursing home resident by the end of December, a month before nearly everyone else. As NPR’s Alex Leo reported, West Virginia stumbled into its independent pharmacy strategy by accident. The Trump administration organized the vaccine roll-out with a recommendation that states partner with large chains CVS and Walgreens on vaccinating people in nursing homes and long-term assisted living facilities. But in West Virginia, there just aren’t have enough CVS or Walgreens stores for the partnership to make sense. So instead, the state had to go directly to its local pharmacies, of which there are 250, mostly in rural areas.
It was a blessing in disguise, as these pharmacies turned out to be better than the unwieldy “bureaucracy of huge national chains,” as Leo put it. The small pharmacies already had data on many patients, and they could schedule appointments, match doses, and handle paperwork quickly, all of which confounded the giants.
(From his newsletter BIG)
The government partnered with chains CVS and Walgreens to deploy the vaccine, and these chains have done a bad job. There’s a natural experiment showing how independently owned pharmacies have outperformed the chains. Roughly 35% of pharmacies are independent, so we can look at where there are a lot of chain pharmacies, and where there aren’t, and then compare the two. A lot of the places dominated by chains, like Virginia and California, are blue states with significant public health systems and expertise, while red states like South Dakota and Alaska tend to have more suspicion of government and have more independent pharmacies.
And what do we find? Illinois, where Walgreens has its headquarters, is 11th slowest in the country in terms of vaccine roll-out (based on the percentage of supply used). Rhode Island, where that wonderful consumer-based CVS is based, is one of the very worst, in the bottom five. Who is doing well? The leading states are rural, South Dakota, West Virginia, and New Mexico. Now, rolling out this kind of campaign is difficult, and the type of drug store ownership structure is only one factor. State leadership and public institutional make-up matters. But private infrastructure is key as well. And in fact, if you look at one state that has been leading since the beginning of the roll-out - West Virginia - one reason it has done a better job is precisely because it doesn’t really have very many chain pharmacies.
West Virginia is poor and rural, precisely what would make it harder to organize a vaccine strategy. And yet, the state, with its strategy based on independent pharmacies, managed to offer vaccines to every nursing home resident by the end of December, a month before nearly everyone else. As NPR’s Alex Leo reported, West Virginia stumbled into its independent pharmacy strategy by accident. The Trump administration organized the vaccine roll-out with a recommendation that states partner with large chains CVS and Walgreens on vaccinating people in nursing homes and long-term assisted living facilities. But in West Virginia, there just aren’t have enough CVS or Walgreens stores for the partnership to make sense. So instead, the state had to go directly to its local pharmacies, of which there are 250, mostly in rural areas.
It was a blessing in disguise, as these pharmacies turned out to be better than the unwieldy “bureaucracy of huge national chains,” as Leo put it. The small pharmacies already had data on many patients, and they could schedule appointments, match doses, and handle paperwork quickly, all of which confounded the giants.
NYT Reports on misbahavior and ripoffs by "consumer complaint" sites
EXCERPT (slightly edited)
Ripoff Report is one of hundreds of “complaint sites” — others include She’s a Homewrecker, Cheaterbot and Deadbeats Exposed — that let people anonymously expose an unreliable handyman, a cheating ex, a sexual predator. Ripoff Report offers “arbitration services,” which cost up to $2,000, to get rid of “substantially false” information.
But there is no fact-checking. The sites often charge money to take down posts, even defamatory ones. And there is limited accountability. Ripoff Report, like the others, notes on its site that, thanks to Section 230 of the federal Communications Decency Act, it isn’t responsible for what its users post.
If someone posts false information about you on the Ripoff Report, the CDA prohibits you from holding us liable for the statements which others have written. You can always sue the author if you want, but you can’t sue Ripoff Report just because we provide a forum for speech.
With that impunity, Ripoff Report and its ilk are willing to host pure, uncensored vengeance.
https://www.nytimes.com/2021/01/30/technology/change-my-google-results.html?action=click&module=Top%20Stories&pgtype=Homepage
EXCERPT (slightly edited)
Ripoff Report is one of hundreds of “complaint sites” — others include She’s a Homewrecker, Cheaterbot and Deadbeats Exposed — that let people anonymously expose an unreliable handyman, a cheating ex, a sexual predator. Ripoff Report offers “arbitration services,” which cost up to $2,000, to get rid of “substantially false” information.
But there is no fact-checking. The sites often charge money to take down posts, even defamatory ones. And there is limited accountability. Ripoff Report, like the others, notes on its site that, thanks to Section 230 of the federal Communications Decency Act, it isn’t responsible for what its users post.
If someone posts false information about you on the Ripoff Report, the CDA prohibits you from holding us liable for the statements which others have written. You can always sue the author if you want, but you can’t sue Ripoff Report just because we provide a forum for speech.
With that impunity, Ripoff Report and its ilk are willing to host pure, uncensored vengeance.
https://www.nytimes.com/2021/01/30/technology/change-my-google-results.html?action=click&module=Top%20Stories&pgtype=Homepage
The next USDOJ Antitrust chief should be an experienced litigator for plaintiffs, preferably for government plaintiffs
By Don Allen Resnikoff
The Hill for 1/19/21 reports that that President-elect Joe Biden’s top candidate to run the Department of Justice’s antitrust division is Renata Hesse. She is known for representing Google in some antitrust cases with co-counsel Ted Cruz (R-Texas).
Renata Hesse’s resume on the Sullivan and Cromwell website says that she is co-head of the Firm’s Antitrust Group. Her practice focuses on antitrust counseling, cartels and merger clearance.
The resume also refers to her experience with the USDOJ Antitrust Division. That experience includes including leading the Antitrust Division at the Department of Justice twice as Acting Assistant Attorney General and serving that division for more than 15 years. During her time at the Division, Ms. Hesse worked on a number of high profile transactions, as well as other key initiatives related to the licensing and enforcement of standards-essential patents. She also had oversight of the criminal program as the Principal Deputy Assistant Attorney General, where she was a decision-maker on a range of significant criminal matters. Ms. Hesse was previously Chief of the Networks and Technology Section and a Trial Attorney in two Division sections.
Renata Hesse is plainly a well-qualified and excellent candidate, but I hope that there is a wide competition for the USDOJ antitrust chief position that includes consideration of a candidate’s court room experience organizing and litigating complex cases for plaintiffs, particularly government plaintiffs.
My experience as a USDOJ trial attorney is that relatively few USDOJ antitrust cases actually go to trial – most are settled without a trial. As a consequence of apparent lack of confidence in the litigation abilties of regular government staff, USDOJ has on occasion bypassed staff and hired outside counsel to litigate its antitrust cases. A well known example is USDOJ engagement of David Boies as lead litigator for its antitrust lawsuit against Microsoft in the late 1990s.
Some insight into the USDOJ’s current in-house litigation staff resources was provided by past USDOJ antitrust chief Makan Delrahim’s line-up of USDOJ lawyers for its recently announced action against Google.
Delrahim’s choice as lead lawyer was Kenneth Dintzer, a longtime trial attorney now in the DOJ’s Civil Division – not the Antitrust Division. Dintzer has handled high-profile cases for the department over more than 20 years. Dintzer led the government’s antitrust prosecution of General Electric Co. for allegedly anticompetitive medical imaging supply arrangements with hospitals in the mid-1990s.
“The Division has tremendous confidence in the hardworking litigation team led by Ken Dintzer, one of the Department’s most experienced and talented trial lawyers,” said a USDOJ representative.
There are other possible candidates to lead the USDOJ’s Antitrust Division with substantial court room experience and demonstrated ability in organizing and litigating complex cases for government plaintiffs.
One is Thomas Greene. His resume on the Hastings College of Law website reflects that he is a trial attorney with the Antitrust Division of the U.S. Department of Justice where he investigates and prosecutes criminal and civil antitrust actions. He was previously special trial counsel for the Federal Trade Commission’s Bureau of Competition where he led successful challenges against major health care mergers in Idaho and Illinois.
Also, he served in the California Attorney General’s Office where he was chief of antitrust. Among other cases, he successfully argued an appeal to the United States Supreme Court vindicating indirect purchaser remedies under state antitrust law, California v. ARC America Corp., 490 U.S. 93 (1989), and served as national class counsel in California v. Hartford Fire Insurance Co. He also served as the Chair of the Multistate Antitrust Task Force of the National Association of Attorneys General.
In addition to antitrust litigation, he led special task forces litigating cases against major tobacco manufacturers and energy companies, and subsequently served as Chief Assistant Attorney General for the Public Rights Division, the 300-attorney, affirmative litigation arm of the California Attorney General’s Office.
Another attorney with a strong background representing government plaintiffs in litigation is Jay Himes. His resume on the Labaton Sucharow website reflects that prior to joining Labaton Sucharow, Jay served for nearly eight years as the Antitrust Bureau Chief in the New York Attorney General's office. In that role, he was the States’ principal representative in the marathon 2001 negotiations that led to settlement of the governments’ landmark monopolization case against Microsoft. Thereafter, Jay partnered with U.S. DOJ officials to lead the Microsoft judgment monitoring and enforcement effort, an activity that continued throughout his time at the Attorney General's office.
During his tenure as New York's chief antitrust official, Jay also led significant, high-profile antitrust investigations and enforcement actions. These cases included In re Buspirone Antitrust Litigation ($100 million settlement), In re Cardizem CD Antitrust Litigation ($80 million settlement), and In re Compact Disc Antitrust Litigation ($67 million settlement). Under Jay's leadership, the New York Bureau secured what were at the time the two largest antitrust civil penalties recoveries ever achieved under the State's antitrust statute.
By Don Allen Resnikoff
The Hill for 1/19/21 reports that that President-elect Joe Biden’s top candidate to run the Department of Justice’s antitrust division is Renata Hesse. She is known for representing Google in some antitrust cases with co-counsel Ted Cruz (R-Texas).
Renata Hesse’s resume on the Sullivan and Cromwell website says that she is co-head of the Firm’s Antitrust Group. Her practice focuses on antitrust counseling, cartels and merger clearance.
The resume also refers to her experience with the USDOJ Antitrust Division. That experience includes including leading the Antitrust Division at the Department of Justice twice as Acting Assistant Attorney General and serving that division for more than 15 years. During her time at the Division, Ms. Hesse worked on a number of high profile transactions, as well as other key initiatives related to the licensing and enforcement of standards-essential patents. She also had oversight of the criminal program as the Principal Deputy Assistant Attorney General, where she was a decision-maker on a range of significant criminal matters. Ms. Hesse was previously Chief of the Networks and Technology Section and a Trial Attorney in two Division sections.
Renata Hesse is plainly a well-qualified and excellent candidate, but I hope that there is a wide competition for the USDOJ antitrust chief position that includes consideration of a candidate’s court room experience organizing and litigating complex cases for plaintiffs, particularly government plaintiffs.
My experience as a USDOJ trial attorney is that relatively few USDOJ antitrust cases actually go to trial – most are settled without a trial. As a consequence of apparent lack of confidence in the litigation abilties of regular government staff, USDOJ has on occasion bypassed staff and hired outside counsel to litigate its antitrust cases. A well known example is USDOJ engagement of David Boies as lead litigator for its antitrust lawsuit against Microsoft in the late 1990s.
Some insight into the USDOJ’s current in-house litigation staff resources was provided by past USDOJ antitrust chief Makan Delrahim’s line-up of USDOJ lawyers for its recently announced action against Google.
Delrahim’s choice as lead lawyer was Kenneth Dintzer, a longtime trial attorney now in the DOJ’s Civil Division – not the Antitrust Division. Dintzer has handled high-profile cases for the department over more than 20 years. Dintzer led the government’s antitrust prosecution of General Electric Co. for allegedly anticompetitive medical imaging supply arrangements with hospitals in the mid-1990s.
“The Division has tremendous confidence in the hardworking litigation team led by Ken Dintzer, one of the Department’s most experienced and talented trial lawyers,” said a USDOJ representative.
There are other possible candidates to lead the USDOJ’s Antitrust Division with substantial court room experience and demonstrated ability in organizing and litigating complex cases for government plaintiffs.
One is Thomas Greene. His resume on the Hastings College of Law website reflects that he is a trial attorney with the Antitrust Division of the U.S. Department of Justice where he investigates and prosecutes criminal and civil antitrust actions. He was previously special trial counsel for the Federal Trade Commission’s Bureau of Competition where he led successful challenges against major health care mergers in Idaho and Illinois.
Also, he served in the California Attorney General’s Office where he was chief of antitrust. Among other cases, he successfully argued an appeal to the United States Supreme Court vindicating indirect purchaser remedies under state antitrust law, California v. ARC America Corp., 490 U.S. 93 (1989), and served as national class counsel in California v. Hartford Fire Insurance Co. He also served as the Chair of the Multistate Antitrust Task Force of the National Association of Attorneys General.
In addition to antitrust litigation, he led special task forces litigating cases against major tobacco manufacturers and energy companies, and subsequently served as Chief Assistant Attorney General for the Public Rights Division, the 300-attorney, affirmative litigation arm of the California Attorney General’s Office.
Another attorney with a strong background representing government plaintiffs in litigation is Jay Himes. His resume on the Labaton Sucharow website reflects that prior to joining Labaton Sucharow, Jay served for nearly eight years as the Antitrust Bureau Chief in the New York Attorney General's office. In that role, he was the States’ principal representative in the marathon 2001 negotiations that led to settlement of the governments’ landmark monopolization case against Microsoft. Thereafter, Jay partnered with U.S. DOJ officials to lead the Microsoft judgment monitoring and enforcement effort, an activity that continued throughout his time at the Attorney General's office.
During his tenure as New York's chief antitrust official, Jay also led significant, high-profile antitrust investigations and enforcement actions. These cases included In re Buspirone Antitrust Litigation ($100 million settlement), In re Cardizem CD Antitrust Litigation ($80 million settlement), and In re Compact Disc Antitrust Litigation ($67 million settlement). Under Jay's leadership, the New York Bureau secured what were at the time the two largest antitrust civil penalties recoveries ever achieved under the State's antitrust statute.
USDOJ press release:
Three Individuals Affiliated With the Oath Keepers Indicted in Federal Court for Conspiracy to Obstruct Congress on Jan. 6, 2021
Three individuals associated with the Oath Keepers, a paramilitary organization focused on recruitment of current and former military, law enforcement, and first responder personnel, were indicted today in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges.
Jessica Marie Watkins, 38, and Donovan Ray Crowl, 50, both of Champaign County, Ohio; and Thomas Caldwell, 65, of Clarke County, Virginia, were indicted today in federal court in the District of Columbia on charges of conspiracy, obstructing an official proceeding, destruction of government property, and unlawful entry on restricted building or grounds, in violation of 18 U.S.C. §§ 371, 1512, 1361, and 1752. Watkins and Crowl were arrested on Jan. 18; Caldwell was arrested on Jan. 19. All three individuals originally were charged by criminal complaint. The maximum penalty for Obstructing an Official Proceeding is a sentence of up to 20 years in prison.
According to the charging documents, Watkins, Crowl, and Caldwell communicated with each another in advance of the Jan. 6, 2021, incursion on the U.S. Capitol and coordinated their attack. Watkins, Crowl, and Caldwell are all affiliated with the Oath Keepers, while Watkins and Crowl are also members of the Ohio State Regular Militia. Watkins claimed to be a commanding officer within the Ohio State Regular Militia in a social media post.
According to the indictment, the three defendants initiated their communications and coordination in November 2020 and continued through on or about Jan. 19, 2021, when Caldwell was arrested. The exchanges vary in topics from a call to action to logistics, including lodging options, coordinating calls to discuss the plan, and joining forces with other Oath Keeper chapters. On Dec. 31, 2020, Caldwell posted, “THIS IS OUR CALL TO ACTION, FREINDS! SEE YOU ON THE 6TH IN WASHINGTON, D.C. ALONG WITH 2 MILLION OTHER LIKE-MINDED PATRIOTS.” In a subsequent post on Jan. 2, 2021, Caldwell stated, “It begins for real Jan 5 and 6 on Washington D.C. when we mobilize in the streets. Let them try to certify some crud on capitol hill with a million or more patriots in the streets. This kettle is set to boil…”
According to the criminal complaint filed on Jan. 19, on Jan. 6, the three documented their participation and whereabouts in or around the U.S. Capitol on social media. Caldwell posted messages on Facebook such as, “We are surging forward. Doors breached[.]” and at 3:05 p.m. posted just, “Inside.” Watkins posted photos of herself, and with Crowl, on her Parler account and captioned a photo by stating, “Me before forcing entry into the Capitol Building. #stopthesteal2 #stormthecapitol #oathkeepers #ohiomilitia.” Subsequently, she posted a video of herself inside the Capitol captioned, “Yeah. We stormed the Capitol today. Teargassed, the whole, 9. Pushed our way into the Rotunda. Made it into the Senate even. The news is lying (even Fox) about the Historical Events we created today.”
In addition to the communication via Facebook and Parler, the FBI obtained an audio recording of Zello communications between Watkins and other suspected Oath Keepers during the Capitol incursion on a channel called “Stop the Steal J6.” As alleged in the indictment, in one transmission Watkins stated, “We have a good group. We have about 30-40 of us. We are sticking together and sticking to the plan.” An unknown male responds, “We’ll see you soon, Jess. Airborne.” Following the U.S. Capitol incursion, Watkins and Crowl each interviewed with the media. During the interviews, both confirmed membership of the Oath Keepers.
Excerpt from https://www.justice.gov/opa/pr/three-individuals-affiliated-oath-keepers-indicted-federal-court-conspiracy-obstruct
Three Individuals Affiliated With the Oath Keepers Indicted in Federal Court for Conspiracy to Obstruct Congress on Jan. 6, 2021
Three individuals associated with the Oath Keepers, a paramilitary organization focused on recruitment of current and former military, law enforcement, and first responder personnel, were indicted today in federal court in the District of Columbia for conspiring to obstruct Congress, among other charges.
Jessica Marie Watkins, 38, and Donovan Ray Crowl, 50, both of Champaign County, Ohio; and Thomas Caldwell, 65, of Clarke County, Virginia, were indicted today in federal court in the District of Columbia on charges of conspiracy, obstructing an official proceeding, destruction of government property, and unlawful entry on restricted building or grounds, in violation of 18 U.S.C. §§ 371, 1512, 1361, and 1752. Watkins and Crowl were arrested on Jan. 18; Caldwell was arrested on Jan. 19. All three individuals originally were charged by criminal complaint. The maximum penalty for Obstructing an Official Proceeding is a sentence of up to 20 years in prison.
According to the charging documents, Watkins, Crowl, and Caldwell communicated with each another in advance of the Jan. 6, 2021, incursion on the U.S. Capitol and coordinated their attack. Watkins, Crowl, and Caldwell are all affiliated with the Oath Keepers, while Watkins and Crowl are also members of the Ohio State Regular Militia. Watkins claimed to be a commanding officer within the Ohio State Regular Militia in a social media post.
According to the indictment, the three defendants initiated their communications and coordination in November 2020 and continued through on or about Jan. 19, 2021, when Caldwell was arrested. The exchanges vary in topics from a call to action to logistics, including lodging options, coordinating calls to discuss the plan, and joining forces with other Oath Keeper chapters. On Dec. 31, 2020, Caldwell posted, “THIS IS OUR CALL TO ACTION, FREINDS! SEE YOU ON THE 6TH IN WASHINGTON, D.C. ALONG WITH 2 MILLION OTHER LIKE-MINDED PATRIOTS.” In a subsequent post on Jan. 2, 2021, Caldwell stated, “It begins for real Jan 5 and 6 on Washington D.C. when we mobilize in the streets. Let them try to certify some crud on capitol hill with a million or more patriots in the streets. This kettle is set to boil…”
According to the criminal complaint filed on Jan. 19, on Jan. 6, the three documented their participation and whereabouts in or around the U.S. Capitol on social media. Caldwell posted messages on Facebook such as, “We are surging forward. Doors breached[.]” and at 3:05 p.m. posted just, “Inside.” Watkins posted photos of herself, and with Crowl, on her Parler account and captioned a photo by stating, “Me before forcing entry into the Capitol Building. #stopthesteal2 #stormthecapitol #oathkeepers #ohiomilitia.” Subsequently, she posted a video of herself inside the Capitol captioned, “Yeah. We stormed the Capitol today. Teargassed, the whole, 9. Pushed our way into the Rotunda. Made it into the Senate even. The news is lying (even Fox) about the Historical Events we created today.”
In addition to the communication via Facebook and Parler, the FBI obtained an audio recording of Zello communications between Watkins and other suspected Oath Keepers during the Capitol incursion on a channel called “Stop the Steal J6.” As alleged in the indictment, in one transmission Watkins stated, “We have a good group. We have about 30-40 of us. We are sticking together and sticking to the plan.” An unknown male responds, “We’ll see you soon, Jess. Airborne.” Following the U.S. Capitol incursion, Watkins and Crowl each interviewed with the media. During the interviews, both confirmed membership of the Oath Keepers.
Excerpt from https://www.justice.gov/opa/pr/three-individuals-affiliated-oath-keepers-indicted-federal-court-conspiracy-obstruct
Biden Appointee fires Trump Allies at Radio Free Europe And Other Overseas Networks
By Don Allen Resnikoff
National Public Radio (NPR) and other media report that the new acting head of the U.S. Agency for Global Media, Kelu Chao, has fired the presidents and boards of Radio Free Europe/Radio Liberty, Radio Free Asia and the Middle East Broadcasting Networks. https://www.npr.org/2021/01/22/959848852/usagm-chief-fires-trump-allies-over-radio-free-europe-and-other-networks
In June of 2020 the Trump Administration installed political ally Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences. Prior to his VOA appointment, Pack ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon.
Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired and replaced the heads of three other networks managed by Global Media — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.
In the final days of the Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and top deputy. Staff complained that the director and deputy had abdicated their responsibility to remain independent of government influence.
The Trump administrations misuse of the Voice of America and other publicly funded overseas broadcasters is a reminder that U.S. publicly funded broadcasting should be protected from ever being turned into a narrow partisan or ideological tool. This caution applies to the Voice of America (VOA) and other broadcasters to overseas audiences, but also to domestic broadcasters of the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS).
Concern about possible future partisan misuse of domestic public broadcasting is suggested by past partisan misuse of the Voice of America and other overseas broadcasters during the Trump administration.
Anne Applebaum’s June, 2020 article in The Atlantic explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.” The Guardian newspaper warns against allowing Government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
By Don Allen Resnikoff
National Public Radio (NPR) and other media report that the new acting head of the U.S. Agency for Global Media, Kelu Chao, has fired the presidents and boards of Radio Free Europe/Radio Liberty, Radio Free Asia and the Middle East Broadcasting Networks. https://www.npr.org/2021/01/22/959848852/usagm-chief-fires-trump-allies-over-radio-free-europe-and-other-networks
In June of 2020 the Trump Administration installed political ally Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America and other publicly funded broadcasters that serve overseas audiences. Prior to his VOA appointment, Pack ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon.
Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired and replaced the heads of three other networks managed by Global Media — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund. Pack dissolved the networks’ bipartisan advisory boards and replaced them with panels composed of people widely considered to be Trump loyalists.
In the final days of the Trump administration more than two dozen VOA newsroom employees signed a petition demanding the immediate resignation of their director and top deputy. Staff complained that the director and deputy had abdicated their responsibility to remain independent of government influence.
The Trump administrations misuse of the Voice of America and other publicly funded overseas broadcasters is a reminder that U.S. publicly funded broadcasting should be protected from ever being turned into a narrow partisan or ideological tool. This caution applies to the Voice of America (VOA) and other broadcasters to overseas audiences, but also to domestic broadcasters of the Corporation for Public Broadcasting (CPB) and the Public Broadcasting Service (PBS).
Concern about possible future partisan misuse of domestic public broadcasting is suggested by past partisan misuse of the Voice of America and other overseas broadcasters during the Trump administration.
Anne Applebaum’s June, 2020 article in The Atlantic explains that the Voice of America “was never meant to be the tool of one political party, but rather to present America from a broad, nonpartisan perspective.” The Guardian newspaper warns against allowing Government “to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
Grounds for prosecuting Trump-inspired rioters: Inciting to riot, Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102
By Don Allen Resnikoff
The grounds for prosecuting Trump-inspired rioters who invaded the U.S. Capital building certainly include such straightforward charges as felony destruction of government property, weapons-related offenses, and assault. Among more complex and interesting possible charges is inciting to riot, based on the Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102. Media reports of FBI and other government investigations suggest significant pre-planning of the invasion of the Capital.
The 1968 Act was successfully used as a basis for a federal prosecution just a few months ago, in the case of United States v. Miselis.
The statute has a checkered history because of complaints that it violates Constitutional free speech rights.
The Anti-Riot Act was passed as a section of the Civil Rights Act of 1968. The Anti-Riot Act appears to have been a response to the urban riots of 1964–1967, which some legislators saw as being incited by agitators from outside of affected cities. The passage of time has made the problem of remote inciting to riot more serious, because of the modern use of the internet to encourage and facilitate violent actions. There has been a lot of media reporting about use of the internet to encourage and facilitate the recent violence at the Capital building.
The 1968 law provides, in part: “a) (1) Whoever travels in interstate or foreign commerce or uses any facility of interstate or foreign commerce or uses any facility of interstate or foreign commerce, including, but not limited to, the mail, telegraph, telephone, radio, or television, with intent – (A) to incite a riot; or (B) to organize, promote, encourage, participate in, or carry on a riot; or (C) to commit any act of violence in furtherance of a riot; or (D) to aid or abet any person in inciting or participating in or carrying on a riot or committing any act of violence in furtherance of a riot. . . . ”
The statute was famously used to prosecute leaders of demonstrations at the 1968 Democratic National Convention in Chicago. The defendants in that case are often called “the Chicago 7.” Their story is told in a recent movie and a recently re-issued book of trial transcript excerpts.
When the 7th Circuit Court of Appeals vacated the convictions of the Chicago 7 defendants for inciting a riot in 1972, one judge wrote that the charging statute, the 1968 Anti-Riot Act, violates the Constitution because it is “intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
Since the time of the 1969-70 Chicago 7 trial, prosecutions relying on the Anti-Riot Act of 1968 have been infrequent, but recently there have been several Anti-Riot prosecutions, including against white neo-Nazi groups. The government’s position in the recent cases is that the statute is Constitutionally valid.
Judicial reaction has been mixed. In the 2019 California federal case of U.S. v. Robert Rundo, et al., No. 18-00759-CJC (Central District Ca., 2019) [See https://www.courthousenews.com/wp-content/uploads/2019/06/USvRundoetal-DISMISSAL.pdf], the Court granted Defendants’ motion to dismiss the Indictment on the grounds that the Anti-Riot Act is unconstitutionally overbroad in violation of the First Amendment.
But in United States v. Miselis, No. 19-4550 (4th Cir. Aug. 24, 2020) the appellate Court construed the Anti-Riot Act so as to give it some actionable scope within the Constitution, allowing it to be used as the basis for a criminal conviction. The Court explained while that the Anti-Riot Act “sweeps up a substantial amount of speech that remains protected advocacy,” the statute also “comports with the First Amendment,” so that “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.” The Court pointed out that “because the factual bases for the defendants' guilty pleas conclusively establish that their own substantive offense conduct—which involves no First Amendment activity—falls under the Anti-Riot Act's surviving applications, their convictions stand.” So, in Miselis, the criminal conviction was allowed to stand.
It will be interesting to see whether and how the Government will use the Anti-Riot Act of 1968 in charging criminal incitement against persons having a role in inciting the Trump-inspired rioting involving invasion of the U.S. Capital building.
Don Allen Resnikoff is fully responsible for the content of this posting
By Don Allen Resnikoff
The grounds for prosecuting Trump-inspired rioters who invaded the U.S. Capital building certainly include such straightforward charges as felony destruction of government property, weapons-related offenses, and assault. Among more complex and interesting possible charges is inciting to riot, based on the Anti-Riot Act of 1968, 18 U.S.C. § 2101 and 2102. Media reports of FBI and other government investigations suggest significant pre-planning of the invasion of the Capital.
The 1968 Act was successfully used as a basis for a federal prosecution just a few months ago, in the case of United States v. Miselis.
The statute has a checkered history because of complaints that it violates Constitutional free speech rights.
The Anti-Riot Act was passed as a section of the Civil Rights Act of 1968. The Anti-Riot Act appears to have been a response to the urban riots of 1964–1967, which some legislators saw as being incited by agitators from outside of affected cities. The passage of time has made the problem of remote inciting to riot more serious, because of the modern use of the internet to encourage and facilitate violent actions. There has been a lot of media reporting about use of the internet to encourage and facilitate the recent violence at the Capital building.
The 1968 law provides, in part: “a) (1) Whoever travels in interstate or foreign commerce or uses any facility of interstate or foreign commerce or uses any facility of interstate or foreign commerce, including, but not limited to, the mail, telegraph, telephone, radio, or television, with intent – (A) to incite a riot; or (B) to organize, promote, encourage, participate in, or carry on a riot; or (C) to commit any act of violence in furtherance of a riot; or (D) to aid or abet any person in inciting or participating in or carrying on a riot or committing any act of violence in furtherance of a riot. . . . ”
The statute was famously used to prosecute leaders of demonstrations at the 1968 Democratic National Convention in Chicago. The defendants in that case are often called “the Chicago 7.” Their story is told in a recent movie and a recently re-issued book of trial transcript excerpts.
When the 7th Circuit Court of Appeals vacated the convictions of the Chicago 7 defendants for inciting a riot in 1972, one judge wrote that the charging statute, the 1968 Anti-Riot Act, violates the Constitution because it is “intended to preclude, under pain of prosecution, advocacy of violence even though only an idea or expression of belief.”
Since the time of the 1969-70 Chicago 7 trial, prosecutions relying on the Anti-Riot Act of 1968 have been infrequent, but recently there have been several Anti-Riot prosecutions, including against white neo-Nazi groups. The government’s position in the recent cases is that the statute is Constitutionally valid.
Judicial reaction has been mixed. In the 2019 California federal case of U.S. v. Robert Rundo, et al., No. 18-00759-CJC (Central District Ca., 2019) [See https://www.courthousenews.com/wp-content/uploads/2019/06/USvRundoetal-DISMISSAL.pdf], the Court granted Defendants’ motion to dismiss the Indictment on the grounds that the Anti-Riot Act is unconstitutionally overbroad in violation of the First Amendment.
But in United States v. Miselis, No. 19-4550 (4th Cir. Aug. 24, 2020) the appellate Court construed the Anti-Riot Act so as to give it some actionable scope within the Constitution, allowing it to be used as the basis for a criminal conviction. The Court explained while that the Anti-Riot Act “sweeps up a substantial amount of speech that remains protected advocacy,” the statute also “comports with the First Amendment,” so that “the appropriate remedy is to invalidate the statute only to the extent that it reaches too far, while leaving the remainder intact.” The Court pointed out that “because the factual bases for the defendants' guilty pleas conclusively establish that their own substantive offense conduct—which involves no First Amendment activity—falls under the Anti-Riot Act's surviving applications, their convictions stand.” So, in Miselis, the criminal conviction was allowed to stand.
It will be interesting to see whether and how the Government will use the Anti-Riot Act of 1968 in charging criminal incitement against persons having a role in inciting the Trump-inspired rioting involving invasion of the U.S. Capital building.
Don Allen Resnikoff is fully responsible for the content of this posting
Informal Auction: Possibly valuable wine in return for contribution to the DC Bar Pro Bono Center
From Don Resnikoff
My wife and I received a gift bottle of wine that could be worth
many hundreds of dollars if it were in perfect condition. The
bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart,
Gordon & Co. Ltd. Given the “provenance,” including that it has
been stored in someone’s residence, and the fill level, experts
have questioned the value.
We would like to use the wine as an
incentive to encourage a substantial charitable donation to the DC
Bar Pro Bono Center. I will be happy to turn over the wine to the
person who promises the highest donation to the Pro Bono
Center, if it is high enough to dissuade me from trying the bottle myself,
and who is willing to take the risk that the wine might or might
not be great. If you are inclined to take a chance on the wine as an
incentive for making a substantial donation to the DC Bar’s Pro
Bono Center, let me know at donresnikoff@donresnikofflaw.com. If your
offer is the best, and high enough to dissuade me from trying the bottle
myself, I’ll let you know. Once I have proof of the donation to the DC Bar
Pro Bono Center I’ll turn over the bottle. (I suggest using Paypal.
See https://www.paypal.com/paypalme/dcbarprobonocenter)
If you are the winning bidder, I hope you’ll then let me know how the wine
tastes!
Here is a picture of our bottle (the bright light behind the bottle is to
make clear the fill level):
From Don Resnikoff
My wife and I received a gift bottle of wine that could be worth
many hundreds of dollars if it were in perfect condition. The
bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart,
Gordon & Co. Ltd. Given the “provenance,” including that it has
been stored in someone’s residence, and the fill level, experts
have questioned the value.
We would like to use the wine as an
incentive to encourage a substantial charitable donation to the DC
Bar Pro Bono Center. I will be happy to turn over the wine to the
person who promises the highest donation to the Pro Bono
Center, if it is high enough to dissuade me from trying the bottle myself,
and who is willing to take the risk that the wine might or might
not be great. If you are inclined to take a chance on the wine as an
incentive for making a substantial donation to the DC Bar’s Pro
Bono Center, let me know at donresnikoff@donresnikofflaw.com. If your
offer is the best, and high enough to dissuade me from trying the bottle
myself, I’ll let you know. Once I have proof of the donation to the DC Bar
Pro Bono Center I’ll turn over the bottle. (I suggest using Paypal.
See https://www.paypal.com/paypalme/dcbarprobonocenter)
If you are the winning bidder, I hope you’ll then let me know how the wine
tastes!
Here is a picture of our bottle (the bright light behind the bottle is to
make clear the fill level):
Here’s more of the story on the wine:
An elderly relative gave us a "thank you" gift of a bottle of Madeira wine that her father gave her in about 1980. The dad said it is “special”. The label says: 1845 Madeira Bual Solera Cossart Centenary. The bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart, Gordon & Co. Ltd.
History: A local expert explained to us that Madeira suffered nearly complete devastation of vineyards from Oidium and Phylloxera during the 1850s and 1870s. With shortages of wines but old stock still around, the Soleras were started during the early to mid 1870s. Basically young wine from the newly planted vines was added to old wine to extend the stock they could actually sell and ship.
The vintage 1845 is the “madre” or mother vintage that was first laid down. In this case the Solera for 1845 Bual Solera was founded in 1875. Each year the casks were topped off or when 10% was ullage. They would add young wine. The average age of the Solera was 50-80 years by the 1950s.
The Soleras were stopped in 1953 when Cossart joined the Madeira Wine Association. The pipes used to store the wine were shipped off and the wine was bottled. This bottling was known as the Centenary wine since the firm was founded in 1745. At least several hundred bottles were sold making it one of the most prolific of the 19th century Soleras.
The expert told us that Madeira is quite robust. If it’s been in bottle for a long time you typically decant it ahead of time at the rate of one day for every decade in bottle.
As for value of the bottle, if the “provenance” and condition were perfect the bottle might be worth $750$-1250. Factors of the provenance make the value of our bottle uncertain, including that it has been stored in someone’s residence for 40 years (we believe horizontally and in a cool location), and that the fill level is below the bottle neck. Your guess is as good as ours on value.
Don Allen Resnikoff
An elderly relative gave us a "thank you" gift of a bottle of Madeira wine that her father gave her in about 1980. The dad said it is “special”. The label says: 1845 Madeira Bual Solera Cossart Centenary. The bottle is Centenary Solera 1845 Bual Madeira shipped by Cossart, Gordon & Co. Ltd.
History: A local expert explained to us that Madeira suffered nearly complete devastation of vineyards from Oidium and Phylloxera during the 1850s and 1870s. With shortages of wines but old stock still around, the Soleras were started during the early to mid 1870s. Basically young wine from the newly planted vines was added to old wine to extend the stock they could actually sell and ship.
The vintage 1845 is the “madre” or mother vintage that was first laid down. In this case the Solera for 1845 Bual Solera was founded in 1875. Each year the casks were topped off or when 10% was ullage. They would add young wine. The average age of the Solera was 50-80 years by the 1950s.
The Soleras were stopped in 1953 when Cossart joined the Madeira Wine Association. The pipes used to store the wine were shipped off and the wine was bottled. This bottling was known as the Centenary wine since the firm was founded in 1745. At least several hundred bottles were sold making it one of the most prolific of the 19th century Soleras.
The expert told us that Madeira is quite robust. If it’s been in bottle for a long time you typically decant it ahead of time at the rate of one day for every decade in bottle.
As for value of the bottle, if the “provenance” and condition were perfect the bottle might be worth $750$-1250. Factors of the provenance make the value of our bottle uncertain, including that it has been stored in someone’s residence for 40 years (we believe horizontally and in a cool location), and that the fill level is below the bottle neck. Your guess is as good as ours on value.
Don Allen Resnikoff
Don Allen Resnikoff article: Threats to the Independence
of Public Broadcasting
Washington Lawyer - January/February 2021 (dcbar.org)
[ http://washingtonlawyer.dcbar.org/januaryfebruary2021/index.php#/p/36 ]
Following is an excerpt from the beginning of the article:
Past steps by the U.S. government limiting the autonomy of Voice of America (VOA) suggest a need for legislative action to safeguard the future
independence of public broadcasting in the United States. The Corporation for Public Broadcasting (CPB) and the Public Broadcasting
Service (PBS) should be protected from ever being turned into a tool of a narrow partisan or ideological point of view.
The challenge of protecting public broadcasting is complicated by the U.S. Supreme Court’s shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the recent case of Seila Law LLC v. Consumer Financial Protection Bureau,[footnote omitted] the Supreme Court determined that the structure of the CFPB, with a single director who could be removed from office only “for cause,” violates the separation of powers requirements of the Constitution. Court explained in its 5–4 decision that as a general matter, leaders of federal agencies
serve at the discretion of the president.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the long established idea that Congress has the power to allow agencies to operate independently of the president. In September, Harvard Law
professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal
Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” [footnote omitted]
The constitutional cloud applies to the independence of the CPB and PBS. There is hope for proposals for statutory change that can effectively supplement existing unique statutory provisions protecting the independence of public television and also meet the Supreme Court’s articulated standards.
of Public Broadcasting
Washington Lawyer - January/February 2021 (dcbar.org)
[ http://washingtonlawyer.dcbar.org/januaryfebruary2021/index.php#/p/36 ]
Following is an excerpt from the beginning of the article:
Past steps by the U.S. government limiting the autonomy of Voice of America (VOA) suggest a need for legislative action to safeguard the future
independence of public broadcasting in the United States. The Corporation for Public Broadcasting (CPB) and the Public Broadcasting
Service (PBS) should be protected from ever being turned into a tool of a narrow partisan or ideological point of view.
The challenge of protecting public broadcasting is complicated by the U.S. Supreme Court’s shift to an “originalist” and “conservative” interpretation of the U.S. Constitution. In the recent case of Seila Law LLC v. Consumer Financial Protection Bureau,[footnote omitted] the Supreme Court determined that the structure of the CFPB, with a single director who could be removed from office only “for cause,” violates the separation of powers requirements of the Constitution. Court explained in its 5–4 decision that as a general matter, leaders of federal agencies
serve at the discretion of the president.
In interpreting the Constitution so as to clip the independence of the CFPB, the Supreme Court cast a dark constitutional cloud over the long established idea that Congress has the power to allow agencies to operate independently of the president. In September, Harvard Law
professors Cass Sunstein and Adrian Vermeule wrote that “the court’s approach raises serious doubts about the legal status of the Federal
Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.” [footnote omitted]
The constitutional cloud applies to the independence of the CPB and PBS. There is hope for proposals for statutory change that can effectively supplement existing unique statutory provisions protecting the independence of public television and also meet the Supreme Court’s articulated standards.
Monday, January 4, 2021
Two-Sided Market, R&D and Payments System Evolution
By D Daniel Sokol
https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/two-sided-market-rd-and-payments-system-evolution.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2FFBhU+%28Antitrust+%26+Competition+Policy+Blog%29#
Two-Sided Market, R&D and Payments System Evolution
By:Bin Grace Li; James McAndrews; Zhu Wang
Abstract:It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
URL:http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/057&r=com
Two-Sided Market, R&D and Payments System Evolution
By D Daniel Sokol
https://lawprofessors.typepad.com/antitrustprof_blog/2021/01/two-sided-market-rd-and-payments-system-evolution.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+typepad%2FFBhU+%28Antitrust+%26+Competition+Policy+Blog%29#
Two-Sided Market, R&D and Payments System Evolution
By:Bin Grace Li; James McAndrews; Zhu Wang
Abstract:It takes many years for more efficient electronic payments to be widely used, and the fees that merchants (consumers) pay for using those services are increasing (decreasing) over time. We address these puzzles by studying payments system evolution with a dynamic model in a twosided market setting. We calibrate the model to the U.S. payment card data, and conduct welfare and policy analysis. Our analysis shows that the market power of electronic payment networks plays important roles in explaining the slow adoption and asymmetric price changes, and the welfare impact of regulations may vary significantly through the endogenous R&D channel.
URL:http://d.repec.org/n?u=RePEc:imf:imfwpa:2019/057&r=com
Linda Greenhouse on Ruth Bader Ginsburg:
How Did a Young, Unknown Lawyer Change the World?Ruth Bader Ginsburg took on the obstacles to women’s equality incrementally, but she was powered by a larger vision.
By Linda Greenhouse
Sept. 24, 2020
I replied that she had a project, a goal from which she never deviated during her long career. It was to have not only the Constitution but also society itself understand men and women as equal.
Fair enough, as far as that explanation goes. But I think it misses something deeper about Justice Ginsburg, who died last Friday at 87. What she had, in addition to passion, skill and a field marshal’s sense of strategy, was imagination.
She envisioned a world different from the one she had grown up in, a better world in which gender was no obstacle to women’s achievement, to their ability to dream big and to realize their aspirations. Then she set out to use the law to usher that world into existence.
Read the full article at https://www.nytimes.com/2020/09/24/opinion/sunday/ginsburg-supreme-court.html
How Did a Young, Unknown Lawyer Change the World?Ruth Bader Ginsburg took on the obstacles to women’s equality incrementally, but she was powered by a larger vision.
By Linda Greenhouse
Sept. 24, 2020
DAR Comment: As we start the New Year, this seems a good moment to read Linda Greenhouse's tribute to Ruth Bader Ginsburg. An axcerpt and citation to the article follow
I replied that she had a project, a goal from which she never deviated during her long career. It was to have not only the Constitution but also society itself understand men and women as equal.
Fair enough, as far as that explanation goes. But I think it misses something deeper about Justice Ginsburg, who died last Friday at 87. What she had, in addition to passion, skill and a field marshal’s sense of strategy, was imagination.
She envisioned a world different from the one she had grown up in, a better world in which gender was no obstacle to women’s achievement, to their ability to dream big and to realize their aspirations. Then she set out to use the law to usher that world into existence.
Read the full article at https://www.nytimes.com/2020/09/24/opinion/sunday/ginsburg-supreme-court.html
Article on section 230 immunity
Posted: 11 Dec 2020 08:20 AM PST
The immunity provided to internet platforms by section 230 of Communications Decency Act is a hot topic these days. Gregory Dickenson has written Rebooting Internet Immunity. Here is the abstract:
We do everything online. We shop, travel, invest, socialize, and even hold garage sales. Even though we may not care whether a company operates online or in the physical world, however, the question has dramatic consequences for the companies themselves. Online and offline entities are governed by different rules. Under Section 230 of the Communications Decency Act, online entities—but not physical-world entities—are immune from lawsuits related to content authored by their users or customers. As a result, online entities have been able to avoid claims for harms caused by their negligence and defective product designs simply because they operate online.
The reason for the disparate treatment is the internet’s dramatic evolution over the last two decades. The internet of 1996 served as an information repository and communications channel and was well governed by Section 230, which treats internet entities as another form of mass media: Because Facebook, Twitter and other online companies could not possibly review the mass of content that flows through their systems, Section 230 immunizes them from claims related to user content. But content distribution is not the internet’s only function, and it is even less so now than it was in 1996. The internet also operates as a platform for the delivery of real-world goods and services and requires a correspondingly diverse immunity doctrine. This Article proposes refining online immunity by limiting it to claims that threaten to impose a content-moderation burden on internet defendants. Where a claim is preventable other than by content moderation—for example, by redesigning an app or website—a plaintiff could freely seek relief, just as in the physical world. This approach empowers courts to identify culpable actors in the virtual world and treat like conduct alike wherever it occurs.
Posted: 11 Dec 2020 08:20 AM PST
The immunity provided to internet platforms by section 230 of Communications Decency Act is a hot topic these days. Gregory Dickenson has written Rebooting Internet Immunity. Here is the abstract:
We do everything online. We shop, travel, invest, socialize, and even hold garage sales. Even though we may not care whether a company operates online or in the physical world, however, the question has dramatic consequences for the companies themselves. Online and offline entities are governed by different rules. Under Section 230 of the Communications Decency Act, online entities—but not physical-world entities—are immune from lawsuits related to content authored by their users or customers. As a result, online entities have been able to avoid claims for harms caused by their negligence and defective product designs simply because they operate online.
The reason for the disparate treatment is the internet’s dramatic evolution over the last two decades. The internet of 1996 served as an information repository and communications channel and was well governed by Section 230, which treats internet entities as another form of mass media: Because Facebook, Twitter and other online companies could not possibly review the mass of content that flows through their systems, Section 230 immunizes them from claims related to user content. But content distribution is not the internet’s only function, and it is even less so now than it was in 1996. The internet also operates as a platform for the delivery of real-world goods and services and requires a correspondingly diverse immunity doctrine. This Article proposes refining online immunity by limiting it to claims that threaten to impose a content-moderation burden on internet defendants. Where a claim is preventable other than by content moderation—for example, by redesigning an app or website—a plaintiff could freely seek relief, just as in the physical world. This approach empowers courts to identify culpable actors in the virtual world and treat like conduct alike wherever it occurs.
As His Term Ends, Trump Faces More Questions on Payments to His Hotel
A civil case being pursued by the attorney general for the District of Columbia has brought renewed attention to what limits there should be on a president’s ability to profit from the office.
https://www.nytimes.com/2020/12/07/us/politics/trump-hotel-payments.html
A civil case being pursued by the attorney general for the District of Columbia has brought renewed attention to what limits there should be on a president’s ability to profit from the office.
https://www.nytimes.com/2020/12/07/us/politics/trump-hotel-payments.html
Naomi Claxton In DC Bar Connect, December 3, 2020
Proskauer's Antitrust Team Recommends that its Clients Conduct a Price-Gouging Audit:
"The definition of price gouging varies significantly from state to state, and consequently, so do the compliance standards. Non-compliance could be met with hefty penalties, as most states charge per individual violation. State attorneys general, private plaintiffs, and the federal government have all been active in price gouging investigations and enforcement actions up and down the supply chain.
Because these price gouging compliance risks are both new and unique to this pandemic, companies cannot necessarily rely on their existing monitoring and risk mitigation systems (for price gouging or otherwise). Even those few companies that had price gouging compliance procedures in place before this pandemic may find that those procedures are out of date or incomplete due to recent changes in the law and changes in enforcement priorities. Given the increased risks to national and multi-state companies across the supply chain, companies should consider conducting what effectively amounts to a 'Price Gouging Audit'."
www.mindingyourbusinesslitigation.com/2020/07/...
NYT: Paycheck Protection … But only for a Few
The government’s Paycheck Protection Program was meant to funnel aid to millions of small businesses so that they could pay their bills during the coronavirus pandemic. But new data shows what many applicants already suspected [https://www.nytimes.com/2020/12/02/business/paycheck-protection-program-coronavirus.html] : Most of the funding went to a tiny fraction of those who needed it. A report from the Small Business Administration revealed that 1 percent of the program’s 5.2 million borrowers received more than a quarter of the $523 billion that was distributed. As for the other 99 percent? Many businesses received much less than what they applied for, and have struggled all the more since the program ended in August. [https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html]
The government’s Paycheck Protection Program was meant to funnel aid to millions of small businesses so that they could pay their bills during the coronavirus pandemic. But new data shows what many applicants already suspected [https://www.nytimes.com/2020/12/02/business/paycheck-protection-program-coronavirus.html] : Most of the funding went to a tiny fraction of those who needed it. A report from the Small Business Administration revealed that 1 percent of the program’s 5.2 million borrowers received more than a quarter of the $523 billion that was distributed. As for the other 99 percent? Many businesses received much less than what they applied for, and have struggled all the more since the program ended in August. [https://www.nytimes.com/2020/09/01/business/economy/small-businesses-coronavirus.html]
Stoller on Slack, Salesforce, and Microsoft
Slack filed a complaint with the EU Competition authority, accusing Microsoft of using its dominant hold on business software tools to exclude Slack’s products. [see https://www.nytimes.com/2020/07/22/technology/slack-microsoft-antitrust.html]
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Jonathan Prince, vice president of communications and policy at Slack, said in a statement. This comment is an echo of the monopoly maintenance claims used against the corporation in the 1998 antitrust case that nearly broke it up.
But there was no action forthcoming. Two months later, Slack warned investors that Microsoft might strike back, writing as an investment risk that “it could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission.” And then finally, this week, Slack threw in the towel, selling itself to Salesforce and ceasing to exist as an independent concern. As Casey Newton put it at Verge, “the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.” Slack’s fate, Newton notes, “mirrors that of many one-time innovators in enterprise productivity,” such as Mailbox, Acompli, and Evernote.
Had Microsoft been broken up in 1998, had antitrust enforcers acted at any point in the last fifteen years to prohibit predatory pricing or illegal tying in software markets or to slow the massive acquisition spree that both Microsoft and Salesforce have undertaken, Slack would still be an independent company and the enterprise software space would be a vibrant place with lots of choices and competition. But there is effectively no antitrust law if you are powerful. So Slack sold out to a more powerful entity, Salesforce, to protect themselves from Microsoft’s predation, since law enforcers wouldn’t bother to do so.
Now, this is a big merger, and the $27 billion price Salesforce for Slack is paying is no small amount, so clearly, antitrust enforcers will notice the deal and look it over. But my guess is that enforcers will examine this merger with the same care they showed every other transaction they waved through while napping. Of course the deal should be blocked, because the goal is to build out a vertically integrated enterprise sales and software toolset and exclude others from that market. That’s what Salesforce is, a mess of product lines glued together with press releases, market power and political connections.
Source: 12/6/2020 Stoller "BIG" newsletter
Slack filed a complaint with the EU Competition authority, accusing Microsoft of using its dominant hold on business software tools to exclude Slack’s products. [see https://www.nytimes.com/2020/07/22/technology/slack-microsoft-antitrust.html]
“Slack threatens Microsoft’s hold on business email, the cornerstone of Office, which means Slack threatens Microsoft’s lock on enterprise software,” Jonathan Prince, vice president of communications and policy at Slack, said in a statement. This comment is an echo of the monopoly maintenance claims used against the corporation in the 1998 antitrust case that nearly broke it up.
But there was no action forthcoming. Two months later, Slack warned investors that Microsoft might strike back, writing as an investment risk that “it could be subject to retaliatory or other adverse measures by Microsoft, its employees, or agents in response to the complaint that we filed with the European Commission.” And then finally, this week, Slack threw in the towel, selling itself to Salesforce and ceasing to exist as an independent concern. As Casey Newton put it at Verge, “the medium-term future of work is increasingly a choice between three giants: Microsoft, Salesforce, and (in a distant third) Google. And with that, the golden age of worker choice in productivity tools seems to be coming to an end.” Slack’s fate, Newton notes, “mirrors that of many one-time innovators in enterprise productivity,” such as Mailbox, Acompli, and Evernote.
Had Microsoft been broken up in 1998, had antitrust enforcers acted at any point in the last fifteen years to prohibit predatory pricing or illegal tying in software markets or to slow the massive acquisition spree that both Microsoft and Salesforce have undertaken, Slack would still be an independent company and the enterprise software space would be a vibrant place with lots of choices and competition. But there is effectively no antitrust law if you are powerful. So Slack sold out to a more powerful entity, Salesforce, to protect themselves from Microsoft’s predation, since law enforcers wouldn’t bother to do so.
Now, this is a big merger, and the $27 billion price Salesforce for Slack is paying is no small amount, so clearly, antitrust enforcers will notice the deal and look it over. But my guess is that enforcers will examine this merger with the same care they showed every other transaction they waved through while napping. Of course the deal should be blocked, because the goal is to build out a vertically integrated enterprise sales and software toolset and exclude others from that market. That’s what Salesforce is, a mess of product lines glued together with press releases, market power and political connections.
Source: 12/6/2020 Stoller "BIG" newsletter
Greenhouse on US Supreme Court and religious rights
Excerpt:
The Supreme Court has become a prize in a war over how far the country will go to privilege religious rights over other rights, including the right not to be discriminated against. A case the court heard last month, Fulton v. City of Philadelphia, raises the question whether a Catholic social services agency under contract with the city to place children in foster homes can refuse to consider same-sex couples as foster parents despite the city’s nondiscrimination law.
For religious adherents pressing such claims, equal treatment is no longer sufficient. Special treatment is the demand. That’s clear in another Covid-related case that reached the Supreme Court this week. In mid-November, Gov. Andrew Beshear of Kentucky issued a temporary order barring in-person instruction in all public and private schools. A religious school, Danville Christian Academy, promptly won an injunction from a federal district judge.
A three-judge panel of the United States Court of Appeals for the Sixth Circuit stayed the injunction this past weekend. The court observed that because the order applied to religious and secular schools alike, it was “neutral and of general applicability,” key words that under a 1990 Supreme Court decision, Employment Division v. Smith, foreclose a claim under the First Amendment’s Free Exercise Clause for a special religious exemption.
Claiming that “it is called by God to provide in-person instruction to its students,” the school has gone to Justice Kavanaugh, who has supervisory jurisdiction over the Sixth Circuit, asking him to vacate the stay of the injunction. The 35-page brief skips almost entirely over the fact that public schools are under the same strictures, asking instead, “Why can a 12-year-old go to the movies along with two dozen other people, but she can’t watch ‘The Greatest Story Ever Told’ with a smaller group in Bible class?” Justice Kavanaugh has told Governor Beshear to respond by Friday afternoon.
From: https://www.nytimes.com/2020/12/03/opinion/amy-coney-barrett-supreme-court-religion.html
From Slate: Congress considers changes to one of the country’s core internet regulation laws, known as Communications Decency Act Section 230.
Right now, CDA 230 gives platforms themselves broad discretion to take down user speech that they consider “objectionable,” even if that speech doesn’t violate the law. Republicans have claimed (with little support) that the law gives platforms cover for “conservative bias” in content moderation. In earlier proposals, Republicans like Sen. Josh Hawley called for platforms to protect all speech, or to somehow create politically “neutral” rules. The DOJ and Graham bills abandon that approach and instead spell out their drafters’ speech preferences. They would keep immunity in place only for specified categories of lawful-but-awful speech, including pornography, barely legal harassment, and pro-terrorist or pro-suicide material. But platforms would face new legal exposure if they take down content for reasons not included in this government-approved list—such as Holocaust denial, white supremacist racial theories, and electoral disinformation. Apparently in these lawmakers’ value systems, platforms should be free to take down The Virgin Suicides, but not The Protocols of the Elders of Zion, recommendations to cure COVID-19 by ingesting bleach, or misleading information about voting by mail.
From: Lindsey Graham and the DOJ’s suggested Section 230 reform would hurt content moderation. (slate.com)
Right now, CDA 230 gives platforms themselves broad discretion to take down user speech that they consider “objectionable,” even if that speech doesn’t violate the law. Republicans have claimed (with little support) that the law gives platforms cover for “conservative bias” in content moderation. In earlier proposals, Republicans like Sen. Josh Hawley called for platforms to protect all speech, or to somehow create politically “neutral” rules. The DOJ and Graham bills abandon that approach and instead spell out their drafters’ speech preferences. They would keep immunity in place only for specified categories of lawful-but-awful speech, including pornography, barely legal harassment, and pro-terrorist or pro-suicide material. But platforms would face new legal exposure if they take down content for reasons not included in this government-approved list—such as Holocaust denial, white supremacist racial theories, and electoral disinformation. Apparently in these lawmakers’ value systems, platforms should be free to take down The Virgin Suicides, but not The Protocols of the Elders of Zion, recommendations to cure COVID-19 by ingesting bleach, or misleading information about voting by mail.
From: Lindsey Graham and the DOJ’s suggested Section 230 reform would hurt content moderation. (slate.com)
From Tax Policy Center: Balancing Hate, The First Amendment, And Tax-Exempt Status
Is hate speech constitutionally protected? Do groups that express hate in their words and deeds deserve tax-exempt status? Is the IRS equipped to judge what is hate and what is merely odious? Does it even matter?
The House Ways & Means Oversight Subcommittee held a hearing on this fraught subject last week. And the answers, it turns out, are very complicated.
Members heard dramatic and painful testimony from victims of hate. But they also heard important, if less passionate, testimony from the former head of the IRS’s tax-exempt organizations division about how the IRS addresses requests for tax-exempt status and from a law professor who cautioned that the Constitution requires “viewpoint-neutral” administration of requests for tax exemption.
Marcus Owens, the former IRS head of tax-exempt organizations, described the IRS process for permitting tax deductions for contributions to educational, charitable, or religious organizations. He acknowledged that the IRS faces multiple challenges when determining whether an organization meets the tests required for being eligible to receive tax-deductible contributions, for example, by being an educational entity.
Ideally, the IRS would examine a group’s written application, activities, organizing documents, operational plans, and public statements. Under IRS rules, if the group advocates a particular viewpoint, it may qualify as educational as long as it presents “a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion;” but it would not qualify if its principle function is “the mere presentation of unsupported opinion.”
Though speech alone is not determinative, courts have ruled that tax-exempt status can be denied for organizations that frequently use inflammatory statements, including ethnic, racial and religious slurs in their communications, coupled with distorted statements presented as fact.
But supervising tax-exempt groups is tangential to the IRS’s core mission of collecting revenue and, faced with reduced resources, the IRS has progressively required or reviewed less information, denied fewer applications for tax-exempt status, and “systematically dismantled” its enforcement structure, Owens testified.
In fiscal year 2018, the IRS examined only 2,816 of the 1.6 million returns filed by tax-exempt organizations. And of the nearly 92,000 new applications it received, the IRS rejected only 71, less than five percent of the number rejected in 2007. This reduced level of activities likely reflects both fewer resources and Congressional criticism of prior policies and procedures.
UCLA law professor Eugene Volokh carefully outlined constitutional limitations the IRS operates under. Hate speech is protected by the Constitution unless it involves imminent threats. While nonprofits have no constitutional right to a tax exemption, they do have a right to be free from discrimination. “The Tax Code indeed subsidizes hate,” he said, “just as it subsidizes Socialism, Satanism, and a wide variety of dangerous and offensive ideas. Under the First Amendment, tax exemptions have to be distributed without discrimination based on viewpoint; that means that evil views have to be treated the same way as good views.”
Excerpt from https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status
Is hate speech constitutionally protected? Do groups that express hate in their words and deeds deserve tax-exempt status? Is the IRS equipped to judge what is hate and what is merely odious? Does it even matter?
The House Ways & Means Oversight Subcommittee held a hearing on this fraught subject last week. And the answers, it turns out, are very complicated.
Members heard dramatic and painful testimony from victims of hate. But they also heard important, if less passionate, testimony from the former head of the IRS’s tax-exempt organizations division about how the IRS addresses requests for tax-exempt status and from a law professor who cautioned that the Constitution requires “viewpoint-neutral” administration of requests for tax exemption.
Marcus Owens, the former IRS head of tax-exempt organizations, described the IRS process for permitting tax deductions for contributions to educational, charitable, or religious organizations. He acknowledged that the IRS faces multiple challenges when determining whether an organization meets the tests required for being eligible to receive tax-deductible contributions, for example, by being an educational entity.
Ideally, the IRS would examine a group’s written application, activities, organizing documents, operational plans, and public statements. Under IRS rules, if the group advocates a particular viewpoint, it may qualify as educational as long as it presents “a sufficiently full and fair exposition of the pertinent facts as to permit an individual or the public to form an independent opinion or conclusion;” but it would not qualify if its principle function is “the mere presentation of unsupported opinion.”
Though speech alone is not determinative, courts have ruled that tax-exempt status can be denied for organizations that frequently use inflammatory statements, including ethnic, racial and religious slurs in their communications, coupled with distorted statements presented as fact.
But supervising tax-exempt groups is tangential to the IRS’s core mission of collecting revenue and, faced with reduced resources, the IRS has progressively required or reviewed less information, denied fewer applications for tax-exempt status, and “systematically dismantled” its enforcement structure, Owens testified.
In fiscal year 2018, the IRS examined only 2,816 of the 1.6 million returns filed by tax-exempt organizations. And of the nearly 92,000 new applications it received, the IRS rejected only 71, less than five percent of the number rejected in 2007. This reduced level of activities likely reflects both fewer resources and Congressional criticism of prior policies and procedures.
UCLA law professor Eugene Volokh carefully outlined constitutional limitations the IRS operates under. Hate speech is protected by the Constitution unless it involves imminent threats. While nonprofits have no constitutional right to a tax exemption, they do have a right to be free from discrimination. “The Tax Code indeed subsidizes hate,” he said, “just as it subsidizes Socialism, Satanism, and a wide variety of dangerous and offensive ideas. Under the First Amendment, tax exemptions have to be distributed without discrimination based on viewpoint; that means that evil views have to be treated the same way as good views.”
Excerpt from https://www.taxpolicycenter.org/taxvox/balancing-hate-first-amendment-and-tax-exempt-status
Excerpts from The New Yorker: “How Venture Capitalists Are Deforming Capitalism”
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Even the worst-run startup can beat competitors if investors prop it up. The V.C. firm Benchmark helped enable WeWork to make one wild mistake after another—hoping that its gamble would pay off before disaster struck.
By Charles Duhigg
November 23, 2020
From the start, venture capitalists have presented their profession as an elevated calling. They weren’t mere speculators—they were midwives to innovation. The first V.C. firms were designed to make money by identifying and supporting the most brilliant startup ideas, providing the funds and the strategic advice that daring entrepreneurs needed in order to prosper. For decades, such boasts were merited. Genentech, which helped invent synthetic insulin, in the nineteen-seventies, succeeded in large part because of the stewardship of the venture capitalist Tom Perkins, whose company, Kleiner Perkins, made an initial hundred-thousand-dollar investment. Perkins demanded a seat on Genentech’s board of directors, and then began spending one afternoon a week in the startup’s offices, scrutinizing spending reports and browbeating inexperienced executives. In subsequent years, Kleiner Perkins nurtured such tech startups as Amazon, Google, Sun Microsystems, and Compaq. When Perkins died, in 2016, at the age of eighty-four, an obituary in the Financial Times remembered him as “part of a new movement in finance that saw investors roll up their sleeves and play an active role in management.”
The V.C. industry has grown exponentially since Perkins’s heyday, but it has also become increasingly avaricious and cynical. It is now dominated by a few dozen firms, which, collectively, control hundreds of billions of dollars. Most professional V.C.s fit a narrow mold: according to surveys, just under half of them attended either Harvard or Stanford, and eighty per cent are male. Although V.C.s depict themselves as perpetually on the hunt for radical business ideas, they often seem to be hyping the same Silicon Valley trends—and their managerial oversight has dwindled, making their investments look more like trading-floor bets. Steve Blank, an entrepreneur who currently teaches at Stanford’s engineering school, said, “I’ve watched the industry become a money-hungry mob. V.C.s today aren’t interested in the public good. They’re not interested in anything except optimizing their own profits and chasing the herd, and so they waste billions of dollars that could have gone to innovation that actually helps people.”
This clubby, self-serving approach has made many V.C.s rich. In January, 2020, the National Venture Capital Association hailed a “record decade” of “hyper growth” in which its members had given nearly eight hundred billion dollars to startups, “fueling the economy of tomorrow.” The pandemic has slowed things down, but not much. According to a report by PitchBook, a company that provides data on the industry, five of the top twenty venture-capital firms are currently making more deals than they did last year.
In recent decades, the gambles taken by V.C.s have grown dramatically larger. A million-dollar investment in a thriving young company might yield ten million dollars in profits. A fifty-million-dollar investment in the same startup could deliver half a billion dollars. “Honestly, it stopped making sense to look at investments that were smaller than thirty or forty million,” a prominent venture capitalist told me. “It’s the same amount of due diligence, the same amount of time going to board meetings, the same amount of work, regardless of how much you invest.”
Critics of the venture-capital industry have observed that, lately, it has given one dubious startup after another gigantic infusions of money. The blood-testing company Theranos received seven hundred million dollars from a number of investors, including Rupert Murdoch and Betsy DeVos, before it was revealed as a fraud; in 2018, its founders were indicted. Juicero, which sold a Wi-Fi-enabled juice press for seven hundred dollars, raised more than a hundred million dollars from such sources as Google’s investment arm, but shut down after only four years. (Consumers posted videos demonstrating that they could press juice just as efficiently with their own hands.) Two years ago, when Wag!, an Uber-like service for dog walking, went looking for seventy-five million dollars in venture capital, its founders—among them, a pair of brothers in their twenties, with little business experience—discovered that investors were interested, as long as Wag! agreed to accept three hundred million dollars. The startup planned to use those funds to expand internationally, but it was too poorly run to flourish. It began shedding its employees after, among other things, the New York City Council accused the firm of losing dogs.
Increasingly, the venture-capital industry has become fixated on creating “unicorns”: startups whose valuations exceed a billion dollars. Some of these companies become lasting successes, but many of them—such as Uber, the data-mining giant Palantir, and the scandal-plagued software firm Zenefits—never seemed to have a realistic plan for turning a profit. A 2018 paper co-written by Martin Kenney, a professor at the University of California, Davis, argued that, thanks to the prodigious bets made by today’s V.C.s, “money-losing firms can continue operating and undercutting incumbents for far longer than previously.” In the traditional capitalist model, the most efficient and capable company succeeds; in the new model, the company with the most funding wins. Such firms are often “destroying economic value”—that is, undermining sound rivals—and creating “disruption without social benefit.”
Many venture capitalists say that they have no choice but to flood startups with cash. In order for a Silicon Valley startup to become a true unicorn, it typically must wipe out its competitors and emerge as the dominant brand. Jeff Housenbold, a managing partner at SoftBank, told me, “Once Uber is founded, within a year you suddenly have three hundred copycats. The only way to protect your company is to get big fast by investing hundreds of millions.” What’s more, V.C.s say, the big venture firms are all looking at the same deals, and trying to persuade the same coveted entrepreneurs to accept their investment dollars. To win, V.C.s must give entrepreneurs what they demand.
Particularly in Silicon Valley, founders often want venture capitalists who promise not to interfere or to ask too many questions. V.C.s have started boasting that they are “founder-friendly” and uninterested in, say, spending an afternoon a week at a company’s offices or second-guessing a young C.E.O. Josh Lerner, a professor at Harvard Business School, told me, “Proclaiming founder loyalty is kind of expected now.” One of the bigger V.C. firms, the Founders Fund, which has more than six billion dollars under management, declares on its Web site that it “has never removed a single founder” and that, when it finds entrepreneurs with “audacious vision,” “a near-messianic attitude,” and “wild-eyed passion,” it essentially seeks to give them veto-proof authority over the board of directors, so that an entrepreneur need never worry about being reined in, let alone fired.
Whereas venture capitalists like Tom Perkins once prided themselves on installing good governance and closely monitoring companies, V.C.s today are more likely to encourage entrepreneurs’ undisciplined eccentricities. Masayoshi Son, the SoftBank venture capitalist who promised WeWork $4.4 billion after less than twenty minutes, embodies this approach. In 2016, he began raising a hundred-billion-dollar Vision Fund, the largest pool of money ever devoted to venture-capital investment. “Masa decided to deliberately inject cocaine into the bloodstream of these young companies,” a former SoftBank senior executive said. “You approach an entrepreneur and say, ‘Hey, either take a billion dollars from me right now, or I’ll give it to your competitor and you’ll go out of business.’ ” This strategy might sound reckless, but it has paid off handsomely for Son. In the mid-nineties, he gave billions of dollars to hundreds of tech firms, including twenty million dollars to a small Chinese online marketplace named Alibaba. When the first Internet bubble burst, in 2001, Son lost almost seventy billion dollars, but Alibaba had enough of a war chest to outlast its competitors, and today it’s valued at more than seven hundred billion dollars. SoftBank’s stake in the firm is more than a hundred billion dollars—far exceeding all of Son’s other losses. “Venture capital has become a lottery,” the former SoftBank executive told me. “Masa is not a particularly deep thinker, but he has one strength: he’s devoted to buying more lottery tickets than anyone else.”
* * *
As the venture-capital industry has become specialized and concentrated—last year, the ten largest firms raised sixteen billion dollars, nearly a third of all new V.C. fund-raising—it has become even more cliquish. Today, most major V.C. deals are “syndicated,” or divvied up, among the big firms. This cartel-like atmosphere has encouraged V.C.s to remain silent when confronted with unethical behavior. Kraus, who has been critical of the industry’s myopia, told me, “If you’re on a board that empowered some wacky founder, or you didn’t pay attention to governance—or something happened that, in retrospect, sort of skirted the law, like at Uber—you’re fine, as long as you post decent returns.” He added, “You’re remembered for your winners, not your losers. In ten years, no one is going to remember all the bad stuff at WeWork. All they’ll remember is who made money.”
Politicians have generally been reluctant to criticize the venture-capital industry, in part because it has successfully portrayed itself as crucial to innovation. Martin Kenney, the professor at the University of California, Davis, said, “Obama loved Silicon Valley and V.C.s, and Trump craved their approval.” He went on, “Regulators have been totally defanged from doing real investigations of venture-capital firms. I think people are finally waking up to the damage the tech industry and V.C.s can do, but it’s slow going.” Senator Elizabeth Warren has proposed reforms that would make it easier for shareholders to sue directors who fail to report unethical behavior. Other Democrats have proposed laws that would force venture capitalists to pay higher taxes. President-elect Joe Biden supports greater protections for stockholding employees. While campaigning in Pennsylvania, he promised, “I’ll be laser-focussed on working families, the middle-class families I came from here in Scranton, not the wealthy investor class—they don’t need me.”
* * *
For decades, venture capitalists have succeeded in defining themselves as judicious meritocrats who direct money to those who will use it best. But examples like WeWork make it harder to believe that V.C.s help balance greedy impulses with enlightened innovation. Rather, V.C.s seem to embody the cynical shape of modern capitalism, which too often rewards crafty middlemen and bombastic charlatans rather than hardworking employees and creative businesspeople. Jeremy Neuner, the NextSpace co-founder, said, “You can’t blame Adam Neumann for being Adam Neumann. It was clear to everyone he was selling something too good to be true. He never pretended to be sensible, or down to earth, or anything besides a crazy optimist. But you can blame the venture capitalists.” Neuner went on, “When you get involved in the startup world, you meet all these amazing entrepreneurs with fantastic ideas, and, over time, you watch them get pushed by V.C.s to take too much money, and make bad choices, and grow as fast as possible. And then they blow up. And, eventually, you start to realize: no matter what happens, the V.C.s still end up rich.” ♦
Published in the print edition of the November 30, 2020, issue of the New Yorker, https://www.newyorker.com/magazine/2020/11/30 , with the headline “The Enablers.”
Charles Duhigg is the author of “The Power of Habit” and “Smarter Faster Better.” He was a member of the Times team that won the 2013 Pulitzer Prize for explanatory reporting.
Why it would be a huge mistake to allow Big Tech firms to acquire banks
By
Art Wilmarth
November 26, 2020 9:00 AM EST
https://fortune.com/2020/11/26/big-tech-banking-glass-steagall-act-financial-crisis/
·
Prior to 1980, the Glass-Steagall Act of 1933 maintained a strict separation between our banking system and our capital markets. However, financial regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, allowing banks to engage in securities activities and permitting nonbanks to offer bank-like products.
“Universal banks” (banks engaged in securities activities) and “shadow banks” (nonbanks offering bank-like services) dominated our financial markets after Congress repealed Glass-Steagall in 1999. Universal banks and shadow banks played leading roles in the toxic subprime lending boom that led to the financial crisis of 2007–09.
In response to the financial crisis, the Treasury Department and the Federal Reserve bailed out big banks as well as large shadow banks (including AIG, Morgan Stanley, and Goldman Sachs). Federal agencies also protected short-term financial instruments that functioned as substitutes for bank deposits, such as money market mutual funds, commercial paper, and securities repurchase agreements (“repos”).
The federal government’s response to the financial crisis went far beyond the traditional U.S. policy of protecting banks and bank depositors. Federal authorities effectively wrapped the federal “safety net” around our entire financial system. By doing so, they “bankified” our financial markets.
The Dodd-Frank Act’s regulatory reforms did not correct the deeply flawed structure of the financial system—including the dominance of universal banks and shadow banks—that caused the financial crisis of 2007–09. Consequently, federal agencies felt compelled to provide another series of bailouts when the COVID-19 pandemic triggered a new financial crisis. Federal authorities aggressively intervened in March to protect universal banks, shadow banks, and short-term financial markets from failure. In addition, federal agencies took the unprecedented step of backstopping the corporate bond market.
That extraordinary measure was not coincidental. Universal banks and shadow banks promoted a massive expansion of corporate debt during the past decade. The debts of U.S. corporations reached a record level of $10.5 trillion in March 2020. Almost two-thirds of those debts were either rated as “junk” or received the lowest investment-grade rating (BBB). Corporate debt markets would have collapsed without the federal government’s backstop, with severe knock-on effects for our financial system and economy.
. Now federal regulators are trying to bankify the rest of the economy. The Office of the Comptroller of the Currency (OCC)—the regulator of national banks—wants to give national bank charters to fintechs that offer lending or payment services but do not accept deposits. The Federal Deposit Insurance Corporation (FDIC) is considering a rule that would allow all types of commercial firms to acquire FDIC-insured industrial banks (consumer banks chartered by Utah and several other states).
The OCC’s and FDIC’s initiatives would allow technology firms and other commercial enterprises to obtain banking privileges and benefits—including access to the federal “safety net”—without complying with many of the prudential requirements governing FDIC-insured full-service banks. For example, commercial owners of fintech national banks and industrial banks would not have to comply with the Bank Holding Company (BHC) Act, which prohibits affiliations between FDIC-insured full-service banks and commercial firms. That prohibition is the cornerstone of our historic policy of separating banking and commerce.
The Glass-Steagall and BHC acts separated banking from commerce to prevent undue concentrations of financial and economic power and to minimize conflicts of interest in bank lending and investment advice. A bank that controls—or is controlled by—a commercial firm has powerful and dangerous incentives to use its lending and investment policies to support its commercial affiliate. Problems that arise in the commercial affiliate are likely to infect the bank, as shown by the recent collapse of Wirecard in Germany.
If the OCC’s and FDIC’s initiatives succeed, Congress will face intense pressure to repeal the separation of banking and commerce. Big Tech firms will lobby for permission to acquire full-service banks, and big banks will push for authority to acquire technology firms. If Congress gives in (as it did when it repealed Glass-Steagall), mergers between Big Tech companies and big banks are virtually certain to occur.
The result will be a bankification of our economy. Giant banking-and-commercial conglomerates will spread across the nation. Commercial owners of banks will profit from the federal “safety net,” including the ability to offer FDIC-insured deposits—the cheapest and most stable source of funding available in the private market. Large commercial firms that own sizable banks will be considered “too big to fail” and will enjoy enormous advantages over smaller competitors that can’t afford to acquire banks.
When the next crisis occurs, federal agencies will feel compelled to rescue not only our financial system but also our leading banking-and-commercial conglomerates. Market discipline, which has already been greatly weakened in our financial markets, will largely disappear from the rest of our economy.
Congress should adopt two crucial measures to reverse the bankification of our country. First, Congress should enact a new Glass-Steagall Act to reestablish a strict separation between our banking system and our capital markets. Congress should prohibit banks from underwriting and trading in securities and other capital market instruments, except for government bonds.
Congress should also prohibit nonbanks from offering short-term financial instruments that function as deposit substitutes. Only banks should be allowed to issue money market mutual funds, commercial paper, and repos. Requiring nonbanks to fund their operations with longer-term securities would eliminate the shadow bank business model, restore market discipline, and improve the stability of our financial markets.
Second, Congress should reaffirm the separation of banking and commerce by overruling the OCC’s and FDIC’s initiatives. Both measures would return banks to their traditional roles as objective providers of deposit, credit, payment, and fiduciary services. The “too big to fail” problem would be greatly diminished with the elimination of universal banks and the likely disappearance of shadow banks. Banks and commercial firms would be prevented from exercising any type of control over each other.
Banks and the capital markets would once again become independent sectors with strong incentives to serve the needs of consumers, communities, and Main Street businesses. Our financial system and our economy would become more stable, more competitive, and more productive.
Art Wilmarth is a professor emeritus of law at George Washington University. This essay is based on his recently published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, and his testimony before the House Financial Services Committee’s Task Force on Financial Technology on Sept. 29, 2020.
By
Art Wilmarth
November 26, 2020 9:00 AM EST
https://fortune.com/2020/11/26/big-tech-banking-glass-steagall-act-financial-crisis/
·
Prior to 1980, the Glass-Steagall Act of 1933 maintained a strict separation between our banking system and our capital markets. However, financial regulators opened loopholes in Glass-Steagall during the 1980s and 1990s, allowing banks to engage in securities activities and permitting nonbanks to offer bank-like products.
“Universal banks” (banks engaged in securities activities) and “shadow banks” (nonbanks offering bank-like services) dominated our financial markets after Congress repealed Glass-Steagall in 1999. Universal banks and shadow banks played leading roles in the toxic subprime lending boom that led to the financial crisis of 2007–09.
In response to the financial crisis, the Treasury Department and the Federal Reserve bailed out big banks as well as large shadow banks (including AIG, Morgan Stanley, and Goldman Sachs). Federal agencies also protected short-term financial instruments that functioned as substitutes for bank deposits, such as money market mutual funds, commercial paper, and securities repurchase agreements (“repos”).
The federal government’s response to the financial crisis went far beyond the traditional U.S. policy of protecting banks and bank depositors. Federal authorities effectively wrapped the federal “safety net” around our entire financial system. By doing so, they “bankified” our financial markets.
The Dodd-Frank Act’s regulatory reforms did not correct the deeply flawed structure of the financial system—including the dominance of universal banks and shadow banks—that caused the financial crisis of 2007–09. Consequently, federal agencies felt compelled to provide another series of bailouts when the COVID-19 pandemic triggered a new financial crisis. Federal authorities aggressively intervened in March to protect universal banks, shadow banks, and short-term financial markets from failure. In addition, federal agencies took the unprecedented step of backstopping the corporate bond market.
That extraordinary measure was not coincidental. Universal banks and shadow banks promoted a massive expansion of corporate debt during the past decade. The debts of U.S. corporations reached a record level of $10.5 trillion in March 2020. Almost two-thirds of those debts were either rated as “junk” or received the lowest investment-grade rating (BBB). Corporate debt markets would have collapsed without the federal government’s backstop, with severe knock-on effects for our financial system and economy.
. Now federal regulators are trying to bankify the rest of the economy. The Office of the Comptroller of the Currency (OCC)—the regulator of national banks—wants to give national bank charters to fintechs that offer lending or payment services but do not accept deposits. The Federal Deposit Insurance Corporation (FDIC) is considering a rule that would allow all types of commercial firms to acquire FDIC-insured industrial banks (consumer banks chartered by Utah and several other states).
The OCC’s and FDIC’s initiatives would allow technology firms and other commercial enterprises to obtain banking privileges and benefits—including access to the federal “safety net”—without complying with many of the prudential requirements governing FDIC-insured full-service banks. For example, commercial owners of fintech national banks and industrial banks would not have to comply with the Bank Holding Company (BHC) Act, which prohibits affiliations between FDIC-insured full-service banks and commercial firms. That prohibition is the cornerstone of our historic policy of separating banking and commerce.
The Glass-Steagall and BHC acts separated banking from commerce to prevent undue concentrations of financial and economic power and to minimize conflicts of interest in bank lending and investment advice. A bank that controls—or is controlled by—a commercial firm has powerful and dangerous incentives to use its lending and investment policies to support its commercial affiliate. Problems that arise in the commercial affiliate are likely to infect the bank, as shown by the recent collapse of Wirecard in Germany.
If the OCC’s and FDIC’s initiatives succeed, Congress will face intense pressure to repeal the separation of banking and commerce. Big Tech firms will lobby for permission to acquire full-service banks, and big banks will push for authority to acquire technology firms. If Congress gives in (as it did when it repealed Glass-Steagall), mergers between Big Tech companies and big banks are virtually certain to occur.
The result will be a bankification of our economy. Giant banking-and-commercial conglomerates will spread across the nation. Commercial owners of banks will profit from the federal “safety net,” including the ability to offer FDIC-insured deposits—the cheapest and most stable source of funding available in the private market. Large commercial firms that own sizable banks will be considered “too big to fail” and will enjoy enormous advantages over smaller competitors that can’t afford to acquire banks.
When the next crisis occurs, federal agencies will feel compelled to rescue not only our financial system but also our leading banking-and-commercial conglomerates. Market discipline, which has already been greatly weakened in our financial markets, will largely disappear from the rest of our economy.
Congress should adopt two crucial measures to reverse the bankification of our country. First, Congress should enact a new Glass-Steagall Act to reestablish a strict separation between our banking system and our capital markets. Congress should prohibit banks from underwriting and trading in securities and other capital market instruments, except for government bonds.
Congress should also prohibit nonbanks from offering short-term financial instruments that function as deposit substitutes. Only banks should be allowed to issue money market mutual funds, commercial paper, and repos. Requiring nonbanks to fund their operations with longer-term securities would eliminate the shadow bank business model, restore market discipline, and improve the stability of our financial markets.
Second, Congress should reaffirm the separation of banking and commerce by overruling the OCC’s and FDIC’s initiatives. Both measures would return banks to their traditional roles as objective providers of deposit, credit, payment, and fiduciary services. The “too big to fail” problem would be greatly diminished with the elimination of universal banks and the likely disappearance of shadow banks. Banks and commercial firms would be prevented from exercising any type of control over each other.
Banks and the capital markets would once again become independent sectors with strong incentives to serve the needs of consumers, communities, and Main Street businesses. Our financial system and our economy would become more stable, more competitive, and more productive.
Art Wilmarth is a professor emeritus of law at George Washington University. This essay is based on his recently published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, and his testimony before the House Financial Services Committee’s Task Force on Financial Technology on Sept. 29, 2020.
FTC Holds Workshop on Data Portability
By Kim Phan & Katie Morehead on September 29, 2020
POSTED IN DATA PORTABILITY, FEDERAL TRADE COMMISSION (FTC), ONLINE PRIVACY [https://www.cyberadviserblog.com/category/federal-trade-commission/]
On September 22nd, the Federal Trade Commission (FTC) hosted an event, “Data To Go: An FTC Workshop on Data Portability,” [https://www.ftc.gov/news-events/events-calendar/data-go-ftc-workshop-data-portability] to examine the potential benefits and challenges to consumers and competition raised by data portability. Data portability means giving consumers the ability to receive a copy of their data for their own use or and move the data to another entity or service.
The workshop did not focus on any specific policy proposals or legislation, but the FTC expressed a desire to begin discussions as issues associated with data portability continue to evolve. The FTC noted that in addition to providing benefits to consumers, data portability may benefit competition by allowing new entrants to access data they otherwise would not have so that they can grow competing platforms and services. At the same time, the FTC recognizes that there may be challenges to implementing or requiring data portability.
During the workshop, FTC staff discussed several examples of existing data portability laws and regulations, such as the right to data portability under Article 20 of the European Union’s General Data Protection Regulation (GDPR) and the right for consumers to make requests for portable data under the California Consumer Privacy Act (CCPA). The FTC noted that other countries have taken different approaches, like India and the United Kingdom’s data portability regulations that are narrowly tailored to address only the health and financial services sectors.
The panelists of the workshop highlighted a variety of issues and considerations for data portability. From an information security perspective, the panelists discussed how businesses would need to ensure they could verify the identity of the consumer before completing a transfer of data to prevent unauthorized actors from stealing people’s data. From a privacy perspective, the panelists discussed how users should be fully informed about the data they are receiving, to whom they can transfer their data, and how a new entity or service may use the information they are given by the consumer.
Additionally, from an operational perspective, the panelists remarked that the data provided to consumers would need to be interoperable between different systems. In one example discussed by the panelists, if consumers receive their data and are not able to give their information to another entity or use their data with other systems then the ability to port the data loses its effectiveness. The panelists called for businesses or the government to implement some form of standardization so that the data would remain useful to consumers. Some panelists called for a federal privacy and security law that would set protection standards for businesses in regards to data portability.
The FTC is not the only government agency exploring the concept of data portability. The Consumer Financial Protection Bureau (CFPB) recently announced a potential rulemaking under the Dodd-Frank Act Section 1033, which authorizes the CFPB to create rules enhancing consumers’ access to their financial data. The CFPB is asking for comments on similar issues as those discussed during the FTC working surrounding data portability, such as privacy, security, effective consumer control over data access, and accountability for errors and any unauthorized access.
By Kim Phan & Katie Morehead on September 29, 2020
POSTED IN DATA PORTABILITY, FEDERAL TRADE COMMISSION (FTC), ONLINE PRIVACY [https://www.cyberadviserblog.com/category/federal-trade-commission/]
On September 22nd, the Federal Trade Commission (FTC) hosted an event, “Data To Go: An FTC Workshop on Data Portability,” [https://www.ftc.gov/news-events/events-calendar/data-go-ftc-workshop-data-portability] to examine the potential benefits and challenges to consumers and competition raised by data portability. Data portability means giving consumers the ability to receive a copy of their data for their own use or and move the data to another entity or service.
The workshop did not focus on any specific policy proposals or legislation, but the FTC expressed a desire to begin discussions as issues associated with data portability continue to evolve. The FTC noted that in addition to providing benefits to consumers, data portability may benefit competition by allowing new entrants to access data they otherwise would not have so that they can grow competing platforms and services. At the same time, the FTC recognizes that there may be challenges to implementing or requiring data portability.
During the workshop, FTC staff discussed several examples of existing data portability laws and regulations, such as the right to data portability under Article 20 of the European Union’s General Data Protection Regulation (GDPR) and the right for consumers to make requests for portable data under the California Consumer Privacy Act (CCPA). The FTC noted that other countries have taken different approaches, like India and the United Kingdom’s data portability regulations that are narrowly tailored to address only the health and financial services sectors.
The panelists of the workshop highlighted a variety of issues and considerations for data portability. From an information security perspective, the panelists discussed how businesses would need to ensure they could verify the identity of the consumer before completing a transfer of data to prevent unauthorized actors from stealing people’s data. From a privacy perspective, the panelists discussed how users should be fully informed about the data they are receiving, to whom they can transfer their data, and how a new entity or service may use the information they are given by the consumer.
Additionally, from an operational perspective, the panelists remarked that the data provided to consumers would need to be interoperable between different systems. In one example discussed by the panelists, if consumers receive their data and are not able to give their information to another entity or use their data with other systems then the ability to port the data loses its effectiveness. The panelists called for businesses or the government to implement some form of standardization so that the data would remain useful to consumers. Some panelists called for a federal privacy and security law that would set protection standards for businesses in regards to data portability.
The FTC is not the only government agency exploring the concept of data portability. The Consumer Financial Protection Bureau (CFPB) recently announced a potential rulemaking under the Dodd-Frank Act Section 1033, which authorizes the CFPB to create rules enhancing consumers’ access to their financial data. The CFPB is asking for comments on similar issues as those discussed during the FTC working surrounding data portability, such as privacy, security, effective consumer control over data access, and accountability for errors and any unauthorized access.
EPA: Diesel truck owners who defeat polution controls
Brief excerpt from EPA statement:
Emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade. As a result ofthis tampering, more than 570,000 tons of excess oxides ofnitrogen(NOx) and 5,000 tons ofparticulate matter (PM) will be emitted by these tampered trucks over the lifetime ofthe vehicles. These tampered trucks constitute approximately 15 percent of the nationalpopulation of diesel trucks that were originally certified with emissions controls. But, due to their severe excess NOx emissions, these trucks have an air quality impact equivalent to adding more than 9 million additional (compliant, non- tampered) diesel pickup trucks to our roads. This Report describes these estimates ingreater detail and explains AED's underlying analysis.
https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf
Brief excerpt from EPA statement:
Emissions controls have been removed from more than 550,000 diesel pickup trucks in the last decade. As a result ofthis tampering, more than 570,000 tons of excess oxides ofnitrogen(NOx) and 5,000 tons ofparticulate matter (PM) will be emitted by these tampered trucks over the lifetime ofthe vehicles. These tampered trucks constitute approximately 15 percent of the nationalpopulation of diesel trucks that were originally certified with emissions controls. But, due to their severe excess NOx emissions, these trucks have an air quality impact equivalent to adding more than 9 million additional (compliant, non- tampered) diesel pickup trucks to our roads. This Report describes these estimates ingreater detail and explains AED's underlying analysis.
https://int.nyt.com/data/documenttools/epa-on-tampered-diesel-pickups-11-20/6d70536b06182ad2/full.pdf
DCOAG: Fighting Price Gouging
For more than eight months, an emergency declaration has been in place in the District because of COVID-19. Special protections for District residents have been in place too, including a ban on price gouging. Most—but not all—District businesses have been following the law. In a price gouging lawsuit my office filed this month, we alleged that Capitol Petroleum Group (CPG), a major gasoline seller, overcharged consumers at 54 gas stations in the District during the emergency. Our investigation revealed that CPG unlawfully doubled average profits per gallon of gas at the expense of District consumers and at one point applied a markup of nearly 150% to the prices it charged other retailers.
From: DC OAG newsletter
For more than eight months, an emergency declaration has been in place in the District because of COVID-19. Special protections for District residents have been in place too, including a ban on price gouging. Most—but not all—District businesses have been following the law. In a price gouging lawsuit my office filed this month, we alleged that Capitol Petroleum Group (CPG), a major gasoline seller, overcharged consumers at 54 gas stations in the District during the emergency. Our investigation revealed that CPG unlawfully doubled average profits per gallon of gas at the expense of District consumers and at one point applied a markup of nearly 150% to the prices it charged other retailers.
From: DC OAG newsletter
The House Transportation Committee investigation report on Boeing and the 737.
https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf
The picture painted in the report is not pretty.
After an exhaustive 18 month investigation, the House Transportation Committee concluded that there were multiple missed opportunities to ensure a safe MAX design and reverse flawed technical design criteria, faulty assumptions about pilot response times and production pressures.
The FAA also bears responsibility for failing to adequately review and correct Boeing’s MAX 737 errors and safety flaws. The FAA failed in its oversight of Boeing and its certification of the aircraft.
The 737 MAX crashes were not the result of a singular failure, technical mistake or mismanaged event. Instead, the two horrific crashes were the culmination of a series of faulty assumptions by Boeing’s engineers, a lack of transparency on Boeing’s management, and grossly inefficient regulation and oversight by the FAA.
From: https://blog.volkovlaw.com/2020/10/boeing-737-max-accountability-shareholder-litigation-against-boeing-board-house-transportation-committee-issues-scathing-report-part-i-of-ii/
https://transportation.house.gov/imo/media/doc/2020.09.15%20FINAL%20737%20MAX%20Report%20for%20Public%20Release.pdf
The picture painted in the report is not pretty.
After an exhaustive 18 month investigation, the House Transportation Committee concluded that there were multiple missed opportunities to ensure a safe MAX design and reverse flawed technical design criteria, faulty assumptions about pilot response times and production pressures.
The FAA also bears responsibility for failing to adequately review and correct Boeing’s MAX 737 errors and safety flaws. The FAA failed in its oversight of Boeing and its certification of the aircraft.
The 737 MAX crashes were not the result of a singular failure, technical mistake or mismanaged event. Instead, the two horrific crashes were the culmination of a series of faulty assumptions by Boeing’s engineers, a lack of transparency on Boeing’s management, and grossly inefficient regulation and oversight by the FAA.
From: https://blog.volkovlaw.com/2020/10/boeing-737-max-accountability-shareholder-litigation-against-boeing-board-house-transportation-committee-issues-scathing-report-part-i-of-ii/
For Billion-Dollar COVID Vaccines, Basic Government-Funded Science Laid the Groundwork
Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits
The vaccines made by Pfizer and Moderna, which are likely to be the first to win FDA approval, in particular rely heavily on two fundamental discoveries that emerged from federally funded research: the viral protein designed by Graham and his colleagues, and the concept of RNA modification, first developed by Drew Weissman and Katalin Karikó at the University of Pennsylvania. In fact, Moderna’s founders in 2010 named the company after this concept: “Modified” + “RNA” = Moderna, according to co-founder Robert Langer.
“This is the people’s vaccine,” said corporate critic Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
* * *
Under a 1980 law,[Bayh-Dole Act] the NIH will obtain no money from the coronavirus vaccine patent. How much money will eventually go to the discoverers or their institutions isn’t clear. Any existing licensing agreements haven’t been publicized; patent disputes among some of the companies will likely last years. HHS’ big contracts with the vaccine companies are not transparent, and Freedom of Information Act requests have been slow-walked and heavily redacted, said Duke University law professor Arti Rai.
Some basic scientists involved in the enterprise seem to accept the potentially lopsided financial rewards.
“Having public-private partnerships is how things get done,” Graham said. “During this crisis, everything is focused on how can we do the best we can as fast as we can for the public health. All this other stuff is going to have to be figured out later.”
“It’s not a good look to become extremely wealthy off a pandemic,” McLellan said, noting the big stock sales by some vaccine company executives after they received hundreds of millions of dollars in government assistance. Still, “the companies should be able to make some money.”
For [Barney] Graham [who did important basic research at NIH], the lesson of the coronavirus vaccine response is that a few billion dollars a year spent on additional basic research could prevent a thousand times as much loss in death, illness and economic destruction. At a news conference Monday, Graham’s boss at NIH, Anthony Fauci, highlighted the spike protein work.
“We shouldn’t underestimate the value of basic biology research,” Fauci said.
Much of the pioneering work on mRNA vaccines was done with government money, though drugmakers could walk away with big profits
- By Arthur Allen, Kaiser Health News on November 18, 2020
- https://www.scientificamerican.com/article/for-billion-dollar-covid-vaccines-basic-government-funded-science-laid-the-groundwork/
The vaccines made by Pfizer and Moderna, which are likely to be the first to win FDA approval, in particular rely heavily on two fundamental discoveries that emerged from federally funded research: the viral protein designed by Graham and his colleagues, and the concept of RNA modification, first developed by Drew Weissman and Katalin Karikó at the University of Pennsylvania. In fact, Moderna’s founders in 2010 named the company after this concept: “Modified” + “RNA” = Moderna, according to co-founder Robert Langer.
“This is the people’s vaccine,” said corporate critic Peter Maybarduk, director of Public Citizen’s Access to Medicines program. “Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
* * *
Under a 1980 law,[Bayh-Dole Act] the NIH will obtain no money from the coronavirus vaccine patent. How much money will eventually go to the discoverers or their institutions isn’t clear. Any existing licensing agreements haven’t been publicized; patent disputes among some of the companies will likely last years. HHS’ big contracts with the vaccine companies are not transparent, and Freedom of Information Act requests have been slow-walked and heavily redacted, said Duke University law professor Arti Rai.
Some basic scientists involved in the enterprise seem to accept the potentially lopsided financial rewards.
“Having public-private partnerships is how things get done,” Graham said. “During this crisis, everything is focused on how can we do the best we can as fast as we can for the public health. All this other stuff is going to have to be figured out later.”
“It’s not a good look to become extremely wealthy off a pandemic,” McLellan said, noting the big stock sales by some vaccine company executives after they received hundreds of millions of dollars in government assistance. Still, “the companies should be able to make some money.”
For [Barney] Graham [who did important basic research at NIH], the lesson of the coronavirus vaccine response is that a few billion dollars a year spent on additional basic research could prevent a thousand times as much loss in death, illness and economic destruction. At a news conference Monday, Graham’s boss at NIH, Anthony Fauci, highlighted the spike protein work.
“We shouldn’t underestimate the value of basic biology research,” Fauci said.
What the EU Gets Right—and the US Gets Wrong—About Antitrust
European regulators focus on how Amazon, Apple, Facebook, and Google use—and abuse–their vast stores of data to maintain advantages over rivals.THERE’S A GROWING bipartisan consensus in the US to rein in the massive power accumulated by dominant tech firms. From state capitals to Congress, officials have launched multiple investigations of whether the big four of Amazon, Apple, Facebook, and Google are now forces more for harm than good and whether their size and scale demand government action to curtail them or potentially break them up.
US regulators have not yet shown all their cards, but they should pause before arguing that too big equals anticompetitive, or seeking to break up or substantially restructure the tech giants. Instead, they might want to look to Europe.
The US and EU have long differed in their approaches to Big Tech. US regulators and legislators have focused more on the size of these companies, while the EU has focused on issues related to control of data. Most recently, the EU sued Amazon for taking undue advantage of its customer and vendor data to gain a competitive edge over the thousands of independent businesses who sell through the platform. Earlier, the EU chipped away at Apple’s questionable tax practices and Google’s management of its ad platform. It has also attempted to give individuals more control over their data through rules such as the General Data Protection Regulation, which allows individuals to opt out of cookies and data-tracking on websites they visit.
In the US, by contrast, powerful voices, from Senator Elizabeth Warren to advocates such as the Open Markets Institute, call for antitrust enforcement to break up these companies. Tuesday, Senator Richard Blumenthal (D–Connecticut) urged “a break-up of tech giants. Because they've misused their bigness and power.” In the executive branch, Justice Department antitrust chief Makan Delrahim, also has spoken of dismantling the big companies.
As appealing as the big stick of antitrust enforcement is to a US government with memories of breaking up Standard Oil and AT&T in the 20th century, it may be the Europeans who are getting to the real issue: the companies’ use, and abuse, of data to erect empires. As European Commission executive vice president Margrethe Vestager wrote in announcing the action against Amazon, “We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct”—Amazon’s use of its data to privilege its own products over those of other sellers.
By emphasizing that data, rather than market size, gives Amazon an unfair advantage, the EU authorities are addressing the core challenge of Big Tech: It’s not their market value or their aggressive acquisitions that undermine competition, it’s the access to mountains of data. Reducing their scale through forced divestitures or curtailing their ability to acquire will satisfy bloodlust and may marginally restore competition, but unless the data market is restructured, it may all be for naught.
In the US, the Justice Department’s recent antitrust suit against Google addresses Google’s privileged use of data it collects to gain a competitive advantage. But the language of the suit, explicitly donning the mantle of the 1890 Sherman Act, echoes the outdated mantras of size and market concentration in a way that suggests a still-encumbered grasp of the real issue.
Over time, US law has come to view antitrust through a single lens: harm to the consumer. That’s a problem for critics of Big Tech, because the companies give away many of their products for free and can argue that in other cases they lower prices. The US antitrust framework simply isn’t well-suited to the unique structure and scope of these 21st-century behemoths.
In the words of Lina Khan, an attorney who served on the staff of the House antitrust subcommittee that issued a highly critical report of the tech giants in October, “the current framework in antitrust—specifically its pegging competition to consumer welfare, defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.” The report says tech’s Big Four have gone from being “scrappy, underdog startups” to the “kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and that have acquired too much power that they have then exploited. Khan favors changing the law to look more broadly at the ill effects of monopolies.
The blunt approach favored by some antitrust advocates in the US contrasts with the surgical tactics of the EU. Breakups are rhetorically appealing; they cut through the media noise and say, “We are doing something!” For that reason, they’re likely to gather continued bipartisan steam. Moreover, the EU’s focus on who owns what data and how it can be used has done little to slow Big Tech’s ascent.
But if the issue isn’t size per se but rather privileged access to and use of data, the EU approach is more tailored to these companies, rather than the 20th-century antecedents they resemble. They are not simply digital variants of Standard Oil or AT&T. They are new entities with distinct business models built on data. Unless their use of data is altered meaningfully, it won’t matter if they are broken up or even if firewalls are erected inside them. They will retain powerful sway over data marketplaces and exert anti-competitive pressure on smaller companies without the same access to data.
The EU’s actions, along with the earlier efforts to give individuals more control over their data, recognize that new world better than US actions based on antitrust regulations designed for industrial monopolies of an earlier time. Here as in so much else, the US could meaningfully learn from approaches in other countries rather than falling back on its own history and frameworks.
It’s often said that data is the new oil; as a resource, that may be. But as for containing excesses, data and tech companies are more like nuclear energy: potent, immensely powerful, but requiring complicated and unique tools to harness them for good and contain them.
Credit: Wired
https://www.wired.com/story/what-eu-gets-right-us-wrong-antitrust/?
European regulators focus on how Amazon, Apple, Facebook, and Google use—and abuse–their vast stores of data to maintain advantages over rivals.THERE’S A GROWING bipartisan consensus in the US to rein in the massive power accumulated by dominant tech firms. From state capitals to Congress, officials have launched multiple investigations of whether the big four of Amazon, Apple, Facebook, and Google are now forces more for harm than good and whether their size and scale demand government action to curtail them or potentially break them up.
US regulators have not yet shown all their cards, but they should pause before arguing that too big equals anticompetitive, or seeking to break up or substantially restructure the tech giants. Instead, they might want to look to Europe.
The US and EU have long differed in their approaches to Big Tech. US regulators and legislators have focused more on the size of these companies, while the EU has focused on issues related to control of data. Most recently, the EU sued Amazon for taking undue advantage of its customer and vendor data to gain a competitive edge over the thousands of independent businesses who sell through the platform. Earlier, the EU chipped away at Apple’s questionable tax practices and Google’s management of its ad platform. It has also attempted to give individuals more control over their data through rules such as the General Data Protection Regulation, which allows individuals to opt out of cookies and data-tracking on websites they visit.
In the US, by contrast, powerful voices, from Senator Elizabeth Warren to advocates such as the Open Markets Institute, call for antitrust enforcement to break up these companies. Tuesday, Senator Richard Blumenthal (D–Connecticut) urged “a break-up of tech giants. Because they've misused their bigness and power.” In the executive branch, Justice Department antitrust chief Makan Delrahim, also has spoken of dismantling the big companies.
As appealing as the big stick of antitrust enforcement is to a US government with memories of breaking up Standard Oil and AT&T in the 20th century, it may be the Europeans who are getting to the real issue: the companies’ use, and abuse, of data to erect empires. As European Commission executive vice president Margrethe Vestager wrote in announcing the action against Amazon, “We do not take issue with the success of Amazon or its size. Our concern is a very specific business conduct”—Amazon’s use of its data to privilege its own products over those of other sellers.
By emphasizing that data, rather than market size, gives Amazon an unfair advantage, the EU authorities are addressing the core challenge of Big Tech: It’s not their market value or their aggressive acquisitions that undermine competition, it’s the access to mountains of data. Reducing their scale through forced divestitures or curtailing their ability to acquire will satisfy bloodlust and may marginally restore competition, but unless the data market is restructured, it may all be for naught.
In the US, the Justice Department’s recent antitrust suit against Google addresses Google’s privileged use of data it collects to gain a competitive advantage. But the language of the suit, explicitly donning the mantle of the 1890 Sherman Act, echoes the outdated mantras of size and market concentration in a way that suggests a still-encumbered grasp of the real issue.
Over time, US law has come to view antitrust through a single lens: harm to the consumer. That’s a problem for critics of Big Tech, because the companies give away many of their products for free and can argue that in other cases they lower prices. The US antitrust framework simply isn’t well-suited to the unique structure and scope of these 21st-century behemoths.
In the words of Lina Khan, an attorney who served on the staff of the House antitrust subcommittee that issued a highly critical report of the tech giants in October, “the current framework in antitrust—specifically its pegging competition to consumer welfare, defined as short-term price effects—is unequipped to capture the architecture of market power in the modern economy.” The report says tech’s Big Four have gone from being “scrappy, underdog startups” to the “kinds of monopolies we last saw in the era of oil barons and railroad tycoons” and that have acquired too much power that they have then exploited. Khan favors changing the law to look more broadly at the ill effects of monopolies.
The blunt approach favored by some antitrust advocates in the US contrasts with the surgical tactics of the EU. Breakups are rhetorically appealing; they cut through the media noise and say, “We are doing something!” For that reason, they’re likely to gather continued bipartisan steam. Moreover, the EU’s focus on who owns what data and how it can be used has done little to slow Big Tech’s ascent.
But if the issue isn’t size per se but rather privileged access to and use of data, the EU approach is more tailored to these companies, rather than the 20th-century antecedents they resemble. They are not simply digital variants of Standard Oil or AT&T. They are new entities with distinct business models built on data. Unless their use of data is altered meaningfully, it won’t matter if they are broken up or even if firewalls are erected inside them. They will retain powerful sway over data marketplaces and exert anti-competitive pressure on smaller companies without the same access to data.
The EU’s actions, along with the earlier efforts to give individuals more control over their data, recognize that new world better than US actions based on antitrust regulations designed for industrial monopolies of an earlier time. Here as in so much else, the US could meaningfully learn from approaches in other countries rather than falling back on its own history and frameworks.
It’s often said that data is the new oil; as a resource, that may be. But as for containing excesses, data and tech companies are more like nuclear energy: potent, immensely powerful, but requiring complicated and unique tools to harness them for good and contain them.
Credit: Wired
https://www.wired.com/story/what-eu-gets-right-us-wrong-antitrust/?
Irving Azoff has offered a decidedly blunt take on the music payments (or the relative lack thereof) made by social networks including Facebook, Snapchat, and TikTok, indicating that they “resist paying for music until you go beat the f—k out of them.”
The 72-year-old management mainstay, who hasn’t hesitated to voice his opinion of big-name content platforms in the past, disclosed his firmly worded stance on social networks in a recent interview with the Los Angeles Times. This piece was published late last week, just before the Full Stop Management exec and chairman was inducted into the Rock and Roll Hall of Fame as a non-performer, receiving the Ahmet Ertegun Award. Irving Azoff nonchalantly noted in the article that Travis Scott is “unmanageable” and opined: “I don’t think there’s that many smart people in our business.”
And after emphasizing that he continues to manage musicians as part of a larger effort to pursue artist-rights causes – not solely due to the far-reaching financial benefits delivered by his star-studded client roster – the Music Artists Coalition co-founder turned his attention to social platforms’ unwillingness to “pay fair market value” for music.
“These people, when they start out – whether it’s Facebook, Snapchat, TikTok, whatever – they resist paying for music until you go beat the f—k out of them,” stated the longtime Eagles manager. “And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough.
“Music, as a commodity, is more important than it’s ever been, and more unfairly monetized for the creators. And that’s what creates an opportunity for people like me,” finished the former Live Nation executive chairman and Ticketmaster CEO.
https://www.digitalmusicnews.com/2020/11/09/irving-azoff-social-platform-comments/
The 72-year-old management mainstay, who hasn’t hesitated to voice his opinion of big-name content platforms in the past, disclosed his firmly worded stance on social networks in a recent interview with the Los Angeles Times. This piece was published late last week, just before the Full Stop Management exec and chairman was inducted into the Rock and Roll Hall of Fame as a non-performer, receiving the Ahmet Ertegun Award. Irving Azoff nonchalantly noted in the article that Travis Scott is “unmanageable” and opined: “I don’t think there’s that many smart people in our business.”
And after emphasizing that he continues to manage musicians as part of a larger effort to pursue artist-rights causes – not solely due to the far-reaching financial benefits delivered by his star-studded client roster – the Music Artists Coalition co-founder turned his attention to social platforms’ unwillingness to “pay fair market value” for music.
“These people, when they start out – whether it’s Facebook, Snapchat, TikTok, whatever – they resist paying for music until you go beat the f—k out of them,” stated the longtime Eagles manager. “And then of course, none of them pay fair market value and they get away with it. Your company’s worth $30 billion and you can’t spend 20 grand for a song that becomes a phenomenon on your channel? Even when they pay, artists don’t get enough.
“Music, as a commodity, is more important than it’s ever been, and more unfairly monetized for the creators. And that’s what creates an opportunity for people like me,” finished the former Live Nation executive chairman and Ticketmaster CEO.
https://www.digitalmusicnews.com/2020/11/09/irving-azoff-social-platform-comments/
DC Court restrains Trump administration actions and protects First Amendment Free Speech Rights of Voice of America Journalists
Recently U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting free speech rights of VOA journalists. She ordered a Trump Administration appointee, U.S. Agency for Global Media CEO Michael Pack, to stop interfering in the news service's news coverage and editorial personnel matters. She limited Pack's authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely "violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression. . . .,"
The opinion is here:
https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf
Recently U.S. District Court Judge Beryl Howell entered a preliminary injunction order protecting free speech rights of VOA journalists. She ordered a Trump Administration appointee, U.S. Agency for Global Media CEO Michael Pack, to stop interfering in the news service's news coverage and editorial personnel matters. She limited Pack's authority to force the news agency to cover President Trump more favorably. She said that the acts of Pack and his aides likely "violated and continue to violate First Amendment rights because, among other unconstitutional effects, they result in self-censorship and the chilling of First Amendment expression. . . .,"
The opinion is here:
https://www.gibsondunn.com/wp-content/uploads/2020/11/PI-Decision-11-20-2020.pdf
New York adopts strong anti-SLAPP statute
Posted: 17 Nov 2020 09:16 AM PST
by Paul Alan Levy
With a signature last week from Governor Cuomo, New York has become the latest state to enact a strong anti-SLAPP law. Addressing flaws that came to the fore in our recent defense of Richard Robbins, the new statute considerably broadens the scope of speech covered by anti-SLAPP protections, and, requires a stay of discovery upon the filing of an anti-SLAPP motion, provides for the consideration of affidavits as well as pleadings in assessing whether there is “a substantial basis in law” for actions directed at protected speech, and requires, rather than simply permitting, awards of attorney fees when an anti-SLAPP motion is granted.
Unlike the anti-SLAPP laws in most states with such broad coverage, the New York statute does not contain exceptions for lawsuits aimed at commercial speech, suits filed in the public interest, or suits filed on behalf of state or local governments. It remains to be seen whether such amendments prove to be needed to prevent the application to the statute to cases far removed some the sort of oppressive lawsuits at which the sponsors were aiming, as enactment of such exceptions proved necessary in California after its pioneering anti-SLAPP law was enacted without those safeguards.
Posted: 17 Nov 2020 09:16 AM PST
by Paul Alan Levy
With a signature last week from Governor Cuomo, New York has become the latest state to enact a strong anti-SLAPP law. Addressing flaws that came to the fore in our recent defense of Richard Robbins, the new statute considerably broadens the scope of speech covered by anti-SLAPP protections, and, requires a stay of discovery upon the filing of an anti-SLAPP motion, provides for the consideration of affidavits as well as pleadings in assessing whether there is “a substantial basis in law” for actions directed at protected speech, and requires, rather than simply permitting, awards of attorney fees when an anti-SLAPP motion is granted.
Unlike the anti-SLAPP laws in most states with such broad coverage, the New York statute does not contain exceptions for lawsuits aimed at commercial speech, suits filed in the public interest, or suits filed on behalf of state or local governments. It remains to be seen whether such amendments prove to be needed to prevent the application to the statute to cases far removed some the sort of oppressive lawsuits at which the sponsors were aiming, as enactment of such exceptions proved necessary in California after its pioneering anti-SLAPP law was enacted without those safeguards.
Apple will pay $113 million to settle states’ investigation into battery throttling.
Nov. 18, 2020, 6:49 p.m. ETNov. 18, 2020
Nov. 18, 2020By Jack Nicas
Apple agreed on Wednesday to pay $113 million to settle an investigation by more than 30 states into its past practice of secretly slowing down older iPhones to preserve their battery life.
Apple’s practice of throttling phones was a black eye for the company when it was revealed in 2017, seeming to confirm some customers’ suspicions that their devices got slower when Apple released new phones. Apple said at the time that its software had slowed down phones with older batteries to prevent them from shutting off unexpectedly. Apple offered some customers free battery replacements in response to the controversy.
As part of its settlement with the states, Apple must be more transparent about how it manages battery life on its devices. Apple previously agreed to pay up to $500 million to affected customers to settle a separate class-action suit.
An Apple spokeswoman declined to comment but pointed to language in the settlement that said the agreement did not mean Apple has admitted any wrongdoing
https://www.nytimes.com/2020/11/18/business/apple-will-pay-113-million-to-settle-states-investigation-into-battery-throttling.html
Nov. 18, 2020, 6:49 p.m. ETNov. 18, 2020
Nov. 18, 2020By Jack Nicas
Apple agreed on Wednesday to pay $113 million to settle an investigation by more than 30 states into its past practice of secretly slowing down older iPhones to preserve their battery life.
Apple’s practice of throttling phones was a black eye for the company when it was revealed in 2017, seeming to confirm some customers’ suspicions that their devices got slower when Apple released new phones. Apple said at the time that its software had slowed down phones with older batteries to prevent them from shutting off unexpectedly. Apple offered some customers free battery replacements in response to the controversy.
As part of its settlement with the states, Apple must be more transparent about how it manages battery life on its devices. Apple previously agreed to pay up to $500 million to affected customers to settle a separate class-action suit.
An Apple spokeswoman declined to comment but pointed to language in the settlement that said the agreement did not mean Apple has admitted any wrongdoing
https://www.nytimes.com/2020/11/18/business/apple-will-pay-113-million-to-settle-states-investigation-into-battery-throttling.html
WSJ: Apple Inc. AAPL -1.10% is halving the commission it charges smaller developers that sell software through its App Store,
a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
From: https://www.wsj.com/articles/apple-under-antitrust-scrutiny-halves-app-store-fee-for-smaller-developers-11605697203?mod=tech_lead_pos4
DAR Comment: Epic's litigation against Apple has been criticized for legal weaknesses, but it may be a cog in Epic's seemingly successful machine to pressure Apple for better rates.
a partial concession in its battle with critics over how it wields power in its digital ecosystem.
The iPhone maker said that starting next year it will collect 15% rather than 30% of App Store sales from companies that generate no more than $1 million in revenue through the software platform, including in-app purchases. The fee will remain 30% for developers whose sales through the App Store, excluding commission payments, exceed $1 million—meaning the reduction won’t affect such vocal Apple opponents as videogame company Epic Games Inc.
Apple’s 30% take has been at the heart of complaints this year from other tech companies and some users over how it manages the vast digital world of people who use iPhones, iPads and other Apple devices. The policy is also central to a major legal battle with Epic, and to government examinations in the U.S. and Europe of Apple’s competitive behavior as a gatekeeper between software makers and the hundreds of millions of people who use Apple’s gadgets.
From: https://www.wsj.com/articles/apple-under-antitrust-scrutiny-halves-app-store-fee-for-smaller-developers-11605697203?mod=tech_lead_pos4
DAR Comment: Epic's litigation against Apple has been criticized for legal weaknesses, but it may be a cog in Epic's seemingly successful machine to pressure Apple for better rates.
Airbnb Claims Google Pushes Competing Travel Listings Down
-
November 17, 2020
Airbnb, in its S-1 filing, wrote that it believes its search results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, reported CNBC. [https://www.cnbc.com/2020/11/16/airbnb-s1-google-travel-sites-hurt-airbnb-in-search-results.html]
Airbnb says Google’s search business has prevented the home-sharing company from reaping internet traffic, according to documents the company filed as it prepares to sell shares to the public.
Airbnb allows users to book short-term rentals and experiences while traveling. Under the “Risk Factors” in Airbnb’s S-1 filing, the company said Google has favored its own products over the company’s, resulting in fewer online visitors to its website. In the last year, the Alphabet company has added more search features akin to travel websites, including for vacation rentals.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” the prospectus states.
DAR Comment: At recent Congressional hearings, many stories like Airbnb's were looked at, and had a prominent role in the Report issued by the Democratic majority.
-
November 17, 2020
Airbnb, in its S-1 filing, wrote that it believes its search results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, reported CNBC. [https://www.cnbc.com/2020/11/16/airbnb-s1-google-travel-sites-hurt-airbnb-in-search-results.html]
Airbnb says Google’s search business has prevented the home-sharing company from reaping internet traffic, according to documents the company filed as it prepares to sell shares to the public.
Airbnb allows users to book short-term rentals and experiences while traveling. Under the “Risk Factors” in Airbnb’s S-1 filing, the company said Google has favored its own products over the company’s, resulting in fewer online visitors to its website. In the last year, the Alphabet company has added more search features akin to travel websites, including for vacation rentals.
“We believe that our SEO results have been adversely affected by the launch of Google Travel and Google Vacation Rental Ads, which reduce the prominence of our platform in organic search results for travel-related terms and placement on Google,” the prospectus states.
DAR Comment: At recent Congressional hearings, many stories like Airbnb's were looked at, and had a prominent role in the Report issued by the Democratic majority.
How Biosimilar Disparagement Violates Antitrust Law
by Michael Carrier
Nov. 16, 2020,
Biosimilar adoption has lagged in the U.S. due, in part, to their high cost and disparagement by manufacturers of biologics. Rutgers Law professor Michael A. Carrier says biologic manufacturers are violating antitrust law because they have a monopoly and engage in exclusionary conduct by issuing disparaging statements with foreboding safety warnings.
Biologics, the next wave of pharmaceutical products, offer pathbreaking advances in treating cancer, arthritis, chronic diseases, and other conditions. Their promise, however, is matched by their high price. More complex than brand-name small-molecule drugs, biologics could cost patients hundreds of thousands of dollars a year.
The hope, then, is that just as with generic drugs, competition from follow-on products known as biosimilars will lower prices. In fact, a recent report from the Association for Affordable Medicines found that biosimilars could “save America tens of billions of dollars over the next decade.” But it warned that these savings would materialize “only if patients can access” the biosimilars. One main reason they might not is disparagement.
Biologic companies have raised ominous warnings that biosimilars are not the same, with differences posing grave safety consequences. This can violate antitrust law.
Biosimilars are nearly the same as biologics. In fact, they are required to be “highly similar” to and have “no clinically meaningful differences” from biologics. To show that it is highly similar, a biosimilar manufacturer “extensively analyz[es]…the structure and function of both the reference product and the proposed biosimilar,” using “[s]tate-of-the-art technology…to compare characteristics…such as purity, chemical identity, and bioactivity.”
The manufacturer also conducts studies to show that there are no clinically meaningful differences in “safety, purity, and potency.”
Biologic Companies Are Violating Antitrust Law
How is antitrust law being violated? First, biologic manufacturers are likely to have monopoly power. There has been limited entry of biosimilars in the U.S. Biologics make up eight of the top 10 highest-selling drugs in the country. And manufacturers charge astronomical prices, as much as hundreds of thousands of dollars a year.
Second, biologic manufacturers’ statements and omissions could constitute exclusionary conduct. There are several types of deception: Manufacturers make foreboding safety threats. They warn that biosimilars act differently from, or are not identical to, reference products. And they fret that biosimilars do not satisfy interchangeability standards.
Each of these types of statements, even though they may be nuanced, deceives. A product that is “highly similar” to and has “no clinically meaningful differences” from the reference product cannot act differently in the body. Similarly, claiming that the biosimilar is not identical is irrelevant; in fact, it is “normal and expected within the manufacturing process” for even batches of biologic products themselves to reveal “[s]light differences.”
Nor does a biosimilar’s failure to attain interchangeability mean that it is less safe. This status only makes sense for biosimilars that would be dispensed at the pharmacy counter, where substitution takes place. But each of the biosimilars that has entered the U.S. market so far has been dispensed not in this setting, but through injection or infusion in the hospital.
Deceptive StatementsThe Federal Trade Commission has explained that companies can engage in deception not just by issuing false statements but also by making misleading statements and omitting information. Similarly, in February, the FDA explained in draft guidance that “representations or suggestions that create an impression that a biosimilar is not highly similar to its reference product are likely to be false or misleading.”
In evaluating antitrust liability for deception, some courts analyze an array of factors to ensure that the conduct affects competition. A plaintiff challenging biosimilar disparagement would be likely to satisfy these factors. Because the statements warn of health concerns, they would be material. As representations about safety, they would be likely to induce reasonable reliance. And a biosimilar manufacturer would not be likely to readily neutralize the disparaging statements.
Other courts apply a more holistic approach. Such a flexible framework makes it even more likely that an antitrust claim would be successful. It would recognize the irreversible effects of locking new patients into biologics because they do not trust biosimilars. And it would consider disparagement’s effects in fortifying entry barriers cementing biologics’ power.
In short, biologic manufacturers are likely to have monopoly power and engage in exclusionary conduct, thereby violating antitrust law.
In warning consumers about safety harms, biologic manufacturers make statements that sound reasonable on their face. But they seek to sow fear, not informing patients that there are no clinically meaningful differences between biologics and biosimilars.
Antitrust liability would prevent biologic manufacturers from stifling more affordable biosimilars in their cradle by ominously implying false safety concerns. In the process, antitrust promises to help U.S. consumers afford lifesaving medicines.
https://news.bloomberglaw.com/health-law-and-business/how-biosimilar-disparagement-violates-antitrust-lawThis column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Author Information
Michael A. Carrier is Distinguished Professor of Law at Rutgers Law School
District officials will now send out another $100 million in grants to businesses hit hardest by the coronavirus pandemic
This is the city’s largest effort to prop up struggling retailers and restaurants since an initial round of cash assistance this spring.
Mayor Muriel Bowser announced this new “Bridge Fund” Wednesday, with plans to let businesses start applying for the grants on a rolling basis over the course of the next few weeks. The money will largely be targeted to the hospitality sector, considering that the pandemic has pummeled those industries particularly acutely, closely mirroring (but still distinct from) a program the D.C. Council created this summer.
The grants will be split among four categories: restaurants, hotels, retail and entertainment. Restaurants will be eligible to earn the largest portion of the funds, with $35 million set aside for the industry, while hotels are close behind with $30 million up for grabs. Entertainment venues and related businesses will be eligible for $20 million, while retailers can earn a total of $15 million.
https://www.bizjournals.com/washington/news/2020/11/18/dc-business-relief-grants-new-coronavirus.html?
This is the city’s largest effort to prop up struggling retailers and restaurants since an initial round of cash assistance this spring.
Mayor Muriel Bowser announced this new “Bridge Fund” Wednesday, with plans to let businesses start applying for the grants on a rolling basis over the course of the next few weeks. The money will largely be targeted to the hospitality sector, considering that the pandemic has pummeled those industries particularly acutely, closely mirroring (but still distinct from) a program the D.C. Council created this summer.
The grants will be split among four categories: restaurants, hotels, retail and entertainment. Restaurants will be eligible to earn the largest portion of the funds, with $35 million set aside for the industry, while hotels are close behind with $30 million up for grabs. Entertainment venues and related businesses will be eligible for $20 million, while retailers can earn a total of $15 million.
https://www.bizjournals.com/washington/news/2020/11/18/dc-business-relief-grants-new-coronavirus.html?
The view from Moscow -- Sputnik News
US Health Dept. Says Will Not Work With Biden Until Official Announcement of His Victory
MOSCOW (Sputnik) – The US Department of Health and Human Services will not work with projected President-elect Joe Biden until the General Services Administration (GSA) confirms his victory in the presidential election, Secretary Alex Azar said.
“We've made it very clear that when GSA makes a determination, we will ensure complete, cooperative professional transitions and planning,” Azar said at a press briefing on Wednesday, as quoted by the CNN broadcaster.
He stressed that the department was just following the existing guidance.
“We're about getting vaccines and therapeutics invented and get the clinical trial data and saving lives here. That's where our focus is as we go forward with our efforts,” Azar added.
GSA head Emily Murphy has reportedly yet to sign the required paperwork formalizing the start of the transition period. Until this move, Biden's team has no access to the government finances as well as cannot cooperate with federal bodies.
Incumbent President Donald Trump has not yet conceded defeat in the election despite prominent US media outlets, such as the Fox News broadcaster, declaring Biden's victory. Trump has made multiple claims of electoral fraud since polls closed.
US Health Dept. Says Will Not Work With Biden Until Official Announcement of His Victory
MOSCOW (Sputnik) – The US Department of Health and Human Services will not work with projected President-elect Joe Biden until the General Services Administration (GSA) confirms his victory in the presidential election, Secretary Alex Azar said.
“We've made it very clear that when GSA makes a determination, we will ensure complete, cooperative professional transitions and planning,” Azar said at a press briefing on Wednesday, as quoted by the CNN broadcaster.
He stressed that the department was just following the existing guidance.
“We're about getting vaccines and therapeutics invented and get the clinical trial data and saving lives here. That's where our focus is as we go forward with our efforts,” Azar added.
GSA head Emily Murphy has reportedly yet to sign the required paperwork formalizing the start of the transition period. Until this move, Biden's team has no access to the government finances as well as cannot cooperate with federal bodies.
Incumbent President Donald Trump has not yet conceded defeat in the election despite prominent US media outlets, such as the Fox News broadcaster, declaring Biden's victory. Trump has made multiple claims of electoral fraud since polls closed.
Businesses Trying to Rebound After Unrest Face a Challenge: Not Enough Insurance - The New York Times
A below-the-fold article in the NYT focuses on small businesses owned by largely uninsured minority people that were destroyed by vandals while racial justice protest riots were going on in Kenosha.
The author, Nellie Bowles, observes that some activists have downplayed the damage to businesses from looting and arson occurring while racial justice protests were going on around the country. But some affected small entrepreneurs, such as those interviewed by Bowles, have little or no insurance, and are struggling.
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html?searchResultPosition=1
A below-the-fold article in the NYT focuses on small businesses owned by largely uninsured minority people that were destroyed by vandals while racial justice protest riots were going on in Kenosha.
The author, Nellie Bowles, observes that some activists have downplayed the damage to businesses from looting and arson occurring while racial justice protests were going on around the country. But some affected small entrepreneurs, such as those interviewed by Bowles, have little or no insurance, and are struggling.
https://www.nytimes.com/2020/11/09/business/small-business-insurance-unrest-kenosha.html?searchResultPosition=1
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians . . . .
Excerpt from opinion at
www.courtlistener.com/recap/gov.uscourts.pamd.127057/gov.uscourts.pamd.127057.202.0_1.pdf
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians from all corners – from Greene County to Pike County, and everywhere in between. In other words, Plaintiffs ask this Court to disenfranchise almost seven million voters.
This Court has been unable to find any case in which a plaintiff has sought such a drastic remedy in the contest of an election, in terms of the sheer volume of votes asked to be invalidated. One might expect that when seeking such a startling outcome, a plaintiff would come formidably armed with compelling legal arguments and factual proof of rampant corruption, such that this Court would have no option but to regrettably grant the proposed injunctive relief despite the impact it would have on such a large group of citizens.
That has not happened. Instead, this Court has been presented with strained legal arguments without merit and speculative accusations, unpled in the operative complaint and unsupported by evidence. In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state. Our people, laws, and institutions demand more. At bottom, Plaintiffs have failed to meet their burden to state a claim upon which relief may be granted.
Therefore, I grant Defendants’ motions and dismiss Plaintiffs’ action with prejudice.
Excerpt from opinion at
www.courtlistener.com/recap/gov.uscourts.pamd.127057/gov.uscourts.pamd.127057.202.0_1.pdf
In this action, the Trump Campaign and the Individual Plaintiffs (collectively, the “Plaintiffs”) seek to discard millions of votes legally cast by Pennsylvanians from all corners – from Greene County to Pike County, and everywhere in between. In other words, Plaintiffs ask this Court to disenfranchise almost seven million voters.
This Court has been unable to find any case in which a plaintiff has sought such a drastic remedy in the contest of an election, in terms of the sheer volume of votes asked to be invalidated. One might expect that when seeking such a startling outcome, a plaintiff would come formidably armed with compelling legal arguments and factual proof of rampant corruption, such that this Court would have no option but to regrettably grant the proposed injunctive relief despite the impact it would have on such a large group of citizens.
That has not happened. Instead, this Court has been presented with strained legal arguments without merit and speculative accusations, unpled in the operative complaint and unsupported by evidence. In the United States of America, this cannot justify the disenfranchisement of a single voter, let alone all the voters of its sixth most populated state. Our people, laws, and institutions demand more. At bottom, Plaintiffs have failed to meet their burden to state a claim upon which relief may be granted.
Therefore, I grant Defendants’ motions and dismiss Plaintiffs’ action with prejudice.
Landlord-Tenant Court Diversion programs in various jurisdictions
by Don Allen Resnikoff
Diversion programs typically provide landlords and tenants with an alternative to court actions against tenants by providing emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
by Don Allen Resnikoff
Diversion programs typically provide landlords and tenants with an alternative to court actions against tenants by providing emergency funds for rent, and mediation. Landlords generally are called upon to voluntarily cooperate, which they will be inclined to do because emergency funds mean that the rent will be paid.Here is a description from the Connecticut Eviction and Foreclosure Prevention Program (EFPP):
The EFPP is designed to prevent evictions and foreclosures through mediation and a Rent Bank. Five community-based agencies operate the program. A trained mediator acts as a third party facilitator to help develop mutually agreed upon solutions to identified problems which may include back rent or mortgage payments, repairs, housing code violations and communication problems. The Rent Bank provides funds to eligible families to help pay rent or mortgage arrears. A family may consist of a single individual, roommates, an extended family, or a one or two parent family.
Following is information about other similar programs:
In Grand Rapids: the Eviction Prevention Program pilot in the 61st District Court
In Massachusetts, the HomeStart Eviction Prevention program
In Phoenix: the Arizona Department of Housing’s Eviction Prevention Assistance, along with an article about its roll-out
In Philadelphia: the Philadelphia Eviction Prevention Project, which also includes other services like a helpline for tenants, training workshops, a legal help website, and connections to legal services.
In Connecticut: the Eviction and Foreclosure Prevention Program
In Jacksonville, FL: the Emergency Assistance Program from the city’s Social Service Division These programs seem to me to be a model worth considering for DC.
See https://evictioninnovation.org/innovations/
https://www.msn.com/en-us/news/politics/punxsutawney-phil-will-do-groundhog-day-virtually-next-year/vi-BB1bcwXl
FROM WTOP: Major DC gas wholesaler/retailer accused of overcharging customers
A local gas retailer is accused of price gouging, according to a lawsuit filed in D.C.
The Office of the Attorney General for the District of Columbia said that Capitol Petroleum Group and its affiliate companies gouged prices during the District’s COVID-19 emergency.
“Even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District,” a news release said. [https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging]
D.C. Attorney General Karl Racine said the company “took advantage” of consumers instead of “passing the cost savings along to District consumers as required by law.”
The allegations state that before March 2020, Capitol Petroleum Group earned an average of $0.44 in profits per gallon of regular gas and $0.80 per gallon of premium. However, following the emergency declaration on March 11, the company earned an average profit of $0.88 per gallon of regular gas and $1.23 per gallon of premium gas that it sold.
The original emergency declaration that has been extended prohibited price gouging during the coronavirus public health emergency.
The D.C. Attorney General’s Office also accused the company of applying a markup of 149.85% to prices it charged other retailers per gallon of gas during the week of March 22-28, whereas from December 2019 to March 9, 2020, its average markup per gallon was 41.6%.
The District is seeking a court order to stop the company from violating D.C.’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices and civil penalties.
Capitol Petroleum Group affiliates named in the lawsuit include Anacostia Realty LLC and DAG Petroleum Suppliers LLC. Capitol Petroleum group is based in Virginia.
This is the second lawsuit Racine’s office has filed against a D.C. business for price gouging during the pandemic. The first was against Helen Mart, a store in Ward 7.
“Price gouging is illegal in the District, and companies may not unlawfully increase their profit margins at the expense of District residents during an emergency,” Racine said.
The penalty for price gouging in D.C. is $5,000 per violation.
- Abigail Constantino
A local gas retailer is accused of price gouging, according to a lawsuit filed in D.C.
The Office of the Attorney General for the District of Columbia said that Capitol Petroleum Group and its affiliate companies gouged prices during the District’s COVID-19 emergency.
“Even as wholesale gas prices dropped when the economy slowed in March and April 2020, CPG unlawfully doubled its profits on each gallon of gas sold to consumers at 54 gas stations in the District,” a news release said. [https://oag.dc.gov/release/ag-racine-sues-major-gasoline-seller-price-gouging]
D.C. Attorney General Karl Racine said the company “took advantage” of consumers instead of “passing the cost savings along to District consumers as required by law.”
The allegations state that before March 2020, Capitol Petroleum Group earned an average of $0.44 in profits per gallon of regular gas and $0.80 per gallon of premium. However, following the emergency declaration on March 11, the company earned an average profit of $0.88 per gallon of regular gas and $1.23 per gallon of premium gas that it sold.
The original emergency declaration that has been extended prohibited price gouging during the coronavirus public health emergency.
The D.C. Attorney General’s Office also accused the company of applying a markup of 149.85% to prices it charged other retailers per gallon of gas during the week of March 22-28, whereas from December 2019 to March 9, 2020, its average markup per gallon was 41.6%.
The District is seeking a court order to stop the company from violating D.C.’s price gouging and consumer protection laws, relief for consumers who were charged unfairly high prices and civil penalties.
Capitol Petroleum Group affiliates named in the lawsuit include Anacostia Realty LLC and DAG Petroleum Suppliers LLC. Capitol Petroleum group is based in Virginia.
This is the second lawsuit Racine’s office has filed against a D.C. business for price gouging during the pandemic. The first was against Helen Mart, a store in Ward 7.
“Price gouging is illegal in the District, and companies may not unlawfully increase their profit margins at the expense of District residents during an emergency,” Racine said.
The penalty for price gouging in D.C. is $5,000 per violation.
Google Breakup Should ‘Be on the Table' Says Sen. Klobuchar, Who Is a Possible Biden Pick for Attorney General
By Lauren Feiner, CNBC • Published November 12, 2020 • Updated on November 12, 2020 at 7:42 pm
Sen. Amy Klobuchar
During a virtual keynote speech for the American Bar Association's Fall Forum, Klobuchar praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
By Lauren Feiner, CNBC • Published November 12, 2020 • Updated on November 12, 2020 at 7:42 pm
Sen. Amy Klobuchar
- During a virtual keynote speech for the American Bar Association's Fall Forum, Sen. Amy Klobuchar, D-Minn., praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
- Klobuchar's name has been floated as a possible attorney general under President-elect Joe Biden, CNBC reported on Tuesday.
- Even if she remains in the Senate, Klobuchar will be a force for tech companies to reckon with, especially if Democrats win the majority in the chamber.
During a virtual keynote speech for the American Bar Association's Fall Forum, Klobuchar praised the Justice Department for leaving open the option of so-called structural remedies in its recent antitrust lawsuit against Google.
European Commission - Press release on Amazon Actions
DAR Comment: At a moment where there is political pressure for reform of antitrust in the U.S., the EU model of "abuse of dominant position" suggests one path for reform. For that reason, it is worth noticing real-world operation of that EU model, and evaluating whether it is an improvement over current U.S. practice.
Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices
Brussels, 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Statement of Objections on Amazon's use of marketplace seller data
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Investigation into Amazon practices regarding its “Buy Box” and Prime label
In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).
In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.
The “Buy Box” is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.
If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Background and procedure
Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
The Commission opened the in-depth investigation into Amazon's use of marketplace seller data on 17 July 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.
More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40462.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened a second in-depth investigation into Amazon's business practices.
This investigation will cover the European Economic Area, with the exception of Italy. The Italian Competition Authority started to investigate partially similar concerns last year, with a particular focus on the Italian market. The Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.
More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40703.
There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
IP/20/2077
Press contacts:
Arianna PODESTA (+32 2 298 70 24)
Maria TSONI (+32 2 299 05 26)
General public inquiries: Europe Direct by ph
DAR Comment: At a moment where there is political pressure for reform of antitrust in the U.S., the EU model of "abuse of dominant position" suggests one path for reform. For that reason, it is worth noticing real-world operation of that EU model, and evaluating whether it is an improvement over current U.S. practice.
Antitrust: Commission sends Statement of Objections to Amazon for the use of non-public independent seller data and opens second investigation into its e-commerce business practices
Brussels, 10 November 2020
The European Commission has informed Amazon of its preliminary view that it has breached EU antitrust rules by distorting competition in online retail markets. The Commission takes issue with Amazon systematically relying on non-public business data of independent sellers who sell on its marketplace, to the benefit of Amazon's own retail business, which directly competes with those third party sellers.
The Commission also opened a second formal antitrust investigation into the possible preferential treatment of Amazon's own retail offers and those of marketplace sellers that use Amazon's logistics and delivery services.
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: “We must ensure that dual role platforms with market power, such as Amazon, do not distort competition. Data on the activity of third party sellers should not be used to the benefit of Amazon when it acts as a competitor to these sellers. The conditions of competition on the Amazon platform must also be fair. Its rules should not artificially favour Amazon's own retail offers or advantage the offers of retailers using Amazon's logistics and delivery services. With e-commerce booming, and Amazon being the leading e-commerce platform, a fair and undistorted access to consumers online is important for all sellers.”
Statement of Objections on Amazon's use of marketplace seller data
Amazon has a dual role as a platform: (i) it provides a marketplace where independent sellers can sell products directly to consumers; and (ii) it sells products as a retailer on the same marketplace, in competition with those sellers.
As a marketplace service provider, Amazon has access to non-public business data of third party sellers such as the number of ordered and shipped units of products, the sellers' revenues on the marketplace, the number of visits to sellers' offers, data relating to shipping, to sellers' past performance, and other consumer claims on products, including the activated guarantees.
The Commission's preliminary findings show that very large quantities of non-public seller data are available to employees of Amazon's retail business and flow directly into the automated systems of that business, which aggregate these data and use them to calibrate Amazon's retail offers and strategic business decisions to the detriment of the other marketplace sellers. For example, it allows Amazon to focus its offers in the best-selling products across product categories and to adjust its offers in view of non-public data of competing sellers.
The Commission's preliminary view, outlined in its Statement of Objections, is that the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and to leverage its dominance in the market for the provision of marketplace services in France and Germany- the biggest markets for Amazon in the EU. If confirmed, this would infringe Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The sending of a Statement of Objections does not prejudge the outcome of an investigation.
Investigation into Amazon practices regarding its “Buy Box” and Prime label
In addition, the Commission opened a second antitrust investigation into Amazon's business practices that might artificially favour its own retail offers and offers of marketplace sellers that use Amazon's logistics and delivery services (the so-called “fulfilment by Amazon or FBA sellers”).
In particular, the Commission will investigate whether the criteria that Amazon sets to select the winner of the “Buy Box” and to enable sellers to offer products to Prime users, under Amazon's Prime loyalty programme, lead to preferential treatment of Amazon's retail business or of the sellers that use Amazon's logistics and delivery services.
The “Buy Box” is displayed prominently on Amazon's websites and allows customers to add items from a specific retailer directly into their shopping carts. Winning the “Buy Box” (i.e. being chosen as the offer that features in this box) is crucial to marketplace sellers as the Buy Box prominently shows the offer of one single seller for a chosen product on Amazon's marketplaces, and generates the vast majority of all sales. The other aspect of the investigation focusses on the possibility for marketplace sellers to effectively reach Prime users. Reaching these consumers is important to sellers because the number of Prime users is continuously growing and because they tend to generate more sales on Amazon's marketplaces than non-Prime users.
If proven, the practice under investigation may breach Article 102 of the Treaty on the Functioning of the European Union (TFEU) that prohibits the abuse of a dominant market position.
The Commission will now carry out its in-depth investigation as a matter of priority. The opening of a formal investigation does not prejudge its outcome.
Background and procedure
Article 102 of the TFEU prohibits the abuse of a dominant position. The implementation of these provisions is defined in the Antitrust Regulation (Council Regulation No 1/2003), which can also be applied by the national competition authorities.
The Commission opened the in-depth investigation into Amazon's use of marketplace seller data on 17 July 2019.
A Statement of Objections is a formal step in Commission investigations into suspected violations of EU antitrust rules. The Commission informs the parties concerned in writing of the objections raised against them. The addressees can examine the documents in the Commission's investigation file, reply in writing and request an oral hearing to present their comments on the case before representatives of the Commission and national competition authorities. Sending a Statement of Objections and opening of a formal antitrust investigation does not prejudge the outcome of the investigations.
More information on the investigation is available on the Commission's competition website, in the public case register under case number AT.40462.
The Commission has informed Amazon and the competition authorities of the Member States that it has opened a second in-depth investigation into Amazon's business practices.
This investigation will cover the European Economic Area, with the exception of Italy. The Italian Competition Authority started to investigate partially similar concerns last year, with a particular focus on the Italian market. The Commission will continue the close cooperation with the Italian Competition Authority throughout the investigation.
More information on the investigation will be available on the Commission's competition website, in the public case register under case number AT.40703.
There is no legal deadlines for bringing an antitrust investigation to an end. The duration of an antitrust investigation depends on a number of factors, including the complexity of the case, the extent to which the undertakings concerned cooperate with the Commission and the exercise of the rights of defence.
IP/20/2077
Press contacts:
Arianna PODESTA (+32 2 298 70 24)
Maria TSONI (+32 2 299 05 26)
General public inquiries: Europe Direct by ph
Europe’s top antitrust enforcer Margrethe Vestager has warned against pushing for the structural break up of tech companies
Vestager, who has aggressively pursued antitrust investigations against the likes of Google, Amazon and Apple in recent years, said it would be “doable” to force the breakup of the tech giants under current EU law. But she warned of unintended consequences and potentially lengthy court battles between European regulators and the tech giants.
“I don’t think it is something that should be introduced in this legislation and I think one should be very careful with that type of remedy because one should be very sure how it would actually work,” Vestager said. “It would tie you up in court for a very very long time. I think it’s important we try these routes first with the platforms.”
She is among the top European bureaucrats who are currently drafting the Digital Services Act, aimed at establishing new rules for the tech giants in Europe.
Vestager’s comments also put her at odds with other senior European officials, including Europe’s Internal Market Commissioner Thierry Breton, who have signalled a desire to force the separation of tech companies in some circumstances.
From https://www.theinformation.com/briefings/bc65c0
Vestager, who has aggressively pursued antitrust investigations against the likes of Google, Amazon and Apple in recent years, said it would be “doable” to force the breakup of the tech giants under current EU law. But she warned of unintended consequences and potentially lengthy court battles between European regulators and the tech giants.
“I don’t think it is something that should be introduced in this legislation and I think one should be very careful with that type of remedy because one should be very sure how it would actually work,” Vestager said. “It would tie you up in court for a very very long time. I think it’s important we try these routes first with the platforms.”
She is among the top European bureaucrats who are currently drafting the Digital Services Act, aimed at establishing new rules for the tech giants in Europe.
Vestager’s comments also put her at odds with other senior European officials, including Europe’s Internal Market Commissioner Thierry Breton, who have signalled a desire to force the separation of tech companies in some circumstances.
From https://www.theinformation.com/briefings/bc65c0
Chemerinsky: Free exercise of religion: Fulton v. City of Philadelphia
May people and businesses, based on their religious beliefs, discriminate against gays and lesbians? This was the central issue, but not decided, in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission, which involved whether a bakery could be held liable for refusing to design and bake a cake to celebrate a same-sex marriage. It is a question that the court identified but did not answer in June 2020, when it held in Bostock v. Clayton County, Georgia that Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on sexual orientation or gender identity. The court left open the issue of whether an employer could discriminate based on religious beliefs.
The city of Philadelphia contracts with private social service agencies to place children in foster homes. The city insists that the agencies not discriminate, including on the basis of sexual orientation. Catholic Social Services challenges this and says that it could not certify a same-sex married couple as foster parents because its religion does not recognize same-sex marriage as marriage. It claims that the requirement of nondiscrimination violates its free exercise of religion and its freedom of speech.
One issue, upon which certiorari has been granted, is whether the court should “revisit” Employment Division Department of Human Resources of Oregon v. Smith. In that 1990 decision, the court, in an opinion by Justice Antonin Scalia, held that the free exercise clause of the First Amendment does not provide a basis for a religious exemption from a general law. Now, though, conservatives favor such exemptions, and there well may be five votes to overrule Employment Division. In 2019’s Kennedy v. Bremerton School District, Justice Samuel A. Alito wrote an opinion respecting the denial of certiorari, joined by Justices Clarence Thomas, Neil M. Gorsuch and Brett M. Kavanaugh, and suggested that they might be open to overruling Employment Division.
If Barrett has been confirmed by the time the case is heard on Nov. 4, there could be five votes to do so and to dramatically expand the protection of free exercise of religion, including as a basis for an exemption from anti-discrimination laws.
From: https://www.abajournal.com/columns/article/chemerinsky-the-supreme-court-returns-to-a-term-like-no-other
May people and businesses, based on their religious beliefs, discriminate against gays and lesbians? This was the central issue, but not decided, in 2018 in Masterpiece Cakeshop v. Colorado Civil Rights Commission, which involved whether a bakery could be held liable for refusing to design and bake a cake to celebrate a same-sex marriage. It is a question that the court identified but did not answer in June 2020, when it held in Bostock v. Clayton County, Georgia that Title VII of the 1964 Civil Rights Act prohibits employment discrimination based on sexual orientation or gender identity. The court left open the issue of whether an employer could discriminate based on religious beliefs.
The city of Philadelphia contracts with private social service agencies to place children in foster homes. The city insists that the agencies not discriminate, including on the basis of sexual orientation. Catholic Social Services challenges this and says that it could not certify a same-sex married couple as foster parents because its religion does not recognize same-sex marriage as marriage. It claims that the requirement of nondiscrimination violates its free exercise of religion and its freedom of speech.
One issue, upon which certiorari has been granted, is whether the court should “revisit” Employment Division Department of Human Resources of Oregon v. Smith. In that 1990 decision, the court, in an opinion by Justice Antonin Scalia, held that the free exercise clause of the First Amendment does not provide a basis for a religious exemption from a general law. Now, though, conservatives favor such exemptions, and there well may be five votes to overrule Employment Division. In 2019’s Kennedy v. Bremerton School District, Justice Samuel A. Alito wrote an opinion respecting the denial of certiorari, joined by Justices Clarence Thomas, Neil M. Gorsuch and Brett M. Kavanaugh, and suggested that they might be open to overruling Employment Division.
If Barrett has been confirmed by the time the case is heard on Nov. 4, there could be five votes to do so and to dramatically expand the protection of free exercise of religion, including as a basis for an exemption from anti-discrimination laws.
From: https://www.abajournal.com/columns/article/chemerinsky-the-supreme-court-returns-to-a-term-like-no-other
Justice Alito: Pandemic Has Brought 'Unimaginable Restrictions' On Freedoms
Supreme Court Justice Samuel Alito says the COVID-19 pandemic has brought "previously unimaginable restrictions on individual liberty," warning of an important shift in the views of essential rights on several fronts, from religious freedom to free speech.Alito's remarks came Thursday in a keynote speech at the Federalist Society's annual National Lawyers Convention, which is being held virtually this week. The event's theme is to examine how the coronavirus is affecting the rule of law.The COVID-19 crisis has "highlighted constitutional fault lines," Alito said.
He cautioned that his statements shouldn't be taken as a judgment on whether numerous coronavirus restrictions reflect good public policy."All that I'm saying is this, and I think it is an indisputable statement of fact," the justice said. "We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020."
"Think of all the live events that would otherwise be protected by the right to freedom of speech," from lectures and meetings to religious services, Alito said. He also noted that the pandemic has affected access to the courts and the constitutional right to a speedy trial.
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"The COVID crisis has served as a sort of constitutional stress test," Alito said. "And in doing so, it has highlighted disturbing trends that were already present before the virus struck."
Shifting attitudes
The Supreme Court justice then ran down a list of examples that, in his view, reflect shifting attitudes toward long-held rights in the United States.
First on the list was what Alito called "the dominance of lawmaking by executive fiat rather than legislation" – actions that he said range from agencies' broad use of regulatory power to the use of executive discretion to impose sweeping restrictions in the name of fighting a pandemic.
Alito later cited a legal case in Nevada, saying the governor's emergency orders in that state have given leeway and support to casinos hosting gamblers at up to 50% capacity while forcing houses of worship to cap their attendance at 50 people.
"Take a quick look at the Constitution," Alito said. "You will see the free exercise clause of the First Amendment, which protects religious liberty. You will not find a craps clause or a blackjack clause or a slot machine clause."
"It pains me to say this, but in certain quarters, religious liberty is fast becoming a disfavored right," Alito said. He ran through several religion-related Supreme Court rulings, including the Little Sisters of the Poor (over providing birth control to employees) to Masterpiece Cakeshop in Colorado (over the refusal to make a wedding cake for a gay couple).
Alito made a direct connection between America's ongoing "culture wars" and the pandemic crisis, citing a 2016 blog entry by Harvard Law School professor Mark Tushnet.
"He candidly wrote, quote, The culture wars are over; they lost, we won," Alito said.
He went on to quote from Tushnet's much-discussed stance that "[m]y own judgment is that taking a hard line ('You lost, live with it') is better than trying to accommodate the losers. ... And taking a hard line seemed to work reasonably well in Germany and Japan after 1945."
Alito went on to quote Bob Dylan: "Is our country going to follow that course? To quote a popular Nobel laureate, 'It's not dark yet, but it's getting there.' "
'Hostility to ... unfashionable views'
The justice described what he called a "growing hostility to the expression of unfashionable views." As an example, he cited the Supreme Court's landmark shift on same-sex marriage.
"You can't say that marriage is a union between one man and one woman," Alito said. "Until very recently, that's what the vast majority of Americans thought. Now it's considered bigotry."
Protecting freedom of speech will be one of the Supreme Court's greatest challenges, Alito said.
"Although that freedom is falling out of favor in some circles, we need to do whatever we can to prevent it from becoming a second-tier constitutional right."
Alito also called out a group of Democratic senators who weighed in on a gun-rights case in New York, saying they had attempted to bully the Supreme Court. The group filed an amicus brief calling the court "a sick institution" that might need to be restructured. Alito said he viewed it as "an affront to the Constitution and the rule of law."
The article: https://www.npr.org/2020/11/13/934666499/justice-alito-pandemic-has-brought-unimaginable-restrictions-on-freedoms
Alito speech URL: https://youtu.be/tYLZL4GZVbA
The Huffington Post's take on the speech:
https://www.youtube.com/watch?v=k0sqj1iTUB8
- November 13, 20203:56 PM ET Bill Chappell
- DAR Comment: I am struck by Alito's comments on "culture war," and what he refers to as "growing hostility to the expression of unfashionable views." There may be a connection between Alito's comments on "culture war" and Alito's decisions as a Supreme Court Justice. The implication of his comments may be that judges on one side of the culture war will decide differently from judges on the other side of the culture war on questions such as whether a commercial baker can refuse to make a wedding cake for a gay couple. I'd prefer to think that is not so, and that decisions are based on some combination of Constitutional scholarship and common sense.
"We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020," Alito said in a speech this week to the Federalist Society's National Lawyers Convention.
Supreme Court Justice Samuel Alito says the COVID-19 pandemic has brought "previously unimaginable restrictions on individual liberty," warning of an important shift in the views of essential rights on several fronts, from religious freedom to free speech.Alito's remarks came Thursday in a keynote speech at the Federalist Society's annual National Lawyers Convention, which is being held virtually this week. The event's theme is to examine how the coronavirus is affecting the rule of law.The COVID-19 crisis has "highlighted constitutional fault lines," Alito said.
He cautioned that his statements shouldn't be taken as a judgment on whether numerous coronavirus restrictions reflect good public policy."All that I'm saying is this, and I think it is an indisputable statement of fact," the justice said. "We have never before seen restrictions as severe, extensive and prolonged as those experienced for most of 2020."
"Think of all the live events that would otherwise be protected by the right to freedom of speech," from lectures and meetings to religious services, Alito said. He also noted that the pandemic has affected access to the courts and the constitutional right to a speedy trial.
Article continues after sponsor message
"The COVID crisis has served as a sort of constitutional stress test," Alito said. "And in doing so, it has highlighted disturbing trends that were already present before the virus struck."
Shifting attitudes
The Supreme Court justice then ran down a list of examples that, in his view, reflect shifting attitudes toward long-held rights in the United States.
First on the list was what Alito called "the dominance of lawmaking by executive fiat rather than legislation" – actions that he said range from agencies' broad use of regulatory power to the use of executive discretion to impose sweeping restrictions in the name of fighting a pandemic.
Alito later cited a legal case in Nevada, saying the governor's emergency orders in that state have given leeway and support to casinos hosting gamblers at up to 50% capacity while forcing houses of worship to cap their attendance at 50 people.
"Take a quick look at the Constitution," Alito said. "You will see the free exercise clause of the First Amendment, which protects religious liberty. You will not find a craps clause or a blackjack clause or a slot machine clause."
"It pains me to say this, but in certain quarters, religious liberty is fast becoming a disfavored right," Alito said. He ran through several religion-related Supreme Court rulings, including the Little Sisters of the Poor (over providing birth control to employees) to Masterpiece Cakeshop in Colorado (over the refusal to make a wedding cake for a gay couple).
Alito made a direct connection between America's ongoing "culture wars" and the pandemic crisis, citing a 2016 blog entry by Harvard Law School professor Mark Tushnet.
"He candidly wrote, quote, The culture wars are over; they lost, we won," Alito said.
He went on to quote from Tushnet's much-discussed stance that "[m]y own judgment is that taking a hard line ('You lost, live with it') is better than trying to accommodate the losers. ... And taking a hard line seemed to work reasonably well in Germany and Japan after 1945."
Alito went on to quote Bob Dylan: "Is our country going to follow that course? To quote a popular Nobel laureate, 'It's not dark yet, but it's getting there.' "
'Hostility to ... unfashionable views'
The justice described what he called a "growing hostility to the expression of unfashionable views." As an example, he cited the Supreme Court's landmark shift on same-sex marriage.
"You can't say that marriage is a union between one man and one woman," Alito said. "Until very recently, that's what the vast majority of Americans thought. Now it's considered bigotry."
Protecting freedom of speech will be one of the Supreme Court's greatest challenges, Alito said.
"Although that freedom is falling out of favor in some circles, we need to do whatever we can to prevent it from becoming a second-tier constitutional right."
Alito also called out a group of Democratic senators who weighed in on a gun-rights case in New York, saying they had attempted to bully the Supreme Court. The group filed an amicus brief calling the court "a sick institution" that might need to be restructured. Alito said he viewed it as "an affront to the Constitution and the rule of law."
The article: https://www.npr.org/2020/11/13/934666499/justice-alito-pandemic-has-brought-unimaginable-restrictions-on-freedoms
Alito speech URL: https://youtu.be/tYLZL4GZVbA
The Huffington Post's take on the speech:
https://www.youtube.com/watch?v=k0sqj1iTUB8
NYT catalog of Trump Era Financial Regulation Rollbacks
Here’s a look at some of the changes under President Trump.
Skimping on consumer protections
Payday lending: In late 2017, the Consumer Financial Protection Bureau finalized tough new restrictions on payday lending that would have prevented most customers from repeatedly re-borrowing, a pattern that can trap borrowers in a cycle of debt. But a director appointed by Mr. Trump, Kathleen Kraninger, took over the bureau in 2018 and delayed the new restrictions from taking effect. This year, she rescinded them. A coalition of consumer advocates filed a lawsuit last week challenging the legality of Ms. Kraninger’s actions.
Rent-a-bank rules: Many states have caps on the interest rate that lenders can charge on loans. But there’s a catch: Lenders can skirt the rule by partnering with a bank in another state — one without rate caps — and having that bank issue its loans. The bank then sells the loan to the lender. The tactic, often used by online lenders, is known as “rent-a-bank,” and the Office of the Comptroller of the Currency — under Brian P. Brooks, the acting head of the office — finalized two rules this year, one in May and one last week, affirming that the maneuver is legal. The Federal Deposit Insurance Corporation also issued a rule in June giving the arrangement a green light. (Both the F.D.I.C. action and the O.C.C.’s May rule have been challenged by state attorneys general in lawsuits that are pending.)
Fiduciary rule rollback: The Obama-era Labor Department imposed a rule that would have forced financial advisers and brokers handling retirement and 401(k) accounts to act as “fiduciaries,” a legal standard that requires putting customers’ interests first. But in 2018, a federal appeals court ruled that the agency had overstepped its authority, and the Trump administration didn’t challenge the decision, which killed the rule. One silver lining for consumers: Some economic research has found signs that the high-profile fight over the rule, and the increased attention it brought to how brokers are compensated, led the financial-services industry to alter its behavior and reduce brokers’ incentives to push costly retirement products.
Debt collection rules: The C.F.P.B. finalized new debt-collection rules last week that will, for the first time, let collectors contact borrowers through text messages, emails and social media direct messages. Electronic messages will be required to include an opt-out option. Collectors say the long-sought change will make it easier for them to reach borrowers; consumer advocates fear it will unleash a fresh barrage of intrusive communications. The new rules added one new protection for consumers: Collectors, who are notorious for their deluge of phone calls, will be limited to seven calls per week to a borrower.
Reversing anti-discrimination policiesTracking bias in home loans: This spring, citing the “operational challenges” banks and other mortgage lenders were facing as a result of the coronavirus pandemic, the C.F.P.B. announced that it would stop collecting detailed data on new mortgages, including information about the borrower’s race and location, which researchers and community groups say is crucial to ferreting out discrimination in home lending. Democratic lawmakers have asked the agency to start collecting the data again, but so far it has not done so.
The Community Reinvestment Act: In May, the O.C.C., which regulates banks, revised its requirements for those institutions to do business in low-income and minority communities, despite objections from Fed officials and a refusal by another bank regulator, the F.D.I.C., to sign on to the new rules. It was a rare regulatory split caused chiefly by a concern that the new methods did not make sense and could allow banks to win credit for activities that had little meaningful impact on the communities they are required to serve.
locking discrimination claims: The Department of Housing and Urban Development makes the rules for identifying and stopping discrimination by landlords and mortgage providers. One such rule governs the concept of “disparate impact,” where the policies of a landlord or a bank may unintentionally disadvantage a Black or Latino person seeking a home loan or trying to rent an apartment. In August, H.U.D. finalized a rewrite of the requirements for bringing “disparate impact” claims that critics said would immediately invalidate almost all potential claims. The change, although meant to benefit financial firms, was so drastic that banks, insurance companies and other big firms took the unprecedented step of asking the department not to go through with it.
Increasing room for risky business
Volcker Rule: The Volcker Rule was created as part of the Dodd-Frank law to prevent banks from taking risky bets in the financial markets for the sake of profit. It stipulated that banks could trade only on behalf of their customers and required them to start keeping records to prove their compliance. This year, the Fed and its fellow regulatory agencies changed the rule to allow banks to invest heavily in venture capital funds — which make bets on start-ups or high-growth businesses that are risky by nature — and credit funds, which invest in corporate debt. Critics said the change represented the first step toward letting banks make their own risky bets again, even if no customers were asking them to do so.
Capital requirements: Banks are required under Dodd-Frank to hold a certain amount of capital in reserve as a buffer against crisis. Bank executives dislike high capital requirements, which force them to limit stock buybacks and dividend payments, both of which can help lift share prices. Mr. Quarles, the Fed vice chair for supervision and a Trump appointee, has favored regulatory tweaks that give banks more certainty about their future capital requirements. Critics say that over time, having that certainty could allow banks to reduce the amount of capital they actually hold, since many had held extra capital to avoid big swings from year to year.
Last year, Mr. Quarles, a former private equity investor, instituted greater transparency around bank stress tests, which assess how their capital would hold up against a shock. More recently, the Fed streamlined the process for setting capital requirements, including tweaks that Governor Lael Brainard said might allow some banks to lower their buffers.
https://www.nytimes.com/2020/11/06/business/trump-administration-financial-regulations.html
Professor Andy Gavil, Congress, and antitrust reform
By Don Allen Resnikoff
A major and well publicized recent antitrust development is investigation by States and the U.S. against perceived platform monopolies Google, Facebook, Apple, Amazon, and filing of a Complaint against Google by USDOJ and eleven Republican States. The Google case and other investigation of platform companies seem likely to go forward.
Another important recent antitrust development is consideration of legislative reform, which may also go forward even in the absence of an election day "Blue wave." The recent Congressional report on competition in digital markets, issued by a House of Representatives committee, discusses the possibility of legislation that would change the antitrust laws. See https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
The Democratic majority’s portion of the House Report alone is 450 pages. It offers detailed discussion of the structure and conduct of the big platform companies. The Congressional report’s perception is that traditional antitrust law may not be able to meet the challenges posed by the platform monopolies.
The Democratic majority report offers an array of recommendations for reform, including structural and conduct proposals. It is interesting and important reading, but the complexity of the Report seems not helpful in the effort to secure reform from sometimes reluctant legislators in a divided Congress.
Professor Andy Gavil recently wrote a brief article on antitrust reform focused on monopolization law (https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/) that was certainly not intended as a comment on the Congressional Report, but I find that it has that effect.
Gavil’s suggestions have the virtue of simplicity. That simplicity would seem to increase the possibility that his particular focused suggestions might be acted on. Here is an excerpt from the Gavil article:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of Section 2. Such a modern framework could:
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
By Don Allen Resnikoff
A major and well publicized recent antitrust development is investigation by States and the U.S. against perceived platform monopolies Google, Facebook, Apple, Amazon, and filing of a Complaint against Google by USDOJ and eleven Republican States. The Google case and other investigation of platform companies seem likely to go forward.
Another important recent antitrust development is consideration of legislative reform, which may also go forward even in the absence of an election day "Blue wave." The recent Congressional report on competition in digital markets, issued by a House of Representatives committee, discusses the possibility of legislation that would change the antitrust laws. See https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
The Democratic majority’s portion of the House Report alone is 450 pages. It offers detailed discussion of the structure and conduct of the big platform companies. The Congressional report’s perception is that traditional antitrust law may not be able to meet the challenges posed by the platform monopolies.
The Democratic majority report offers an array of recommendations for reform, including structural and conduct proposals. It is interesting and important reading, but the complexity of the Report seems not helpful in the effort to secure reform from sometimes reluctant legislators in a divided Congress.
Professor Andy Gavil recently wrote a brief article on antitrust reform focused on monopolization law (https://equitablegrowth.org/competitive-edge-crafting-a-monopolization-law-for-our-time/) that was certainly not intended as a comment on the Congressional Report, but I find that it has that effect.
Gavil’s suggestions have the virtue of simplicity. That simplicity would seem to increase the possibility that his particular focused suggestions might be acted on. Here is an excerpt from the Gavil article:
Fortunately, our understanding of “exclusionary” conduct has advanced, as has our understanding of market power. Exclusionary conduct cases such as Microsoft have provided a structured, burden-shifting framework for evaluating claims of exclusionary conduct within the reasonableness framework first identified by Standard Oil. In addition, the federal government’s Horizontal Merger Guidelines aptly identify the focus of most of modern competition law when they state that their “unifying theme” is that “mergers should not be permitted to create, enhance, or entrench market power or to facilitate its exercise.”
A modern approach to unilateral conduct could draw upon these advances. It might start by revisiting and refreshing the meaning of the common law terminology of Section 2. Such a modern framework could:
- Embrace today’s structured approach to the rule of reason, as did the Court in Microsoft
- Fully integrate a more sophisticated understanding of exclusionary conduct, market power, and anti-competitive effects.
Such an approach would prohibit exclusionary conduct (unilateral or concerted) that significantly contributes to the creation, entrenchment, or enhancement of market power, allowing for methods of proving power through alternatives to defining markets and calculating market shares.
This more contemporary approach would be more consonant with trends in most other modern antitrust law. It would untether the law of exclusionary conduct from blind and formalistic reliance on market-share benchmarks, while also allowing for cognizable and verifiable efficiency justifications. In theory, Section 2’s common law origins should allow for this kind of evolution in the courts, but it might instead require legislative reform. In the end, under either approach, change would open up needed space for Section 2 to begin to evolve once again, as has Section 1, so it could adapt to the needs of our time.
Excerpt of Article on Epic-Apple by Jonathan Rubin: Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
Excerpt:
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
From Venturebeat: Epic v. Apple
from https://venturebeat.com/2020/09/11/the-deanbeat-apple-v-epic-a-briefing-on-the-antitrust-arguments-and-interesting-facts/
Epic markets programming is available on Apple and Android (Google) platforms. The charge from Apple to Epic customers is 30% of what Epic charges the customer (Google is similar). Epic started charging customers 30% outside of the Apple app, which led Apple to drop Epic from its platform. Epic then brought suit against Apple.
Epic argues that Apple is a monopolist in two respects: its control of app distribution on the App Store and its requirement that users pay through its payment processing system.
Epic also argues that because Apple has monopoly power, antitrust laws say Apple can’t use that power to shut competition out of the market for either the app store or the payment system. Epic does, however, acknowledge that Apple created value with the App Store.
“To be clear, Epic does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them. What Epic wants is the freedom not to use Apple’s App Store or IAP (in-app purchase), and instead to use and offer competing service,” Epic said.
Apple has asserted its store isn’t a separate product, but Epic argues app distribution is an “aftermarket” derived from the primary market of the smartphone platform. Epic says the courts should view the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic isn’t challenging Apple’s rights on the smartphone platform, only in the aftermarket, where Epic alleges Apple is behaving in a monopolistic manner. It argues that Apple cuts off choices (such as downloading apps from websites) that are available to consumers in other markets. The U.S. Supreme Court examines this issue of the aftermarket in a the case Apple vs. Pepper.
While Apple doesn’t have a monopoly in the presence of Google’s Android, Epic argues that the duopoly has negative effects on the market and that Apple, rather than Google, has the most valuable users. Epic noted that two-thirds of the profits are on Apple’s platform and that Apple has a virtual lock on a billion highly desirable users who spend more than those on Android.
In his testimony, economist David Evans argued on Epic’s behalf that the cost of switching is very high for anyone thinking about moving from iOS to Android. It’s basically like starting over.
Pleadings:
August 13 Epic Complaint: https://www.courtlistener.com/docket/17442392/1/epic-games-inc-v-apple-inc/
August 17 Motion for TRO: https://www.courtlistener.com/docket/17442392/17/epic-games-inc-v-apple-inc/
August 21 Opposition to Motion: https://www.courtlistener.com/docket/17442392/36/epic-games-inc-v-apple-inc/
August 23 Reply to Opposition: https://www.courtlistener.com/docket/17442392/43/epic-games-inc-v-apple-inc/
August 24 Court Order, TRO: https://www.courtlistener.com/docket/17442392/48/epic-games-inc-v-apple-inc/
Sept 4 Motion for PI: https://www.courtlistener.com/docket/17442392/61/epic-games-inc-v-apple-inc/
Sept 8 Answer of Apple to Complaint, Counterclaim: https://www.courtlistener.com/docket/17442392/66/epic-games-inc-v-apple-inc/
Sept 15 Opposition to PI Motion: https://www.courtlistener.com/docket/17442392/73/epic-games-inc-v-apple-inc/
Sept 18 Epic Reply on PI Motion: https://www.courtlistener.com/docket/17442392/90/epic-games-inc-v-apple-inc/
Oct 9, 2020 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION https://www.courtlistener.com/docket/17442392/118/epic-games-inc-v-apple-inc/
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
Excerpt:
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
From Venturebeat: Epic v. Apple
from https://venturebeat.com/2020/09/11/the-deanbeat-apple-v-epic-a-briefing-on-the-antitrust-arguments-and-interesting-facts/
Epic markets programming is available on Apple and Android (Google) platforms. The charge from Apple to Epic customers is 30% of what Epic charges the customer (Google is similar). Epic started charging customers 30% outside of the Apple app, which led Apple to drop Epic from its platform. Epic then brought suit against Apple.
Epic argues that Apple is a monopolist in two respects: its control of app distribution on the App Store and its requirement that users pay through its payment processing system.
Epic also argues that because Apple has monopoly power, antitrust laws say Apple can’t use that power to shut competition out of the market for either the app store or the payment system. Epic does, however, acknowledge that Apple created value with the App Store.
“To be clear, Epic does not seek to force Apple to provide distribution and processing services for free, nor does Epic seek to enjoy Apple’s services without paying for them. What Epic wants is the freedom not to use Apple’s App Store or IAP (in-app purchase), and instead to use and offer competing service,” Epic said.
Apple has asserted its store isn’t a separate product, but Epic argues app distribution is an “aftermarket” derived from the primary market of the smartphone platform. Epic says the courts should view the relevant antitrust market as the aftermarket, which has a unique brand and a unique market and is not part of a larger single product. Epic isn’t challenging Apple’s rights on the smartphone platform, only in the aftermarket, where Epic alleges Apple is behaving in a monopolistic manner. It argues that Apple cuts off choices (such as downloading apps from websites) that are available to consumers in other markets. The U.S. Supreme Court examines this issue of the aftermarket in a the case Apple vs. Pepper.
While Apple doesn’t have a monopoly in the presence of Google’s Android, Epic argues that the duopoly has negative effects on the market and that Apple, rather than Google, has the most valuable users. Epic noted that two-thirds of the profits are on Apple’s platform and that Apple has a virtual lock on a billion highly desirable users who spend more than those on Android.
In his testimony, economist David Evans argued on Epic’s behalf that the cost of switching is very high for anyone thinking about moving from iOS to Android. It’s basically like starting over.
Pleadings:
August 13 Epic Complaint: https://www.courtlistener.com/docket/17442392/1/epic-games-inc-v-apple-inc/
August 17 Motion for TRO: https://www.courtlistener.com/docket/17442392/17/epic-games-inc-v-apple-inc/
August 21 Opposition to Motion: https://www.courtlistener.com/docket/17442392/36/epic-games-inc-v-apple-inc/
August 23 Reply to Opposition: https://www.courtlistener.com/docket/17442392/43/epic-games-inc-v-apple-inc/
August 24 Court Order, TRO: https://www.courtlistener.com/docket/17442392/48/epic-games-inc-v-apple-inc/
Sept 4 Motion for PI: https://www.courtlistener.com/docket/17442392/61/epic-games-inc-v-apple-inc/
Sept 8 Answer of Apple to Complaint, Counterclaim: https://www.courtlistener.com/docket/17442392/66/epic-games-inc-v-apple-inc/
Sept 15 Opposition to PI Motion: https://www.courtlistener.com/docket/17442392/73/epic-games-inc-v-apple-inc/
Sept 18 Epic Reply on PI Motion: https://www.courtlistener.com/docket/17442392/90/epic-games-inc-v-apple-inc/
Oct 9, 2020 ORDER GRANTING IN PART AND DENYING IN PART MOTION FOR PRELIMINARY INJUNCTION https://www.courtlistener.com/docket/17442392/118/epic-games-inc-v-apple-inc/
NY TIMES: Uber and Lyft shares surge after California voters affirm how they classify drivers.
By Kevin Granville
Uber shares gained as much as 9 percent, and Lyft rose more than 12 percent.
Both companies help draft the ballot measure, known as Proposition 22, which exempts them from a new state labor law that would have forced them to employ drivers and pay for health care. Uber is expected to pursue federal legislation that would protect it and other gig economy companies from similar employment laws in other states.
The battle over Prop. 22 became hugely expensive, with backers contributing $200 million to a campaign that pitted Uber, Lyft, DoorDash and similar gig economy companies against labor groups and state lawmakers.
READ THE FULL STORY
Uber and Lyft drivers in California will remain independent
https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html?action=click&module=RelatedLinks&pgtype=Article
By Kevin Granville
- Nov. 4, 2020Updated 9:47 a.m. ETShare prices in Uber and Lyft jumped in early trading on Wednesday after California voters approved a measure that will allow the ride-hailing companies to continue treating drivers as independent contractors.
Uber shares gained as much as 9 percent, and Lyft rose more than 12 percent.
Both companies help draft the ballot measure, known as Proposition 22, which exempts them from a new state labor law that would have forced them to employ drivers and pay for health care. Uber is expected to pursue federal legislation that would protect it and other gig economy companies from similar employment laws in other states.
The battle over Prop. 22 became hugely expensive, with backers contributing $200 million to a campaign that pitted Uber, Lyft, DoorDash and similar gig economy companies against labor groups and state lawmakers.
READ THE FULL STORY
Uber and Lyft drivers in California will remain independent
https://www.nytimes.com/2020/11/04/technology/california-uber-lyft-prop-22.html?action=click&module=RelatedLinks&pgtype=Article
How Google Misappropriated Third-Party Content from Yelp
from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
Comment by DAR: The recently released House Committee majority report on competition in digital markets runs 450 pages. It resembles the kind of industry report economists like Leonard Weiss might have written a generation ago. It is anecdotal in the sense that the industry stories it tells are based in large part on testimony from industry participants and documents that are publicly available. The Committee relied on voluntary cooperation from targets like Amazon. The Report complains that cooperation from companies like Amazon was limited.
The factual issues addressed by the Report deserve attention. Following is a very brief snippet from the Report about Google and Yelp. It illustrates the detail and style of the Report:
In the years following 2005, Google invested in building out its own vertical services. Documents reveal that Google partly did so through lifting content directly from third-party providers to bootstrap Google’s own vertical services. In the process, Google leveraged its search dominance—demanding that third parties permit Google to take their content, or else be removed from Google’s search results entirely. 184
For example, after identifying local search as a “particularly important” vertical to develop, Google built Google Local, which licensed content from local providers, including Yelp. [fn. 1103] In 2010 Google rolled out a service directly competing with Yelp, even as Google continued to license Yelp’s content—prompting Yelp’s CEO to request that Google immediately remove Yelp’s proprietary content from Google’s own service. [fn 1104] At a time when Google Local was failing to gain momentum, Google told Yelp that the only way to have its content removed from Google’s competing product was to be removed from Google’s general results entirely.[fn 1105] Yelp relied so heavily on Google for user traffic that the company could not afford to be delisted—a fact that Google likely knew. [fn1106] In short, Google weaponized its search dominance, demanding that Yelp surrender valuable content to Google’s competing product or else risk heavy losses in traffic and revenue.
from: https://judiciary.house.gov/uploadedfiles/competition_in_digital_markets.pdf
Comment by DAR: The recently released House Committee majority report on competition in digital markets runs 450 pages. It resembles the kind of industry report economists like Leonard Weiss might have written a generation ago. It is anecdotal in the sense that the industry stories it tells are based in large part on testimony from industry participants and documents that are publicly available. The Committee relied on voluntary cooperation from targets like Amazon. The Report complains that cooperation from companies like Amazon was limited.
The factual issues addressed by the Report deserve attention. Following is a very brief snippet from the Report about Google and Yelp. It illustrates the detail and style of the Report:
In the years following 2005, Google invested in building out its own vertical services. Documents reveal that Google partly did so through lifting content directly from third-party providers to bootstrap Google’s own vertical services. In the process, Google leveraged its search dominance—demanding that third parties permit Google to take their content, or else be removed from Google’s search results entirely. 184
For example, after identifying local search as a “particularly important” vertical to develop, Google built Google Local, which licensed content from local providers, including Yelp. [fn. 1103] In 2010 Google rolled out a service directly competing with Yelp, even as Google continued to license Yelp’s content—prompting Yelp’s CEO to request that Google immediately remove Yelp’s proprietary content from Google’s own service. [fn 1104] At a time when Google Local was failing to gain momentum, Google told Yelp that the only way to have its content removed from Google’s competing product was to be removed from Google’s general results entirely.[fn 1105] Yelp relied so heavily on Google for user traffic that the company could not afford to be delisted—a fact that Google likely knew. [fn1106] In short, Google weaponized its search dominance, demanding that Yelp surrender valuable content to Google’s competing product or else risk heavy losses in traffic and revenue.
Supreme Court Laying Out Path to Help Trump Win a Contested Race?
Greg Stohr
Excerpt from Bloomberg article:
(Bloomberg) -- The U.S. Supreme Court’s conservatives started carving a path that could let President Donald Trump win a contested election, issuing a far-reaching set of opinions just as Amy Coney Barrett was getting Senate confirmation to provide what could be a crucial additional vote.
In a 5-3 decision released minutes before the Senate vote Monday night, the court rejected Democratic calls to reinstate a six-day extension for the receipt of mail ballots in Wisconsin, a hotly contested state that is experiencing a surge of Covid-19 cases. The Supreme Court as a whole gave no explanation for the decision.
The outcome was bad enough for Democrats, but an opinion by Trump-appointed Justice Brett Kavanaugh bordered on catastrophic. Kavanaugh suggested sympathy for Trump’s unsubstantiated contentions that votes received after Election Day would be tainted by fraud, warning that “charges of a rigged election could explode” if late-arriving ballots change the perceived outcome.
Most states “want to avoid the chaos and suspicions of impropriety that can ensue if thousands of absentee ballots flow in after election day and potentially flip the results of an election,” Kavanaugh wrote. “And those states also want to be able to definitively announce the results of the election on election night, or as soon as possible thereafter.”
Although Trump is trailing Democrat Joe Biden in national polls, the race is tighter in Wisconsin and other swing states that will determine who wins and are the focus of the two campaigns. Two other pivotal states, Pennsylvania and North Carolina, are awaiting Supreme Court action in cases raising similar issues.
Kavanaugh’s vote -- and those of fellow Trump appointees Barrett and Neil Gorsuch -- could be crucial in any post-election dispute. With Chief Justice John Roberts showing less willingness to second-guess state election decisions, Trump could need the support of all three of his appointed justices to overturn election results that seem to favor Biden.
All three Democratic appointees dissented Monday night. Writing for the group, Justice Elena Kagan blasted Kavanaugh’s word choice, as well as his reasoning.
There are no results to ‘flip’ until all valid votes are counted,” Kagan wrote for herself and Justices Stephen Breyer and Sonia Sotomayor. “And nothing could be more suspicious or improper than refusing to tally votes once the clock strikes 12 on election night.”
The court’s decision Monday means ballots must be received by Election Day to count in Wisconsin. Democrats were seeking to revive an extension that had been ordered by a federal trial judge because of the Covid outbreak and then blocked by an appeals court.
Kagan said the worsening pandemic in Wisconsin means that without without the extension voters would have to “opt between braving the polls, with all the risk that entails, and losing their right to vote.” Kavanaugh countered that the high court order wouldn’t disenfranchise any voter who had adequately planned ahead.
The dueling opinions, however, went well beyond the Wisconsin circumstances. Kavanaugh embraced a legal theory that could let Republican-controlled state legislatures override results certified by Democratic officials. That argument, developed by three conservative justices in the 2000 Bush v. Gore case, says the Supreme Court should intervene in a presidential election dispute even when a state court is interpreting its own laws.
Dueling ElectorsCiting that opinion, Kavanaugh pointed to a constitutional provision that says state legislatures get to determine how electors are appointed to the Electoral College, the body that formally selects the U.S. president.
“The text of the Constitution requires federal courts to ensure that state courts do not rewrite state election laws,” Kavanaugh wrote. He was one of three current justices, including Roberts and Barrett, who worked as lawyers for Republican George W. Bush in the 2000 election fight
From: https://www.msn.com/en-us/news/politics/supreme-court-lays-out-path-to-help-trump-win-a-contested-race/ar-BB1asZSx?ocid=msedgdhp
Greg Stohr
Excerpt from Bloomberg article:
(Bloomberg) -- The U.S. Supreme Court’s conservatives started carving a path that could let President Donald Trump win a contested election, issuing a far-reaching set of opinions just as Amy Coney Barrett was getting Senate confirmation to provide what could be a crucial additional vote.
In a 5-3 decision released minutes before the Senate vote Monday night, the court rejected Democratic calls to reinstate a six-day extension for the receipt of mail ballots in Wisconsin, a hotly contested state that is experiencing a surge of Covid-19 cases. The Supreme Court as a whole gave no explanation for the decision.
The outcome was bad enough for Democrats, but an opinion by Trump-appointed Justice Brett Kavanaugh bordered on catastrophic. Kavanaugh suggested sympathy for Trump’s unsubstantiated contentions that votes received after Election Day would be tainted by fraud, warning that “charges of a rigged election could explode” if late-arriving ballots change the perceived outcome.
Most states “want to avoid the chaos and suspicions of impropriety that can ensue if thousands of absentee ballots flow in after election day and potentially flip the results of an election,” Kavanaugh wrote. “And those states also want to be able to definitively announce the results of the election on election night, or as soon as possible thereafter.”
Although Trump is trailing Democrat Joe Biden in national polls, the race is tighter in Wisconsin and other swing states that will determine who wins and are the focus of the two campaigns. Two other pivotal states, Pennsylvania and North Carolina, are awaiting Supreme Court action in cases raising similar issues.
Kavanaugh’s vote -- and those of fellow Trump appointees Barrett and Neil Gorsuch -- could be crucial in any post-election dispute. With Chief Justice John Roberts showing less willingness to second-guess state election decisions, Trump could need the support of all three of his appointed justices to overturn election results that seem to favor Biden.
All three Democratic appointees dissented Monday night. Writing for the group, Justice Elena Kagan blasted Kavanaugh’s word choice, as well as his reasoning.
There are no results to ‘flip’ until all valid votes are counted,” Kagan wrote for herself and Justices Stephen Breyer and Sonia Sotomayor. “And nothing could be more suspicious or improper than refusing to tally votes once the clock strikes 12 on election night.”
The court’s decision Monday means ballots must be received by Election Day to count in Wisconsin. Democrats were seeking to revive an extension that had been ordered by a federal trial judge because of the Covid outbreak and then blocked by an appeals court.
Kagan said the worsening pandemic in Wisconsin means that without without the extension voters would have to “opt between braving the polls, with all the risk that entails, and losing their right to vote.” Kavanaugh countered that the high court order wouldn’t disenfranchise any voter who had adequately planned ahead.
The dueling opinions, however, went well beyond the Wisconsin circumstances. Kavanaugh embraced a legal theory that could let Republican-controlled state legislatures override results certified by Democratic officials. That argument, developed by three conservative justices in the 2000 Bush v. Gore case, says the Supreme Court should intervene in a presidential election dispute even when a state court is interpreting its own laws.
Dueling ElectorsCiting that opinion, Kavanaugh pointed to a constitutional provision that says state legislatures get to determine how electors are appointed to the Electoral College, the body that formally selects the U.S. president.
“The text of the Constitution requires federal courts to ensure that state courts do not rewrite state election laws,” Kavanaugh wrote. He was one of three current justices, including Roberts and Barrett, who worked as lawyers for Republican George W. Bush in the 2000 election fight
From: https://www.msn.com/en-us/news/politics/supreme-court-lays-out-path-to-help-trump-win-a-contested-race/ar-BB1asZSx?ocid=msedgdhp
Werden and Froeb: Possible Problems in the Google Case
-
October 26, 2020By Gregory J. Werden & Luke M. Froeb1
Google invented neither the search engine nor the Internet browser, but it made them better. Competing on the merits, Google overcame Microsoft’s substantial incumbency advantages and displaced it as the dominant incumbent. At a cost of billions of dollars each year, Google provides and improves services that make it the third most trusted brand in American (behind the United States Postal Service and Amazon). To give up all on-line search and maps, the median American (in 2017) must be paid $21,178 per year.
The complaint filed by the Department of Justice and 11 states echoes the Microsoft case by alleging that Google has monopoly positions in search and search advertising which Google protects with anticompetitive tactics. The complaint has been criticized for not going further, but it states a case that seeks to take advantage of a causation standard for monopoly maintenance so low that the D.C. Circuit’s liability opinion in Microsoft described it as “edentulous.” Even so, Judge Mehta could get hung up on some points.
The complaint stresses the inability of small rivals to compete because they lack scale, and it alleges that Google’s practices block small rivals from achieving scale. But the complaint does not allege that Google’s small rivals had a plausible path to obtaining scale in the absence of all the challenged practices. If every computer and mobile device were preloaded with every search engine and browser, the vast majority of users likely would choose Google’s search engine and browser.
Among other things, the complaint alleges that Google pays makers of mobile devices and mobile service providers to promote usage of Google search. A striking allegation in the complaint is that Apple charges Google $8-12 billion per year to use its search engine. One might wonder whether Apple is the real gatekeeper and Google is just paying the price of admission.
The foundational allegation of the complaint is that “For both mobile and computer search access points, being preset as the default is the most effective way for general search engines to reach users, develop scale or remain competitive.” And the complaint acknowledges that Microsoft takes advantage of its monopoly in PC operating systems to promote its Edge browser and Bing search engine. Yet statcounter reports that Google has an 81.5 percent share in U.S. desktop search engines, while Bing has just a 12.1 percent share. Being preset as a default either does confer a big advantage on Bing, or Google overcomes that advantage through competition on the merits.
The obvious remedy would bar Google from buying distribution. The big loser could be Apple, and the loss of Google’s payments would act like a cost increase throughout the mobile device supply chain, so consumer prices likely would rise. Microsoft stands to benefit significantly, as it has the second most popular search engine and browser. The impact on Google is least clear, but it could come out ahead: Google could save billions of dollars a year in payments yet experience only a modest decline in usage.
The complaint asserts that “Google’s practices are anticompetitive under long-established antitrust law,” but antitrust law has not come to grips with monopolies in free services. An earlier monopoly claim against Google brought by KinderStart.com was dismissed, in part, on the basis that free Internet search could not be a monopoly under antitrust law. But conventional antitrust principles can be applied to free search with careful modification to account for monetization through advertising.
The complaint misapprehends application of the hypothetical monopolist test (“HMT”) to free search. The HMT made market delineation into a market power inquiry. Because market power normally is exercised by raising prices, the HMT asks whether a profit-maximizing monopolist would raise price, or perhaps whether an actual monopolist already did. Although a search monopolist would maximize profits by charging monopoly prices for advertising, the complaint omits the profit maximization and alleges that a hypothetical monopolist “would be able to maintain quality below the level that would prevail in a competitive market.”
A curious aspect of the government’s complaint is the public bemoaning of the fact that Google instructed employees not to use language that the government otherwise would have quoted. Antitrust plaintiffs love to invite the inference of anticompetitive motivation from small snippets taken from memos and emails. But the government cannot be inviting the inference of anticompetitive motivation from the absence of the usual snippets, so what is the point?
It also is unclear what the government hopes to achieve. History suggests that, no matter what is accomplished, the Biden Administration can be accused of selling out the American people in the 2024 election campaign. As President, William Howard Taft presided over the breakups of American Tobacco and Standard Oil in 1911. In the 1912 presidential election campaign, both Wilson and Roosevelt lambasted Taft for selling out the American people, and Taft got just 8 electoral votes (compared to 321 in 1908).
While any remedy is unlikely to satisfy the public, any rationale in the liability ruling is unlikely to satisfy the antitrust bar. In the platform context, legitimate competitive practices can look like illegitimate anticompetitive practices because network expansion lowers cost and improves quality. According to the complaint, Google increases the quality of it services by enlarging its user base and the best way to do that is through the sort of arrangement the government challenges. No one should expect the legal guidance from this case to be either clear or clearly in the consumer’s interest.
https://www.competitionpolicyinternational.com/possible-problems-in-the-google-case/
-
October 26, 2020By Gregory J. Werden & Luke M. Froeb1
Google invented neither the search engine nor the Internet browser, but it made them better. Competing on the merits, Google overcame Microsoft’s substantial incumbency advantages and displaced it as the dominant incumbent. At a cost of billions of dollars each year, Google provides and improves services that make it the third most trusted brand in American (behind the United States Postal Service and Amazon). To give up all on-line search and maps, the median American (in 2017) must be paid $21,178 per year.
The complaint filed by the Department of Justice and 11 states echoes the Microsoft case by alleging that Google has monopoly positions in search and search advertising which Google protects with anticompetitive tactics. The complaint has been criticized for not going further, but it states a case that seeks to take advantage of a causation standard for monopoly maintenance so low that the D.C. Circuit’s liability opinion in Microsoft described it as “edentulous.” Even so, Judge Mehta could get hung up on some points.
The complaint stresses the inability of small rivals to compete because they lack scale, and it alleges that Google’s practices block small rivals from achieving scale. But the complaint does not allege that Google’s small rivals had a plausible path to obtaining scale in the absence of all the challenged practices. If every computer and mobile device were preloaded with every search engine and browser, the vast majority of users likely would choose Google’s search engine and browser.
Among other things, the complaint alleges that Google pays makers of mobile devices and mobile service providers to promote usage of Google search. A striking allegation in the complaint is that Apple charges Google $8-12 billion per year to use its search engine. One might wonder whether Apple is the real gatekeeper and Google is just paying the price of admission.
The foundational allegation of the complaint is that “For both mobile and computer search access points, being preset as the default is the most effective way for general search engines to reach users, develop scale or remain competitive.” And the complaint acknowledges that Microsoft takes advantage of its monopoly in PC operating systems to promote its Edge browser and Bing search engine. Yet statcounter reports that Google has an 81.5 percent share in U.S. desktop search engines, while Bing has just a 12.1 percent share. Being preset as a default either does confer a big advantage on Bing, or Google overcomes that advantage through competition on the merits.
The obvious remedy would bar Google from buying distribution. The big loser could be Apple, and the loss of Google’s payments would act like a cost increase throughout the mobile device supply chain, so consumer prices likely would rise. Microsoft stands to benefit significantly, as it has the second most popular search engine and browser. The impact on Google is least clear, but it could come out ahead: Google could save billions of dollars a year in payments yet experience only a modest decline in usage.
The complaint asserts that “Google’s practices are anticompetitive under long-established antitrust law,” but antitrust law has not come to grips with monopolies in free services. An earlier monopoly claim against Google brought by KinderStart.com was dismissed, in part, on the basis that free Internet search could not be a monopoly under antitrust law. But conventional antitrust principles can be applied to free search with careful modification to account for monetization through advertising.
The complaint misapprehends application of the hypothetical monopolist test (“HMT”) to free search. The HMT made market delineation into a market power inquiry. Because market power normally is exercised by raising prices, the HMT asks whether a profit-maximizing monopolist would raise price, or perhaps whether an actual monopolist already did. Although a search monopolist would maximize profits by charging monopoly prices for advertising, the complaint omits the profit maximization and alleges that a hypothetical monopolist “would be able to maintain quality below the level that would prevail in a competitive market.”
A curious aspect of the government’s complaint is the public bemoaning of the fact that Google instructed employees not to use language that the government otherwise would have quoted. Antitrust plaintiffs love to invite the inference of anticompetitive motivation from small snippets taken from memos and emails. But the government cannot be inviting the inference of anticompetitive motivation from the absence of the usual snippets, so what is the point?
It also is unclear what the government hopes to achieve. History suggests that, no matter what is accomplished, the Biden Administration can be accused of selling out the American people in the 2024 election campaign. As President, William Howard Taft presided over the breakups of American Tobacco and Standard Oil in 1911. In the 1912 presidential election campaign, both Wilson and Roosevelt lambasted Taft for selling out the American people, and Taft got just 8 electoral votes (compared to 321 in 1908).
While any remedy is unlikely to satisfy the public, any rationale in the liability ruling is unlikely to satisfy the antitrust bar. In the platform context, legitimate competitive practices can look like illegitimate anticompetitive practices because network expansion lowers cost and improves quality. According to the complaint, Google increases the quality of it services by enlarging its user base and the best way to do that is through the sort of arrangement the government challenges. No one should expect the legal guidance from this case to be either clear or clearly in the consumer’s interest.
https://www.competitionpolicyinternational.com/possible-problems-in-the-google-case/
From Mother Jones: Payday Lenders Gave Trump Millions. Then He Helped Them Cash In on the Working Poor.
The investment in Trump has continued paying off during the pandemic.
https://www.motherjones.com/politics/2020/10/payday-lenders-gave-trump-millions-then-he-helped-them-cash-in-on-the-working-poor/
The investment in Trump has continued paying off during the pandemic.
https://www.motherjones.com/politics/2020/10/payday-lenders-gave-trump-millions-then-he-helped-them-cash-in-on-the-working-poor/
WSJ- Ant Group to Raise More Than $34 Billion in Record IPO
Excerpts:
HONG KONG—Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, fillings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges.
Ant Group's coming initial public offering is set to be the largest ever IPO of all time.
The price values the Hangzhou-based group at about $313 billion, after including the new capital raised but before any greenshoe. In comparison, Mastercard Inc. was worth about $330 billion as of Friday’s close.
DAR Comment: Ant's vast electronic payment networks in China amd elsewhere have provoked concerns about invasive data collection to which the Chinese government would be privy.
Posted by Don Allen Resnikoff
Excerpts:
HONG KONG—Chinese financial-technology giant Ant Group Co. is set to raise at least $34.4 billion from the world’s biggest-ever initial public offering, fillings showed Monday, in a blockbuster deal that will bypass U.S. stock exchanges.
Ant Group's coming initial public offering is set to be the largest ever IPO of all time.
The price values the Hangzhou-based group at about $313 billion, after including the new capital raised but before any greenshoe. In comparison, Mastercard Inc. was worth about $330 billion as of Friday’s close.
DAR Comment: Ant's vast electronic payment networks in China amd elsewhere have provoked concerns about invasive data collection to which the Chinese government would be privy.
Posted by Don Allen Resnikoff
FTC Vote Pending As Commissioners Weigh Facebook Antitrust Suit
CPI
-
October 23, 2020
While the five commissioners of the Federal Trade Commission (FTC) debate if an antitrust lawsuit against Facebook should be pursued, FTC staffers are in favor of moving forward with the case, according to a Wall Street Journal report (WSJ) on Friday (Oct. 23), citing sources familiar with the matter.
It has been over a year since the FTC started investigating complaints that the social media giant stifled competition. The sources told the WSJ that the commission is expected to vote and hand down a decision in a few weeks.
Even though the investigation has been in progress for more than 12 months, Facebook is still “making its case to the commission.”
The sources told WSJ that FTC commissioners — three Republicans and two Democrats — held a virtual meeting among themselves to determine their next move. Per rules, the commissioners have to announce a formal meeting in order to discuss any enforcement actions as a group.
One part of the FTC investigation focuses on Facebook’s purchases of companies that could be considered possible rivals. Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
The FTC meeting comes on the heels of an antitrust filing against Google by the Department of Justice (DOJ). The suit says that Google uses anti-competitive measures to protect its search monopoly.
CPI
-
October 23, 2020
While the five commissioners of the Federal Trade Commission (FTC) debate if an antitrust lawsuit against Facebook should be pursued, FTC staffers are in favor of moving forward with the case, according to a Wall Street Journal report (WSJ) on Friday (Oct. 23), citing sources familiar with the matter.
It has been over a year since the FTC started investigating complaints that the social media giant stifled competition. The sources told the WSJ that the commission is expected to vote and hand down a decision in a few weeks.
Even though the investigation has been in progress for more than 12 months, Facebook is still “making its case to the commission.”
The sources told WSJ that FTC commissioners — three Republicans and two Democrats — held a virtual meeting among themselves to determine their next move. Per rules, the commissioners have to announce a formal meeting in order to discuss any enforcement actions as a group.
One part of the FTC investigation focuses on Facebook’s purchases of companies that could be considered possible rivals. Facebook bought Instagram in 2012 for $1 billion and WhatsApp in 2014 for $19 billion.
The FTC meeting comes on the heels of an antitrust filing against Google by the Department of Justice (DOJ). The suit says that Google uses anti-competitive measures to protect its search monopoly.
Harvard scholars on voter fraud disinformation
Benkler, Yochai, Casey Tilton, Bruce Etling, Hal Roberts, Justin Clark, et al. Mail-In Voter Fraud: Anatomy of a Disinformation Campaign, 2020.
Abstract
The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in Network Propaganda, in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and balance, neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
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Citable link to this page
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Benkler, Yochai, Casey Tilton, Bruce Etling, Hal Roberts, Justin Clark, et al. Mail-In Voter Fraud: Anatomy of a Disinformation Campaign, 2020.
Abstract
The claim that election fraud is a major concern with mail-in ballots has become the central threat to election participation during the Covid-19 pandemic and to the legitimacy of the outcome of the election across the political spectrum. President Trump has repeatedly cited his concerns over voter fraud associated with mail-in ballots as a reason that he may not abide by an adverse electoral outcome. Polling conducted in September 2020 suggests that nearly half of Republicans agree with the president that election fraud is a major concern associated with expanded mail-in voting during the pandemic. Few Democrats share that belief. Despite the consensus among independent academic and journalistic investigations that voter fraud is rare and extremely unlikely to determine a national election, tens of millions of Americans believe the opposite. This is a study of the disinformation campaign that led to widespread acceptance of this apparently false belief and to its partisan distribution pattern. Contrary to the focus of most contemporary work on disinformation, our findings suggest that this highly effective disinformation campaign, with potentially profound effects for both participation in and the legitimacy of the 2020 election, was an elite-driven, mass-media led process. Social media played only a secondary and supportive role.
Our results are based on analyzing over fifty-five thousand online media stories, five million tweets, and seventy-five thousand posts on public Facebook pages garnering millions of engagements. They are consistent with our findings about the American political media ecosystem from 2015-2018, published in Network Propaganda, in which we found that Fox News and Donald Trump’s own campaign were far more influential in spreading false beliefs than Russian trolls or Facebook clickbait artists. This dynamic appears to be even more pronounced in this election cycle, likely because Donald Trump’s position as president and his leadership of the Republican Party allow him to operate directly through political and media elites, rather than relying on online media as he did when he sought to advance his then-still-insurgent positions in 2015 and the first half of 2016.
Our findings here suggest that Donald Trump has perfected the art of harnessing mass media to disseminate and at times reinforce his disinformation campaign by using three core standard practices of professional journalism. These three are: elite institutional focus (if the President says it, it’s news); headline seeking (if it bleeds, it leads); and balance, neutrality, or the avoidance of the appearance of taking a side. He uses the first two in combination to summon coverage at will, and has used them continuously to set the agenda surrounding mail-in voting through a combination of tweets, press conferences, and television interviews on Fox News. He relies on the latter professional practice to keep audiences that are not politically pre-committed and have relatively low political knowledge confused, because it limits the degree to which professional journalists in mass media organizations are willing or able to directly call the voter fraud frame disinformation. The president is, however, not acting alone. Throughout the first six months of the disinformation campaign, the Republican National Committee (RNC) and staff from the Trump campaign appear repeatedly and consistently on message at the same moments, suggesting an institutionalized rather than individual disinformation campaign. The efforts of the president and the Republican Party are supported by the right-wing media ecosystem, primarily Fox News and talk radio functioning in effect as a party press. These reinforce the message, provide the president a platform, and marginalize or attack those Republican leaders or any conservative media personalities who insist that there is no evidence of widespread voter fraud associated with mail-in voting.
The primary cure for the elite-driven, mass media communicated information disorder we observe here is unlikely to be more fact checking on Facebook. Instead, it is likely to require more aggressive policing by traditional professional media, the Associated Press, the television networks, and local TV news editors of whether and how they cover Trump’s propaganda efforts, and how they educate their audiences about the disinformation campaign the president and the Republican Party have waged.
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Apple Allowed to Continue to Ban Epic’s Fortnite From Store, But May Not Retaliate Against Epic Affiliates
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
October 19, 2020
By Jonathan Rubin (from MoginRubin firm blog)
The case involves questions “on the frontier edges” of U.S. antitrust law, according to the judge overseeing it. It is a legal battle between a $4 billion company (Epic Games, Inc.) and a $260 billion company (Apple, Inc.) in a market that’s valued at $160 billion globally. At the center of the legal battle is the distribution of a digital one: a mobile application played by hundreds of millions of gamers on billions of devices around the word.
It’s no small matter, and Apple has scored a temporary victory in the suit, which raises Sherman Antitrust Section 1 and Section 2 claims.
(See related post, Pistacchio vs. Apple: Gamers Claim Anticompetitive Behavior in Subscription Game Market, a lawsuit filed the day before this ruling was handed down.)
On Oct. 9, 2020, U.S. Judge Yvonne Gonzalez Rogers of California’s Northern District held that Apple may continue to ban from its store Epic’s wildly popular Fortnite app. The judge conceded that Epic had some “strong arguments” regarding the exclusivity of the store, but determined they weren’t enough to support a preliminary injunction. The judge rejected as seemingly “retaliatory,” however, Apple’s effort to also block the products of companies affiliated with Epic. Those companies operate independently and have separate agreements with Apple.
In other words, the court held that Epic had not yet shown sufficient likelihood of success of prevailing on its legal claim that Apple has abused its market power, then went on to block Apple from conduct that is potentially just that with regard to Epic’s affiliates.
(For additional background on the case, please read our previous post.)
After it was barred from Apple’s App Store, Epic asked the court to force Apple to reinstate Fortnite, despite acknowledging that it breached licensing agreements and operating guidelines in which Apple bars developers from circumventing the iPhone and iPad system (IAP) or distributing iOS apps outside the Apple Store. However, Epic launched the Epic Games Store and would like to create an iOS store independent of the Apple store, as well. “Apple maintains the iOS platform as a walled garden or closed platform model, whereby Apple has strict and exclusive control over the hardware, the operating system, the digital distribution, and the IAP system,” Judge Rogers wrote.
Epic also urged the court to stop Apple from terminating its affiliates’ access to developer tools for other applications, including Unreal Engine, while Epic litigates its claims. Epic Games International of Sweden hosts Unreal Engine, a widely used by third-party developers to create graphics for video games, as well as for Epic Inc. and Fortnite. Unreal Engine remains compatible with iOS. But rival graphics engine, Unity, is used by more iOS applications, including Fortnite rival PlayerUnknown’s Battlegrounds.
“Given the novelty and the magnitude of the issues, as well as the debate in both the academic community and society at large,” Judge Rogers wrote, “the Court is unwilling to tilt the playing field in favor of one party or the other with an early ruling of likelihood of success on the merits.”
Judge Rogers also noted the absence of guiding authority on the questions raised. One case cited by the court, however, was the Ninth Circuit’s ruling in FTC v. Qualcomm, which held that “novel business practices — especially in technology markets — should not be ‘conclusively presumed to be unreasonable and therefore illegal without elaborate inquiry as to the precise harm they have caused or the business excuse for their use.'”
Judge Rogers carefully recited some of the basic tenants of antitrust law, explaining that courts will not condemn monopoly power, if it exists, without proof of anticompetitive conduct. And to answer that question, a plaintiff must define the relevant market, something Epic failed to do, the judge held.
“The relevant market must include both a geographic market and a product market,” the court said. Epic maintained that the market is the marketing for distributing apps operating on the iOS platform – which only considers, the judge noted, “how iOS apps are distributed on the iOS platform.” Apple countered that the relevant market is much broader, including all competing platforms that distribute Fortnite, everything from Xbox to PlayStation to all makes of computers and tablets.
“The multiplatform nature of Fortnite suggests that these other platforms and their digital distributions may be economic substitutes that should be considered in any ‘relevant market’ definition because they are ‘reasonably interchangeable’ when used ‘for the same purposes,'” Judge Rogers wrote.
Epic argued that some of console platforms are different from the iOS platform because they are not mobile — players need to plug them in and they require separate screens. The judge dismissed this argument, saying Epic failed to include all the devices, like tablets and Nintendo Switch, which are mobile.
Epic argued, however, that whether these other platforms are economic substitutes has yet to been proven. To that, the judge said Apple’s definition also faces hurdles. “Antitrust law is not concerned with individual consumers or producers, like Epic Games; it is concerned with market aggregates. Substitutes may not deprive a monopolist of market power if they fail to affect enough consumers to make a price increase unprofitable … Alternatively, constraints among some consumers may not render the market as a whole narrow … Here both parties cite factors impacting the elasticity of their proposed markets. A final determination may depend on the magnitude of those effects.” The judge added not enough is known about the iOS market, such as how many iOS users own multiple devices or how many would switch to another device if the price goes up, or how many developers can afford to ignore iOS customers completely.
Turning to the allegations of illegal tying, the court again found the record wanting.
Apple claimed that it does not “tie” IAP to iOS app distribution, because developers may choose other business models. It does not dispute, however, that its App Store Review Guidelines require the IAP system’s use for IAPs as a condition of distribution.
“This requirement manifests the coercion, that is, developers who offer IAP must do so on Apple’s terms,” wrote Judge Rogers. “Apple also does not dispute that it holds market power in the iOS app distribution market and that the alleged tie affects a substantial volume of commerce in in-app payment processing. Accordingly, Epic Games raises serious questions with regard to per se tying, but fails to demonstrate the likelihood of success due to lack of evidence of ‘purchaser demand’ for IAP processing service separate from the ‘integrated service’ of app distribution.”
While competitors could provide equal or better services, Apple has established that its security features — which is a key selling point — is superior to competing platforms, the judge found, but still concluded the record isn’t sufficient to grant a preliminary injunction.
As for Epic’s claim of irreparable harm, the judge said Epic made the decision to breach its agreements with Apple and “self-inflicted wounds are not irreparable injury.” Epic argued the court shouldn’t enforce anticompetitive contracts, to which the court responded that Epic “cannot simply exclaim ‘monopoly’ to rewrite agreements giving itself unilateral benefit.”
With regard to Epic’s affiliated companies, namely Epic Games International, maker of the Unreal Engine, there would be irreparable harm if the Unreal Engine was removed from the Apple Store, the judge determined, noting Apple’s actions are already having a negative impact. While removing affiliates is consistent with Apple’s practice, Judge Rogers said this is an exception. She said Apple made good arguments, including the at-will nature of the agreements. But Epic argued persuasively, the judge found, that it and its affiliates have separate agreements that have not been breached. Further, the judge said Apple’s elimination of Unreal Engine and other affiliate agreements “appears to be retaliatory.”
Apple had also argued that Epic Games could use the Unreal Engine to carry malicious code designed to damage the iOS platform. The judge rejected this concern as exaggerated and not supported by any evidence.
The court entered a ruling against Epic’s request to force Apple to return Fortnite to the Apple Store, and in favor of the preliminary injunction stopping Apple from removing developer tools provided by Epic affiliates, notably Unreal Engine.
Art Wilmarth will be speaking about his recently-published book, Taming the Megabanks: Why We Need a New Glass-Steagall Act, during a virtual program hosted by the Peterson Institute for International Economics on Wednesday, Oct. 28th, at 9 a.m.
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Here's the link to PIIE's announcement and registration information: https://lnkd.in/dkUJQy
Biotech supports Fauci
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
Like Comment
Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
Supporting US public health experts
Jeremy Levin
CEO, Ovid Therapeutics
Published Oct 22, 2020
Like Comment
Share https://bioengineeringcommunity.nature.com/posts/supporting-us-public-health-experts-dd8a3fc2-f5df-437a-aec5-e66df7441516#share
To the editor:
As CEOs of biotechnology companies, we are writing this letter in support of US National Institutes of Allergy and Infectious Disease (NIAID) director Anthony Fauci and the institutions and organizations that are working tirelessly to combat the COVID-19 pandemic.
The biotechnology industry is the world’s greatest innovation engine for creating new medicines and vaccines that improve the human condition. It is a strategic asset to the nation. The past few decades have shown extraordinary progress in our ability to fight disease. This year, our industry has risen to the challenge of overcoming the deadly pandemic that has gripped the world, putting that engine to work at miraculous speed to develop therapies and vaccines.
To do so most effectively requires close collaboration among biopharmaceutical companies, regulatory authorities such as the US Food and Drug Administration (FDA), public health authorities such as the US Centers for Disease Control and Prevention (CDC), federal, state and local government authorities, scientific and medical institutions, such as the US National Institutes of Health (NIH), and world experts in epidemiology and infectious disease, most prominently, Anthony Fauci. As we come ever closer to producing safe, effective therapies for COVID-19, it is critical that all of these institutions and experts work together to ensure the best, most rapid possible outcomes for all Americans and, indeed, for people worldwide.
The institutions of the CDC, the FDA and NIH comprise tens of thousands of men and women who care deeply about society and making the world a better place. These nameless individuals represent our ‘United Armed Forces’ against COVID-19. They fight with brains instead of weapons, displaying the same courage and dedication as our armed forces in times of war, and they deserve our eternal gratitude. We and the associates of our companies consider that we fight alongside these individuals as part of the same cause, wielding science against our common adversary.
However, we are concerned that various parties in this critical coalition have come under politically motivated attacks. Targets have included, among others, the FDA, the CDC and Fauci; in Fauci’s case this has occurred to the point where he now requires a security detail. Not only are these attacks completely unjustified, they risk intimidating and demoralizing the very people we all are relying on to help end the COVID-19 nightmare. As such, they are irresponsible and a pose danger to us all.
Fauci is a giant of epidemiology, one of the world’s most respected scientists in infectious diseases, and an American hero who has served multiple administrations—both Republican and Democratic—for decades. He has recommended measures that have saved likely scores of thousands of lives in our country. Had his counsel been taken more widely, even more lives could have been saved. Unfortunately, the United States today has experienced the largest number of deaths from COVID-19 of any country in the world.
When a public servant of Fauci’s caliber is attacked, it puts our collective efforts, and the safety of the American public, at risk. Senator Lamar Alexander (R-Tennessee) posted on Twitter: “Dr. Fauci is one of our country’s most distinguished public servants,” and “If more Americans paid attention to his advice, we’d have fewer cases of COVID-19, & it would be safer to go back to school & back to work & out to eat.”
This is the sort of responsible, truthful support that is needed from our public officials. Many of our colleagues and friends are working as part of Operation Warp Speed; we stand united with them, with the many good people at FDA, CDC and NIH, and with Dr. Fauci, in upholding the high scientific, medical and ethical principles that will allow us to defeat COVID-19.
Acknowledgments
This letter represents solely the individual and personal views of the authors and signatories, and not those of their company.
Authors
Ron Cohen, President and CEO, Acorda Therapeutics; Cedric Francois, President and CEO, Apellis Pharmaceuticals; John Crowley, Chairman and CEO, Amicus Therapeutics; Paul Hastings, President and CEO, Nkarta Therapeutics; Rachel King, CEO, GlycoMimetics; Ted W. Love, President and CEO, Global Blood Therapeutics; John Maraganore, CEO, Alnylam Pharmaceuticals; Michelle McMurry-Heath, President and CEO, Biotechnology Innovation Organization; Jeremy Levin, Chairman and CEO, Ovid Therapeutics, and Chairman, Biotechnology Innovation Organization
Jeremy Levin
A D.C. State-level case decision puts a surprise crimp in federal designs to control public broadcasting
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
The Voice of America and Corporation for Public Broadcasting are the entities established to provide federally supported public broadcasting. The VOA focuses overseas, while CPB operates domestically.
Recent successful litigation by the D.C. Attorney General suggests that State law on not-for profit corporations can provide a basis for limiting federal executive power to interfere with the independence of public broadcasting. In a case addressing the authority of Voice of America executives to replace directors of the not-for-profit Open Technology Fund, D.C. Superior Court Judge Matini held that efforts by VOA executives to replace Fund board members were precluded by Fund by-laws, which “contains the only clear mechanism for removal of directors.”
The D.C. State-level case decision is also relevant to local PBS stations, which are set up as not-for-profit corporations. So, the D.C. case comes out of left field to put a crimp in possible future federal designs to control public broadcasting content. That is important in avoiding concerns that, as the Guardian newspaper put it, the U.S. executive branch will try to turm public broadcasting, including domestic public broadcasting "into a loyal state broadcaster of the kind normally found in authoritarian societies.”
An article on the case, and the case opinion, are at https://www.techdirt.com/articles/20201016/00123345515/court-says-trump-appointee-had-no-authority-to-fire-open-technology-fund-board-says-they-remain-place.shtml
I am preparing a longer article on the topic for future publication.
Don Resnikoff
Ingram on the Google case
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Excerpt:
Recently the House subcommittee on antitrust released a 400-plus page report detailing the anti-competitive practices of the four major digital platforms — Google, Amazon, Apple, and Facebook — and called for the Department of Justice (among others) to take action. And this week, the government did exactly that, filing a landmark antitrust case against Google, one the DoJ has reportedly been working on for some time. Depending on whom you ask, it is either a cravenly political gambit by Attorney General Bill Barr designed to make the Trump administration look tough, a legal quagmire that is significantly weaker than the 1998 Microsoft case and almost certain to fail, or a sign that the government is finally taking strong action to correct some of the blatant antitrust failures of the past two decades. It’s even possible that it may be all three of those things simultaneously.
What it is almost certain to be if it survives the election (and there’s good reason to believe it will continue even if Joe Biden becomes president) is a full-employment program for antitrust lawyers both inside the DoJ and elsewhere. The Microsoft case generated work for thousands of lawyers for the more than five years it took to reach a conclusion. As a number of experts have pointed out since the Google case was filed, it also ended with a negotiated settlement and a series of fairly modest restrictions on Microsoft’s conduct, a deal the Justice Department was forced to reach after its proposed remedy — breaking the company into two parts -- was rejected by the courts. That said, however, some tech veterans believe the case was successful despite its weak conclusion, because it tied Microsoft up in legal knots, and made the company hyper-sensitive to criticism, and therefore leery of being too aggressive. (This actually helped the rise of Google.)
Those who subscribe to the theory that the case was rushed to make Trump look good point to reports before the indictment’s release that suggested Barr was pressuring the DoJ to launch the case before the election, and that some members of the staff had balked, saying it wasn’t ready. Barry Lynn, executive director of the Open Markets Institute, doesn’t buy this theory: he told CJR during a discussion on our Galley platform Wednesday that “it’s actually a very strong case, and a well-written case. So this was anything but a rush job”. Zephyr Teachout, a professor of law at Fordham University and a former Democratic candidate for governor of New York, said in a similar discussion that while she believes Barr “should be impeached, and I don’t trust him for a second”, the case is well-grounded, and should have been brought years ago. Both Lynn and Teachout said that despite the appearance of political divisions in the House report that preceded the Google case, there is more agreement than disagreement about the necessity for regulation.
Google, unsurprisingly, disagrees. In a blog post, the company called the Justice Department’s case “deeply flawed”. Google said the money it pays Apple -- estimated by the DoJ at between $8 billion and $12 billion a year — to make its search engine the default choice is similar to the way cereal makers pay grocery chains for preferred locations on their store shelves. It’s an appealing analogy, but as antitrust expert Gary Reback noted, “It’s not just Google has a better shelf and its competitor is on the next shelf, it’s that Google has all the shelves and its competitor is in a different store in a bad neighborhood 400 miles away”. Analogies aside, Google and its defenders argue that the case is doomed to fail because the company provides its services for free, and people freely choose to use its search engine. Antitrust law for the past 40 years or so has been based around the concept of consumer harm, and it’s difficult to see how Google’s free services harm consumers in any tangible way.
In order to win their case, in other words, the government has to either convince the courts to ignore several decades of judicial precedent, or come up with a novel definition of consumer harm that covers what Google does. The closest it can probably get are the deals that the company makes with phone makers, where it forces them to install all of Google’s apps if they want to use its free Android operating system. But even that makes smartphones significantly cheaper than they otherwise would be, which looks a lot like a win for consumers, and therefore a tough argument for traditional antitrust. That’s a fairly slim branch to be hanging a landmark case on. But if experts are right about the lessons of the Microsoft case, it might be enough to just tie Google up for awhile, and make it less aggressive. And then we might see new competitors emerge in the same way Google itself did 25 years ago.
https://www.cjr.org/the_media_today/the-google-case-is-a-stew-of-technology-law-and-politics.php
Antitrust v. Regulation (NYT)
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
“The mechanism of antitrust is not working to protect competition,” said Fiona Scott Morton, an official in the Justice Department’s antitrust division in the Obama administration, who is an economist at the Yale University School of Management. “So let’s do something else — use a different tool.”
Ms. Scott Morton led an expert panel on antitrust in a report last year on digital platforms by the Stigler Center at the University of Chicago’s Booth School of Business. The report recommended the creation of a regulatory authority. (Ms. Scott Morton has been a forceful critic of Google, but also a consultant to Apple and Amazon.)
Such a regulatory approach carries the risk of government’s meddling in a fast-moving industry that could hobble innovation, some antitrust experts warned. While antitrust law reacts to alleged anticompetitive behavior and can thus be slow, that shortcoming is preferable to prescriptive government rules and regulations, they said.
“I’m very uncomfortable with the regulatory path, especially if it means things like getting government approval for product changes,” said Herbert Hovenkamp, a professor at the University of Pennsylvania Law School. “The history of regulation shows that it is an innovation killer.”
From https://www.nytimes.com/2020/10/22/technology/antitrust-laws-tech-new-regulator.html
The Babylon Bee on electronic money security risks
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
Recently President Trump was widely ridiculed when he retweeted a satirical news article from the conservative-leaning Babylon Bee humor site, which suggested that Twitter shut down its “entire network” to slow the spread of a contested New York Post story about Hunter Biden.
A characteristic of effective satire is often that it has some recognizable if distorted relationship to reality. It’s like a carnival distortion mirror.
The Babylon Bee recently published an extraordinarily long-winded tongue-in-cheek joke article about how elimination of paper money and reliance on electronic money will give the government intrusive access into everyone's finances. The Bee’s joke is to suggest that there is a conspiracy led by Nancy Pelosi to do that. The long-windedness and tedious detail of the article seems to be part of the joke.
The idea of a Pelosi led conspiracy against paper money is obviously a joke. But the idea that there is likely to be greater reliance on electronic money in the future is not a joke, nor is the idea that broad use of electronic money potentially gives government intrusive access into people’s financial affairs. To paraphrase the once-famous words of Molly McGee to husband Fibber McGee, it’s not funny.
On point, the Economist has an article about a Chinese fintech firm, Ant, that suggests something of the potential for government intrusion based on electronic money, although the focus is on China. The idea is that the ubiquity of electronic money gives companies and potentially the government invasive access to everyone's finances.
It may be a little weird that the Bee and the Economist have parallel ideas about potential government intrusion facilitated by electronic money, but the concern about privacy invasion seems real. And, of course, concerns about intrusive behavior by the Chinese government hold out the possibility that a U.S. government could go down the same path.
Here is an excerpt from The Economist article about the fintech firm Ant (emphasis added):
Digitisation also promises to broaden the spread of finance. Reaching customers will be easier and data will make loan underwriting more accurate. Firms like Square and Stripe help small businesses connect to the digital economy. In India and Africa digital finance can free people from dodgy moneylenders and decrepit banks. By creating their own digital currencies, governments may be able to bypass the conventional banking system and tax, take deposits from, and make payments to citizens at the touch of a button. Compare that with the palaver of Uncle Sam posting stimulus cheques this year.
Yet the fintech conquest also brings two risks. The first is that it could destabilise the financial system. Fintech firms swarm to the most profitable parts of the industry, often leaving less profit and most of the risk with traditional lenders. Fully 98% of loans issued through Ant in China ultimately sit on the books of banks, which pay it a fee. Ant is eventually expected to capture a tenth or more of Chinese banking’s profits. Lumbering lenders in the rich world are already crushed by low interest rates, legacy it systems and huge compliance costs. If they are destabilised it could spell trouble, because banks still perform crucial economic functions, including holding people’s deposits and transforming these short-term liabilities into long-term loans for others.
The second danger is that the state and fintech “platform” firms could grab more power from individuals. Network effects are integral to the fintech model—the more people use a platform the more useful it is and likely that others feel drawn to it. So the industry is prone towards monopoly. And if fintech gives even more data to governments and platforms, the potential for surveillance, manipulation and cyber-hacks will rise. In China Ant is a cog in the Communist Party’s apparatus of control—one reason it is often unwelcome abroad. When Facebook, a firm not known for its ethical conduct, launched a digital currency, Libra, last year, it caused a global backlash.
As the fintech surge continues, governments should take a holistic view of financial risk that includes banks and fintech firms—Chinese regulators rightly snuffed out Ant’s booming business in loan securitisation, which had echoes of the subprime fiasco. Governments should also lower barriers to entry so as to boost competition. Singapore and India have cheap, open, bank-to-bank payment systems which America could learn from. Europe has flexible banking that lets customers switch accounts easily. Last, the rise of fintech must be tied to a renewed effort to protect people’s privacy from giant companies and the state. So long as fintech can be made safer, open and respectful of individual rights, then a monetary innovation led by China will once again change the world for the better.
DOJ To File Google Antitrust Suit Without Dem Support
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
-
October 18, 2020
The US Department of Justice is reportedly likely to file its highly-anticipated antitrust suit against Google early next week without the support of any Democratic state attorneys general.
The first major monopolization case in decades comes as both sides of the aisle have hammered Google and other tech companies like Facebook and Amazon about their influence over the US economy.
According to Politico, the Trump administration had hoped to enlist bipartisan support for its case.
For months, the Justice Department has been negotiating with a group of attorneys general from 48 states, the District of Columbia, and Puerto Rico — who have conducted separate investigations, hoping to form a unified complaint over the world’s largest search engine, Politico reported.
Republican attorneys general have joined both the Justice Department and a coalition of their Democratic colleagues, sources familiar with the suit told Politico.
The bipartisan group — led by Democratic attorneys general in Colorado and Iowa along with Nebraska’s Republican attorney general — expects to file an antitrust complaint challenging Google at a later date.
DOJ Adds Six New Defendants to Price-Fixing Boiler Chicken Conspiracy
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
by Michael Volkov · October 13, 2020
The Justice Department announced a major expansion of its ongoing investigation and prosecution of executives and employees in the boiler chicken price-fixing conspiracy. https://www.justice.gov/opa/pr/six-additional-individuals-indicted-antitrust-charges-ongoing-broiler-chicken-investigation
DOJ recently returned a superseding indictment adding six new defendants to the boiler chicken conspiracy indictment, and expanding the scope of the charged conspiracy. (Here for earlier Posting on conspiracy).
The new indictment charges ten (10) executives and employees at boiler chicken producers for their role in a conspiracy to fix prices and rig bids for chicken products. The six additional individuals are Timothy Mulrenin, William Kantola, Jimmie Little, William Lovette, Gary Roberts and Rickie Blake.
The new indictment adds six defendants to the price-fixing conspiracy in the $65 billion poultry industry. In addition, the new indictment expands the period of the charged conspiracy to 2012 to 2019.
The new defendants include Bill Lovette, the former CEO of Pilgrim’s Pride, the second largest US chicken supplier. Jason Penn, Pilgrim’s current CEO, was charged in the original indictment in June. Pilgrim’s Vice President Roger Austin and Claxton’s President Mikell Fries and Scott Brady, a President, were also charged in the original June 2020 indictment.
The new defendants include executives and employees from companies involved in the price-fixing conspiracy: Timothy Mulrenin is a sales executive at Perdue Farms, who previously worked at Tyson; William Kantola is a sales executive at Koch Foods, Inc.; Jimmie Little is former sales director at Pilgrim’s Pride; Gary Brian Roberts is an employee at Case Farms who previously worked at Tyson; and Rickie Blake, a former director and manager at George’s Inc. Jimmie Little is also charged with making false statements to law enforcement agents and obstruction of justice.
The price-fixing conspiracy operated in the chicken industry responsible for supplying billions of pounds of chicken nuggets, breast filets, thighs and wings to US restaurant chains and grocery stores.
The six additional defendants join four senior industry executives from Pilgrim’s Pride and Claxton Poultry Farms who were allegedly engaged in a long-running conspiracy to exchange pricing information and agree on bids submitted for chicken supply deals for major restaurant chains.
Tyson Foods was one of the earliest cooperators in the government investigation and reported the conspiracy after DOJ initiated an investigation in response to a then-pending civil proceeding. Tyson is cooperating under DOJ’s antitrust criminal leniency program.
DOJ’s criminal investigation began in 2019 after it intervened in a price-fixing lawsuit filed in 2016. The class action lawsuit accuses chicken producers, including Pilgrim’s Pride, Perdue Farms, Tyson Foods and Sanderson Farms, of engaging in conspiracy to fix and increase chicken prices.
The new indictment details incidents where the defendants communicated with each other and discussed pricing information and agreed on responses to negotiations with chicken customers.
If convicted, each defendant faces a maximum term of imprisonment of ten (10) years imprisonment and a fine of $1 million.
https://blog.volkovlaw.com/2020/10/doj-adds-six-new-defendants-to-price-fixing-boiler-chicken-conspiracy/
DAR Comment on the news about the antibody treatment that apparently worked well for President Trump:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
The therapy is very promising. Availability is sharply limited. Regeneron has applied for emergency FDA authorization for the product. Astrazenica and others will follow.
Regeneron's stock has risen based on the success of its antibody therapy. 80% of the the cost of develop reportedly was carried by the US government.
It is a puzzle why the therapy is not widely and cheaply available.
More detail follows:
Gottlieb: antibody drugs are good, but not widely available
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
Dr. Scott Gottlieb told CNBC on Friday that antibody drugs are likely to be important treatments for the coronavirus, but he cautioned against considering them a panacea for the nation’s Covid-19 outbreak.
The former U.S. Food and Drug Administration commissioner said the lack of supply means not every person who becomes diagnosed with the coronavirus will be able to receive an antibody treatment — should the FDA grant emergency use authorization to the two companies that recently applied.
“I think these drugs will make a meaningful difference for people who are the highest risk of having a bad outcome,” Gottlieb said on “Closing Bell.” “But this is not going to end the epidemic. This is not going to be widely available to everyone,” he added.
Priority would probably be given to Covid-19 patients who are over the age of 65, given they are more likely to become severely ill or die, according to Gottlieb.
People who have significant underlying medical conditions also would be higher on the list of patients to receive an antibody treatment, he said.
“We’re not going to have this available in the kind of volumes where you’d want to give it to everyone who is at risk and maybe even as a prophylaxis for people who are at high risk of contracting the infection like people in nursing homes, front-line health-care providers, front-line workers.” he said.
The U.S. government has awarded $486 million to AstraZeneca Plc to develop and secure supplies of up to 100,000 doses of Covid-19 antibody treatment
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
This is similar to the antibody drug that was used in treating President Donald Trump.
The agreement, under the Trump administration’s Operation Warp Speed, is for developing a monoclonal antibody cocktail that can prevent Covid-19, especially in high-risk population like those over 80 years old, the U.S. Department of Health and Human Services said.
The treatment has come under the spotlight after Trump was treated with Regeneron Pharmaceuticals’ antibody drug last week. The president has also released a video on Twitter touting its benefits.
In a call earlier on Friday, a top U.S. health official said the government was expecting to provide more than 1 million free doses of antibody treatments to Covid-19 patients, similar to the one that was administered to Trump.
Regeneron and Eli Lilly have both applied to the U.S. Food and Drug Administration for emergency use authorizations of their antibody treatments.
AstraZeneca said it was planning to supply up to 100,000 doses starting toward the end of 2020 and that the U.S. government could acquire up to an additional one million doses in 2021 under a separate agreement.
Regeneron signed a $450 million deal in July to sell Operation Warp Speed enough doses of its antibody treatment, REGN-COV2, to treat around 300,000 people.
Eli Lilly said on Friday it had not signed an agreement with Operation Warp Speed.
AstraZeneca plans to evaluate the treatment, AZD7442, which is a cocktail of two monoclonal antibodies, in two studies.
One trial will evaluate the safety and efficacy of the experimental treatment to prevent infection for up to 12 months in about 5,000 participants, while the second will evaluate post-exposure preventative and pre-emptive treatment in roughly 1,100 participants.
https://www.cnbc.com/2020/10/12/us-astrazeneca-strike-deal-for-covid-19-antibody-treatment.html
Regeneron’s stock price rose after the company submitted an “emergency use authorization” request to the U.S. Food and Drug Administration for its Covid-19 antibody treatment.
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Its REGN-COV2 monoclonal antibody coronavirus therapy is what President Donald Trump took last week after being diagnosed with Covid-19. He has since described it as a “cure” even though there’s no such scientific proof.
The biotech company published a statement Wednesday noting that “if an EUA is granted the government has committed to making these doses available to the American people at no cost and would be responsible for their distribution.”
At this time, there are doses available for approximately 50,000 patients, Regeneron said, “and we expect to have doses available for 300,000 patients in total within the next few months.”
REGN-COV2 is a combination of two monoclonal antibodies and was “designed specifically to block infectivity” of the virus (SARS-CoV-2) that causes Covid-19.
Trump was given an 8 gram dose of the antibody cocktail early in the course of his Covid-19 infection, despite it not being authorized by the FDA.
https://www.cnbc.com/2020/10/08/regeneron-requests-eua-from-the-fda-for-coronavirus-treatment.html
Taxpayers are subsidizing 80 percent of Regeneron’s COVID-19 treatment’s R&D costs
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Posted on October 8, 2020 by Kathryn Ardizzone https://www.keionline.org/author/kathryn-ardizzone
See: https://www.keionline.org/34126
Regeneron Pharmaceutical recently applied for Emergency Use Authorization of its investigational COVID-19 treatment, REGN-COV2, after Donald Trump said that it cured him of COVID-19, suggesting that Regeneron expects to cash in on the treatment. Taxpayers, however, are funding 80 percent of the costs of developing REGN-COV2.
Regeneron’s May 5, 2020 SEC filing [https://www.sec.gov/Archives/edgar/data/872589/000180422020000011/regn-033120x10q.htm] states as follows (emphasis added):
We are using our end-to-end antibody technologies to discover and develop brand new therapeutic antibodies for COVID-19. The Company is advancing REGN-COV2, a novel investigational antibody “cocktail” treatment designed to prevent and treat infection from the SARS-CoV-2 virus. In April, the Company moved its leading neutralizing antibodies into pre-clinical and clinical-scale cell production lines and plans to have supply available for clinical studies, which are expected to begin in June 2020.
The Company is also working to rapidly scale-up manufacturing.The Company also announced an expansion of its Other Transaction Agreement (“OTA”) with BARDA, pursuant to which HHS is obligated to fund 80% of our costs incurred for certain research and development activities related to COVID-19 treatments.
Regeneron should open license the IP rights, data, know-how, and cell lines necessary to manufacture the COVID-19 treatment to the World Health Organization COVID-19 Technology Access Pool (C-TAP), a global framework for the voluntary licensing of rights in COVID-19 medical technologies. A deep technology transfer to C-TAP, i.e., one that enables other qualified companies to manufacture the licensed technologies, is the best way to ensure that any treatment or vaccine deemed safe and effective is distributed as widely and quickly as possible.
Regeneron conference call and press release on its COVID-19 antibody cocktail
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
alexandra.bowie@regeneron.com
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
mark.hudson@regeneron.com
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
invest@regeneron.com
Media Relations
Regeneron COVID-19 Conference call
https://edge.media-server.com/mmc/p/bgwc5r8v
Regeneron 9-29-20 press release:
https://investor.regeneron.com/news-releases/news-release-details/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and
FROM THE PRESS RELEASE:
September 29, 2020 at 4:01 PM EDT
REGENERON'S REGN-COV2 ANTIBODY COCKTAIL REDUCED VIRAL LEVELS AND IMPROVED SYMPTOMS IN NON-HOSPITALIZED COVID-19 PATIENTSTARRYTOWN, N.Y., Sept. 29, 2020 /PRNewswire/ --
Greatest improvements in patients who had not mounted their own effective immune response prior to treatment
Plan rapidly to discuss results with regulatory authorities
Regeneron to host investor and media webcast to discuss results at 4:30 pm ET today
Regeneron Pharmaceuticals, Inc. (NASDAQ: REGN) today announced the first data from a descriptive analysis of a seamless Phase 1/2/3 trial of its investigational antibody cocktail REGN-COV2 showing it reduced viral load and the time to alleviate symptoms in non-hospitalized patients with COVID-19. REGN-COV2 also showed positive trends in reducing medical visits. The ongoing, randomized, double-blind trial measures the effect of adding REGN-COV2 to usual standard-of-care, compared to adding placebo to standard-of-care.
This trial is part of a larger program that also includes studies of REGN-COV2 for the treatment of hospitalized patients, and for prevention of infection in people who have been exposed to COVID-19 patients.
"After months of incredibly hard work by our talented team, we are extremely gratified to see that Regeneron's antibody cocktail REGN-COV2 rapidly reduced viral load and associated symptoms in infected COVID-19 patients," said George D. Yancopoulos, M.D., Ph.D., President and Chief Scientific Officer of Regeneron. "The greatest treatment benefit was in patients who had not mounted their own effective immune response, suggesting that REGN-COV2 could provide a therapeutic substitute for the naturally-occurring immune response. These patients were less likely to clear the virus on their own, and were at greater risk for prolonged symptoms. We are highly encouraged by the robust and consistent nature of these initial data, as well as the emerging well-tolerated safety profile, and we have begun discussing our findings with regulatory authorities while continuing our ongoing trials. In addition to having positive implications for REGN-COV2 trials and those of other antibody therapies, these data also support the promise of vaccines targeting the SARS-CoV-2 spike protein."
The descriptive analysis included the first 275 patients enrolled in the trial and was designed to evaluate anti-viral activity with REGN-COV2 and identify patients most likely to benefit from treatment; the next cohort, which could be used to rapidly and prospectively confirm these results, has already been enrolled. Patients in the trial were randomized 1:1:1 to receive a one-time infusion of 8 grams of REGN-COV2 (high dose), 2.4 grams of REGN-COV2 (low dose) or placebo. All patients entering the trial had laboratory-confirmed COVID-19 that was being treated in the outpatient setting. Patients were prospectively characterized prior to treatment by serology tests to see if they had already generated antiviral antibodies on their own and were classified as seronegative (no measurable antiviral antibodies) or seropositive (measurable antiviral antibodies). Approximately 45% of patients were seropositive, 41% were seronegative and 14% were categorized as "other" due to unclear or unknown serology status.
Key data findings include:
Note that since this analysis was considered descriptive, all p-values are nominal.
- As hypothesized, patients in the study consisted of two different populations: those who had already mounted an effective immune response, and those whose immune response was not yet adequate. These populations could be identified serologically by the presence (seropositive) or absence (seronegative) of SARS-CoV-2 antibodies, and/or by high viral loads at baseline.
- Serological status highly correlated with baseline viral load (p<0.0001). Seropositive patients had much lower levels of virus at baseline, and rapidly achieved viral loads approaching lowest levels quantifiable (LLQ), even without treatment. In contrast, seronegative patients had substantially higher viral levels at baseline, and cleared virus more slowly in the absence of treatment.
- Serological status at baseline also predicted how rapidly patients had alleviation of their COVID-19 clinical symptoms. In the untreated (placebo) patients, seropositive patients had a median time to alleviation of symptoms of 7 days, compared to seronegative patients who had a median time to alleviation of symptoms of 13 days.
- REGN-COV2 rapidly reduced viral load through Day 7 in seronegative patients (key virologic endpoint). The mean time-weighted-average change from baseline nasopharyngeal (NP) viral load through Day 7 in the seronegative group was a 0.60 log10 copies/mL greater reduction (p=0.03) in patients treated with high dose, and a 0.51 log10 copies/mL greater reduction (p=0.06) in patients treated with low dose, compared to placebo. In the overall population, there was a 0.51 log10 copies/mL greater reduction (p=0.0049) in patients treated with high dose, and a 0.23 log10 copies/mL greater reduction (p= 0.20) in patients treated with low dose, compared to placebo.
- Patients with increasingly higher baseline viral levels had correspondingly greater reductions in viral load at Day 7 with REGN-COV2 treatment. The mean log10 copies/mL reduction in viral load compared to placebo were as follows:
- Viral load higher than 105 copies/mL: high dose (-0.93); low dose (-0.86) (p=0.03 for both); approximately 50-60% reduction compared to placebo
- Viral load higher than 106 copies/mL: high dose (-1.55); low dose (-1.65) (p<0.002 for both); approximately 95% reduction compared to placebo
- Viral load higher than 107 copies/mL: high dose (-1.79); low dose (-2.00) (p<0.0015 for both); approximately 99% reduction compared to placebo - Patients who were seronegative and/or had higher baseline viral levels also had greater benefits in terms of symptom alleviation. Among seronegative patients, median time to symptom alleviation (defined as symptoms becoming mild or absent) was 13 days in placebo, 8 days in high dose (p=0.22), and 6 days in low dose (p=0.09). Patients with increasing viral loads at baseline had correspondingly increasing benefit in time to symptom alleviation.
- There were a small number of medically-attended visits given that most non-hospitalized patients recover well at home. Patients in the seronegative group were at higher risk of medically-attended visits: 10 of the 12 medically-attended visits (defined as hospitalizations, or emergency room, urgent care or telemedicine visits for COVID-19) occurred in patients who were seronegative at baseline. In the seronegative group, 15.2% of placebo-treated patients, 7.7% of patients treated with high dose and 4.9% of patients treated with low dose required additional medical visits.
- Both doses were well-tolerated. Infusion reactions were seen in 4 patients (2 on placebo and 2 on REGN-COV2). Serious adverse events occurred in 2 placebo patients, 1 low dose patient and no high dose patients. There were no deaths in the trial.
"Thank you to the global investigators, sites and patients who continue to work with us to conduct REGN-COV2 trials, especially given the unique challenges posed by the pandemic," said David Weinreich, M.D., Senior Vice President and Head of Global Clinical Development at Regeneron. "We plan rapidly to submit detailed results from this analysis for publication in order to share insights with the public health and medical communities. Regeneron continues to enroll patients in this trial and all other ongoing late-stage trials evaluating REGN-COV2."
Additional Trial Background
Among the first 275 patients, approximately 56% were Hispanic, 13% were African American and 64% had one or more underlying risk factors for severe COVID-19, including obesity (more than 40%). On average, patients were 44 years of age. In total, 49% of participants were male and 51% were female.
At least 1,300 patients will be recruited into the Phase 2/3 portion of the outpatient trial overall. Patients will be followed for 29 days, with viral shedding in the upper respiratory tract assessed approximately every 2-3 days in the Phase 2 portion of the trial and clinical endpoints assessed via investigator and patient-reported data throughout.
In addition to this trial in non-hospitalized patients, REGN-COV2 is currently being studied in a Phase 2/3 clinical trial for the treatment of COVID-19 in hospitalized patients, the Phase 3 open-label RECOVERY trial of hospitalized patients in the UK and a Phase 3 trial for the prevention of COVID-19 in household contacts of infected individuals. Recruitment in all 4 trials is ongoing.
Investor and Media Webcast Information
Regeneron will host a conference call and simultaneous webcast to share updates on REGN-COV2 today September 29, 2020 at 4:30 pm ET. To access the call, dial (888) 660-6127 (U.S.) or (973) 890-8355 (International). A link to the webcast may be accessed from the "Investors and Media" page of Regeneron's website at www.regeneron.com. A replay of the conference call and webcast will be archived on the Company's website and will be available for at least 30 days.
About REGN-COV2
REGN-COV2 is a combination of two monoclonal antibodies (REGN10933 and REGN10987) and was designed specifically to block infectivity of SARS-CoV-2, the virus that causes COVID-19.
To develop REGN-COV2, Regeneron scientists evaluated thousands of fully-human antibodies produced by the company's VelocImmune® mice, which have been genetically modified to have a human immune system, as well as antibodies identified from humans who have recovered from COVID-19. The two potent, virus-neutralizing antibodies that form REGN-COV2 bind non-competitively to the critical receptor binding domain of the virus's spike protein, which diminishes the ability of mutant viruses to escape treatment and protects against spike variants that have arisen in the human population, as detailed in Science. Preclinical studies have shown that REGN-COV2 reduced the amount of virus and associated damage in the lungs of non-human primates.
REGN-COV2's development and manufacturing has been funded in part with federal funds from the Biomedical Advanced Research and Development Authority (BARDA), part of the Office of the Assistant Secretary for Preparedness and Response at the U.S. Department of Health and Human Services under OT number: HHSO100201700020C. Regeneron has recently partnered with Roche to increase the global supply of REGN-COV2. If REGN-COV2 proves safe and effective in clinical trials and regulatory approvals are granted, Regeneron will manufacture and distribute it in the U.S. and Roche will develop, manufacture and distribute it outside the U.S.
About Regeneron [omitted]
For additional information about the company, please visit www.regeneron.com or follow @Regeneron on Twitter.
Forward-Looking Statements and Use of Digital Media [omitted]
Contacts:
Media Relations
Alexandra Bowie
Tel: +1 (914) 847-3407
alexandra.bowie@regeneron.com
Investor Relations
Mark Hudson
Tel: +1 (914) 847-3482
mark.hudson@regeneron.com
View original content:http://www.prnewswire.com/news-releases/regenerons-regn-cov2-antibody-cocktail-reduced-viral-levels-and-improved-symptoms-in-non-hospitalized-covid-19-patients-301140336.html
SOURCE Regeneron Pharmaceuticals, Inc.
Investor Relations
914.847.7741
invest@regeneron.com
Media Relations
Reprise: Tony Picadio on gun rights
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
and the US Supreme Court
by DAR: Rights of gun owners have become an increasingly fraught issue as incidents of gun violence in the U.S. occur with alarming frequency. The connection between private "militia" activity and gun ownership is of concern.
An article by Anthony Picadio criticizes the U.S. Supreme Court's decision in District of Columbia v.Heller, which expanded gun ownership rights. Picadio points out that the history of the Second Amendment in the lower courts since the Heller decision does in fact support Justice Thomas’ lament [in a case dissent] that the courts have failed to afford the Second Amendment “the respect due an enumerated constitutional right.”
Mr. Picadio suggests that perhaps one of the reasons that expansive treatment of the Second Amendment has been so disfavored by the lower courts is a growing recognition that it was never intended by those who drafted and adopted it to grant any rights to own or use a firearm unconnected to membership in a government connected militia.
Moreover, Justice Scalia’s opinion “is based on an erroneous reading of colonial history and the drafting history of the Second Amendment,’’ Mr. Picadio wrote. “If the Second Amendment had been understood to have the meaning given to it by Justice Scalia, it would not have been ratified by Virginia and the other slave states.”
The amendment began with the phrase “a well regulated Militia’’ because the Virginian founders wanted to be sure guns didn’t get into the hands of enslaved black Virginians or free black Virginians, Mr. Picadio argues. With the state’s all-white militia, this amendment helped do just that.
Mr. Picadio’s article appears in the PENNSYLVANIA BAR ASSOCIATION QUARTERLY | January 2019
A copy of the Picadio article accompanies a newspaper op-ed at https://www.post-gazette.com/opinion/brian-oneill/2019/02/10/Brian-O-Neill-Slavery-root-of-the-Second-Amendment/stories/201902100107
Douglas Ginsburg explains Constitutional originalism on PBS
By Don Allen Resnikoff
Amy Coney Barrett, the president’s choice for the U.S. Supreme Court, is often described as a disciple of Justice Antonin Scalia and an advocate of an interpretation of the Constitution known as originalism.
For those interested in a popular TV presentation explaining and defending Constitutional originalism, Public Broadcasting Service’s (PBS) fits the bill. “A More or Less Perfect Union, A Personal Exploration,” featuring Judge Douglas Ginsburg, offers an interesting, albeit mostly one-sided presentation.
PBS is admirable because of its independence from direct political control of content, but independence does not mean that particular PBS programs will meet standards of objectivity and balance that are suggested by the Corporation for Public Broadcasting’s enabling statute. The Ginsburg series, particularly the last of the series, called “Our Constitution at Risk,” veers sharply in the direction of supporting the Constitutional originalist ideas of Justice Scalia[i]
The Ginsburg PBS show is excellent in the sense that it is intelligently presented and interesting. But it is also an advocacy piece supporting a political viewpoint that includes a narrow “originalist” view of the Constitution, and strong condemnation of government action (such as action in support of labor unions) that many defend as highly desirable.
An article describing the video program for the American Bar Association Journal accurately explains that “Ginsburg, who is an originalist in his interpretation of the Constitution, points out how the balance of powers has shifted over the years. He contends elected officials have degraded the Constitution, and now there are agencies that do the work of all three governmental branches.” [ii] Ginsburg’s opinion is that regulatory agencies often act inappropriately in taking on the multiple tasks of making law, judging whether law violations occurred, and prescribing punishment.
Judge Ginsburg explains his “originalist” views of Constitutional interpretation in a companion book to the PBS video series called Voices of Our Republic.:[iii] The Constitution has also been “interpreted” by the Supreme Court to make certain clauses meaningless and to give other clauses new meaning. That evolution at the hands of the Court has been celebrated by many as a testament to the needed flexibility of the Constitution to respond to new circumstances, and lamented by others, myself included, as a betrayal of the ideals and principles that animated the Constitution in the first place. It also gave rise to the debate . . . : Should a court read the words of the Constitution as those who wrote and ratified them understood them? Or is a court authorized to give those words a new and different meaning in response to new and different circumstances?
The PBS show on the Constitution focuses at length on examples of government regulatory overreach into the business of very small entrepreneurs, such as easily criticized stringent city rules for licensing of tour guides. The show also refers to the history of the Tennessee Valley Authority as an example of government overreach, a bigger and more politically controversial story. The TVA was part of a regional development authority, famously including building of a huge hydroelectric dam that supplied electricity to a large geographic area. It was a centerpiece of Franklin D. Roosevelt’s New Deal programs, and was later opposed by politicians such as Ronald Reagan and Barry Goldwater.
Judge Ginsburg opposes FDR’s New Deal programs and its successors based on the Constitutional interpretation points explained in the PBS program.
Ginsburg explains in an earlier article that “the Great Depression and the determination of the Roosevelt Administration placed the Supreme Court’s commitment to the Constitution as written under severe stress in the 1930s, and it was then that the wheels began to come off [of correct commitment to the Constitution as written].” [iv]
Judge Ginsburg’s examples of the “wheels coming off” the Court’s interpretation of the Constitution include the New Deal era court decision NLRB v. Jones & Laughlin Steel Corp., [v] upholding the power of the Congress under the Constitution’s Commerce Clause to require companies to recognize labor unions. Ginsburg says that the Supreme Court thereby wrongly “threw open the door to national regulation of employment relations—and much more. Not only interstate commerce but anything that affects interstate commerce came within the reach of the Congress.” [vi]
Judge Ginsburg’s views are politically controversial. Financial and intellectual support for the Ginsburg presentation comes from groups that are themselves controversial. The PBS website for the television program on the Constitution credits production to “Free to Choose Media, in association with Thirteen [the New York PBS station WNET].” The Free to Choose website explains that the Freedom to Choose media efforts evolved from a broadcasting collaboration with economist Milton Friedman.[vii]
Milton Freidman is frequently associated with the political arguments that the Great Depression of the 1930s was a consequence of inept monetary policies of the Federal Reserve, and that the large bureaucracies of the Roosevelt New Deal were unneeded and inappropriate as a matter of Constitutional policy. [viii]
Media watchdog Sourcewatch’s characterizations of Free to Choose Media as “right-wing” and “extremist,” and “partisan” suggest, at minimum, that Free to Choose is associated with controversial political views. [ix]
If views expressed in the PBS show “ A More Or Less Perfect Union” are politically controversial, it seems fair to ask whether public broadcasting network PBS and its local affiliate WNET could do more to protect objectivity and balance. I think that the answer is yes, they could do more.
PBS and WNET do not make it clear that the views expressed in the program on the Constitution are the responsibility of the producer, and not PBS. Instead, PBS affiliate WNET appears to take shared credit for the content. As mentioned earlier, a PBS website for the show credits production to “Free to Choose Media, in association with Thirteen,” “Thirteen” being the New York PBS station WNET.
The PBS promotional material for the program is mainly an endorsement of Judge Ginsburg’s views: “Judge Ginsburg skillfully weaves the story of . . .how we may risk freedom today by ignoring the words of the Framers. . . .Business owners and American citizens relate stories both of protection and of overreach by the government – as with the USDA regulating the care of Hemingway’s cats! The Bill of Rights is explored . . . [including] momentous issues surrounding the freedom of speech, religion, press, and assembly, the Second Amendment [guns], eminent domain, the separation of powers, and civil rights.”
How could PBS do better? The answer is simple: Where a program advocates politically controversial positions, PBS should provide context for viewers. That need for context applies to the recent PBS program on the Constitution featuring Judge Ginsburg, if only because the Constitutional originalist ideas the program advocates are controversial. Those originalist ideas are in opposition to regulations and government agencies that many people believe necessary, including regulations necessary to save our country from the ravages of financial depression and Covid.
Don Allen Resnikoff 10-1-20
[i] A video preview is at https://www.pbs.org/video/our-constitution-risk-preview-z4ai48/
[ii] See https://www.abajournal.com/web/article/pbs-a-more-or-less-perfect-union-aims-to-boost-understanding-of-the-Constitution
[iii] Simon and Schuster, Jan 28, 2020
[iv] Cato Supreme Court Review, 2002-2003, James L. Swanson, Cato Institute, Oct 25, 2003
[v] 301 U.S. 1 (1937), a United States Supreme Court case that upheld the constitutionality of the National Labor Relations Act of 1935, also known as the Wagner Act.
[vi] https://www.cato.org/sites/cato.org/files/serials/files/supreme-court-review/2003/9/constitutional.pdf
[vii] https://www.freetochoosenetwork.org/about/
[viii] Franklin Roosevelt and Presidential Power, John Yoo, Chapman Law Review, Vol. 21, No. 1, 2018
[ix] See https://www.sourcewatch.org/index.php/Free_to_Choose_Network
From The Hill: To restore financial stability, bring back Glass-Steagall
By Arthur E. Wilmarth, Jr
Excerpts:
The global response to the pandemic confirms that we have not solved the problems that brought us the Great Recession more than a decade ago.
To break the global doom loop and restore financial stability, we must adopt a new Glass-Steagall Act. The original Glass-Steagall Act of 1933 supported stable financial markets and prevented systemic financial crises for more than three decades after World War II. Glass-Steagall separated banks from the capital markets and prohibited nonbanks from accepting deposits. It established risk buffers that prevented financial disruptions occurring in one sector of the financial markets from spreading to other sectors and triggering systemic crises. Regulators could respond to problems arising in one sector without being forced to bail out the entire financial system. Regulators could also encourage strong financial institutions in one sector to support troubled institutions in another sector. The undermining and repeal of Glass-Steagall’s prudential buffers helped to ignite the subprime mortgage boom that led to the Great Recession.
A new Glass-Steagall Act would greatly improve financial stability. It would prevent banks from using government-protected deposits to finance speculative trading in the capital markets. It would prohibit banks from underwriting securities other than government bonds. It would stop nonbanks from offering short-term financial instruments (like money market mutual funds) that masquerade as “deposits” but are not covered by deposit insurance and other banking regulations.
A new Glass-Steagall Act would reestablish risk buffers and prevent contagion across financial sectors. It would improve market discipline by preventing banks from transferring their public subsidies to affiliates engaged in capital market activities. Regulators would no longer be compelled to prop up securities markets because of concerns about massive securities exposures held by banks. Shadow banks would shrink substantially, as they could no longer finance their operations with short-term financial instruments. Bank regulators could more effectively monitor and control levels of short-term claims in financial markets because those claims would be issued only by banks.
A new Glass-Steagall Act would create a more diverse and competitive banking system by breaking up universal banks. Banks would return to their traditional roles of providing deposit, credit, fiduciary and payment services to businesses and consumers. Banks would have much stronger incentives to serve all segments of business and society, instead of focusing their efforts on Wall Street speculators, multinational corporations and the wealthy.
Securities markets would once again become true markets because they would not be linked to the fortunes of “too big to fail” universal banks and shadow banks. Our political, regulatory and monetary policies would no longer be held hostage by financial giants. Banks and securities firms would return to their proper roles as servants – not masters – of commerce, industry and society.
In 1914, Louis Brandeis warned the American public, “We must break the Money Trust or the Money Trust will break us.” Congress acted on his advice in 1933 by enacting the Glass-Steagall Act. Brandeis’s warning is just as timely today as it was in 1914 and 1933.
Arthur E. Wilmarth, Jr. is a professor emeritus of law at George Washington University in Washington, D.C. This op-ed is based on his book, “Taming the Megabanks: Why We Need a New Glass-Steagall Act (Oxford University Press),” which will be published on October 2.
https://www.msn.com/en-us/money/savingandinvesting/to-restore-financial-stability-bring-back-glass-steagall/ar-BB19A4L3
A&P:
September 2020
California’s Mini CFPB Among Innovations in a Trifecta of New Consumer Protection Laws
September 25, 2020 was a momentous day for the regulation of consumer finance in California—Governor Newsom signed into law three important bills: the California Consumer Financial Protection Law, the Debt Collection Licensing Act and the Student Borrower Bill of Rights.
In doing so, the Department of Business Oversight once again has a new name. Formerly the Department of Corporations, the Department of Business Oversight will now be renamed the Department of Financial Protection and Innovation. Some are calling it a "mini-CFPB"—meaning a California version of the federal Consumer Financial Protection Bureau. The new name and the establishment of a new Financial Technology Innovation Office signals California's renewed focus on financial innovation in the state and commitment to regulatory enforcement.
Read Advisory;https://comms.arnoldporter.com/e/niuiw04bwlagbha/e83a538d-6b1b-4475-afb5-5780d31ea1ab
September 2020
California’s Mini CFPB Among Innovations in a Trifecta of New Consumer Protection Laws
September 25, 2020 was a momentous day for the regulation of consumer finance in California—Governor Newsom signed into law three important bills: the California Consumer Financial Protection Law, the Debt Collection Licensing Act and the Student Borrower Bill of Rights.
In doing so, the Department of Business Oversight once again has a new name. Formerly the Department of Corporations, the Department of Business Oversight will now be renamed the Department of Financial Protection and Innovation. Some are calling it a "mini-CFPB"—meaning a California version of the federal Consumer Financial Protection Bureau. The new name and the establishment of a new Financial Technology Innovation Office signals California's renewed focus on financial innovation in the state and commitment to regulatory enforcement.
Read Advisory;https://comms.arnoldporter.com/e/niuiw04bwlagbha/e83a538d-6b1b-4475-afb5-5780d31ea1ab
PBS: Voice of America politicized?--could U.S. public TV be next?
https://www.pbssocal.org/programs/pbs-newshour/controlling-the-message-1600974186/
Michael Pack, CEO of the U.S. Agency for Global Media, ignored a congressional subpoena over concerns he has politicized and mismanaged media outlets that helped the U.S. win the Cold War. One of those outlets is Voice of America. Nick Schifrin reports.
DAR Comment:
The Voice of America story is that the Trump Administration installed Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America. Press reports indicate that Pack previously ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon. Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired the heads of three other networks — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund.
Pack reportedly dissolved the networks’ bipartisan advisory boards and replaced them with new panels composed of people widely considered to be Trump loyalists.
The Guardian newspaper opined that “The action by Michael Pack appeared to confirm fears that Trump wanted to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
The statute relevant to the Voice of America is the International Broadcasting Act, which critics argue was weakened in several ways by Congress in 2016, including weakening job security of broadcast network heads.
Is there reason for concern that public broadcasting could in the future be made a tool of a partisan or narrow ideological point of view? To use the language of the Guardian newspaper editorial, could the U.S. Public Broadcasting Service stations at some future point be turned into loyal state broadcasters of the kind normally found in authoritarian societies?
Past experience suggests reason for concern. The Voice of America experience in particular suggests that public broadcasting can be an attractive target for aggressive politicians who wish to take control of the information available to the public.
Another source of concern lies in constitutional requirements articulated by the U.S. Supreme Court in its 2020 decision in the case of SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU. The case concerns the status of the CFPB as an independent regulatory agency. The U.S. Supreme Court explained in SEILA that as a general matter, leaders of federal agencies serve at the discretion of the President. The Court then applied that principle to the CFPB.
Commenters have pointed out that in clipping the independence of the Consumer Financial Protection Bureau, a conservative majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. Cass Sunstein says that “The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.”
That constitutional cloud applies as well to the independence of the Corporation for Public Broadcasting, which is responsible for public broadcasting in the United States.
Posting by Don Allen Resnikoff, who is responsible for the content.
https://www.pbssocal.org/programs/pbs-newshour/controlling-the-message-1600974186/
Michael Pack, CEO of the U.S. Agency for Global Media, ignored a congressional subpoena over concerns he has politicized and mismanaged media outlets that helped the U.S. win the Cold War. One of those outlets is Voice of America. Nick Schifrin reports.
DAR Comment:
The Voice of America story is that the Trump Administration installed Michael Pack as head of the Agency for Global Media, which has a supervisory role over the Voice of America. Press reports indicate that Pack previously ran the conservative Claremont Institute and was a colleague of right-wing political strategist Steve Bannon. Shortly after Pack took on his Global Media position, the Director and Deputy Director of Voice of America resigned, and Pack fired the heads of three other networks — Radio Free Asia, Radio Free Europe/Radio Liberty and the Middle East Broadcasting Networks — as well as the Open Technology Fund.
Pack reportedly dissolved the networks’ bipartisan advisory boards and replaced them with new panels composed of people widely considered to be Trump loyalists.
The Guardian newspaper opined that “The action by Michael Pack appeared to confirm fears that Trump wanted to turn the US Agency for Global Media (USAGM) into a loyal state broadcaster of the kind normally found in authoritarian societies.”
The statute relevant to the Voice of America is the International Broadcasting Act, which critics argue was weakened in several ways by Congress in 2016, including weakening job security of broadcast network heads.
Is there reason for concern that public broadcasting could in the future be made a tool of a partisan or narrow ideological point of view? To use the language of the Guardian newspaper editorial, could the U.S. Public Broadcasting Service stations at some future point be turned into loyal state broadcasters of the kind normally found in authoritarian societies?
Past experience suggests reason for concern. The Voice of America experience in particular suggests that public broadcasting can be an attractive target for aggressive politicians who wish to take control of the information available to the public.
Another source of concern lies in constitutional requirements articulated by the U.S. Supreme Court in its 2020 decision in the case of SEILA LAW LLC v. CONSUMER FINANCIAL PROTECTION BUREAU. The case concerns the status of the CFPB as an independent regulatory agency. The U.S. Supreme Court explained in SEILA that as a general matter, leaders of federal agencies serve at the discretion of the President. The Court then applied that principle to the CFPB.
Commenters have pointed out that in clipping the independence of the Consumer Financial Protection Bureau, a conservative majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. Cass Sunstein says that “The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.”
That constitutional cloud applies as well to the independence of the Corporation for Public Broadcasting, which is responsible for public broadcasting in the United States.
Posting by Don Allen Resnikoff, who is responsible for the content.
PBS's Hacking Your Mind
The official "teaser" for the three part series is here:
https://www.youtube.com/watch?v=Hs0lEP6r2Ig
DAR comment: The show offers an interesting analysis of how behavioral manipulation strategies are used to persuade consumers concerning products like antacids, and voters concerning support for particular parties and candidates.
A consumer product example is the advertising campaign that successfully persuaded people to switch from Prilosec to the more expensive prescription-only Nexium, even though the two are functionally very similar.
In the world of politics, similar strategies are on steroids because of Facebook, which profits by selling information on user interests. The PBS program suggests that strategies of politicians and those wishing to influence politics are often the result of careful research on voter biases, rather than random off-the-cuff thinking.
For example, "us v them" biases are exploited by groups seeking to influence political thinking. One illustration offered by the PBS program involves a Russia troll group that created two different web sites in the U.S. -- one anti-Muslim, and the other promoting defense of Muslim interests. The troll group used both websites to announce a public demonstration for both groups at the same time and place, which succeeded in creating a real world large and angry crowd confrontation between anti-Muslim people and Muslim defenders. The Russian political goal? To promote political discord in the U.S.
Broad use of behavioral manipulation techniques is more than a little concerning, both with regard to consumer product promotion and politics. I recommend the PBS series.
-Posting by Don Allen Resnikoff, who is responsible for the content.
The official "teaser" for the three part series is here:
https://www.youtube.com/watch?v=Hs0lEP6r2Ig
DAR comment: The show offers an interesting analysis of how behavioral manipulation strategies are used to persuade consumers concerning products like antacids, and voters concerning support for particular parties and candidates.
A consumer product example is the advertising campaign that successfully persuaded people to switch from Prilosec to the more expensive prescription-only Nexium, even though the two are functionally very similar.
In the world of politics, similar strategies are on steroids because of Facebook, which profits by selling information on user interests. The PBS program suggests that strategies of politicians and those wishing to influence politics are often the result of careful research on voter biases, rather than random off-the-cuff thinking.
For example, "us v them" biases are exploited by groups seeking to influence political thinking. One illustration offered by the PBS program involves a Russia troll group that created two different web sites in the U.S. -- one anti-Muslim, and the other promoting defense of Muslim interests. The troll group used both websites to announce a public demonstration for both groups at the same time and place, which succeeded in creating a real world large and angry crowd confrontation between anti-Muslim people and Muslim defenders. The Russian political goal? To promote political discord in the U.S.
Broad use of behavioral manipulation techniques is more than a little concerning, both with regard to consumer product promotion and politics. I recommend the PBS series.
-Posting by Don Allen Resnikoff, who is responsible for the content.
From New America:
Protecting the Vote
RSVP
Following the 2016 U.S. presidential election, internet platforms have come under increased scrutiny for how they tackle the spread of election-related misinformation and disinformation, particularly content that aims to suppress voter engagement and that targets communities of color. As the 2020 U.S. presidential election draws near, concerns that these platforms are being used by both foreign and domestic actors to exploit users and spread misleading information are growing, especially given that this election is taking place amid an unprecedented pandemic.
Join New America’s Open Technology Institute (OTI) for a virtual panel that will explore how internet platforms are addressing the spread of election-related misinformation and disinformation on their services, and how these efforts can be improved.
This event builds off of OTI’s work which evaluates how companies are tackling the spread of COVID-19 related misinformation and disinformation, and our forthcoming report on how platforms are addressing the spread of election-related disinformation.
Speakers:
David Brody
Counsel & Senior Fellow for Privacy and Technology, Lawyer’s Committee for Civil Rights Under Law
Yosef Getachew, @ygetachew2
Director, Media & Democracy Program, Common Cause
Spandi Singh, @spandi_s
Policy Analyst, New America’s Open Technology Institute
Ian Vandewalker, @IanVandewalker
Senior Counsel, Brennan Center for Justice
Moderator:
Sam Sabin, @samsabin923
Tech Policy Reporter, Morning Consult
Protecting The Vote: How Internet Platforms Are Addressing Election-Related Misinformation And Disinformation Online
THURSDAY, OCTOBER 1, 2020
1:30 PM – 2:30 PM ET
ONLINE
LINK: https://newamerica.cvent.com/events/protecting-the-vote-how-internet-platforms-are-addressing-election-related-misinformation-and-disinf/registration-359054d33cc24f58b053175983cd898e.aspx?i=06bb9732-d58b-421e-baa1-9304dc065010&fqp=true
RSV
Rand Paul v. Dr. Fauci at Senate hearing
From The Hill
https://thehill.com/policy/healthcare/517801-fauci-rand-paul-is-not-listening-to-the-cdc-director-about-covid-19-data
Paul, who has frequently criticized lockdowns aimed at preventing the spread of the coronavirus while questioning their effectiveness, asked Fauci if he had second thoughts over his support for such measures given statistics in other countries.
He claimed mitigation measures like closing movie theaters, bars and limiting restaurant capacity had no impact, because the New York tri-state area had the highest coronavirus death rate in the country.
"It's important that we the people not simply acquiesce to authoritarian mandates on our behavior without first making the nanny state prove their hypothesis," Paul said. "What we do know is that New York and New Jersey and Connecticut and Rhode Island still allowed the highest death rates in the world."
Fauci said New York got hit "pretty badly" but the state has managed to bring its positivity down to about 1 percent because New Yorkers have been following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors.
When Paul floated the theory that New Yorkers have now developed enough immunity that they are no longer at risk, Fauci appeared irritated and said the senator was completely off base.
"I challenge that, senator," Fauci said, before asking for more time to finish his response "because this happens with Senator Rand all the time."
"You are not listening to what the director of the CDC [Centers for Disease Control and Prevention] said, that in New York [the infection rate is] about 22 percent. If you believe 22 percent is herd immunity, I believe you're alone in that," Fauci said.
DAR Comment: The debate is about a libertarian approach to government regulation, the "nanny state" concern. For Paul, the "nanny state" must prove very strong justification before imposing lockdown mandates. Fauci does not argue with the point that justfication is needed, but does argue with the idea that justification has not been strongly shown. He points out that New York has brought its positivity rate down by following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors. As a matter of fact, what Dr. Fauci refers to as New York recommendations were mandates. See https://www.nytimes.com/2020/04/15/nyregion/coronavirus-face-masks-andrew-cuomo.html
From The Hill
https://thehill.com/policy/healthcare/517801-fauci-rand-paul-is-not-listening-to-the-cdc-director-about-covid-19-data
Paul, who has frequently criticized lockdowns aimed at preventing the spread of the coronavirus while questioning their effectiveness, asked Fauci if he had second thoughts over his support for such measures given statistics in other countries.
He claimed mitigation measures like closing movie theaters, bars and limiting restaurant capacity had no impact, because the New York tri-state area had the highest coronavirus death rate in the country.
"It's important that we the people not simply acquiesce to authoritarian mandates on our behavior without first making the nanny state prove their hypothesis," Paul said. "What we do know is that New York and New Jersey and Connecticut and Rhode Island still allowed the highest death rates in the world."
Fauci said New York got hit "pretty badly" but the state has managed to bring its positivity down to about 1 percent because New Yorkers have been following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors.
When Paul floated the theory that New Yorkers have now developed enough immunity that they are no longer at risk, Fauci appeared irritated and said the senator was completely off base.
"I challenge that, senator," Fauci said, before asking for more time to finish his response "because this happens with Senator Rand all the time."
"You are not listening to what the director of the CDC [Centers for Disease Control and Prevention] said, that in New York [the infection rate is] about 22 percent. If you believe 22 percent is herd immunity, I believe you're alone in that," Fauci said.
DAR Comment: The debate is about a libertarian approach to government regulation, the "nanny state" concern. For Paul, the "nanny state" must prove very strong justification before imposing lockdown mandates. Fauci does not argue with the point that justfication is needed, but does argue with the idea that justification has not been strongly shown. He points out that New York has brought its positivity rate down by following recommendations like wearing masks, keeping physical distance and staying outdoors more than indoors. As a matter of fact, what Dr. Fauci refers to as New York recommendations were mandates. See https://www.nytimes.com/2020/04/15/nyregion/coronavirus-face-masks-andrew-cuomo.html
From the Daily Beast: "Red State" troll of Fauci worked in Fauci's agency
The managing editor of the prominent conservative website RedState has spent months trashing U.S. officials tasked with combating COVID-19, dubbing White House coronavirus task force member Dr. Anthony Fauci a “mask nazi,” and intimating that government officials responsible for the pandemic response should be executed.
But that writer, who goes by the pseudonym “streiff,” isn’t just another political blogger. The Daily Beast has discovered that he actually works in the public affairs shop of the very agency that Fauci leads.
William B. Crews is, by day, a public affairs specialist for the National Institute of Allergy and Infectious Diseases. But for years he has been writing for RedState under the streiff pseudonym. And in that capacity he has been contributing to the very same disinformation campaign that his superiors at the NIAID say is a major challenge to widespread efforts to control a pandemic that has claimed roughly 200,000 U.S. lives
.
Under his pseudonym, Crews has derided his own colleagues as part of a left-wing anti-Trump conspiracy and vehemently criticized the man who leads his agency, whom he described as the “attention-grubbing and media-whoring Anthony Fauci.” He has gone after other public health officials at the state and federal levels, as well—“the public health Karenwaffen,'' as he’s called them—over measures such as the closures of businesses and other public establishments and the promotion of social distancing and mask-wearing. Those policies, Crews insists, have no basis in science and are simply surreptitious efforts to usurp Americans’ rights, destroy the U.S. economy, and damage President Donald Trump’s reelection effort.
“I think we’re at the point where it is safe to say that the entire Wuhan virus scare was nothing more or less than a massive fraud perpetrated upon the American people by ‘experts’ who were determined to fundamentally change the way the country lives and is organized and governed,” Crews wrote in a June post on RedState.
“If there were justice,” he added, “we’d send and [sic] few dozen of these fascists to the gallows and gibbet their tarred bodies in chains until they fall apart.”
After The Daily Beast brought those and other quotes from Crews to NIAID’s attention, the agency said in an emailed statement that Crews would “retire” from his position.
From https://www.thedailybeast.com/redstate-covid-troll-streiff-is-actually-bill-crews-and-he-actually-works-for-dr-anthony-fauci
The managing editor of the prominent conservative website RedState has spent months trashing U.S. officials tasked with combating COVID-19, dubbing White House coronavirus task force member Dr. Anthony Fauci a “mask nazi,” and intimating that government officials responsible for the pandemic response should be executed.
But that writer, who goes by the pseudonym “streiff,” isn’t just another political blogger. The Daily Beast has discovered that he actually works in the public affairs shop of the very agency that Fauci leads.
William B. Crews is, by day, a public affairs specialist for the National Institute of Allergy and Infectious Diseases. But for years he has been writing for RedState under the streiff pseudonym. And in that capacity he has been contributing to the very same disinformation campaign that his superiors at the NIAID say is a major challenge to widespread efforts to control a pandemic that has claimed roughly 200,000 U.S. lives
.
Under his pseudonym, Crews has derided his own colleagues as part of a left-wing anti-Trump conspiracy and vehemently criticized the man who leads his agency, whom he described as the “attention-grubbing and media-whoring Anthony Fauci.” He has gone after other public health officials at the state and federal levels, as well—“the public health Karenwaffen,'' as he’s called them—over measures such as the closures of businesses and other public establishments and the promotion of social distancing and mask-wearing. Those policies, Crews insists, have no basis in science and are simply surreptitious efforts to usurp Americans’ rights, destroy the U.S. economy, and damage President Donald Trump’s reelection effort.
“I think we’re at the point where it is safe to say that the entire Wuhan virus scare was nothing more or less than a massive fraud perpetrated upon the American people by ‘experts’ who were determined to fundamentally change the way the country lives and is organized and governed,” Crews wrote in a June post on RedState.
“If there were justice,” he added, “we’d send and [sic] few dozen of these fascists to the gallows and gibbet their tarred bodies in chains until they fall apart.”
After The Daily Beast brought those and other quotes from Crews to NIAID’s attention, the agency said in an emailed statement that Crews would “retire” from his position.
From https://www.thedailybeast.com/redstate-covid-troll-streiff-is-actually-bill-crews-and-he-actually-works-for-dr-anthony-fauci
From Buzzfeed: secret government documents reveal how the giants of Western banking move trillions of dollars in suspicious transactions, facilitating the work of terrorists, kleptocrats, and drug kingpins.
And the US government, despite its vast powers, fails to stop it.
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world.”
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In the rare instances when the US government does crack down on banks, it often relies on sweetheart deals called deferred prosecution agreements, which include fines but no high-level arrests. The Trump administration has made it even harder to hold executives personally accountable, under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “piling on.”
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
Suspicious payments flow around the world and into countless industries, from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants. They filter into the companies that make familiar items from people’s lives, from the gas in their car to the granola in their cereal bowl.
The FinCEN Files expose an underlying truth of the modern era: The networks through which dirty money traverse the world have become vital arteries of the global economy. They enable a shadow financial system so wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy. Banks with household names have helped to make it so.
From: https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks?ref=hpsplash&origin=spl
And the US government, despite its vast powers, fails to stop it.
Today, the FinCEN Files — thousands of “suspicious activity reports” and other US government documents — offer an unprecedented view of global financial corruption, the banks enabling it, and the government agencies that watch as it flourishes. BuzzFeed News has shared these reports with the International Consortium of Investigative Journalists and more than 100 news organizations in 88 countries.
These documents, compiled by banks, shared with the government, but kept from public view, expose the hollowness of banking safeguards, and the ease with which criminals have exploited them. Profits from deadly drug wars, fortunes embezzled from developing countries, and hard-earned savings stolen in a Ponzi scheme were all allowed to flow into and out of these financial institutions, despite warnings from the banks’ own employees.
Money laundering is a crime that makes other crimes possible. It can accelerate economic inequality, drain public funds, undermine democracy, and destabilize nations — and the banks play a key role. “Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world,” said Martin Woods, a former suspicious transactions investigator for Wachovia.
“Some of these people in those crisp white shirts in their sharp suits are feeding off the tragedy of people dying all over the world.”
Laws that were meant to stop financial crime have instead allowed it to flourish. So long as a bank files a notice that it may be facilitating criminal activity, it all but immunizes itself and its executives from criminal prosecution. The suspicious activity alert effectively gives them a free pass to keep moving the money and collecting the fees.
The Financial Crimes Enforcement Network, or FinCEN, is the agency within the Treasury Department charged with combating money laundering, terrorist financing, and other financial crimes. It collects millions of these suspicious activity reports, known as SARs. It makes them available to US law enforcement agencies and other nations’ financial intelligence operations. It even compiles a report called “Kleptocracy Weekly” that summarizes the dealings of foreign leaders such as Russian President Vladimir Putin.
What it does not do is force the banks to shut the money laundering down.
In the rare instances when the US government does crack down on banks, it often relies on sweetheart deals called deferred prosecution agreements, which include fines but no high-level arrests. The Trump administration has made it even harder to hold executives personally accountable, under guidance by former deputy attorney general Rod Rosenstein that warned government agencies against “piling on.”
But the FinCEN Files investigation shows that even after they were prosecuted or fined for financial misconduct, banks such as JPMorgan Chase, HSBC, Standard Chartered, Deutsche Bank, and Bank of New York Mellon continued to move money for suspected criminals.
Suspicious payments flow around the world and into countless industries, from international sports to Hollywood entertainment to luxury real estate to Nobu sushi restaurants. They filter into the companies that make familiar items from people’s lives, from the gas in their car to the granola in their cereal bowl.
The FinCEN Files expose an underlying truth of the modern era: The networks through which dirty money traverse the world have become vital arteries of the global economy. They enable a shadow financial system so wide-ranging and so unchecked that it has become inextricable from the so-called legitimate economy. Banks with household names have helped to make it so.
From: https://www.buzzfeednews.com/article/jasonleopold/fincen-files-financial-scandal-criminal-networks?ref=hpsplash&origin=spl
Daimler AG and Mercedes Benz Settle with US for $1.5 Billion for Emissions Cheating
by Michael Volkov · September 21, 2020
The Justice Department, the Environmental Protection Agency and the California Resources Board announced a joint settlement totaling roughly $1.5 billion with Daimler AG and its US subsidiary Mercedes Benz to resolve violations of the Clean Air Act and California law from the emissions cheating scandal.
The EPA and CARB discovered the violations by conducting tests in the wake of the original Volkswagen emissions cheating scandal. The Mercedes emissions systems included defeat devices and were intended to increase fuel mileage and performance and boost sales to the detriment of compliance with applicable emissions standards.
Daimler agreed to recall and repair the emissions systems in Mercedes diesel vehicles sold in the US between 2009 and 2016 and pay approximately $945,300 in penalties. Also, Daimler agreed to extend the warranty period for parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxide (NOx) emitted from the vehicles and implement new internal audit procedures to prevent a recurrence of the cheating scandal. The recall program and federal mitigation project are expected to cost Daimler around $436 million.
Daimler also will pay another $110 million to fund mitigation projects in California. Added together, the settlement is valued at approximately $1.5 billion.
From 2009 to 2016, Daimler manufactured, imported and sold more than 250,000 diesel vans and cars with undisclosed emission control devices and defeat devices designed to circumvent emissions standards set by the EPA. These devices caused the vehicles to generate results that complied with emissions tests. However, when not being tested, the vehicles had programmed emissions controls to operate differently, and less effectively, resulting in an increase in NOx emissions above the mandated maximum standard.
NOx emissions play a significant role in ground-level ozone production and cause harm to human health. Breathing ozone may damage lung tissue in children and adults, and cause further harm to humans with conditions like asthma, emphysema and bronchitis. recent scientific studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue, and premature death.
Under the settlement, Daimler will implement a recall and repair program to remove all emissions defeat devices at no cost to consumers. The repair includes a software update and replacement of hardware for different years and models. Mercedes vehicles will be brought into compliance with Clear Air Act requirements.
Daimler is subject to a requirement that it repair at least 85 percent of the vehicles within two years and 85 percent of certain vans within three years. Daimler has to extend the warranty for the new software and hardware, and it must test repaired vehicles each year for the next five years to ensure compliance with the emissions standards. Daimler will face set penalties if it fails to meet the applicable recall rates.
As part of the settlement, Daimler has to implement systemic corporate compliance enhancements to detect and prevent eliminate violations in the future. These reforms include use of a portable emissions measurement system, install a robust whistleblower program, enhance training and perform internal audits subject to review by an external compliance consultant.
From: https://blog.volkovlaw.com/2020/09/daimler-ag-and-mercedes-benz-settle-with-us-for-benz-1-5-billion-for-emissions-cheating/
by Michael Volkov · September 21, 2020
The Justice Department, the Environmental Protection Agency and the California Resources Board announced a joint settlement totaling roughly $1.5 billion with Daimler AG and its US subsidiary Mercedes Benz to resolve violations of the Clean Air Act and California law from the emissions cheating scandal.
The EPA and CARB discovered the violations by conducting tests in the wake of the original Volkswagen emissions cheating scandal. The Mercedes emissions systems included defeat devices and were intended to increase fuel mileage and performance and boost sales to the detriment of compliance with applicable emissions standards.
Daimler agreed to recall and repair the emissions systems in Mercedes diesel vehicles sold in the US between 2009 and 2016 and pay approximately $945,300 in penalties. Also, Daimler agreed to extend the warranty period for parts in the repaired vehicles, perform projects to mitigate excess ozone-creating nitrogen oxide (NOx) emitted from the vehicles and implement new internal audit procedures to prevent a recurrence of the cheating scandal. The recall program and federal mitigation project are expected to cost Daimler around $436 million.
Daimler also will pay another $110 million to fund mitigation projects in California. Added together, the settlement is valued at approximately $1.5 billion.
From 2009 to 2016, Daimler manufactured, imported and sold more than 250,000 diesel vans and cars with undisclosed emission control devices and defeat devices designed to circumvent emissions standards set by the EPA. These devices caused the vehicles to generate results that complied with emissions tests. However, when not being tested, the vehicles had programmed emissions controls to operate differently, and less effectively, resulting in an increase in NOx emissions above the mandated maximum standard.
NOx emissions play a significant role in ground-level ozone production and cause harm to human health. Breathing ozone may damage lung tissue in children and adults, and cause further harm to humans with conditions like asthma, emphysema and bronchitis. recent scientific studies indicate that the direct health effects of NOx are worse than previously understood, including respiratory problems, damage to lung tissue, and premature death.
Under the settlement, Daimler will implement a recall and repair program to remove all emissions defeat devices at no cost to consumers. The repair includes a software update and replacement of hardware for different years and models. Mercedes vehicles will be brought into compliance with Clear Air Act requirements.
Daimler is subject to a requirement that it repair at least 85 percent of the vehicles within two years and 85 percent of certain vans within three years. Daimler has to extend the warranty for the new software and hardware, and it must test repaired vehicles each year for the next five years to ensure compliance with the emissions standards. Daimler will face set penalties if it fails to meet the applicable recall rates.
As part of the settlement, Daimler has to implement systemic corporate compliance enhancements to detect and prevent eliminate violations in the future. These reforms include use of a portable emissions measurement system, install a robust whistleblower program, enhance training and perform internal audits subject to review by an external compliance consultant.
From: https://blog.volkovlaw.com/2020/09/daimler-ag-and-mercedes-benz-settle-with-us-for-benz-1-5-billion-for-emissions-cheating/
Antitrust Experts Assess New Data on Private U.S. Antitrust Enforcement, Highlight Trends in Compensating Victims and Deterring Illegal Conduct
September 21, 2020
Private Enforcement , Section 1 of the Sherman Act , Competition Policy
The American Antitrust Institute (AAI) and the University of San Francisco School of Law (USF Law) released a commentary (Commentary) on a new annual report examining antitrust class actions in federal court from 2009 to 2019. The 2019 Antitrust Annual Report (2019 Report) finds that cases settled since 2009 have recovered more than $24 billion on behalf of victims of antitrust violations. The 2019 Report, which expands on last year’s 2018 Antitrust Annual Report (2018 Report) was jointly produced by USF Law and Huntington National Bank.
Private enforcement actions are brought under two main federal statutes—the Sherman Antitrust Act and the Clayton Antitrust Act—and various states’ laws. The laws prohibit collusive agreements, monopolization, and mergers that are likely substantially to lessen competition. Federal courts oversee many private enforcement actions.
“With increasing concerns over the ill effects of high market concentration in critical sectors and markets, private enforcement is more important than ever,” said AAI President Diana Moss. “We see strong evidence of increased filings and recoveries in antitrust class actions from 2009-2019, and at the same time we see federal antitrust enforcement action, particularly against illegal conspiracies, in decline. Private enforcement remains a critical tool in the U.S. enforcement system and can deliver meaningful compensation to victims and deter future illegal conduct. The 2019 Report and Commentary together highlight the significant results achieved through private antitrust enforcement,” explained Moss.
“The 2019 Antitrust Annual Report is the second installment in this pioneering annual research effort,” Professor Joshua Davis, Director of the Center for Law and Ethics, University of San Francisco School of Law, noted. “The law firms prosecuting private antitrust enforcement actions play a crucial role in the public interest as private attorneys general, particularly when enforcement by federal agencies is waning. The U.S. system relies almost entirely on private enforcement to compensate victims. Moreover, private damages often dwarf the sanctions imposed by government actors, providing a critical deterrent to wrongdoers,” Professor Davis explained.
“The depth and breadth of the data assembled in the 2019 Report provides critical perspective for understanding trends in public and private enforcement over time,” said Laura Alexander, AAI’s Vice President of Policy. “With this report, we can better understand the real impact of pivotal court decisions on the ability of private enforcers to bring cases and recover compensation for victims illegal anticompetitive conduct.”
The AAI-USF Law Commentary highlights a number of key takeaways from the 2019 Report’s data on antitrust actions over the period 2009-2019. These collectively signal the efficiency and effectiveness of private enforcement — and the antitrust class action in particular.
- Private enforcement resources are focused efficiently on violations that harm victims, such as consumers and businesses. The 2019 Report reflects, among other things, considerable overlap between the industries where private and public enforcers find misconduct. “The data demonstrate that the congressional plan for parallel private and public enforcement works efficiently, often against well-resourced defendants,” commented AAI’s Moss.
- Private antitrust enforcement continues to be effective. From to 2009 to 2019, there was robust growth in total annual settlement amounts, with smaller settlement providing the backbone for private antitrust enforcement. Total settlement amounts showed robust growth over the period, which was particularly driven by an increase in very large settlements (around or above $1 billion). But smaller settlements of up to $50 million per case also held steady over the period, notwithstanding increasingly challenging law and procedure facing enforcers. “This growth in recoveries overall signals that private enforcement is effective, and that smaller settlements continue as the strong core of private enforcement” noted Moss.
- Private enforcement focused on victims directly harmed by large, often global antitrust conspiracies remains critical, but enforcement on behalf of indirect purchasers and victims of illegal monopolization also plays a crucial role. While the vast majority of the recoveries over the period 2009-2019 came from conspiracy cases brought by direct purchasers, both indirect purchaser cases and monopolization cases played an important role. “Monopolization and attempted monopolization cases—so-called conduct cases—are often thought to be unicorns. This data shows that, far from it, these cases result in substantial recoveries and may represent an overlooked area where more enforcement would be fruitful,” observed Professor Davis.
“The Commentary uses the occasion of the 2019 Report to step back and observe the U.S. private enforcement system and the antitrust class action device through a broader lens, both empirically and qualitatively,” Alexander stated. Davis noted further that the 2019 Report “Highlights fruitful areas for further academic work in studying private antitrust enforcement actions, their deterrence effect, and compensation for victims of illegal activity.”
###
Based in Washington, D.C., the American Antitrust Institute is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. It serves the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Founded in 1912, the University of San Francisco School of Law provides a rigorous education – from intellectual property law to litigation and more — with a global perspective in a diverse, supportive community. It is fully accredited by the American Bar Association and a member of the Association of American Law Schools.
From PBS: Doctors who are musicians, and play together virtually and in person in socially distanced settings
See https://www.facebook.com/newshour/videos/385047986220855
Among other things, the PBS shows physician-musicians playing together outdoors is small, socially distanced groups. The doctors have often experienced the stress of treating very ill patients in the time of COVID. They well understand the current rules and principles of social distancing, but they have found ways of participating in happy activities. It can be done, and playing in socially distanced music groups is something happy I've done myself (although I am not a physician). Don Resnikoff
See https://www.facebook.com/newshour/videos/385047986220855
Among other things, the PBS shows physician-musicians playing together outdoors is small, socially distanced groups. The doctors have often experienced the stress of treating very ill patients in the time of COVID. They well understand the current rules and principles of social distancing, but they have found ways of participating in happy activities. It can be done, and playing in socially distanced music groups is something happy I've done myself (although I am not a physician). Don Resnikoff
From PBS: Wired's Nick Thompson on Tik-Tok and WeChat
The Trump administration is going ahead with plans to ban two popular Chinese social media apps. Soon Americans will no longer be able to download TikTok or WeChat from Apple or Google app stores, although current versions of TikTok will still be usable. Nick Thompson, editor-in-chief of WIRED Magazine, joins PBS's William Brangham to discuss.
In this observer's opinion, Thompson (who is skillfully questioned by Brangham) is adept at explaining the relevant technology of protecting the privacy of personal information, and the problem of Chinese Government access to personal data. Also, he puts the privacy protection issues in the broader context of a long term tech rivalry between U.S. and China.
Thompson suggests the value of a broader set of U.S. policies and rules on tech issues with China rather than seemingly ad hoc attacks like that on Tik-Tok.
From a lawyer's perspective, Thompson's suggestion of well formulated and generally applicable policies and rules connects well with the due process idea that the Government's expectations on questions of legality be well laid out in advance, not developed on an ad hoc basis or after the fact.
Proceedings of the relevant government agency The Committee on Foreign Investment in the United States (CFIUS)
tend to be quick and carried out without great transparency, and do not typically involve court review. There are reasons for the difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters -- national security matters can be emergencies requiring particularly swift resolution. But Thompson's suggestion of generally applicable and clearly articulated policies and rules on matters like media privacy rights seems a sensible one.
Posting by Don Resnikoff, who is responsible for the content
The Thompson interview is here: https://www.youtube.com/watch?v=Q49RO2kd1u8
The Trump administration is going ahead with plans to ban two popular Chinese social media apps. Soon Americans will no longer be able to download TikTok or WeChat from Apple or Google app stores, although current versions of TikTok will still be usable. Nick Thompson, editor-in-chief of WIRED Magazine, joins PBS's William Brangham to discuss.
In this observer's opinion, Thompson (who is skillfully questioned by Brangham) is adept at explaining the relevant technology of protecting the privacy of personal information, and the problem of Chinese Government access to personal data. Also, he puts the privacy protection issues in the broader context of a long term tech rivalry between U.S. and China.
Thompson suggests the value of a broader set of U.S. policies and rules on tech issues with China rather than seemingly ad hoc attacks like that on Tik-Tok.
From a lawyer's perspective, Thompson's suggestion of well formulated and generally applicable policies and rules connects well with the due process idea that the Government's expectations on questions of legality be well laid out in advance, not developed on an ad hoc basis or after the fact.
Proceedings of the relevant government agency The Committee on Foreign Investment in the United States (CFIUS)
tend to be quick and carried out without great transparency, and do not typically involve court review. There are reasons for the difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters -- national security matters can be emergencies requiring particularly swift resolution. But Thompson's suggestion of generally applicable and clearly articulated policies and rules on matters like media privacy rights seems a sensible one.
Posting by Don Resnikoff, who is responsible for the content
The Thompson interview is here: https://www.youtube.com/watch?v=Q49RO2kd1u8
PBS Newshour, Solman, Rosenthal: US paying twice for COVID vaccines?
https://www.pbs.org/newshour/show/is-the-u-s-government-paying-twice-for-coronavirus-vaccine
Excerpt:
https://www.pbs.org/newshour/show/is-the-u-s-government-paying-twice-for-coronavirus-vaccine
Excerpt:
- Osaremen Okolo:
There is no reason that private pharmaceutical companies should be profiteering off of a pandemic. - Paul Solman:
Osaremen Okolo is the chief health policy aide for Illinois Democrat Jan Schakowsky. - Rep. Jan Schakowsky, D-Ill.:
Yes or no, will you sell your vaccine at cost, so that we can verify you aren't making a profit? - Paul Solman:
Merck's vaccine has received $38 million in government funding.
Julie Gerberding is executive vice president. - Julie Gerberding:
No, we will not be selling vaccine at cost, although it's very premature for us, since we're a long way from really understanding the cost basis of what will end up. - Rep. Jan Schakowsky:
So, Dr. Hoge, yes or no? - Paul Solman:
Stephen Hoge is president of Moderna, which, by some measures, has gotten nearly $1.5 billion in federal funding, all the money it's put into the vaccine, and will get another $1.5 if it succeeds. - Stephen Hoge:
We will not sell it at cost, no ma'am.
Tyson, Perdue, Escape Antitrust Suit Over Immigrant Wages
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September 17, 2020
Tyson Foods and other top poultry processors tentatively escaped a lawsuit alleging an industrywide scheme to depress the wages of their largely immigrant workforce, although the Maryland federal judge hearing the case signaled she might revive it if the workers can offer more specifics, reported Bloomberg Law.
Despite the suit’s “smoking gun” conspiracy allegations, including a statement by a Tyson executive “fretting about the propriety of wage discussions at the secret meetings” and “admitting to the inappropriateness of its conduct” it suffers from a fatal flaw, Judge Stephanie A. Gallagher wrote.
Full Content: Bloomberg https://news.bloomberglaw.com/mergers-and-antitrust/tyson-perdue-others-dodge-antitrust-suit-over-immigrant-wages
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September 17, 2020
Tyson Foods and other top poultry processors tentatively escaped a lawsuit alleging an industrywide scheme to depress the wages of their largely immigrant workforce, although the Maryland federal judge hearing the case signaled she might revive it if the workers can offer more specifics, reported Bloomberg Law.
Despite the suit’s “smoking gun” conspiracy allegations, including a statement by a Tyson executive “fretting about the propriety of wage discussions at the secret meetings” and “admitting to the inappropriateness of its conduct” it suffers from a fatal flaw, Judge Stephanie A. Gallagher wrote.
Full Content: Bloomberg https://news.bloomberglaw.com/mergers-and-antitrust/tyson-perdue-others-dodge-antitrust-suit-over-immigrant-wages
Cass Sunstein: More than at any time since the 1930s, the administrative state is under constitutional assault.
Some judges, lawyers and legal academics are calling into question the very structure of modern government.
Four members of the U.S. Supreme Court, and possibly five, have indicated that they would like to revive the “nondelegation doctrine,” which would forbid Congress from granting excessively broad or uncabined discretion to administrative agencies such as the Environmental Protection Agency, the Department of Labor and the Department of Transportation. Under their approach, important parts of the Clean Air Act and the Occupational Safety and Health Act might be invalidated.
So too, in eliminating the independence of the Consumer Financial Protection Bureau in June, a majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.
These developments are just two of a large number of emerging efforts within the federal courts to limit the power of administrative agencies or perhaps even to abolish them, at least in their current form. We are witnessing the flowering of a longstanding attempt to see the administrative state as fundamentally illegitimate. (The legal assault on the administrative state has political resonance, too; think of the former Trump adviser Steve Bannon’s call for the “deconstruction of the administrative state.”)
Excerpt from: https://www.nytimes.com/2020/09/15/opinion/us-government-constitution.html
Some judges, lawyers and legal academics are calling into question the very structure of modern government.
Four members of the U.S. Supreme Court, and possibly five, have indicated that they would like to revive the “nondelegation doctrine,” which would forbid Congress from granting excessively broad or uncabined discretion to administrative agencies such as the Environmental Protection Agency, the Department of Labor and the Department of Transportation. Under their approach, important parts of the Clean Air Act and the Occupational Safety and Health Act might be invalidated.
So too, in eliminating the independence of the Consumer Financial Protection Bureau in June, a majority of the Supreme Court cast a dark constitutional cloud over the long-established idea that Congress has the power to allow agencies to operate independently of the president. The court’s approach raises serious doubts about the legal status of the Federal Reserve Board, the Federal Trade Commission, the Nuclear Regulatory Commission and other such entities.
These developments are just two of a large number of emerging efforts within the federal courts to limit the power of administrative agencies or perhaps even to abolish them, at least in their current form. We are witnessing the flowering of a longstanding attempt to see the administrative state as fundamentally illegitimate. (The legal assault on the administrative state has political resonance, too; think of the former Trump adviser Steve Bannon’s call for the “deconstruction of the administrative state.”)
Excerpt from: https://www.nytimes.com/2020/09/15/opinion/us-government-constitution.html
The US Justice Department has ordered Al Jazeera’s affiliate youth channel AJ+ to register as a foreign agent for engaging in “political activities” on behalf of the Qatari government
The move comes a few months after US Congress members demanded that Al Jazeera itself be registered and subject to the Foreign Agents Registration Act (FARA).
AJ+, a youth network only found on social media channels, produces short videos in English Arabic, French and Spanish.
The Justice Department stated in a letter dated Monday that Qatar provides the channel with funding and appoints its board of directors.
“Journalism designed to influence American perceptions of a domestic policy issue or a foreign nation’s activities or its leadership qualifies as ‘political activities’ under the statutory definition, even if it views itself as ‘balanced’,” stated the letter, which was signed by Jay I. Bratt, head of the department’s counterintelligence division, and first obtained by American magazine Mother Jones.
Al Jazeera has been called a useful tool for Qatar’s ruling elite, which sympathizes with the Muslim Brotherhood and other terrorist and extremist groups.
From: https://www.arabnews.com/node/1735401/media
The move comes a few months after US Congress members demanded that Al Jazeera itself be registered and subject to the Foreign Agents Registration Act (FARA).
AJ+, a youth network only found on social media channels, produces short videos in English Arabic, French and Spanish.
The Justice Department stated in a letter dated Monday that Qatar provides the channel with funding and appoints its board of directors.
“Journalism designed to influence American perceptions of a domestic policy issue or a foreign nation’s activities or its leadership qualifies as ‘political activities’ under the statutory definition, even if it views itself as ‘balanced’,” stated the letter, which was signed by Jay I. Bratt, head of the department’s counterintelligence division, and first obtained by American magazine Mother Jones.
Al Jazeera has been called a useful tool for Qatar’s ruling elite, which sympathizes with the Muslim Brotherhood and other terrorist and extremist groups.
From: https://www.arabnews.com/node/1735401/media
Ohio businesses get state protection from COVID related liability
Ohio has joined the list of states where legislation offering businesses protection from Covid-19-related liabilities has been approved. The bill signed by Ohio Gov. Mike DeWine gives individuals, schools, health-care providers, businesses and other entities civil immunity from lawsuits stemming from the exposure, transmission or contraction of Covid-19 as long as organizations are not blatantly disregarding health and safety guidelines. The legislation take effect later this year and runs through September 2021.
From https://connect.bizjournals.com/index.php/email/emailWebview
Comcast Wants SCOTUS to Shut Down A Monopolization Suit Over TV Ads
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September 14, 2020
Comcast claims that the US Supreme Court should step in and shut down a monopolization lawsuit over the TV ad placement market, arguing a federal appeals court improperly gave a green light to claims it illegally refused to do business with rival Viamedia, reported Bloomberg.
“Compelled cooperation between rivals contradicts antitrust law’s goal of encouraging competition, and courts are ill-suited to policing the rare exceptions to the general rule,” the company says. “The Seventh Circuit’s expansive approach to refusal-to-deal liability upends this court’s intentional limits on such claims.”
The suit accuses Comcast of leveraging its control over its “interconnect,” a regional clearinghouse for TV advertising availabilities, to force a boycott of Viamedia, its sole competitor in the market for ad placement services in Chicago, Detroit, and Hartford, Conn.
Comcast also refused to let Viamedia use the interconnect at all, the suit states. The “tying” tactic and outright refusal to deal allegedly combined to drive Viamedia out of the three regional markets.
After a federal judge in Chicago threw out the case in 2018, a divided US Court of Appeals for the Seventh Circuit revived it in February.
https://news.bloomberglaw.com/antitrust/comcast-tells-scotus-viamedia-ruling-would-upend-antitrust-law
-
September 14, 2020
Comcast claims that the US Supreme Court should step in and shut down a monopolization lawsuit over the TV ad placement market, arguing a federal appeals court improperly gave a green light to claims it illegally refused to do business with rival Viamedia, reported Bloomberg.
“Compelled cooperation between rivals contradicts antitrust law’s goal of encouraging competition, and courts are ill-suited to policing the rare exceptions to the general rule,” the company says. “The Seventh Circuit’s expansive approach to refusal-to-deal liability upends this court’s intentional limits on such claims.”
The suit accuses Comcast of leveraging its control over its “interconnect,” a regional clearinghouse for TV advertising availabilities, to force a boycott of Viamedia, its sole competitor in the market for ad placement services in Chicago, Detroit, and Hartford, Conn.
Comcast also refused to let Viamedia use the interconnect at all, the suit states. The “tying” tactic and outright refusal to deal allegedly combined to drive Viamedia out of the three regional markets.
After a federal judge in Chicago threw out the case in 2018, a divided US Court of Appeals for the Seventh Circuit revived it in February.
https://news.bloomberglaw.com/antitrust/comcast-tells-scotus-viamedia-ruling-would-upend-antitrust-law
The future of gambling is being shaped by a 2018 Supreme Court decision that struck down a 1992 federal limit on sports betting to four states.
In addition to the 40 plus states that allow daily fantasy sports, nine now have legal sports betting and three have iGaming, or online casino betting. A DraftKings customer can use a single online wallet for all three in a state such as New Jersey.
DraftKings estimates that the total addressable U.S. market for online betting and gaming could be $40 billion annually. Flutter says online represents just 12% of the gambling market globally and is growing at 10% a year.
https://www.osga.com/online_gaming_articles.php?Making-Sense-Of-DraftKings-Multi-Billion-Dollar-Valuation-26055
In addition to the 40 plus states that allow daily fantasy sports, nine now have legal sports betting and three have iGaming, or online casino betting. A DraftKings customer can use a single online wallet for all three in a state such as New Jersey.
DraftKings estimates that the total addressable U.S. market for online betting and gaming could be $40 billion annually. Flutter says online represents just 12% of the gambling market globally and is growing at 10% a year.
https://www.osga.com/online_gaming_articles.php?Making-Sense-Of-DraftKings-Multi-Billion-Dollar-Valuation-26055
President Trump signed an executive order that he says lowers prescription drug prices "by putting America first," but experts say the move is unlikely to have any immediate impact.
The move comes nearly two months after the president signed a different executive order with the exact same name, but held it back to see if he could negotiate a better deal with drug companies. "If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them," Trump said at the time.
The new executive order repeals the original and expands the drugs covered by Trump's proposed "most favored nations" pricing scheme to include both Medicare Part B and Medicare Part D. The idea is that Medicare would refuse to pay more for drugs than the lower prices paid by other developed nations.
excerpt from https://www.npr.org/2020/09/13/912545090/trump-signs-new-executive-order-on-prescription-drug-prices
A copy of the Order is here: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/e
The move comes nearly two months after the president signed a different executive order with the exact same name, but held it back to see if he could negotiate a better deal with drug companies. "If these talks are successful, we may not need to implement the fourth executive order, which is a very tough order for them," Trump said at the time.
The new executive order repeals the original and expands the drugs covered by Trump's proposed "most favored nations" pricing scheme to include both Medicare Part B and Medicare Part D. The idea is that Medicare would refuse to pay more for drugs than the lower prices paid by other developed nations.
excerpt from https://www.npr.org/2020/09/13/912545090/trump-signs-new-executive-order-on-prescription-drug-prices
A copy of the Order is here: https://www.whitehouse.gov/presidential-actions/executive-order-lowering-drug-prices-putting-america-first-2/e
Why Apple’s antitracking strategy hurts everyone but Apple
https://apple.news/ANDTY_1e_St26rypFUHfJ4A
Steve Latham September 12, 2020
Excerpt:
Apple recently announced a new privacy feature that will ask iPhone and iPad users to opt in or opt out of tracking for in-app advertising. While most applaud Apple for its pro-privacy stance, there’s much more to the story. As I’ll explain below, Apple’s move will hurt publishers and consumers for its own financial gain. The truth is that Apple’s virtue-signaling is masking anti-competitive behavior that needs to be called out.
The first domino
Apple announced in June that iOS14 (due later this month) would prompt users to opt in out of tracking by advertisers in third-party apps on their iPhones and iPads. It’s not hard to see why most expect users to opt-out en masse. How ominous is this warning?
When a user selects “Ask App Not to Track,” it disables an anonymous identifier known as the ID for Advertisers (IDFA). Once the IDFA is disabled, app developers and publishers can no longer make that identifier available to advertisers seeking to deliver relevant ads to users. While it seems rather innocuous, it will set off a chain of events that will end badly for everyone but Apple and Google.
Harm to publishers and developers
Articles have covered how this will hurt advertisers. While few will take pity on advertisers, what about your favorite news, weather, music, fitness, gaming, or meditation app? Disabling the IDFA will devastate ad-supported apps because it’s the IDFA that makes their media valuable to advertisers. If you’re a luxury apparel brand for women, you’re targeting a very narrow set of users, and you’re willing to pay more to reach them. In this example, apps that serve ads to affluent females (anonymously identified by their IDFA) can charge a 2-3x premium for that ad. Without IDFAs to target ads to relevant audiences, prices will plummet by 50-70%, making ad-supported models untenable.
Of the 2.2 million apps in the Apple store, many will fail as ad revenue nosedives. Apps that are able to migrate to subscription models will pay a high price. Aside from the costly development work and the inevitable loss of users, publishers will have to pay Apple a 30% tax on new subscription revenue. This is where Apple crosses the line into monopolistic behavior – more on that below.
Harm to consumers
When ad supported content is no longer viable, consumers will have to pay for content. While very few say they like ads, most realize we need them. A recent NAI study found that 75% of consumers are aware that free content is enabled by advertising. Moreover, 64% of consumers believe online content should be free. So we expect free ad-supported content, but we don’t want to share data that makes ad models work? Actually the problem isn’t advertisers. The NAI study also found that the #1 privacy concern is data collection by hackers, not publishers. Guess who else knows this and stands to benefit from the death of the free content? Well … you know the answer.
So to recap: Apple knows that disabling IDFAs will kill ad models and force publishers to migrate to subscriptions for which Apple will collect 30%. Apple also knows this will require us to pay for content (such as Apple News+ at $9.99/month) that we fundamentally expect for free. Are you getting the picture yet?
Goldman in the Lancet: Exaggerated risk of transmission of COVID-19 by fomites [hard surfaces and objects]
"In my opinion, the chance of transmission through inanimate surfaces is very small, and only in instances where an infected person coughs or sneezes on the surface, and someone else touches that surface soon after the cough or sneeze (within 1–2 h). I do not disagree with erring on the side of caution, but this can go to extremes not justified by the data. Although periodically disinfecting surfaces and use of gloves are reasonable precautions especially in hospitals, I believe that fomites that have not been in contact with an infected carrier for many hours do not pose a measurable risk of transmission in non-hospital settings. A more balanced perspective is needed to curb excesses that become counterproductive."
https://www.thelancet.com/pdfs/journals/laninf/PIIS1473-3099(20)30561-2.pdf
DAR Comment: This article in the Lancet has drawn the attention of journalist Ed Yong in the Atlantic Magazine, and others. Their takeaway point is that the most important strategy for avoiding COVID exposure is avoiding airborne transmission. Social distancing and avoiding crowded places are part of that strategy. Hard surfaces and objects that have been exposed to virus are less likely to cause a problem, according to Goldman. He says that after a few hours the viruses that may have landed on hard surfaces pose a diminished threat. The suggestion of the journalists is that elaborate cleaning of surfaces at commercial establishments is a theatrical exercise intended to create comfort among patrons who should be discomfited by proximity of other people. The greater threat to a restaurant patron is the close presence of other people sending out airborne particles, not a table top that has not been disinfected. Which is not to say that table tops should not be disinfected.
"In my opinion, the chance of transmission through inanimate surfaces is very small, and only in instances where an infected person coughs or sneezes on the surface, and someone else touches that surface soon after the cough or sneeze (within 1–2 h). I do not disagree with erring on the side of caution, but this can go to extremes not justified by the data. Although periodically disinfecting surfaces and use of gloves are reasonable precautions especially in hospitals, I believe that fomites that have not been in contact with an infected carrier for many hours do not pose a measurable risk of transmission in non-hospital settings. A more balanced perspective is needed to curb excesses that become counterproductive."
https://www.thelancet.com/pdfs/journals/laninf/PIIS1473-3099(20)30561-2.pdf
DAR Comment: This article in the Lancet has drawn the attention of journalist Ed Yong in the Atlantic Magazine, and others. Their takeaway point is that the most important strategy for avoiding COVID exposure is avoiding airborne transmission. Social distancing and avoiding crowded places are part of that strategy. Hard surfaces and objects that have been exposed to virus are less likely to cause a problem, according to Goldman. He says that after a few hours the viruses that may have landed on hard surfaces pose a diminished threat. The suggestion of the journalists is that elaborate cleaning of surfaces at commercial establishments is a theatrical exercise intended to create comfort among patrons who should be discomfited by proximity of other people. The greater threat to a restaurant patron is the close presence of other people sending out airborne particles, not a table top that has not been disinfected. Which is not to say that table tops should not be disinfected.
Learning Pods and Inequality: Issues and Ideas to Combat Unfair Treatment
08/10/2020 Maria Airth
Learning pods are small groups of students learning together normally independent of a traditional school system. In times of forced school closures due to public health emergencies, learning pods can be a welcome alternative to individual remote learning at home.
Unfortunately, learning pods tend to create inequality and unfair educational experiences for students. Let's look at the characteristics required for families to create a learning pod:
Due to the need for geographic proximity to create a learning pod, especially during times of public health crises, learning pods can create unintentional segregation in education.
Knowing how inequalities in education can come about when learning pods are created in response to school closures is the first part of the battle. Addressing these inequalities is the most important part of winning the battle against unfair treatment in education.
One main issue with many learning pods is a lack of diversity in the pod. Minority students and children from low-income families may not have the resources to participate in learning pods.
A method to address this issue is school involvement in the creation of pods. If a teacher knows that some parents from the class are intending to create a learning pod, the teacher can approach those parents and ask that disadvantaged students be included in the group. The teacher can facilitate communication between parents intending to create pods and parents with children who would benefit from being included in such a learning environment.
Another option might be for teachers to divide their students into diverse learning pods and offer ideas and resources to assist the parents of these students to form and implement the pods. While parents can't be forced to create learning pods with specific children, they may be more willing to include disadvantaged students if it is suggested by their child's teacher.
Another area that separates disadvantaged students from other students is their access to resources. Students in learning pods formed by affluent families will likely have plenty of access to technology devices and learning tools to support their students.
When schools are forcibly closed, it might be plausible for the government to subsidize low-income and disadvantaged student access to resources in a number of ways:
Some learning pods include a paid private tutor to offer students excellent, high-quality instruction during their school day. Students from low-income families cannot often afford this luxury but should not be disadvantaged academically.
How can teachers help students in learning pods have access to a high level of education? Implementing online instruction in a flipped classroom model could be the most efficient use of teacher and student time. In a flipped classroom, students preview recorded instructional information prior to a live teacher facilitating discussion on the topic. In this way, students would be somewhat familiar with the concepts prior to their teacher's live instruction, through Zoom or a similar platform, to answer any questions and address any issues students have. The flipped classroom method would allow teachers to spread their time between multiple learning pods due to students being prepared with alternative instruction methods prior to the teacher making contact.
SummaryI
t is not possible to address every inequality or unfairness that stems from the creation of learning pods in a time when schools are closed due to a public health crisis. No single learning environment is going to be perfect for every student nor is it going to be implemented the same for every student.
Best efforts should be made to increase the equality of the educational experience for all students in a crisis. This may mean that the government should subsidize learning space, resources (such as devices and internet access) and instruction time. Schools can encourage diversity when parents are forming learning pods. Using alternative instructional methods such as the flipped classroom method, each teacher may be able to effectively offer instruction to multiple learning pods daily.
https://study.com/academy/popular/learning-pods-and-inequality-issues-and-ideas-to-combat-unfair-treatment.html
08/10/2020 Maria Airth
Learning pods are small groups of students learning together normally independent of a traditional school system. In times of forced school closures due to public health emergencies, learning pods can be a welcome alternative to individual remote learning at home.
Unfortunately, learning pods tend to create inequality and unfair educational experiences for students. Let's look at the characteristics required for families to create a learning pod:
- Affluent enough to afford resources for multiple students.
- Affluent enough to have space for multiple students to work.
- Access to a facilitator (either parents in the group or privately sourced) with educational credentials sufficient to assist students with their learning objectives.
- Ability for a parent/guardian to remain home to facilitate the learning pod.
- Geographic proximity to other members of a learning pod.
- Access to experts to facilitate students with special needs.
- It is clear from this list that many students who live in socio-economic hardship would not be able to participate in a typical learning pod.
Due to the need for geographic proximity to create a learning pod, especially during times of public health crises, learning pods can create unintentional segregation in education.
Knowing how inequalities in education can come about when learning pods are created in response to school closures is the first part of the battle. Addressing these inequalities is the most important part of winning the battle against unfair treatment in education.
One main issue with many learning pods is a lack of diversity in the pod. Minority students and children from low-income families may not have the resources to participate in learning pods.
A method to address this issue is school involvement in the creation of pods. If a teacher knows that some parents from the class are intending to create a learning pod, the teacher can approach those parents and ask that disadvantaged students be included in the group. The teacher can facilitate communication between parents intending to create pods and parents with children who would benefit from being included in such a learning environment.
Another option might be for teachers to divide their students into diverse learning pods and offer ideas and resources to assist the parents of these students to form and implement the pods. While parents can't be forced to create learning pods with specific children, they may be more willing to include disadvantaged students if it is suggested by their child's teacher.
Another area that separates disadvantaged students from other students is their access to resources. Students in learning pods formed by affluent families will likely have plenty of access to technology devices and learning tools to support their students.
When schools are forcibly closed, it might be plausible for the government to subsidize low-income and disadvantaged student access to resources in a number of ways:
- Allow libraries to loan out computers, laptops and other learning devices to learning pods with disadvantaged students.
- Pay teachers and/or substitute teachers to attend some learning pods (safely, using social distancing restrictions) to ensure that the students are progressing.
- Offer space in libraries or schools to learning pods that include disadvantaged students.
- Ensure that all students on an IEP, or special education plan, have internet access and devices with which to access the internet so that they can contact specialists to assist with their individual educational needs.
- Offer internet access to learning pods with disadvantaged students.
Some learning pods include a paid private tutor to offer students excellent, high-quality instruction during their school day. Students from low-income families cannot often afford this luxury but should not be disadvantaged academically.
How can teachers help students in learning pods have access to a high level of education? Implementing online instruction in a flipped classroom model could be the most efficient use of teacher and student time. In a flipped classroom, students preview recorded instructional information prior to a live teacher facilitating discussion on the topic. In this way, students would be somewhat familiar with the concepts prior to their teacher's live instruction, through Zoom or a similar platform, to answer any questions and address any issues students have. The flipped classroom method would allow teachers to spread their time between multiple learning pods due to students being prepared with alternative instruction methods prior to the teacher making contact.
SummaryI
t is not possible to address every inequality or unfairness that stems from the creation of learning pods in a time when schools are closed due to a public health crisis. No single learning environment is going to be perfect for every student nor is it going to be implemented the same for every student.
Best efforts should be made to increase the equality of the educational experience for all students in a crisis. This may mean that the government should subsidize learning space, resources (such as devices and internet access) and instruction time. Schools can encourage diversity when parents are forming learning pods. Using alternative instructional methods such as the flipped classroom method, each teacher may be able to effectively offer instruction to multiple learning pods daily.
https://study.com/academy/popular/learning-pods-and-inequality-issues-and-ideas-to-combat-unfair-treatment.html
Oversight group says SBA misled public on disaster loan fraud
Internal emails show the agency was scrambling to clamp down on fraudulent loans from the Economic Injury Disaster Loan program.
A government watchdog group said in a report published Wednesday that the Small Business Administration misled the public about its ability to prevent fraud in a disaster business loan program.
The Project on Government Oversight (POGO), citing internal emails said the SBA was scrambling through mid-August to clamp down on fraudulent loans from the Economic Injury Disaster Loan (EIDL) program. That counters assertions from SBA Administrator Jovita Carranza to the agency's inspector general in late July that solutions to reported problems were already in place, the group says.
https://www.pogo.org/investigation/2020/09/a-disaster-small-business-administration-scrambling-to-stop-pandemic-loan-fraud/
Internal emails show the agency was scrambling to clamp down on fraudulent loans from the Economic Injury Disaster Loan program.
A government watchdog group said in a report published Wednesday that the Small Business Administration misled the public about its ability to prevent fraud in a disaster business loan program.
The Project on Government Oversight (POGO), citing internal emails said the SBA was scrambling through mid-August to clamp down on fraudulent loans from the Economic Injury Disaster Loan (EIDL) program. That counters assertions from SBA Administrator Jovita Carranza to the agency's inspector general in late July that solutions to reported problems were already in place, the group says.
https://www.pogo.org/investigation/2020/09/a-disaster-small-business-administration-scrambling-to-stop-pandemic-loan-fraud/
A new report outlines the efforts of a team paid by the Centers for Medicare and Medicaid Services to enhance Administrator Verma’s personal image, obtain profiles and coverage from friendly reporters
https://drive.google.com/file/d/1nezMXLk6auFtFn4bzLy26k0P5CVI1Zow/view
https://drive.google.com/file/d/1nezMXLk6auFtFn4bzLy26k0P5CVI1Zow/view
Fishy Price Fixing Leads to 40-month Jail Stint
By Darley Maw on June 30, 2020POSTED IN PRICE-FIXING
On June 16, following a monthlong trial, Christopher Lischewski, former CEO and president of Bumble Bee Foods LLC, was sentenced by Judge Edward Chen of the Northern District of California to 40 months in prison plus a $100,000 fine for orchestrating a canned tuna price-fixing conspiracy. Lischewski’s sentence demonstrates the punishment individuals should be prepared to face if involved in price fixing and that such criminal behavior cannot be shielded by any corporate protections. Assistant Attorney General Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that “[t]he sentence imposed … will serve as a significant deterrent in the C-suite and the boardroom.”[1] Indeed, Chen himself stated that Lischewski’s sentence was intended to send a message of general deterrence, particularly where a basic food staple relied upon by many households is concerned.
After a lengthy government investigation, Lischewski, along with other senior executives in the packaged seafood industry, was charged in 2018 with one count of price fixing. During his trial, the government showed evidence of Lischewski’s involvement with competitors and colleagues in the conspiracy, such as sharing pricing information with other executives in the canned tuna industry, including at Chicken of the Sea and Starkist, and their efforts to keep such meetings and communications covert. Lischewski’s defense argued that the government failed to show that consumers were harmed by any such price fixing, an element required in this kind of criminal case. Ultimately, however, the jury found Lischewski guilty of one count of price fixing. His attorneys have indicated they plan on filing an appeal.
Lischewski’s trial and sentence serve as an example to show compliance officers and in-house counsel what could happen without an effective and robust compliance program in place. Here, Bumble Bee had pleaded guilty for its role in a price-fixing conspiracy and already had agreed to pay a $25 million fine. Though when this sort of anticompetitive action happens, typically no one gets a prison sentence. And for many corporations, while a multimillion-dollar fine definitely hurts, it may not be enough of a deterrent (though in Bumble Bee’s situation, it did hurt, as the company had to file for Chapter 11 bankruptcy protection at the end of last year). But seeing Lischewski face prison time for more than three years, the punishment of breaking the law seems much more palpable. And in addition to the criminal punishment, Lischewski also now faces susceptibility to civil lawsuits.
The pursuit of Lischewski – from investigation to sentencing – must put all executives and business leaders on high alert that individuals who are involved in price fixing or other anticompetitive conduct will be held accountable by the government. Corporate heads should refrain from sharing pricing information with competitors and, likewise, should not take the bait when such information is requested. Pun intended.
[1] https://www.justice.gov/opa/pr/former-bumble-bee-ceo-sentenced-prison-fixing-prices-canned-tuna.
https://www.antitrustadvocate.com/2020/06/30/fishy-price-fixing-leads-to-40-month-jail-stint/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=7aa08c09dc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-7aa08c09dc-70980973
By Darley Maw on June 30, 2020POSTED IN PRICE-FIXING
On June 16, following a monthlong trial, Christopher Lischewski, former CEO and president of Bumble Bee Foods LLC, was sentenced by Judge Edward Chen of the Northern District of California to 40 months in prison plus a $100,000 fine for orchestrating a canned tuna price-fixing conspiracy. Lischewski’s sentence demonstrates the punishment individuals should be prepared to face if involved in price fixing and that such criminal behavior cannot be shielded by any corporate protections. Assistant Attorney General Makan Delrahim, head of the Department of Justice’s Antitrust Division, remarked that “[t]he sentence imposed … will serve as a significant deterrent in the C-suite and the boardroom.”[1] Indeed, Chen himself stated that Lischewski’s sentence was intended to send a message of general deterrence, particularly where a basic food staple relied upon by many households is concerned.
After a lengthy government investigation, Lischewski, along with other senior executives in the packaged seafood industry, was charged in 2018 with one count of price fixing. During his trial, the government showed evidence of Lischewski’s involvement with competitors and colleagues in the conspiracy, such as sharing pricing information with other executives in the canned tuna industry, including at Chicken of the Sea and Starkist, and their efforts to keep such meetings and communications covert. Lischewski’s defense argued that the government failed to show that consumers were harmed by any such price fixing, an element required in this kind of criminal case. Ultimately, however, the jury found Lischewski guilty of one count of price fixing. His attorneys have indicated they plan on filing an appeal.
Lischewski’s trial and sentence serve as an example to show compliance officers and in-house counsel what could happen without an effective and robust compliance program in place. Here, Bumble Bee had pleaded guilty for its role in a price-fixing conspiracy and already had agreed to pay a $25 million fine. Though when this sort of anticompetitive action happens, typically no one gets a prison sentence. And for many corporations, while a multimillion-dollar fine definitely hurts, it may not be enough of a deterrent (though in Bumble Bee’s situation, it did hurt, as the company had to file for Chapter 11 bankruptcy protection at the end of last year). But seeing Lischewski face prison time for more than three years, the punishment of breaking the law seems much more palpable. And in addition to the criminal punishment, Lischewski also now faces susceptibility to civil lawsuits.
The pursuit of Lischewski – from investigation to sentencing – must put all executives and business leaders on high alert that individuals who are involved in price fixing or other anticompetitive conduct will be held accountable by the government. Corporate heads should refrain from sharing pricing information with competitors and, likewise, should not take the bait when such information is requested. Pun intended.
[1] https://www.justice.gov/opa/pr/former-bumble-bee-ceo-sentenced-prison-fixing-prices-canned-tuna.
https://www.antitrustadvocate.com/2020/06/30/fishy-price-fixing-leads-to-40-month-jail-stint/?utm_source=BakerHostetler+-+Antitrust+Advocate&utm_campaign=7aa08c09dc-RSS_EMAIL_CAMPAIGN&utm_medium=email&utm_term=0_a95f379648-7aa08c09dc-70980973
DOJ’s Antitrust Division Targets Commercial Flooring Industry for Criminal Cartel Activity
BY MICHAEL VOLKOV · SEPTEMBER 8, 2020
EXCERPT:
DOJ’s Antitrust Division is increasing criminal antitrust enforcement. After two relatively slow years of criminal enforcement, the Antitrust Division’s criminal enforcement program is steadily increasing. The next five years promises to be a time of aggressive criminal cartel enforcement.
DOJ’s Antitrust Division has been racking up indictments and guilty pleas in a long-time cartel operating in the commercial flooring and services industry in the Chicago area. Nine companies were involved in the long-running conspiracy involving bid-rigging for flooring contracts.
DOJ has identified at least 15 instances of bid-rigging for certain jobs valued from $11,000 to more than $3.3 million. The contracts involved not only public schools but also hospitals, an electronics company, a professional services firm and a broadband provider.
From https://blog.volkovlaw.com/2020/09/dojs-antitrust-division-targets-commercial-flooring-industry-for-criminal-cartel-activity/
BY MICHAEL VOLKOV · SEPTEMBER 8, 2020
EXCERPT:
DOJ’s Antitrust Division is increasing criminal antitrust enforcement. After two relatively slow years of criminal enforcement, the Antitrust Division’s criminal enforcement program is steadily increasing. The next five years promises to be a time of aggressive criminal cartel enforcement.
DOJ’s Antitrust Division has been racking up indictments and guilty pleas in a long-time cartel operating in the commercial flooring and services industry in the Chicago area. Nine companies were involved in the long-running conspiracy involving bid-rigging for flooring contracts.
DOJ has identified at least 15 instances of bid-rigging for certain jobs valued from $11,000 to more than $3.3 million. The contracts involved not only public schools but also hospitals, an electronics company, a professional services firm and a broadband provider.
From https://blog.volkovlaw.com/2020/09/dojs-antitrust-division-targets-commercial-flooring-industry-for-criminal-cartel-activity/
Protection of low wage workers declines during coronavirus recession
https://equitablegrowth.org/research-paper/maintaining-effective-u-s-labor-standards-enforcement-through-the-coronavirus-recession/
https://equitablegrowth.org/research-paper/maintaining-effective-u-s-labor-standards-enforcement-through-the-coronavirus-recession/
USDOJ filing taking over Trump's defamation defense in Carroll rape denial case
https://int.nyt.com/data/documenttools/trump-justice-department-e-jean-carroll/cc7606ac221ce832/full.pdf
https://int.nyt.com/data/documenttools/trump-justice-department-e-jean-carroll/cc7606ac221ce832/full.pdf
DAR Note: The following is by an apparent Biden partisan, but the topic is of broader interest, and is suggestive for Trump partisans as well
Fed Paper's Inadvertent Antitrust Policy Questions For Biden
By Christopher Kelly
Excerpt, footnotes omitted:
No one confuses the Federal Reserve Board with the American Antitrust Institute. The Fed's concern is financial stability, not competition. But a recent working paper from two Fed staff economists[1] points up a potentially major role for antitrust enforcement in a Joe Biden administration, one well beyond heightened merger scrutiny and tougher standards for platform industries.
By identifying increased market power as a cause of the income and wealth inequality that has become a subject of intense public debate and, not coincidentally, a key issue for Democratic presidential candidate Biden's campaign, the paper implicitly raises the possibility that antitrust enforcement could take on urgency and aggressiveness well beyond what the predictable campaign positions have suggested and be used to address a core societal issue.
The paper's focus is narrow: Consistent with the Fed's mission to "foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems and to promote optimal economic performance,"[2] it examines a collective increase in firms' market power over the past 40 years as a cause of an increased risk of financial crises like that of 2008 (defined as "events during which a country's banking sector experiences bank runs, sharp increases in default rates accompanied by large losses of capital that result in public intervention, bankruptcy, or forced merger of financial institutions").[3]
But the paper concludes that the market-power increase raised that risk by triggering a chain reaction of noncyclical (in economics terms, "secular") trends that themselves are major policy hot buttons. To simplify the paper's chain reaction:
From the Fed's standpoint, the critical policy concern is that the rise of market power has made financial crises like that of 2008 more likely. But the findings that, along the way, market power led to increased income and wealth inequality play directly into the broader discussions of economic equity that have become part of this year's presidential campaign.
The paper's implications for antitrust enforcement seem inadvertent. The word "antitrust" appears only once, in a sidelong mention in a footnote, so antitrust law does not appear as a potential solution to the problem.
To the contrary, the authors propose a back-end fix: They suggest redistributing the market-power-driven profits back to the working class through an income tax specifically because the tax (unlike antitrust enforcement) would not distort marketplace decisions. But no one interested in shaping antitrust policy in a potential Biden administration would miss the underlying questions of whether antitrust law's retreat at the outset of this 40-year period into "a mild constraint on a relatively small set of practices that pose a threat to allocative efficiency"[4] contributed to these secular trends and, if so, whether shifting antitrust law's goal from mere allocative efficiency to economic equity could be an important part of the solution.
Christopher J. Kelly is a partner at Mayer Brown LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Isabel Cairó & Jae Sim (2020). Market Power, Inequality, and Financial Instability, Finance and Economics Discussion Series 2020-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.057.
From https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/09/law360--fed-papers-inadvertent-antitrust-policy-questions-for-biden.pdf
Fed Paper's Inadvertent Antitrust Policy Questions For Biden
By Christopher Kelly
Excerpt, footnotes omitted:
No one confuses the Federal Reserve Board with the American Antitrust Institute. The Fed's concern is financial stability, not competition. But a recent working paper from two Fed staff economists[1] points up a potentially major role for antitrust enforcement in a Joe Biden administration, one well beyond heightened merger scrutiny and tougher standards for platform industries.
By identifying increased market power as a cause of the income and wealth inequality that has become a subject of intense public debate and, not coincidentally, a key issue for Democratic presidential candidate Biden's campaign, the paper implicitly raises the possibility that antitrust enforcement could take on urgency and aggressiveness well beyond what the predictable campaign positions have suggested and be used to address a core societal issue.
The paper's focus is narrow: Consistent with the Fed's mission to "foster the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems and to promote optimal economic performance,"[2] it examines a collective increase in firms' market power over the past 40 years as a cause of an increased risk of financial crises like that of 2008 (defined as "events during which a country's banking sector experiences bank runs, sharp increases in default rates accompanied by large losses of capital that result in public intervention, bankruptcy, or forced merger of financial institutions").[3]
But the paper concludes that the market-power increase raised that risk by triggering a chain reaction of noncyclical (in economics terms, "secular") trends that themselves are major policy hot buttons. To simplify the paper's chain reaction:
- The increased market power, in both product and labor markets, has reduced the labor income share and, to a much lesser degree, the capital share of total output.
- The reduced labor and capital shares necessarily increase the profit share of output.
- The increased profit share increases income inequality by raising the income of the most wealthy households, whose income is driven by stock ownership, relative to the less wealthy, whose income is based primarily on wages.
- Because the wealthy have a relatively high marginal propensity to save, the skewed income also increases wealth inequality between wealthy and less wealthy households.
- Less wealthy households respond to their decreasing relative income and wealth by increasing borrowing (from, in effect, the wealthy households).
- The resulting increased credit-to-GDP ratio leads in turn to a significantly increased probability of a financial crisis.
From the Fed's standpoint, the critical policy concern is that the rise of market power has made financial crises like that of 2008 more likely. But the findings that, along the way, market power led to increased income and wealth inequality play directly into the broader discussions of economic equity that have become part of this year's presidential campaign.
The paper's implications for antitrust enforcement seem inadvertent. The word "antitrust" appears only once, in a sidelong mention in a footnote, so antitrust law does not appear as a potential solution to the problem.
To the contrary, the authors propose a back-end fix: They suggest redistributing the market-power-driven profits back to the working class through an income tax specifically because the tax (unlike antitrust enforcement) would not distort marketplace decisions. But no one interested in shaping antitrust policy in a potential Biden administration would miss the underlying questions of whether antitrust law's retreat at the outset of this 40-year period into "a mild constraint on a relatively small set of practices that pose a threat to allocative efficiency"[4] contributed to these secular trends and, if so, whether shifting antitrust law's goal from mere allocative efficiency to economic equity could be an important part of the solution.
Christopher J. Kelly is a partner at Mayer Brown LLP.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
[1] Isabel Cairó & Jae Sim (2020). Market Power, Inequality, and Financial Instability, Finance and Economics Discussion Series 2020-057. Washington: Board of Governors of the Federal Reserve System, https://doi.org/10.17016/FEDS.2020.057.
From https://www.mayerbrown.com/-/media/files/perspectives-events/publications/2020/09/law360--fed-papers-inadvertent-antitrust-policy-questions-for-biden.pdf
Biopharma leaders unite to stand with science
- Nine CEOs sign pledge to continue to make the safety and well-being of vaccinated individuals the top priority in development of the first COVID-19 vaccines
NEW YORK – September 8, 2020 – The CEOs of AstraZeneca (LSE/STO/NYSE: AZN), BioNTech (NASDAQ: BNTX), GlaxoSmithKline plc (LSE/NYSE: GSK), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK), known as MSD outside the United States and Canada, Moderna, Inc. (Nasdaq: MRNA), Novavax, Inc. (Nasdaq: NVAX), Pfizer Inc. (NYSE: PFE), and Sanofi (NASDAQ: SNY) today announced a historic pledge, outlining a united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines.
All nine CEOs signed the following pledge:
We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.
The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration (FDA). FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA’s guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations.
Following guidance from expert regulatory authorities such as FDA regarding the development of COVID-19 vaccines, consistent with existing standards and practices, and in the interest of public health, we pledge to:
From: http://www.news.sanofi.us/2020-09-08-Biopharma-leaders-unite-to-stand-with-science
- Nine CEOs sign pledge to continue to make the safety and well-being of vaccinated individuals the top priority in development of the first COVID-19 vaccines
NEW YORK – September 8, 2020 – The CEOs of AstraZeneca (LSE/STO/NYSE: AZN), BioNTech (NASDAQ: BNTX), GlaxoSmithKline plc (LSE/NYSE: GSK), Johnson & Johnson (NYSE: JNJ), Merck (NYSE: MRK), known as MSD outside the United States and Canada, Moderna, Inc. (Nasdaq: MRNA), Novavax, Inc. (Nasdaq: NVAX), Pfizer Inc. (NYSE: PFE), and Sanofi (NASDAQ: SNY) today announced a historic pledge, outlining a united commitment to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first COVID-19 vaccines.
All nine CEOs signed the following pledge:
We, the undersigned biopharmaceutical companies, want to make clear our on-going commitment to developing and testing potential vaccines for COVID-19 in accordance with high ethical standards and sound scientific principles.
The safety and efficacy of vaccines, including any potential vaccine for COVID-19, is reviewed and determined by expert regulatory agencies around the world, such as the United States Food and Drug Administration (FDA). FDA has established clear guidance for the development of COVID-19 vaccines and clear criteria for their potential authorization or approval in the US. FDA’s guidance and criteria are based on the scientific and medical principles necessary to clearly demonstrate the safety and efficacy of potential COVID-19 vaccines. More specifically, the agency requires that scientific evidence for regulatory approval must come from large, high quality clinical trials that are randomized and observer-blinded, with an expectation of appropriately designed studies with significant numbers of participants across diverse populations.
Following guidance from expert regulatory authorities such as FDA regarding the development of COVID-19 vaccines, consistent with existing standards and practices, and in the interest of public health, we pledge to:
- Always make the safety and well-being of vaccinated individuals our top priority.
- Continue to adhere to high scientific and ethical standards regarding the conduct of clinical trials and the rigor of manufacturing processes.
- Only submit for approval or emergency use authorization after demonstrating safety and efficacy through a Phase 3 clinical study that is designed and conducted to meet requirements of expert regulatory authorities such as FDA.[emphasis added by DAR]
- Work to ensure a sufficient supply and range of vaccine options, including those suitable for global access.
From: http://www.news.sanofi.us/2020-09-08-Biopharma-leaders-unite-to-stand-with-science
A group of drug companies competing with one another to be among the first to develop coronavirus vaccines are planning to pledge early next week that they will not release any vaccines that do not follow rigorous efficacy and safety standards, according to representatives of three of the companies.
The statement, which has not yet been finalized, is meant to reassure the public that the companies will not seek a premature approval of vaccines under political pressure from the Trump administration. A New York Times headline calls the agreement a "Joint Pledge on Vaccine Safety."
President Trump has pushed for a vaccine to be available by October — just before the presidential election — and a growing number of scientists, regulators and public health experts have expressed concern over what they see as a pattern of political arm-twisting by the Trump administration in its efforts to combat the virus.
The companies’ joint statement was planned for early next week, but it may be released before then after its existence was made public on Friday by The Wall Street Journal. The manufacturers that are said to have signed the letter include Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline and Sanofi.
The pharmaceutical companies are not the only ones pushing back. Senior regulators at the Food and Drug Administration have been discussing making their own joint public statement about the need to rely on proven science, according to two senior administration officials, a move that would breach their usual reticence as civil servants.
From: https://www.nytimes.com/2020/09/04/science/covid-vaccine-pharma-pledge.html?action=click&module=Top%20Stories&pgtype=Homepage
DAR Comment: The expected collaboration announcement by Pfizer, Moderna, Johnson & Johnson, GlaxoSmithKline and Sanofi causes some consternation among antitrust experts. Even collaborations for ostensibly good public interest purposes cause worry that other and darker collaborative actions might be facilitated. Here the companies pledge that they will not ask government regulators to approve new vaccines as safe and effective unless the vaccines actually have proven to be safe and effective. The joint pledge seems to include agreeing that no one company will rush ahead to ask emergency approval, a risky but possibly profitable step depending on real world experience with the vaccine. The collaboration is a response to perceived government disfunction -- government arm twisting to release vaccines before election day even if they are not proven safe and effective.
Over time many collaborators have justified their collusive conduct by calling on public interest justifications. On the other hand, this may be a situation where one's broad view of the politics and the public interest trumps parsing the relevant antitrust law. Avoiding premature release of a vaccine that turns out after election day to be unsafe or ineffective may seem more important than resolving antitrust issues like rule of reason or procompetitive effects versus anticompetitive effects.
PS. I am grateful that someone suggested comparison to Georgia restaurants that agreed to stay closed despite the Governor's order allowing them to open. See https://thehill.com/changing-america/well-being/prevention-cures/495712-more-than-120-atlanta-restaurants-refuse-to-open
Russian government sponsored voting propaganda in plain sight
By Don Allen Resnikoff:
The media suggests that Russian operatives are spreading disinformation in order to influence the Presidential election. The disinformation effort is said to frequently be surreptitious, known to U.S. intelligence people, but largely hidden from the general public.
Recently an acquaintance sent me a YouTube link featuring a “comedian” in the John Oliver mold who was leading a discussion on the perils of mail in ballots for the Trump v. Biden Presidential vote. The main peril, briefly put, is that the mail-in ballots won’t be counted. The YouTube link is here. https://www.youtube.com/watch?v=qT8YUyNuirE
After a little searching I found that Wikopedia says of the interviewer-comedian Lee Camp that:
he is host and head writer of the weekly comedy news show Redacted Tonight with Lee Camp, which airs every Friday at 8pm EST on the Russian-financed RT America. Jason Zinoman wrote in The New York Times that his appearance on the channel: "raises questions about the comedian’s independence."[cites omitted] He told Rachel Manteuffel of The Washington Post Magazine that the Russian government funds his show, explaining "One of the reasons I'm at RT America is because there’s no advertising. If there were advertising, no channel really wants someone who goes after corporations as much as I do."[cite omitted]
So it may be that the video I was sent is an example of Russian Government sponsored propaganda in plain sight.
That doesn't necessarily mean that all the points about unreliability of mail-in ballots in the video are wrong, but knowing the possible Russian government propaganda link is concerning. It suggests that viewers need to take the information offered with the proverbial grain of salt, or perhaps many grains of salt. It is not unusual for propaganda to start from actual facts and real concerns and spin a further web that includes disinformation.
Following is a link to Bloomberg's coverage of the same topic, which there is reason to hope is relatively objective, fair, and balanced:
https://www.bloomberg.com/news/videos/2020-08-07/2020-year-in-crisis-vote-from-home-video
Posting is by Don Allen Resnikoff, who is responsible for its content.
By Don Allen Resnikoff:
The media suggests that Russian operatives are spreading disinformation in order to influence the Presidential election. The disinformation effort is said to frequently be surreptitious, known to U.S. intelligence people, but largely hidden from the general public.
Recently an acquaintance sent me a YouTube link featuring a “comedian” in the John Oliver mold who was leading a discussion on the perils of mail in ballots for the Trump v. Biden Presidential vote. The main peril, briefly put, is that the mail-in ballots won’t be counted. The YouTube link is here. https://www.youtube.com/watch?v=qT8YUyNuirE
After a little searching I found that Wikopedia says of the interviewer-comedian Lee Camp that:
he is host and head writer of the weekly comedy news show Redacted Tonight with Lee Camp, which airs every Friday at 8pm EST on the Russian-financed RT America. Jason Zinoman wrote in The New York Times that his appearance on the channel: "raises questions about the comedian’s independence."[cites omitted] He told Rachel Manteuffel of The Washington Post Magazine that the Russian government funds his show, explaining "One of the reasons I'm at RT America is because there’s no advertising. If there were advertising, no channel really wants someone who goes after corporations as much as I do."[cite omitted]
So it may be that the video I was sent is an example of Russian Government sponsored propaganda in plain sight.
That doesn't necessarily mean that all the points about unreliability of mail-in ballots in the video are wrong, but knowing the possible Russian government propaganda link is concerning. It suggests that viewers need to take the information offered with the proverbial grain of salt, or perhaps many grains of salt. It is not unusual for propaganda to start from actual facts and real concerns and spin a further web that includes disinformation.
Following is a link to Bloomberg's coverage of the same topic, which there is reason to hope is relatively objective, fair, and balanced:
https://www.bloomberg.com/news/videos/2020-08-07/2020-year-in-crisis-vote-from-home-video
Posting is by Don Allen Resnikoff, who is responsible for its content.
Amazon Is Spying on Its Workers in Closed Facebook Groups, Internal Reports Show
The company is surveilling dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet.
By Lauren Kaori Gurley
By Joseph Cox
September 1, 2020, 7:53pm
Amazon is monitoring the conversations of Amazon Flex drivers in dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet and viewed by Motherboard. According to the files left online, Amazon corporate employees are getting regular reports about the social media posts of its Flex drivers on nominally private pages, and are using these reports to diagnose problems as well as monitor, for example, drivers "planning for any strike or protest against Amazon."
Among the files left online is a document called “social media monitoring” that lists closed Amazon Flex Driver Facebook groups and websites across the world, as well as open Flex driver Subreddits, and the Twitter keyword "Amazon Flex." Forty three of the Facebook groups are run by drivers in different cities in the United States.
“The following social forums mentioned in the table are to be monitored during the Social media process,” the document reads. Facebook groups being monitored include “Amazon Flex Drivers of Los Angeles,” “Amazon Flex Drivers,” “deactivated Amazon Drivers,” and dozens of others.
Amazon seemingly asked employees to keep this monitoring secret.
https://www.vice.com/en_ca/article/3azegw/amazon-is-spying-on-its-workers-in-closed-facebook-groups-internal-reports-show
The company is surveilling dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet.
By Lauren Kaori Gurley
By Joseph Cox
September 1, 2020, 7:53pm
Amazon is monitoring the conversations of Amazon Flex drivers in dozens of private Facebook groups in the United States, the United Kingdom, and Spain, according to an internal web tool and reports left on the open internet and viewed by Motherboard. According to the files left online, Amazon corporate employees are getting regular reports about the social media posts of its Flex drivers on nominally private pages, and are using these reports to diagnose problems as well as monitor, for example, drivers "planning for any strike or protest against Amazon."
Among the files left online is a document called “social media monitoring” that lists closed Amazon Flex Driver Facebook groups and websites across the world, as well as open Flex driver Subreddits, and the Twitter keyword "Amazon Flex." Forty three of the Facebook groups are run by drivers in different cities in the United States.
“The following social forums mentioned in the table are to be monitored during the Social media process,” the document reads. Facebook groups being monitored include “Amazon Flex Drivers of Los Angeles,” “Amazon Flex Drivers,” “deactivated Amazon Drivers,” and dozens of others.
Amazon seemingly asked employees to keep this monitoring secret.
https://www.vice.com/en_ca/article/3azegw/amazon-is-spying-on-its-workers-in-closed-facebook-groups-internal-reports-show
10th Circuit nixes Oklahoma City panhandling restrictions
The US Court of Appeals for the 10th Circuit has held that an anti-panhandling law in Oklahoma City runs afoul of constitutional free speech protections. The ordinance prohibited pedestrians in roadway medians, which the court said "share fundamental characteristics with public streets, sidewalks and parks, which are quintessential public fora."
Full Story: https://apnews.com/dd2c9484747abf5e2347d6bb182c03ec
The US Court of Appeals for the 10th Circuit has held that an anti-panhandling law in Oklahoma City runs afoul of constitutional free speech protections. The ordinance prohibited pedestrians in roadway medians, which the court said "share fundamental characteristics with public streets, sidewalks and parks, which are quintessential public fora."
Full Story: https://apnews.com/dd2c9484747abf5e2347d6bb182c03ec
California's proposal for its own CFPB is back on track
...https://www.housingwire.com/articles/californias...Aug 18, 2020 ·
The proposal to create a “mini-CFPB” in the state was added to a pending budget bill after being dropped in June.
...https://www.housingwire.com/articles/californias...Aug 18, 2020 ·
The proposal to create a “mini-CFPB” in the state was added to a pending budget bill after being dropped in June.
Michael Kades on antitrust enforcement:
The curious case of the federal prosecutor who sided with defendants
Excerpt:
Let’s look at three cases that are emblematic of this antitrust tilt toward defendants in antitrust cases brought by other antitrust agencies. As Equitable Growth recently reiterated, the United States has a monopoly power problem. During this critical moment, however, the Trump administration’s antitrust legacy at the Department Justice may be to limit the ability of the antitrust laws to combat that problem. Rather than criticizing other agencies for bringing cases, the leadership at the Department of Justice and its Antitrust Division would better serve the country by enforcing the law.
Peabody-Arch Coal: The most recent intervention
Let’s start with the most recent action. Back in February 2020, in a 4-1 vote, the Federal Trade Commission sought to block a joint venture (a form of coordination that is less than a full merger but still subject to the antitrust laws) between Peabody Energy Corporation and Arch Coal, Inc. According to the complaint, the two companies are combining their coal mines located in the Southern Powder River Basin in Wyoming. They are the two largest coal mines in the Southern Powder River Basin and fierce, direct competitors.
According to the Commission’s complaint, coal from this region is different than other coal. It is cheaper to mine, being close to the surface. It is cleaner to burn. And it boasts a higher heat content. This is why the Federal Trade Commission argues that the proposed post-merger joint venture would be able to increase the price of its coal—it won’t be profitable for utilities to shift to other types of coal or other types of energy. Currently, the agency is seeking a preliminary judgement in federal court to prevent the joint venture.
If granted, that injunction would block the deal until the FTC’s litigation on the full merits is concluded, which is an administrative trial. The federal court held a 9-day hearing on the request for a preliminary injunction, with the parties now awaiting the court’s judgment. The administrative trial is scheduled to start on December 1, 2020, before the FTC’s administrative law judge.
So far, this is a pretty standard antitrust complaint. It includes high market shares, direct competitors, and limited alternatives. Could the Federal Trade Commission be wrong? Maybe, which is why the agency has to go to court and convince a judge that the evidence supports its case.
Here is what is not so standard. After meeting with Wyoming Gov. Mark Gordon (R), who supports the merger, Attorney General Barr announced he was going to review the FTC’s case: “If I reach a conclusion in which I feel like the merger would benefit competition,” he explained, “then I will try to use whatever authority I have to rectify the situation.”
A judge will decide the merits of the Peabody-Arch Coal case, so let’s focus on Government 101. The Federal Trade Commission is an independent agency. It was created to be separate from the U.S. Department of Justice. Neither the Department of Justice nor Attorney General Barr have any formal authority over the FTC’s decision to bring an antitrust case. But the Department of Justice can interfere. It can file statements of interest in the case or intervene in an ongoing litigation.
The parties will almost certainly quote as often as possible Attorney General Barr’s statement: “It sounds to me like the whole picture wasn’t looked at here.” Why interfere in this case? It is not as though the agency has a reputation for being overly aggressive. It currently has three Republican commissioners, two of whom—Chairman Joe Simmons and Commissioner Noah Phillips—supported the action. Both a majority of the Commission and a majority of the majority party at the agency supported blocking the joint venture.
Qualcomm: Opposing monopolization cases
Next up is the semiconductor monopoly case involving Qualcomm Inc. In 2017, the Federal Trade Commission alleged that Qualcomm used licensing and supply terms to maintain its monopoly on semiconductors necessary for cell phones to work. After the trial and before the judge issued her decision, the Antitrust Division of the Department of Justice filed a statement of interest, requesting that the judge hold additional hearings on remedy if she were to rule for the FTC.
When the judge did rule in the FTC’s favor and rejected the need for more hearings, the Division sided with Qualcomm in seeking a stay of the order and asking the federal Ninth Circuit Court of Appeals to vacate the lower court’s decision. The Ninth Circuit granted the stay and recently ruled in favor of Qualcomm.
The current administration’s Antitrust Division has not brought a single monopolization case (to be fair, the Division has brought only one monopolization case this century). But it opposes this monopolization case against Qualcomm brought by the Federal Trade Commission.
Although the Justice Department (along with the Departments of Defense and Energy) raised legal issues with the district court’s decision, it also mentioned national security 17 times in one brief, an argument the Justice Department itself had to refute when it sought to break up AT&T almost 40 years ago.
T-Mobile Sprint: Defending consolidation
Then, there is the case challenging T-Mobile US Inc.’s acquisition of Sprint Corporation. In November of last year, a group of state attorneys general sued to block the deal that would reduce the number of mobile phone carriers in the United States from four to three. The Antitrust Division had entered a settlement with the two companies, agreeing not to challenge the transaction in exchange for a remedy that the Division believed would resolve any competitive concerns.
The Antitrust Division filed a Statement of Interest in the states’ case defending the merger. In its view, “The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.” The Assistant Attorney General Makan Delrahim even went so far as to encourage Dish Network Corporation, which would benefit from the settlement as a buyer of some of the merging parties’ assets, to lobby lawmakers to the settlement.
In short, the Antitrust Division was asking for the very deference it had failed to show the Federal Trade Commission in the first two cases detailed above. The district court ruled against the states.
Excerpt from https://equitablegrowth.org/the-curious-case-of-the-federal-prosecutor-who-sided-with-defendants/
The curious case of the federal prosecutor who sided with defendants
Excerpt:
Let’s look at three cases that are emblematic of this antitrust tilt toward defendants in antitrust cases brought by other antitrust agencies. As Equitable Growth recently reiterated, the United States has a monopoly power problem. During this critical moment, however, the Trump administration’s antitrust legacy at the Department Justice may be to limit the ability of the antitrust laws to combat that problem. Rather than criticizing other agencies for bringing cases, the leadership at the Department of Justice and its Antitrust Division would better serve the country by enforcing the law.
Peabody-Arch Coal: The most recent intervention
Let’s start with the most recent action. Back in February 2020, in a 4-1 vote, the Federal Trade Commission sought to block a joint venture (a form of coordination that is less than a full merger but still subject to the antitrust laws) between Peabody Energy Corporation and Arch Coal, Inc. According to the complaint, the two companies are combining their coal mines located in the Southern Powder River Basin in Wyoming. They are the two largest coal mines in the Southern Powder River Basin and fierce, direct competitors.
According to the Commission’s complaint, coal from this region is different than other coal. It is cheaper to mine, being close to the surface. It is cleaner to burn. And it boasts a higher heat content. This is why the Federal Trade Commission argues that the proposed post-merger joint venture would be able to increase the price of its coal—it won’t be profitable for utilities to shift to other types of coal or other types of energy. Currently, the agency is seeking a preliminary judgement in federal court to prevent the joint venture.
If granted, that injunction would block the deal until the FTC’s litigation on the full merits is concluded, which is an administrative trial. The federal court held a 9-day hearing on the request for a preliminary injunction, with the parties now awaiting the court’s judgment. The administrative trial is scheduled to start on December 1, 2020, before the FTC’s administrative law judge.
So far, this is a pretty standard antitrust complaint. It includes high market shares, direct competitors, and limited alternatives. Could the Federal Trade Commission be wrong? Maybe, which is why the agency has to go to court and convince a judge that the evidence supports its case.
Here is what is not so standard. After meeting with Wyoming Gov. Mark Gordon (R), who supports the merger, Attorney General Barr announced he was going to review the FTC’s case: “If I reach a conclusion in which I feel like the merger would benefit competition,” he explained, “then I will try to use whatever authority I have to rectify the situation.”
A judge will decide the merits of the Peabody-Arch Coal case, so let’s focus on Government 101. The Federal Trade Commission is an independent agency. It was created to be separate from the U.S. Department of Justice. Neither the Department of Justice nor Attorney General Barr have any formal authority over the FTC’s decision to bring an antitrust case. But the Department of Justice can interfere. It can file statements of interest in the case or intervene in an ongoing litigation.
The parties will almost certainly quote as often as possible Attorney General Barr’s statement: “It sounds to me like the whole picture wasn’t looked at here.” Why interfere in this case? It is not as though the agency has a reputation for being overly aggressive. It currently has three Republican commissioners, two of whom—Chairman Joe Simmons and Commissioner Noah Phillips—supported the action. Both a majority of the Commission and a majority of the majority party at the agency supported blocking the joint venture.
Qualcomm: Opposing monopolization cases
Next up is the semiconductor monopoly case involving Qualcomm Inc. In 2017, the Federal Trade Commission alleged that Qualcomm used licensing and supply terms to maintain its monopoly on semiconductors necessary for cell phones to work. After the trial and before the judge issued her decision, the Antitrust Division of the Department of Justice filed a statement of interest, requesting that the judge hold additional hearings on remedy if she were to rule for the FTC.
When the judge did rule in the FTC’s favor and rejected the need for more hearings, the Division sided with Qualcomm in seeking a stay of the order and asking the federal Ninth Circuit Court of Appeals to vacate the lower court’s decision. The Ninth Circuit granted the stay and recently ruled in favor of Qualcomm.
The current administration’s Antitrust Division has not brought a single monopolization case (to be fair, the Division has brought only one monopolization case this century). But it opposes this monopolization case against Qualcomm brought by the Federal Trade Commission.
Although the Justice Department (along with the Departments of Defense and Energy) raised legal issues with the district court’s decision, it also mentioned national security 17 times in one brief, an argument the Justice Department itself had to refute when it sought to break up AT&T almost 40 years ago.
T-Mobile Sprint: Defending consolidation
Then, there is the case challenging T-Mobile US Inc.’s acquisition of Sprint Corporation. In November of last year, a group of state attorneys general sued to block the deal that would reduce the number of mobile phone carriers in the United States from four to three. The Antitrust Division had entered a settlement with the two companies, agreeing not to challenge the transaction in exchange for a remedy that the Division believed would resolve any competitive concerns.
The Antitrust Division filed a Statement of Interest in the states’ case defending the merger. In its view, “The Litigating States’ strong interest in this merger does not justify their attempt to substitute their judgment for the nationwide perspective of the United States.” The Assistant Attorney General Makan Delrahim even went so far as to encourage Dish Network Corporation, which would benefit from the settlement as a buyer of some of the merging parties’ assets, to lobby lawmakers to the settlement.
In short, the Antitrust Division was asking for the very deference it had failed to show the Federal Trade Commission in the first two cases detailed above. The district court ruled against the states.
Excerpt from https://equitablegrowth.org/the-curious-case-of-the-federal-prosecutor-who-sided-with-defendants/
Artist Rights Alliance Calls Out ‘Secretive Agreements’ Between Streaming Services and Major Music Publishers
Dylan Smith
August 31, 2020
1
In comments forwarded to the U.S. Copyright Office, the Artist Rights Alliance (ARA) has called out “secretive agreements” between streaming services and music publishers.
Artist Rights Alliance officials voiced their criticism of the “secretive agreements” this morning, and the corresponding statement was shared with Digital Music News. Delivered in response to the Copyright Office’s Unpaid Royalties Study (and “Notice of Inquiry” requesting expert opinions and feedback), the ARA’s statement arrives exactly four weeks after questions surfaced over whether the overarching “Black Box” initiative is doomed to fail.
While the latter comments centered on the pitfalls associated with a disproportionate degree of music industry influence upon the Mechanical Licensing Collective’s royalty-matching procedures, the ARA’s latest message takes aim at “secret, private agreements” between streaming services and publishers.
Specifically, these behind-closed-doors arrangements enable the involved parties to forego identifying and paying rightsholders based upon their number of plays, per the ARA. Instead, they serve to divvy up the mechanical royalties to major publishers by market share.
“Using market share to distribute royalties is a terrible substitute for actual matching — since market share leaders are least likely to have any unclaimed royalties of their own in the pool because they have the greatest ability and incentives to find and claim their work,” the Artist Rights Alliance’s formal inquiry to the Copyright Office continues.
From there, the ARA calls on the Copyright Office and the MLC “to aggressively investigate” agreements that circumvent the MLC and utilize market share as a benchmark for the distribution of royalties. The system should be used “as a very last resort,” according to the Washington, D.C.-based non-profit organization.
The ARA then touches on a few points aside from agreements between streaming services and major publishers. Concurring with a suggestion from the Recording Academy, ARA higher-ups recommend that the MLC delay royalty payments in order to improve their match rate – even if the process “takes more time than initially hoped.” Similarly, the entity lends support to the idea that the Music Modernization Act’s Digital Licensee Coordinator should join the MLC in identifying unmatched royalties.
“Digital services… must be required to be part of the solution, not a cause of further problems in this area,” the document indicates.
Lastly, the entity emphasizes that the purpose of eliminating Black Box royalties isn’t to simply pay out the funds to any party that will accept them, but rather, is to afford publishers and songwriters their due compensation.
Dylan Smith
August 31, 2020
1
In comments forwarded to the U.S. Copyright Office, the Artist Rights Alliance (ARA) has called out “secretive agreements” between streaming services and music publishers.
Artist Rights Alliance officials voiced their criticism of the “secretive agreements” this morning, and the corresponding statement was shared with Digital Music News. Delivered in response to the Copyright Office’s Unpaid Royalties Study (and “Notice of Inquiry” requesting expert opinions and feedback), the ARA’s statement arrives exactly four weeks after questions surfaced over whether the overarching “Black Box” initiative is doomed to fail.
While the latter comments centered on the pitfalls associated with a disproportionate degree of music industry influence upon the Mechanical Licensing Collective’s royalty-matching procedures, the ARA’s latest message takes aim at “secret, private agreements” between streaming services and publishers.
Specifically, these behind-closed-doors arrangements enable the involved parties to forego identifying and paying rightsholders based upon their number of plays, per the ARA. Instead, they serve to divvy up the mechanical royalties to major publishers by market share.
“Using market share to distribute royalties is a terrible substitute for actual matching — since market share leaders are least likely to have any unclaimed royalties of their own in the pool because they have the greatest ability and incentives to find and claim their work,” the Artist Rights Alliance’s formal inquiry to the Copyright Office continues.
From there, the ARA calls on the Copyright Office and the MLC “to aggressively investigate” agreements that circumvent the MLC and utilize market share as a benchmark for the distribution of royalties. The system should be used “as a very last resort,” according to the Washington, D.C.-based non-profit organization.
The ARA then touches on a few points aside from agreements between streaming services and major publishers. Concurring with a suggestion from the Recording Academy, ARA higher-ups recommend that the MLC delay royalty payments in order to improve their match rate – even if the process “takes more time than initially hoped.” Similarly, the entity lends support to the idea that the Music Modernization Act’s Digital Licensee Coordinator should join the MLC in identifying unmatched royalties.
“Digital services… must be required to be part of the solution, not a cause of further problems in this area,” the document indicates.
Lastly, the entity emphasizes that the purpose of eliminating Black Box royalties isn’t to simply pay out the funds to any party that will accept them, but rather, is to afford publishers and songwriters their due compensation.
NIJ: The Use-of-Force Continuum
https://nij.ojp.gov/topics/articles/use-force-continuum (USDOJ)
Date Published
August 3, 2009
Most law enforcement agencies have policies that guide their use of force. These policies describe a escalating series of actions an officer may take to resolve a situation. This continuum generally has many levels, and officers are instructed to respond with a level of force appropriate to the situation at hand, acknowledging that the officer may move from one part of the continuum to another in a matter of seconds.
An example of a use-of-force continuum follows:
https://nij.ojp.gov/topics/articles/use-force-continuum (USDOJ)
Date Published
August 3, 2009
Most law enforcement agencies have policies that guide their use of force. These policies describe a escalating series of actions an officer may take to resolve a situation. This continuum generally has many levels, and officers are instructed to respond with a level of force appropriate to the situation at hand, acknowledging that the officer may move from one part of the continuum to another in a matter of seconds.
An example of a use-of-force continuum follows:
- Officer Presence — No force is used. Considered the best way to resolve a situation.
- The mere presence of a law enforcement officer works to deter crime or diffuse a situation.
- Officers' attitudes are professional and nonthreatening.
- Verbalization — Force is not-physical.
- Officers issue calm, nonthreatening commands, such as "Let me see your identification and registration."
- Officers may increase their volume and shorten commands in an attempt to gain compliance. Short commands might include "Stop," or "Don't move."
- Empty-Hand Control — Officers use bodily force to gain control of a situation.
- Soft technique. Officers use grabs, holds and joint locks to restrain an individual.
- Hard technique. Officers use punches and kicks to restrain an individual.
- Less-Lethal Methods — Officers use less-lethal technologies to gain control of a situation.
- Blunt impact. Officers may use a baton or projectile to immobilize a combative person.
- Chemical. Officers may use chemical sprays or projectiles embedded with chemicals to restrain an individual (e.g., pepper spray).
- Conducted Energy Devices (CEDs). Officers may use CEDs to immobilize an individual. CEDs discharge a high-voltage, low-amperage jolt of electricity at a distance.
- Lethal Force — Officers use lethal weapons to gain control of a situation. Should only be used if a suspect poses a serious threat to the officer or another individual.
- Officers use deadly weapons such as firearms to stop an individual's actions.
Product Liability's Amazon Problem
Posted: 9 Jul 2020
Sean Bender
University of Pennsylvania Law School
Date Written: June 16, 2020
From the Abstract:
As Amazon has reinvented retail, tort law has struggled to keep up. Modern product liability doctrines were developed at a time when supply chains were linear and actors could be neatly cabined into roles like “seller” or “manufacturer.” By design, Amazon’s marketplace disrupts that model, removing the middlemen between manufacturers and consumers while reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market. And while courts have readily held its third-party merchants strictly liable when they sell defective products through Amazon’s website, Amazon’s own role in these transactions is far less clear.
This Article proceeds in three parts. Part I begins with an overview of contemporary product liability law, discussing the origins of the strict liability rule and the rise of the Restatement (Second)’s approach to no fault recovery. Part II focuses on the doctrine’s application to Amazon, tracking the outcome of every product liability lawsuit filed against the company between 2015 and 2020. Finally, Part III is prescriptive, discussing both why and how courts should respond to Amazon’s disruption of product liability law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3628921
Posted: 9 Jul 2020
Sean Bender
University of Pennsylvania Law School
Date Written: June 16, 2020
From the Abstract:
As Amazon has reinvented retail, tort law has struggled to keep up. Modern product liability doctrines were developed at a time when supply chains were linear and actors could be neatly cabined into roles like “seller” or “manufacturer.” By design, Amazon’s marketplace disrupts that model, removing the middlemen between manufacturers and consumers while reducing the friction that might keep foreign (or otherwise judgment-proof) manufacturers from putting dangerous products on the market. And while courts have readily held its third-party merchants strictly liable when they sell defective products through Amazon’s website, Amazon’s own role in these transactions is far less clear.
This Article proceeds in three parts. Part I begins with an overview of contemporary product liability law, discussing the origins of the strict liability rule and the rise of the Restatement (Second)’s approach to no fault recovery. Part II focuses on the doctrine’s application to Amazon, tracking the outcome of every product liability lawsuit filed against the company between 2015 and 2020. Finally, Part III is prescriptive, discussing both why and how courts should respond to Amazon’s disruption of product liability law.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3628921
Should the US border wall contract comply with competitive procurement practices that reward efficiency?
DAR comment: The Bannon border wall indictment story is related to another story where the issue is more mundane: whether government contracts for the Mexico/US border wall went to the most qualified company based on routine competitive procurement practices. Forbes and the Washington Post are among the media sources for the point that Tommy Fisher and his Fisher Industries are politically-connected and helping the Bannon We Build The Wall project. Reportedly Fisher also won US Government wall building work after repeatedly being "touted" by Trump. That touting does not mean that usual government procurement procedures were not followed, but it would be interesting to know whether Fisher's company was subjected to routine government contract vetting, as opposed to being helped into the contract by political favoritism.
Following are excerpts from Forbes:
Trump also “personally and repeatedly” lobbied for the U.S. Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, a politically-connected firm that was also helping We Build The Wall build a private portion of the wall, according to the Washington Post.
The company, which is not mentioned in the indictment, is run by GOP donor and frequent Fox News guest Tommy Fisher and won the contract after it “captured Trump's attention” and was “repeatedly touted” by him, according to CNN.
The White House declined to comment on whether Trump knew of the connection between Fisher and We Build The Wall.
The White House insisted at the time that Trump’s interest in Fisher was due to their cost efficiency. “The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals,” White House press secretary Sarah Sanders told the Washington Post. “He wants to make sure we get the job done under budget and ahead of schedule.”
https://www.forbes.com/sites/andrewsolender/2020/08/20/trump-reportedly-gave-we-build-the-wall-his-blessing-and-tried-to-steer-1b-contract-to-its-builder/#592043263904
DAR comment: The Bannon border wall indictment story is related to another story where the issue is more mundane: whether government contracts for the Mexico/US border wall went to the most qualified company based on routine competitive procurement practices. Forbes and the Washington Post are among the media sources for the point that Tommy Fisher and his Fisher Industries are politically-connected and helping the Bannon We Build The Wall project. Reportedly Fisher also won US Government wall building work after repeatedly being "touted" by Trump. That touting does not mean that usual government procurement procedures were not followed, but it would be interesting to know whether Fisher's company was subjected to routine government contract vetting, as opposed to being helped into the contract by political favoritism.
Following are excerpts from Forbes:
Trump also “personally and repeatedly” lobbied for the U.S. Army Corps of Engineers to award a $1.28 billion wall-building contract to Fisher Industries, a politically-connected firm that was also helping We Build The Wall build a private portion of the wall, according to the Washington Post.
The company, which is not mentioned in the indictment, is run by GOP donor and frequent Fox News guest Tommy Fisher and won the contract after it “captured Trump's attention” and was “repeatedly touted” by him, according to CNN.
The White House declined to comment on whether Trump knew of the connection between Fisher and We Build The Wall.
The White House insisted at the time that Trump’s interest in Fisher was due to their cost efficiency. “The President is one of the country’s most successful builders and knows better than anyone how to negotiate the best deals,” White House press secretary Sarah Sanders told the Washington Post. “He wants to make sure we get the job done under budget and ahead of schedule.”
https://www.forbes.com/sites/andrewsolender/2020/08/20/trump-reportedly-gave-we-build-the-wall-his-blessing-and-tried-to-steer-1b-contract-to-its-builder/#592043263904
Steve Bannon and Three Defendants Indicted for $25 Million “We Build The Wall” Fraud Scheme
BY MICHAEL VOLKOV · AUGUST 24, 2020
In a surprise indictment, the US Attorney’s Office for the Southern District of New York announced that Steve Bannon, Brian Kolfage, Andrew Badolato and Timothy Shea were indicted for defrauding hundreds of thousands of donors in response to the “We Build The Wall” online fundraising campaign. The indictment charges the defendants in defrauding donors from more than $25 million.
As charged, the defendants defrauded hundreds of thousands of donors under the false pretense that all the money would be spent on the construction of the border wall between Mexico and the United States.
All four defendants were charged with conspiracy to commit wire fraud, and conspiracy to engage in money laundering. In an ironic twist (you cannot make this up), the case was investigated by the United States Postal Inspection Services, and the defendants were arrested by USPIS agents.
Kolfage, a disabled war veteran, was the founder and public face of We Build The Wall, and repeatedly assured donors would not be paid a penny. Notwithstanding this reassurance, the defendants secretly schemed to funnel hundreds of thousands of dollars to Kolfage, which he used to pay for his lavish lifestyle. To hide the scheme, the defendants not only lied to donors, they created sham invoices and accounts to launder donations and cover up the financial transaction trail.
The scheme was launched in December 2018 when the defendants launched a website for an online crowdfunding campaign, We Build The Wall. According to statements on the crowdfunding webpage, the campaign was raising funds to donate to the federal government for construction of a wall on the southern border of the United States. The website included an assurance that “100 % of your donations” would be given to the government for the construction of a wall, and if the campaign could not attain its goal, it would “refund every single penny.”
Kolfage is quoted as repeatedly and falsely stating to the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.” Bannon was quoted on numerous occasions as stating “we’re a volunteer organization.”
The “We Build The Wall” online campaign was an instant success. Within the first week, the site raised $17 million. Based on this success, the campaign drew scrutiny, including questions concerning Kolfage’s background and the plan to give the money to the federal government.
Later in December 2018, the crowdfunding website suspended the campaign, which by that time had raised $20 million. The website operator warned Kolfage that unless he identified a legitimate non-profit organization into which those funds could be transferred, the website would return the funds to the donors.
Kolfage enlisted Bannon and Badolato to lead the campaign. Bannon and Badolato already maintained and operated a non-profit organization to promote economic nationalism and American sovereignty. Bannon and Badolato took control of the fundraising organization and day-to-day activities, including its finances, messaging, donor outreach and operations. They created a new non-profit organization, We Build the Wall Inc., to which they proposed to transfer the money raised on the crowdfunding website., and resume operation of the fundraising activities with a modified purpose – to fund the private construction of a wall along the southern border. They also announced that donors would need to “opt in” to transfer their previous donations to the new We Build the Wall, and in effect “re-raise” the $20 million previously donated.
Starting in 2019, the defendants mislead donors and the crowdfunding website. promising them that “100 percent” of the funds would be used for construction of a wall and that Kolfage would not take a salary or compensation from the new organization.
These false representations were made in solicitations, public statements, social media posts and press appearances by Kolfage and Bannon, and others acting at their direction. In fact, Kolfage issued statements that were false and misleading and reviewed and approved by Bannon and Botolato.
To reinforce these false representations, the defendants adopted bylaws for the non-profit organization that contained false representations that none of the defendants could or would receive any compensation from the funds raised. The defendants also promoted communications that none of the Advisory Board members, which was chaired by Bannon, would receive any compensation for their services. Bannon publicly stated that he and other principals were volunteers.
Bannon and Botalato text each other that the false public statements were important to drive donations and since it “removes all taint of self-interest.”
The false representations were important to many donors and repeated to reassure donors.
All four of the defendants worked together to misappropriate hundreds of thousands of dollars for their personal use. Kolfage took more than $350,000 for personal use, including home renovations, payments for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt. Bannon received over $1 million from We Build The Wall through a non-profit organization under his control, which he used for personal purposes.
The four defendants employed a scheme to route payments from We Build The Wall to Kolfage through Bannon’s non-profit organization and a shell company under Shea’s control. The defendants prepared fake invoices and sham “vendor” arrangements to ensure that the pay arrangement as Kolfage noted in a text message to Badolato remained “confidential” and kept on a “need to know” basis.
Kolfage specifically requested that a specific payment be routed to his spouse. Subsequently a false 1099 was issued to his spouse and listed the services provided as “media.”
In October 2019, the defendants learned they may be under criminal investigation. They switched to encrypted text messaging, revised the website to remove the representation that Kolfage would not be compensated and added a statement that Kolfage would receive a salary beginning in January 2020.
https://blog.volkovlaw.com/
BY MICHAEL VOLKOV · AUGUST 24, 2020
In a surprise indictment, the US Attorney’s Office for the Southern District of New York announced that Steve Bannon, Brian Kolfage, Andrew Badolato and Timothy Shea were indicted for defrauding hundreds of thousands of donors in response to the “We Build The Wall” online fundraising campaign. The indictment charges the defendants in defrauding donors from more than $25 million.
As charged, the defendants defrauded hundreds of thousands of donors under the false pretense that all the money would be spent on the construction of the border wall between Mexico and the United States.
All four defendants were charged with conspiracy to commit wire fraud, and conspiracy to engage in money laundering. In an ironic twist (you cannot make this up), the case was investigated by the United States Postal Inspection Services, and the defendants were arrested by USPIS agents.
Kolfage, a disabled war veteran, was the founder and public face of We Build The Wall, and repeatedly assured donors would not be paid a penny. Notwithstanding this reassurance, the defendants secretly schemed to funnel hundreds of thousands of dollars to Kolfage, which he used to pay for his lavish lifestyle. To hide the scheme, the defendants not only lied to donors, they created sham invoices and accounts to launder donations and cover up the financial transaction trail.
The scheme was launched in December 2018 when the defendants launched a website for an online crowdfunding campaign, We Build The Wall. According to statements on the crowdfunding webpage, the campaign was raising funds to donate to the federal government for construction of a wall on the southern border of the United States. The website included an assurance that “100 % of your donations” would be given to the government for the construction of a wall, and if the campaign could not attain its goal, it would “refund every single penny.”
Kolfage is quoted as repeatedly and falsely stating to the public that he would “not take a penny in salary or compensation” and that “100% of the funds raised . . . will be used in the execution of our mission and purpose.” Bannon was quoted on numerous occasions as stating “we’re a volunteer organization.”
The “We Build The Wall” online campaign was an instant success. Within the first week, the site raised $17 million. Based on this success, the campaign drew scrutiny, including questions concerning Kolfage’s background and the plan to give the money to the federal government.
Later in December 2018, the crowdfunding website suspended the campaign, which by that time had raised $20 million. The website operator warned Kolfage that unless he identified a legitimate non-profit organization into which those funds could be transferred, the website would return the funds to the donors.
Kolfage enlisted Bannon and Badolato to lead the campaign. Bannon and Badolato already maintained and operated a non-profit organization to promote economic nationalism and American sovereignty. Bannon and Badolato took control of the fundraising organization and day-to-day activities, including its finances, messaging, donor outreach and operations. They created a new non-profit organization, We Build the Wall Inc., to which they proposed to transfer the money raised on the crowdfunding website., and resume operation of the fundraising activities with a modified purpose – to fund the private construction of a wall along the southern border. They also announced that donors would need to “opt in” to transfer their previous donations to the new We Build the Wall, and in effect “re-raise” the $20 million previously donated.
Starting in 2019, the defendants mislead donors and the crowdfunding website. promising them that “100 percent” of the funds would be used for construction of a wall and that Kolfage would not take a salary or compensation from the new organization.
These false representations were made in solicitations, public statements, social media posts and press appearances by Kolfage and Bannon, and others acting at their direction. In fact, Kolfage issued statements that were false and misleading and reviewed and approved by Bannon and Botolato.
To reinforce these false representations, the defendants adopted bylaws for the non-profit organization that contained false representations that none of the defendants could or would receive any compensation from the funds raised. The defendants also promoted communications that none of the Advisory Board members, which was chaired by Bannon, would receive any compensation for their services. Bannon publicly stated that he and other principals were volunteers.
Bannon and Botalato text each other that the false public statements were important to drive donations and since it “removes all taint of self-interest.”
The false representations were important to many donors and repeated to reassure donors.
All four of the defendants worked together to misappropriate hundreds of thousands of dollars for their personal use. Kolfage took more than $350,000 for personal use, including home renovations, payments for a boat, a luxury SUV, a golf cart, jewelry, cosmetic surgery, personal tax payments and credit card debt. Bannon received over $1 million from We Build The Wall through a non-profit organization under his control, which he used for personal purposes.
The four defendants employed a scheme to route payments from We Build The Wall to Kolfage through Bannon’s non-profit organization and a shell company under Shea’s control. The defendants prepared fake invoices and sham “vendor” arrangements to ensure that the pay arrangement as Kolfage noted in a text message to Badolato remained “confidential” and kept on a “need to know” basis.
Kolfage specifically requested that a specific payment be routed to his spouse. Subsequently a false 1099 was issued to his spouse and listed the services provided as “media.”
In October 2019, the defendants learned they may be under criminal investigation. They switched to encrypted text messaging, revised the website to remove the representation that Kolfage would not be compensated and added a statement that Kolfage would receive a salary beginning in January 2020.
https://blog.volkovlaw.com/
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
Here is the AAI's statement about the brief:
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
Read the brief here: https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-for-proper-predominance-and-evidentiary-standards-in-antitrust-class-actions-in-re-packaged-seafood-antitrust-litig
The brief was written by AAI Vice President of Advocacy Randy Stutz, with assistance from AAI Board Member Ellen Meriwether of Cafferty Clobes Meriwether & Sprengel and AAI Research Fellow Henry Visser Melville.
Here is the AAI's statement about the brief:
AAI filed an amicus brief on August 21 urging the Ninth Circuit Court of Appeals to apply proper standards to class plaintiffs seeking to rely on statistical analysis as common evidence of antitrust impact in satisfying Rule 23’s predominance requirement for class certification.
In In re Packaged Seafood Antitrust Litig., a district court certified three classes of purchasers, including direct purchasers and two groups of indirect purchasers, seeking to recover for the confessed price fixing of the three leading producers of packaged tuna, Bumble Bee Foods LLC, Starkist, and Chicken of the Sea. The defendants had either sought leniency or pled guilty after a Department of Justice Investigation, and several of their executives have been sentenced to prison.
Unable to contest liability given their admissions, the defendants focused extensive resources and attention on defeating class certification. In district court proceedings, they introduced rebuttal experts seeking to counter plaintiffs’ economic experts, which had introduced statistical analysis attempting to show that the price fixing caused widespread injury across the respective classes. The district court, after a three-day evidentiary hearing, found plaintiffs’ experts more persuasive and held that the plaintiffs’ common statistical evidence of impact was sufficient to help satisfy Rule 23’s predominance requirement, though it allowed that defendants could still challenge the admissibility and probative value of the common statistical evidence at trial.
On interlocutory appeal, the defendants, supported by the U.S. Chamber of Commerce and the Washington Legal Foundation, argued that the district court erred by refusing to definitively resolve the battle of the experts at class certification, and that plaintiffs’ expert statistical analysis was inherently problematic because it relied on the average overcharges to the classes, thereby masking the possibility that some of the class members were uninjured by the price fixing. The defendants maintained that, because plaintiffs’ expert evidence could not necessarily sustain a jury finding for every class member, it should not be a permissible means of establishing that common questions would predominate at a class trial.
The AAI brief argued that the defendants’ and their amici’s arguments must be rejected under binding precedent and sound principles of competition policy. First, the defendants conflated proof of actual impact to each class member with the required Rule 23 showing, which is satisfied by evidence that is capable of supporting a prima facie showing of impact. Under binding Supreme Court precedent, such evidence need only be relevant and reliable to be admissible; it does not have to assure that each plaintiff would prevail on the merits of impact in an individual action.
Second, in the Ninth Circuit, the plain meaning canon applies to the Federal Rules. And the plain meaning of Rule 23’s requirement that common “questions” must predominate over individual questions at trial cannot be read to suggest that the questions’ answers must be determined to permit class certification.
Finally, any uninjured class members, which the district court found to be de minimis, may be identified after trial, and longstanding case law prevents defendants from capitalizing on the uncertainty created by their own illegal conduct, including uncertain damages calculations.
The AAI brief also argued that the court should unequivocally reject the defendants’ effort to cast categorical doubt on statistical analysis, and specifically regression modeling, in antitrust cases. Regression models frequently rely on averaging techniques, but that is not where they begin and end. Such models are routinely accepted as reliable methods of proving widespread injury to antitrust classes because econometric techniques can control for price changes caused by supply and demand factors and then focus on the uniformity of differences across class members to reliably show common impact.
Read the brief here: https://www.antitrustinstitute.org/work-product/aai-asks-ninth-circuit-for-proper-predominance-and-evidentiary-standards-in-antitrust-class-actions-in-re-packaged-seafood-antitrust-litig
The Tik-Tok Complaint against the US
You can read the Complaint here:
https://www.scribd.com/document/473516538/Tiktok-Trump-Complaint#from_embed?
A useful and skeptical analysis of the Tik-Tok Complaint is here:
Will TikTok Win Its Lawsuit Against Trump?
By Robert Chesney https://www.lawfareblog.com/will-tiktok-win-its-lawsuit-against-trump
DAR Comment: Chesney finds that some Tik-Tok arguments are stronger than others, but doubts that any will prevail. CFIUS is about national security, and the arguments that can prevail in the CFIUS context are narrow.
CFIUS proceedings tend to be quick and carried out without great transparency. The CFIUS process does not typically involve court review. There is a difference between the quick procedures the government follows in CFIUS national security matters and the more complex and slower procedures that apply in ordinary competition policy matters.
A point of the TikTok Complaint is that CFUIS rules and procedures and the government's use of them are unfair and unreasonable. It is a policy point worth pondering, but there is reason to doubt the effectiveness of that point in a court proceeding where the context involves allegations about national security.
Tik-Tok's public statement about its Complaint is here:
https://newsroom.tiktok.com/en-us/tiktok-files-lawsuit
Excerpts:
In our complaint we make clear that we believe the Administration ignored our extensive efforts to address its concerns, which we conducted fully and in good faith even as we disagreed with the concerns themselves:
"The executive order seeks to ban TikTok purportedly because of the speculative possibility that the application could be manipulated by the Chinese government. But, as the U.S. government is well aware, Plaintiffs have taken extraordinary measures to protect the privacy and security of TikTok’s U.S. user data, including by having TikTok store such data outside of China (in the United States and Singapore) and by erecting software barriers that help ensure that TikTok stores its U.S. user data separately from the user data of other ByteDance products. These actions were made known to the U.S. government during a recent U.S. national security review of ByteDance’s 2017 acquisition of a China-based company, Musical.ly. As part of that review, Plaintiffs provided voluminous documentation to the U.S. government documenting TikTok's security practices and made commitments that were more than sufficient to address any conceivable U.S. government privacy or national security concerns..."
* * *
Further, as we note in our complaint, not only does the Executive Order ignore due process, it also authorizes the prohibition of activities that have not been found to be "an unusual and extraordinary threat," as required by the International Emergency Economic Powers Act (IEEPA), under which the Administration is purportedly acting:
"By banning TikTok with no notice or opportunity to be heard (whether before or after the fact), the executive order violates the due process protections of the Fifth Amendment.
"The order is ultra vires because it is not based on a bona fide national emergency and authorizes the prohibition of activities that have not been found to pose 'an unusual and extraordinary threat.'"
In the complaint we also point to the fact that the August 6 Executive Order is a misuse of IEEPA:
"...the actions directed in the August 6 executive order are not supported by the emergency declared a year earlier in Executive Order 13873.
"That previous executive order was designed to address asserted U.S. national security concerns about certain telecommunications companies’ ability to abuse access to 'information and communications technology and services' that 'store and communicate vast amounts of sensitive information, facilitate the digital economy, and support critical infrastructure and vital emergency services, in order to commit malicious cyber-enabled actions, including economic and industrial espionage against the United States and its people.'
"TikTok Inc. is not a telecommunications provider and it does not provide the types of technology and services contemplated by the 2019 executive order. Specifically, TikTok Inc. does not provide the hardware backbone to 'facilitate the digital economy,' and TikTok Inc. has no role in providing 'critical infrastructure and vital emergency services.'"
In the complaint we also go into significant detail about the nearly year-long effort we made in good faith to provide the Committee on Foreign Investment in the United States (“CFIUS”) the voluminous information requested – was disregarded – and the numerous steps we offered to take in our commitment to transparency and cooperation:
"In 2019, CFIUS contacted ByteDance to consider whether to review its acquisition of Musical.ly, a China-based video-sharing platform—even though Musical.ly was based in China and had very limited assets in the United States. This review was highly unusual in that ByteDance had acquired Musical.ly two years earlier in 2017, Musical.ly was previously Chinese-owned and based in China, and ByteDance had predominantly abandoned Musical.ly’s limited U.S. assets by the time of CFIUS’s outreach in 2019.
"During this period, and through the course of the CFIUS review, ByteDance provided voluminous documentation and information in response to CFIUS’s questions. Among other evidence, ByteDance submitted detailed documentation to CFIUS demonstrating TikTok’s security measures to help ensure U.S. user data is safeguarded in storage and in transit and cannot be accessed by unauthorized persons—including any government—outside the United States.
"CFIUS never articulated any reason why TikTok’s security measures were inadequate to address any national security concerns, and effectively terminated formal communications with Plaintiffs well before the conclusion of the initial statutory review period. Notwithstanding the U.S. government's failure to identify any security risk, in an effort to address any conceivable concerns that the U.S. government may have and to assure continuity for the U.S. users who had come to value and cherish the platform that TikTok provides, Plaintiffs took the extraordinary step of offering to restructure their U.S. business...
"Despite these repeated efforts and concrete proposals to alleviate any national security concerns, the agency record reflects that CFIUS repeatedly refused to engage with ByteDance and its counsel about CFIUS’s concerns."
* * *
Likewise, in the August 6 Executive Order issued under IEEPA, the Administration failed to follow due process and act in good faith, neither providing evidence that TikTok was an actual threat, nor justification for its punitive actions. We believe the Administration's decisions were heavily politicized, and industry experts have said the same. As the complaint explains:
"The executive order is not rooted in bona fide national security concerns. Independent national security and information security experts have criticized the political nature of this executive order, and expressed doubt as to whether its stated national security objective is genuine...
"The President’s demands for payments have no relationship to any conceivable national security concern and serve only to underscore that Defendants failed to provide Plaintiffs with the due process required by law."
A three-judge Ninth Circuit panel upheld a lower court’s June 2018 ruling refusing to dismiss Oakland’s claims for lost property tax revenue under the Fair Housing Act.
However, the panel also upheld the dismissal of claims over increased city spending to tackle blight and unsafe conditions at abandoned homes.
Additionally, the panel ordered the lower court to reevaluate if Wells Fargo is inflicting an ongoing injury on Oakland that would justify the city’s request for an injunction to change the bank’s lending practices in the city going forward.
Oakland sued Wells Fargo in September 2015 claiming the bank steered minority homebuyers into predatory loans that caused hundreds of foreclosures, lost tax revenue, and increased costs of addressing problems with abandoned properties.
In June 2018, U.S. District Judge Edward Chen advanced Oakland’s claims for injunctive relief and lost tax revenue, finding Oakland’s proposed statistical analysis offered a “clear quantifiable link between [Wells Fargo’s] challenged practice and foreclosure rates and consequent harm to the city.”
The Ninth Circuit opinion is here:
https://www.courthousenews.com/wp-content/uploads/2020/08/OaklandWellsFargo-9CA.pdf
Case: 19-15169, 08/26/2020, ID: 11802959, DktEntry: 73-1
Excerpt:
The panel held that the allegations in Oakland’s amended complaint were sufficient to plead that its reduced property-tax revenues, but not its increased municipal expenses, were proximately caused by Wells Fargo’s discriminatory lending practices. Construing the amended complaint’s allegations in the light most favorable to the City, including the City’s proposed statistical regression analyses, the panel held that Oakland had plausibly alleged that its decrease in property-tax revenues had some direct and continuous relation to Wells Fargo’s discriminatory lending practices throughout much of the City.
However, the panel also upheld the dismissal of claims over increased city spending to tackle blight and unsafe conditions at abandoned homes.
Additionally, the panel ordered the lower court to reevaluate if Wells Fargo is inflicting an ongoing injury on Oakland that would justify the city’s request for an injunction to change the bank’s lending practices in the city going forward.
Oakland sued Wells Fargo in September 2015 claiming the bank steered minority homebuyers into predatory loans that caused hundreds of foreclosures, lost tax revenue, and increased costs of addressing problems with abandoned properties.
In June 2018, U.S. District Judge Edward Chen advanced Oakland’s claims for injunctive relief and lost tax revenue, finding Oakland’s proposed statistical analysis offered a “clear quantifiable link between [Wells Fargo’s] challenged practice and foreclosure rates and consequent harm to the city.”
The Ninth Circuit opinion is here:
https://www.courthousenews.com/wp-content/uploads/2020/08/OaklandWellsFargo-9CA.pdf
Case: 19-15169, 08/26/2020, ID: 11802959, DktEntry: 73-1
Excerpt:
The panel held that the allegations in Oakland’s amended complaint were sufficient to plead that its reduced property-tax revenues, but not its increased municipal expenses, were proximately caused by Wells Fargo’s discriminatory lending practices. Construing the amended complaint’s allegations in the light most favorable to the City, including the City’s proposed statistical regression analyses, the panel held that Oakland had plausibly alleged that its decrease in property-tax revenues had some direct and continuous relation to Wells Fargo’s discriminatory lending practices throughout much of the City.
NYPD's Terrorism Official Says Anarchist Groups Planned George Floyd Protest Violence in Advance
By Tom Winter, Andrew Blankstein and Jonathan Dienst • Published May 31, 2020 • Updated on June 1, 2020 at 9:05 am
Excerpts:
New York's top terrorism official says there's evidence that members of anarchist groups from outside the city intentionally planned to incite violence at protests calling for justice in the death of George Floyd.
Deputy Commissioner for Intelligence and Counterterrorism John Miller said there is a high level of confidence within the NYPD that these unnamed groups had organized scouts, medics, and supply routes of rocks, bottles and accelerants for breakaway groups to commit vandalism and violence. There are strong indicators they planned for violence in advance using at times encrypted communications, he said.
One out of every seven arrests, of 686 so far since May 28, has been people from out of state, according to Miller. He said those arrested came from Massachusettes, Connecticut, Pennsylvania, New Jersey, Iowa, Nevada, Virginia, Maryland, Texas and St. Paul, Minnesota.
"Before the protests began, organizers of certain anarchists groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police," Miller said.
He added, "They prepared to commit property damage and directed people who were following them that this should be done selectively and only in wealthier areas or at high-end stores run by corporate entities."
Without specifying who "they" are, Miller said the agitators "developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be."
Mayor Bill de Blasio said Sunday morning that the members of the anarchist movement plan together online and that "they have explicit rules, and we're going to make all this information available today and in the days ahead."
Among the out-of-area instigators were two sisters from upstate New York. They were detained after one threw a Molotov cocktail at a police van. The woman who threw the Molotov cocktail will face federal charges from prosecutors in Brooklyn, law enforcement source said.
https://www.nbcnewyork.com/news/local/nypds-terrorism-chief-says-unnamed-groups-planned-protest-violence-in-advance/2440722/
By Tom Winter, Andrew Blankstein and Jonathan Dienst • Published May 31, 2020 • Updated on June 1, 2020 at 9:05 am
Excerpts:
New York's top terrorism official says there's evidence that members of anarchist groups from outside the city intentionally planned to incite violence at protests calling for justice in the death of George Floyd.
Deputy Commissioner for Intelligence and Counterterrorism John Miller said there is a high level of confidence within the NYPD that these unnamed groups had organized scouts, medics, and supply routes of rocks, bottles and accelerants for breakaway groups to commit vandalism and violence. There are strong indicators they planned for violence in advance using at times encrypted communications, he said.
One out of every seven arrests, of 686 so far since May 28, has been people from out of state, according to Miller. He said those arrested came from Massachusettes, Connecticut, Pennsylvania, New Jersey, Iowa, Nevada, Virginia, Maryland, Texas and St. Paul, Minnesota.
"Before the protests began, organizers of certain anarchists groups set out to raise bail money and people who would be responsible to be raising bail money, they set out to recruit medics and medical teams with gear to deploy in anticipation of violent interactions with police," Miller said.
He added, "They prepared to commit property damage and directed people who were following them that this should be done selectively and only in wealthier areas or at high-end stores run by corporate entities."
Without specifying who "they" are, Miller said the agitators "developed a complex network of bicycle scouts to move ahead of demonstrators in different directions of where police were and where police were not for purposes of being able to direct groups from the larger group to places where they could commit acts of vandalism including the torching of police vehicles and Molotov cocktails where they thought officers would not be."
Mayor Bill de Blasio said Sunday morning that the members of the anarchist movement plan together online and that "they have explicit rules, and we're going to make all this information available today and in the days ahead."
Among the out-of-area instigators were two sisters from upstate New York. They were detained after one threw a Molotov cocktail at a police van. The woman who threw the Molotov cocktail will face federal charges from prosecutors in Brooklyn, law enforcement source said.
https://www.nbcnewyork.com/news/local/nypds-terrorism-chief-says-unnamed-groups-planned-protest-violence-in-advance/2440722/
DC AG on home improvement abuse
DAR Comment: When I've helped as a volunteer attorney with the DC Bar pro bono clinic, I've been impressed by the many instances when property owners failed to take basic steps to protect themselves from home improvement abuse. The consumer guide on the DC AG's website talks about those steps, some of which are copied below:
HOME IMPROVEMENT ABUSE
Remodeling or performing construction on your home may require a contractor. There are a few things you can do to ensure that you find someone reputable:
Research contractors before hiring them. Find out whether a contractor’s license is valid and up to date. To verify a D.C. contractor’s license, call the Department of Consumer and Regulatory Affairs at (202) 442-4311. You can also call Office of the Attorney General’s Office of Consumer Protection or check online to see if there are complaints against a particular contractor. Request written estimates from several contractors.
Request a copy of the contractor’s personal liability, worker’s compensation, and property damage coverage insurance.
Obtain a written contract describing the work to be performed and make sure the contract states that it is the contractor’s obligation to get all necessary permits.
Keep a record of all meetings, phone conversations, and payments.
Do not obtain a home equity loan from your contractor unless you have shopped around for a loan first and compared rates and terms. For a list of approved lenders in your area, visit http://www.hud.gov/ll/code/ llslcrit.cfm or call (800) 225-5342. CONSUMER HOTLINE — (202) 442-9828 15
Be wary of a contractor who claims to have “leftover” material from another job or who “just happens to be in the neighborhood.”
Do not hire a contractor who only accepts cash.
Avoid paying the full price up front. You can ask to pay only a deposit at the beginning of a job and withhold the final payment until the work is completed and passes any required inspection.
See https://oag.dc.gov/sites/default/files/2019-04/2016-06-30%20Consumer%20Protection%20Guide%20FINAL_06_15_17_SinglePage.pdf
DAR Comment: When I've helped as a volunteer attorney with the DC Bar pro bono clinic, I've been impressed by the many instances when property owners failed to take basic steps to protect themselves from home improvement abuse. The consumer guide on the DC AG's website talks about those steps, some of which are copied below:
HOME IMPROVEMENT ABUSE
Remodeling or performing construction on your home may require a contractor. There are a few things you can do to ensure that you find someone reputable:
Research contractors before hiring them. Find out whether a contractor’s license is valid and up to date. To verify a D.C. contractor’s license, call the Department of Consumer and Regulatory Affairs at (202) 442-4311. You can also call Office of the Attorney General’s Office of Consumer Protection or check online to see if there are complaints against a particular contractor. Request written estimates from several contractors.
Request a copy of the contractor’s personal liability, worker’s compensation, and property damage coverage insurance.
Obtain a written contract describing the work to be performed and make sure the contract states that it is the contractor’s obligation to get all necessary permits.
Keep a record of all meetings, phone conversations, and payments.
Do not obtain a home equity loan from your contractor unless you have shopped around for a loan first and compared rates and terms. For a list of approved lenders in your area, visit http://www.hud.gov/ll/code/ llslcrit.cfm or call (800) 225-5342. CONSUMER HOTLINE — (202) 442-9828 15
Be wary of a contractor who claims to have “leftover” material from another job or who “just happens to be in the neighborhood.”
Do not hire a contractor who only accepts cash.
Avoid paying the full price up front. You can ask to pay only a deposit at the beginning of a job and withhold the final payment until the work is completed and passes any required inspection.
See https://oag.dc.gov/sites/default/files/2019-04/2016-06-30%20Consumer%20Protection%20Guide%20FINAL_06_15_17_SinglePage.pdf
NYT: Concierge care, which offers personalized medical services for people who can afford it, has grown fast in the pandemic as patients seek direct access to physicians.
Basic telemedicine can bring with it cumbersome insurance protocols and hard-to-navigate health care portals. Concierge care, which is typically not covered by insurance, gets around restrictions placed on doctors and other health care providers. But it comes at a steep cost: Prices for services can be two to three times higher, and that comes on top of annual fees.
When more than 173,000 people in the United States have died from the coronavirus and millions of Americans remain out of work, the growing interest in concierge medical services may seem out of touch with the devastation the pandemic has inflicted.
But the concept is expanding in other areas. The affluent are able to pay a premium for a luxury pursuit that was relatively affordable before the coronavirus crisis, like pampering themselves with a private manicure or hiring a personal trainer for a home workout.
Doctors say they have had to expand their services or create new ones to meet the expectations of their wealthy patients.
From: https://www.nytimes.com/2020/08/24/business/doctors-are-offering-direct-access-in-the-pandemic-for-those-who-can-afford-it.html
Basic telemedicine can bring with it cumbersome insurance protocols and hard-to-navigate health care portals. Concierge care, which is typically not covered by insurance, gets around restrictions placed on doctors and other health care providers. But it comes at a steep cost: Prices for services can be two to three times higher, and that comes on top of annual fees.
When more than 173,000 people in the United States have died from the coronavirus and millions of Americans remain out of work, the growing interest in concierge medical services may seem out of touch with the devastation the pandemic has inflicted.
But the concept is expanding in other areas. The affluent are able to pay a premium for a luxury pursuit that was relatively affordable before the coronavirus crisis, like pampering themselves with a private manicure or hiring a personal trainer for a home workout.
Doctors say they have had to expand their services or create new ones to meet the expectations of their wealthy patients.
From: https://www.nytimes.com/2020/08/24/business/doctors-are-offering-direct-access-in-the-pandemic-for-those-who-can-afford-it.html
AG Barr says he’ll review stalled Wyoming coal merger
DAR Comment: The local Wyoming press report below indicates that AG Barr will review the proposed joint venture between Arch Coal and Peabody Energy that has been challenged by the FTC. A number of antitrust lawyers and economists who support strong enforcement have complained about Barr’s role, for several reasons. For one, some antitrust experts think it is inappropriate for the head of the USDOJ to comment on the work of the FTC (although in the past Barr’s USDOJ has actually filed in court against the FTC’s challenge to Qualcomm). Also, Barr’s support of an Arch/Peabody joint venture for the purpose of stabilizing production in response to changing demand is contrary to established case law. The Arch/Peabody position in some ways resembles the argument of book publishers that they should be allowed to coordinate on price in order to provide a counter to Amazon as the dominant force in electronic book distribution. Some critics see Barr’s position as influenced by political considerations in support of the President, rather than antitrust law principles. The President has promised support for the coal industry.
https://trib.com/news/state-and-regional/attorney-general-says-he-will-look-into-stalled-wyoming-coal-venture/article_3b20f273-5d9c-5908-92da-ab2d89619f4a.html
by Nick Reynolds
Aug 13, 2020 Updated Aug 14, 2020
– U.S. Attorney General William Barr said he would look into stalled joint venture between two of Wyoming’s largest coal operators after meeting with Gov. Mark Gordon on Thursday morning.
The joint venture between Arch Coal and Peabody Energy was pitched by the two companies last year as a way to improve price stability and keep two of the state’s largest coal mines viable as the industry continues to suffer from bankruptcies spurred by massive declines coal demand following a decade of coal plant closures in favor of new natural gas plants.
The Federal Trade Commission, however, rejected the deal, saying it would reduce competition in coal markets. That left both companies in a precarious financial position at a time when the Trump administration has pushed for a resurgence in coal within the United States’ efforts for energy independence.
DAR Comment: Following is the FTC press release explaining the agencies challenge to the joint venture:
FTC Files Suit to Block Joint Venture between Coal Mining Companies Peabody Energy Corporation and Arch Coal
February 26, 2020
For Release
The Federal Trade Commission has filed an administrative complaint challenging a proposed joint venture between Peabody Energy Corporation and Arch Coal. The transaction would combine their coal mining operations in the Southern Powder River Basin, located in northeastern Wyoming.
The complaint [ https://www.ftc.gov/system/files/documents/cases/d09391_peabody_energy-arch_coal_administrative_complaint_0.pdf ] alleges that the transaction will eliminate competition between Peabody and Arch Coal, which are the two major competitors in the market for thermal coal in the Southern Powder River Basin, or SPRB, and the two largest coal-mining companies in the United States.
The FTC has also authorized staff to file a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri, to maintain the status quo pending an administrative trial on the merits.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices. This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition.
The complaint alleges that, in 2018, Peabody and Arch Coal produced more than 60 percent of all SPRB coal mined. The complaint also states that these firms collectively control more than 60 percent of SPRB coal reserves. SPRB coal is attractive to electric power producers in the central United States and upper Midwest because the deposits are relatively inexpensive to extract compared to deposits elsewhere, according to the complaint. The deposits’ sulfur and sodium content allow electric power plants to burn significant quantities without violating environmental regulations. The complaint alleges that owners of power generation units designed to burn SPRB coal have high fixed costs, and these units cannot readily replace SPRB coal with natural gas, wind, sun, or nuclear fuels.
DAR Comment: The following news report concerns the position of the State of Wyoming concerning the Arch/Peabody joint venture:
Wyoming sides with Peabody-Arch over proposed coal venture
The state of Wyoming once again threw its support behind a proposed joint venture involving two of its leading coal operators this week.
In an amicus curiae brief filed Tuesday in the U.S. District Court for the Eastern District of Missouri, state attorneys opposed the Federal Trade Commission’s recent move to block the joint venture proposed by coal firms Peabody Energy Corp. and Arch Resources Inc.
In February, the FTC filed a preliminary injunction to stop Peabody and Arch’s attempt to combine their coal operations under one roof. The two companies operate five coal mines in Wyoming and hoped to join ventures and reduce costs. But the FTC, charged with protecting consumers, is concerned the move could stifle competition and hurt the public by hiking up prices for coal.
The two coal firms control about two-thirds of the southern Powder River Basin’s coal reserves, making them the biggest players in the basin.
In response to the federal agency’s decision to halt the venture and take the coal operators to court, Gov. Mark Gordon and the Wyoming Attorney General’s Office reaffirmed their support of the coal companies’ plan.
“In Wyoming’s view, the benefits of the proposed joint venture to the public plainly outweigh the unlikely anti-competitive effects,” Deputy Attorney General James Kaste wrote in court documents. “It just does not make sense to Wyoming that the merged entity can or will raise prices; effectively cutting off its nose to spite its face. Nor does it makes sense to Wyoming to conclude that a reduction in production is anti-competitive rather than a reasonable and necessary response to reduced demand. A healthy, albeit consolidated, coal production industry benefits the mines, the miners, the State, its citizens, and the public at large.”
The coal operators have said the joint venture would increase their cost competitiveness and help them survive. Coal’s ranking in the power generation market has been under siege in recent years with the expansion of affordable natural gas and renewable energy.
In response to these rapidly changing conditions, coal operators, including Peabody and Arch, have been hunting for ways to cut costs and keep their foothold in the electricity markets. The joint venture would save the companies roughly $120 million each year for the next decade during a time when the firms must operate amidst thermal coal’s brutal market conditions, the firms argue.
Peabody owns the North Antelope Rochelle mine, the largest coal mine in the country. Arch Resources owns neighboring Black Thunder. In addition to these two mammoth mines, the joint venture would include the Rawhide, Caballo and Coal Creek mines in the Powder River Basin, as well as a pair of mines in Colorado.
Gov. Mark Gordon immediately opposed the FTC’s decision back in February too, calling the decision “a nail into an industry which is struggling to adapt to a rapidly changing marketplace.” He also cited the potential job losses at coal mines in the basin if controlled consolidation does not occur.
Production losses in coal country have significant consequences for the state — heightening unemployment and exacerbating revenue shortfalls. One in 10 jobs in the Powder River Basin depends on coal, according to research conducted by University of Wyoming economist Rob Godby in 2015. Last quarter, the coal industry supported some 4,500 jobs.
A combined Peabody and Arch venture would likely translate into more stability and certainty for the coal-dependent state, the Attorney General’s Office outlined in court documents. Overcapacity in the basin (or too many coal operators vying for too few customers) has sent five firms operating in the Powder River Basin into bankruptcy since 2015.
Posting on Arch/Peabody by Don Allen Resnikoff
DAR Comment: The local Wyoming press report below indicates that AG Barr will review the proposed joint venture between Arch Coal and Peabody Energy that has been challenged by the FTC. A number of antitrust lawyers and economists who support strong enforcement have complained about Barr’s role, for several reasons. For one, some antitrust experts think it is inappropriate for the head of the USDOJ to comment on the work of the FTC (although in the past Barr’s USDOJ has actually filed in court against the FTC’s challenge to Qualcomm). Also, Barr’s support of an Arch/Peabody joint venture for the purpose of stabilizing production in response to changing demand is contrary to established case law. The Arch/Peabody position in some ways resembles the argument of book publishers that they should be allowed to coordinate on price in order to provide a counter to Amazon as the dominant force in electronic book distribution. Some critics see Barr’s position as influenced by political considerations in support of the President, rather than antitrust law principles. The President has promised support for the coal industry.
https://trib.com/news/state-and-regional/attorney-general-says-he-will-look-into-stalled-wyoming-coal-venture/article_3b20f273-5d9c-5908-92da-ab2d89619f4a.html
by Nick Reynolds
Aug 13, 2020 Updated Aug 14, 2020
– U.S. Attorney General William Barr said he would look into stalled joint venture between two of Wyoming’s largest coal operators after meeting with Gov. Mark Gordon on Thursday morning.
The joint venture between Arch Coal and Peabody Energy was pitched by the two companies last year as a way to improve price stability and keep two of the state’s largest coal mines viable as the industry continues to suffer from bankruptcies spurred by massive declines coal demand following a decade of coal plant closures in favor of new natural gas plants.
The Federal Trade Commission, however, rejected the deal, saying it would reduce competition in coal markets. That left both companies in a precarious financial position at a time when the Trump administration has pushed for a resurgence in coal within the United States’ efforts for energy independence.
DAR Comment: Following is the FTC press release explaining the agencies challenge to the joint venture:
FTC Files Suit to Block Joint Venture between Coal Mining Companies Peabody Energy Corporation and Arch Coal
February 26, 2020
For Release
The Federal Trade Commission has filed an administrative complaint challenging a proposed joint venture between Peabody Energy Corporation and Arch Coal. The transaction would combine their coal mining operations in the Southern Powder River Basin, located in northeastern Wyoming.
The complaint [ https://www.ftc.gov/system/files/documents/cases/d09391_peabody_energy-arch_coal_administrative_complaint_0.pdf ] alleges that the transaction will eliminate competition between Peabody and Arch Coal, which are the two major competitors in the market for thermal coal in the Southern Powder River Basin, or SPRB, and the two largest coal-mining companies in the United States.
The FTC has also authorized staff to file a complaint for a temporary restraining order and preliminary injunction in the U.S. District Court for the Eastern District of Missouri, to maintain the status quo pending an administrative trial on the merits.
“Whatever the product, the antitrust laws protect customers from mergers that lead to higher prices. This joint venture would eliminate the substantial head-to-head competition between the two largest coal miners in the United States, and that loss of competition would likely raise coal prices to power-generating utilities that provide electricity to millions of Americans,” said Ian Conner, Director of the FTC’s Bureau of Competition.
The complaint alleges that, in 2018, Peabody and Arch Coal produced more than 60 percent of all SPRB coal mined. The complaint also states that these firms collectively control more than 60 percent of SPRB coal reserves. SPRB coal is attractive to electric power producers in the central United States and upper Midwest because the deposits are relatively inexpensive to extract compared to deposits elsewhere, according to the complaint. The deposits’ sulfur and sodium content allow electric power plants to burn significant quantities without violating environmental regulations. The complaint alleges that owners of power generation units designed to burn SPRB coal have high fixed costs, and these units cannot readily replace SPRB coal with natural gas, wind, sun, or nuclear fuels.
DAR Comment: The following news report concerns the position of the State of Wyoming concerning the Arch/Peabody joint venture:
Wyoming sides with Peabody-Arch over proposed coal venture
- Camille Erickson
- Jul 10, 2020 Updated Aug 14, 2020
The state of Wyoming once again threw its support behind a proposed joint venture involving two of its leading coal operators this week.
In an amicus curiae brief filed Tuesday in the U.S. District Court for the Eastern District of Missouri, state attorneys opposed the Federal Trade Commission’s recent move to block the joint venture proposed by coal firms Peabody Energy Corp. and Arch Resources Inc.
In February, the FTC filed a preliminary injunction to stop Peabody and Arch’s attempt to combine their coal operations under one roof. The two companies operate five coal mines in Wyoming and hoped to join ventures and reduce costs. But the FTC, charged with protecting consumers, is concerned the move could stifle competition and hurt the public by hiking up prices for coal.
The two coal firms control about two-thirds of the southern Powder River Basin’s coal reserves, making them the biggest players in the basin.
In response to the federal agency’s decision to halt the venture and take the coal operators to court, Gov. Mark Gordon and the Wyoming Attorney General’s Office reaffirmed their support of the coal companies’ plan.
“In Wyoming’s view, the benefits of the proposed joint venture to the public plainly outweigh the unlikely anti-competitive effects,” Deputy Attorney General James Kaste wrote in court documents. “It just does not make sense to Wyoming that the merged entity can or will raise prices; effectively cutting off its nose to spite its face. Nor does it makes sense to Wyoming to conclude that a reduction in production is anti-competitive rather than a reasonable and necessary response to reduced demand. A healthy, albeit consolidated, coal production industry benefits the mines, the miners, the State, its citizens, and the public at large.”
The coal operators have said the joint venture would increase their cost competitiveness and help them survive. Coal’s ranking in the power generation market has been under siege in recent years with the expansion of affordable natural gas and renewable energy.
In response to these rapidly changing conditions, coal operators, including Peabody and Arch, have been hunting for ways to cut costs and keep their foothold in the electricity markets. The joint venture would save the companies roughly $120 million each year for the next decade during a time when the firms must operate amidst thermal coal’s brutal market conditions, the firms argue.
Peabody owns the North Antelope Rochelle mine, the largest coal mine in the country. Arch Resources owns neighboring Black Thunder. In addition to these two mammoth mines, the joint venture would include the Rawhide, Caballo and Coal Creek mines in the Powder River Basin, as well as a pair of mines in Colorado.
Gov. Mark Gordon immediately opposed the FTC’s decision back in February too, calling the decision “a nail into an industry which is struggling to adapt to a rapidly changing marketplace.” He also cited the potential job losses at coal mines in the basin if controlled consolidation does not occur.
Production losses in coal country have significant consequences for the state — heightening unemployment and exacerbating revenue shortfalls. One in 10 jobs in the Powder River Basin depends on coal, according to research conducted by University of Wyoming economist Rob Godby in 2015. Last quarter, the coal industry supported some 4,500 jobs.
A combined Peabody and Arch venture would likely translate into more stability and certainty for the coal-dependent state, the Attorney General’s Office outlined in court documents. Overcapacity in the basin (or too many coal operators vying for too few customers) has sent five firms operating in the Powder River Basin into bankruptcy since 2015.
Posting on Arch/Peabody by Don Allen Resnikoff
The Decline of College Free Speech Zones
Jul 2, 2020
Nicole Divers
The term “free speech zone” can be misleading. While the name implies a policy that promotes free expression, free speech zones do the opposite. They confine political demonstrations to a small, often secluded, area on campus and typically require students to get advance permission to demonstrate.
In Oregon, a pro-life group, Students for Life, filed a lawsuit [http://www.adfmedia.org/files/ChemeketaComplaint.pdf] against Chemeketa Community College in May to challenge the college’s free speech zone policy.
The college restricts outdoor speech to two small “free speech areas” and requires a two-week notice to use them. Students for Life claims that the policy violates their right to free speech and that the required notice prevents them from engaging in spontaneous political expression.
Even at schools that claim to have eliminated their free speech zone policies, though, colleges still restrict speech. In 2003, Western Illinois University said that it would eliminate its free speech area policy. However, when students protested to legalize marijuana in 2019, campus police told them to stop because they were outside the school’s free speech zone.
Thankfully, colleges have been cleaning up their act in recent years: free speech zones are on the decline. According to FIRE’s 2020 Spotlight on Speech Codes, only 8.3 percent of surveyed schools enforced free speech zone policies, down from 10.5 percent in 2019.
State legislatures have also acted against free speech zones. Seventeen states have passed legislation preventing free speech zone policies: Virginia, Missouri, Arizona, Kentucky, Colorado, Utah, North Carolina, Tennessee, Florida, Georgia, Louisiana, Arkansas, South Dakota, Iowa, Alabama, Oklahoma, and Texas.
Those annoying limitations on students exercising their Constitutional rights on campus may soon be a relic of the past.
Nicole Divers is a Martin Center intern and a senior at the University of North Carolina at Chapel Hill.
Source: https://www.jamesgmartin.center/2020/07/did-you-know-the-decline-of-free-speeech-zones/
Jul 2, 2020
Nicole Divers
The term “free speech zone” can be misleading. While the name implies a policy that promotes free expression, free speech zones do the opposite. They confine political demonstrations to a small, often secluded, area on campus and typically require students to get advance permission to demonstrate.
In Oregon, a pro-life group, Students for Life, filed a lawsuit [http://www.adfmedia.org/files/ChemeketaComplaint.pdf] against Chemeketa Community College in May to challenge the college’s free speech zone policy.
The college restricts outdoor speech to two small “free speech areas” and requires a two-week notice to use them. Students for Life claims that the policy violates their right to free speech and that the required notice prevents them from engaging in spontaneous political expression.
Even at schools that claim to have eliminated their free speech zone policies, though, colleges still restrict speech. In 2003, Western Illinois University said that it would eliminate its free speech area policy. However, when students protested to legalize marijuana in 2019, campus police told them to stop because they were outside the school’s free speech zone.
Thankfully, colleges have been cleaning up their act in recent years: free speech zones are on the decline. According to FIRE’s 2020 Spotlight on Speech Codes, only 8.3 percent of surveyed schools enforced free speech zone policies, down from 10.5 percent in 2019.
State legislatures have also acted against free speech zones. Seventeen states have passed legislation preventing free speech zone policies: Virginia, Missouri, Arizona, Kentucky, Colorado, Utah, North Carolina, Tennessee, Florida, Georgia, Louisiana, Arkansas, South Dakota, Iowa, Alabama, Oklahoma, and Texas.
Those annoying limitations on students exercising their Constitutional rights on campus may soon be a relic of the past.
Nicole Divers is a Martin Center intern and a senior at the University of North Carolina at Chapel Hill.
Source: https://www.jamesgmartin.center/2020/07/did-you-know-the-decline-of-free-speeech-zones/
Consumer advocates call for investigation of Paypal on student loans
https://protectborrowers.org/wp-content/uploads/2020/08/PayPal-Credit-letter-Regulators.pdf
Excerpt:
[T]he results of an investigation by the Student Borrower Protection Center (SBPC) indicate that PayPal Credit is currently providing its products as high cost education financing options that can leave borrowers in significant distress with few protections. Further, PayPal Credit is being used to prop up a wide range of for-profit educational institutions, many of them bearing the hallmarks of schools that have cheated or failed borrowers in the past. We write today to warn of the significant consumer harm that PayPal Credit may be driving and to call for an immediate investigation into PayPal, Synchrony Bank, and their business practices related to PayPal Credit.
https://protectborrowers.org/wp-content/uploads/2020/08/PayPal-Credit-letter-Regulators.pdf
Excerpt:
[T]he results of an investigation by the Student Borrower Protection Center (SBPC) indicate that PayPal Credit is currently providing its products as high cost education financing options that can leave borrowers in significant distress with few protections. Further, PayPal Credit is being used to prop up a wide range of for-profit educational institutions, many of them bearing the hallmarks of schools that have cheated or failed borrowers in the past. We write today to warn of the significant consumer harm that PayPal Credit may be driving and to call for an immediate investigation into PayPal, Synchrony Bank, and their business practices related to PayPal Credit.
WSJ: Community development financial institutions, or CDFIs, are community-based banks, credit unions and investment funds that lend to home buyers, small businesses and others in rural, impoverished and minority communities.
Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. GS -0.87% and Bank of America Corp., BAC -1.43% and new corporate supporters such as Netflix Inc. NFLX 1.97% and Google Inc.
Google joined with the Opportunity Finance Network, a membership group for CDFIs, to launch a $125 million fund for the industry. Goldman, Bank of America, Morgan Stanley, Citigroup Inc. and Wells Fargo & Co., all of which had existing relationships with CDFIs, have in recent months announced investments—in the form of grants or capital to fund PPP and other loans—ranging from $5 million to $750 million.
There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.
CDFIs are meant to redress racial and economic disparities. For example, the Opportunity Finance Network, based on a 2018 survey, estimates 58% of the clients served by its roughly 300 members are people of color, 85% are low-income and 48% are women.
From: https://www.wsj.com/articles/renewed-focus-on-race-triggers-surge-of-interest-in-community-based-lenders-11597743000?mod=business_major_pos4
Earlier this year, Congress and the Trump administration earmarked billions of dollars for CDFIs to issue Paycheck Protection Program loans to small businesses. Meanwhile, CDFIs have received multimillion-dollar investments from traditional lenders such as Goldman Sachs Group Inc. GS -0.87% and Bank of America Corp., BAC -1.43% and new corporate supporters such as Netflix Inc. NFLX 1.97% and Google Inc.
Google joined with the Opportunity Finance Network, a membership group for CDFIs, to launch a $125 million fund for the industry. Goldman, Bank of America, Morgan Stanley, Citigroup Inc. and Wells Fargo & Co., all of which had existing relationships with CDFIs, have in recent months announced investments—in the form of grants or capital to fund PPP and other loans—ranging from $5 million to $750 million.
There are about 1,100 CDFIs nationwide. Under a program created in 1994, the Treasury Department’s CDFI Fund certifies CDFIs and provides them with grants, low-cost credit and operational support. Demand for CDFI Fund grants and support typically far exceeds Congress’s yearly appropriations.
CDFIs are meant to redress racial and economic disparities. For example, the Opportunity Finance Network, based on a 2018 survey, estimates 58% of the clients served by its roughly 300 members are people of color, 85% are low-income and 48% are women.
From: https://www.wsj.com/articles/renewed-focus-on-race-triggers-surge-of-interest-in-community-based-lenders-11597743000?mod=business_major_pos4
When antitrust prosecutors act on political motives: judicial review of antitrust consent decrees under the Tunney Act
There is a growing perception that U.S. Government antitrust prosecutors are acting improperly and pursuing political rather than impartial goals. A question that follows is whether the courts can step in and restrain such behavior. As discussed in this brief note, an important judicial role in response to abuse of prosecutorial discretion is for the courts to more aggressively review antitrust settlements, using sometimes neglected settlement review provisions of the decades-old Tunney Act
Law professor Chris Sagers recently opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
Among other things, Sagers talks about USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers now finds the allegations “hard to doubt.”
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s own guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
Waller supports the thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
Requiring antitrust prosecutors to be clear in explaining prosecutorial decisions reduces the opportunity for furtive pursuit of narrow and partisan political goals. A further and more difficult question is whether courts should have any role to play in reviewing USDOJ exercise of prosecutorial discretion.
An important opportunity for the courts to play a reviewing role occurs when the USDOJ elects to settle an antitrust matter and enter a consent decree. The Tunney Act, passed in 1974, and amended in 2004, requires a public interest showing before a consent decree can be accepted by the court.
Darren Bush explains in his article The Death of the Tunney Act at the Hands of an Activist D.C. Circuit (April 11, 2018). Antitrust Bulletin, Vol. 63, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3161181 that some courts, particularly D.C. courts, have limited the Tunney Act because of Constitutional concerns about separation of powers – the courts don’t want to overrule prosecutor’s judgments and decide what cases should or should not be prosecuted. Bush calls that view “disingenuous,” pointing out that separation of powers is really not in issue in the context of a consent decree. The court’s acceptance or rejection of a consent decree does not supplant exercise of prosecutorial discretion about whether and how to move forward with a matter. Bush also points out that concerns about separation of powers do not block the courts’ traditional role in reviewing sufficiency of remedies proposed by government prosecutors.
A thought provoking and relevant story about judicial review of questionable prosecutorial action recently arose in a context removed from antitrust. That is the extraordinary story of USDOJ’s request to United States District Judge Emmet G. Sullivan to dismiss the felony charge against President Trump’s former National Security Advisor, Michael T. Flynn. The unusual circumstance that Flynn had pled guilty and was awaiting sentencing gave the trial court a strong reason to be interested in the government’s motives. Despite the circumstances, the Government urged that Judge Sullivan had little choice but to grant the motion to dismiss, notwithstanding that the relevant Court rule requires “leave of court.” (Rule 48(a))
Commenters have pointed out that the Rule 48(a) “leave of court” requirement for government dismissal of a criminal action was purposefully added by the U.S. Supreme Court in 1944 with the goal of arming district judges with a powerful tool to halt corrupt or politically motivated dismissals of cases. See https://www.stanfordlawreview.org/online/why-do-rule-48a-dismissals-require-leave-of-court/
Judge Griffith at the August 11, 2020 en banc federal circuit court hearing concerning the Flynn case posed questions suggesting that the district court’s role in reviewing the government dismissal motion is more than ministerial. (See the video of the hearing at https://www.c-span.org/video/?474473-1/michael-flynn-perjury-dismissal-case-rehearing , beginning at approximately minute 18.) Judge Griffith says at one point about the court’s Rule 48(a) decision: “It’s not ministerial, you know that. … The judge has to do some thinking about it. He’s not simply a rubber stamp.”
Judge Robert Wilkins asked Flynn’s defense attorney Sidney Powell a hypothetical: If a group of nuns approached the court to say they had video footage of a prosecutor taking a bribe from a defendant to dismiss a case, should that judge be allowed to investigate a motion to dismiss? Powell said that no, even in such a case the trial judge “cannot go behind the prosecutors’ decision to dismiss a case.”
Returning to Chris Sagers’ comments about political misuse by prosecutors in antitrust cases, are there ways to apply to antitrust cases the very serious concern expressed in the Flynn matter: that the courts not be a rubber stamp for bad prosecutorial behavior? One way is vigorous application of Tunney Act review procedures for settlement consent decrees as advocated in Darren Bush’s article. Heightened concerns about political misuse of antitrust provide a rationale for reviving and strengthening the original Tunney Act idea that in appropriate situations the courts should have more than a ministerial role in reviewing case settlements. It is worth remembering that Tunney Act judicial review of USDOJ antitrust settlements came about because of what Senator Tunney decried as “a massive behind-closed-doors campaign [that] resulted in halting of the prosecution of the ITT case and its hasty settlement favorable to the Company.”
By Don Allen Resnikoff, who takes full responsibility for the content
There is a growing perception that U.S. Government antitrust prosecutors are acting improperly and pursuing political rather than impartial goals. A question that follows is whether the courts can step in and restrain such behavior. As discussed in this brief note, an important judicial role in response to abuse of prosecutorial discretion is for the courts to more aggressively review antitrust settlements, using sometimes neglected settlement review provisions of the decades-old Tunney Act
Law professor Chris Sagers recently opined that President Trump’s U.S. Antitrust chief enforcer Delrahim “briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks." See https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
Among other things, Sagers talks about USDOJ’s challenge to the AT&T/Time Warner merger. Sagers discusses the allegations that the USDOJ action was pursued to punish President Trump’s political enemy, Time Warner’s CNN. Sagers now finds the allegations “hard to doubt.”
Spencer Waller’s article The Political Misuse of Antitrust https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/ , helpfully reviews the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Among them is the USDOJ’s own guidance on the impropriety of government prosecutorial decisions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
Waller supports the thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
Requiring antitrust prosecutors to be clear in explaining prosecutorial decisions reduces the opportunity for furtive pursuit of narrow and partisan political goals. A further and more difficult question is whether courts should have any role to play in reviewing USDOJ exercise of prosecutorial discretion.
An important opportunity for the courts to play a reviewing role occurs when the USDOJ elects to settle an antitrust matter and enter a consent decree. The Tunney Act, passed in 1974, and amended in 2004, requires a public interest showing before a consent decree can be accepted by the court.
Darren Bush explains in his article The Death of the Tunney Act at the Hands of an Activist D.C. Circuit (April 11, 2018). Antitrust Bulletin, Vol. 63, No. 1, 2018, Available at SSRN: https://ssrn.com/abstract=3161181 that some courts, particularly D.C. courts, have limited the Tunney Act because of Constitutional concerns about separation of powers – the courts don’t want to overrule prosecutor’s judgments and decide what cases should or should not be prosecuted. Bush calls that view “disingenuous,” pointing out that separation of powers is really not in issue in the context of a consent decree. The court’s acceptance or rejection of a consent decree does not supplant exercise of prosecutorial discretion about whether and how to move forward with a matter. Bush also points out that concerns about separation of powers do not block the courts’ traditional role in reviewing sufficiency of remedies proposed by government prosecutors.
A thought provoking and relevant story about judicial review of questionable prosecutorial action recently arose in a context removed from antitrust. That is the extraordinary story of USDOJ’s request to United States District Judge Emmet G. Sullivan to dismiss the felony charge against President Trump’s former National Security Advisor, Michael T. Flynn. The unusual circumstance that Flynn had pled guilty and was awaiting sentencing gave the trial court a strong reason to be interested in the government’s motives. Despite the circumstances, the Government urged that Judge Sullivan had little choice but to grant the motion to dismiss, notwithstanding that the relevant Court rule requires “leave of court.” (Rule 48(a))
Commenters have pointed out that the Rule 48(a) “leave of court” requirement for government dismissal of a criminal action was purposefully added by the U.S. Supreme Court in 1944 with the goal of arming district judges with a powerful tool to halt corrupt or politically motivated dismissals of cases. See https://www.stanfordlawreview.org/online/why-do-rule-48a-dismissals-require-leave-of-court/
Judge Griffith at the August 11, 2020 en banc federal circuit court hearing concerning the Flynn case posed questions suggesting that the district court’s role in reviewing the government dismissal motion is more than ministerial. (See the video of the hearing at https://www.c-span.org/video/?474473-1/michael-flynn-perjury-dismissal-case-rehearing , beginning at approximately minute 18.) Judge Griffith says at one point about the court’s Rule 48(a) decision: “It’s not ministerial, you know that. … The judge has to do some thinking about it. He’s not simply a rubber stamp.”
Judge Robert Wilkins asked Flynn’s defense attorney Sidney Powell a hypothetical: If a group of nuns approached the court to say they had video footage of a prosecutor taking a bribe from a defendant to dismiss a case, should that judge be allowed to investigate a motion to dismiss? Powell said that no, even in such a case the trial judge “cannot go behind the prosecutors’ decision to dismiss a case.”
Returning to Chris Sagers’ comments about political misuse by prosecutors in antitrust cases, are there ways to apply to antitrust cases the very serious concern expressed in the Flynn matter: that the courts not be a rubber stamp for bad prosecutorial behavior? One way is vigorous application of Tunney Act review procedures for settlement consent decrees as advocated in Darren Bush’s article. Heightened concerns about political misuse of antitrust provide a rationale for reviving and strengthening the original Tunney Act idea that in appropriate situations the courts should have more than a ministerial role in reviewing case settlements. It is worth remembering that Tunney Act judicial review of USDOJ antitrust settlements came about because of what Senator Tunney decried as “a massive behind-closed-doors campaign [that] resulted in halting of the prosecution of the ITT case and its hasty settlement favorable to the Company.”
By Don Allen Resnikoff, who takes full responsibility for the content
Statement by Secretary Steven T. Mnuchin on the President’s Decision Regarding the Acquisition by ByteDance Ltd. of the U.S. Business of musical.ly
https://home.treasury.gov/news/press-releases/sm1094
August 14, 2020WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), U.S. Treasury Secretary Steven T. Mnuchin today issued the following statement:
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance. The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
View a copy of the President’s order.https://home.treasury.gov/system/files/136/EO-on-TikTok-8-14-20.pdf
https://home.treasury.gov/news/press-releases/sm1094
August 14, 2020WASHINGTON – As chair of the Committee on Foreign Investment in the United States (CFIUS), U.S. Treasury Secretary Steven T. Mnuchin today issued the following statement:
“Today the President issued an order prohibiting the transaction that resulted in the acquisition of Musical.ly, now known as TikTok, by the Chinese company ByteDance. The order directs ByteDance to divest all interests and rights in any assets or property used to enable or support the operation of TikTok in the United States, and any data obtained or derived from TikTok or Musical.ly users in the United States.
“CFIUS conducted an exhaustive review of the case and unanimously recommended this action to the President in order to protect U.S. users from exploitation of their personal data.”
View a copy of the President’s order.https://home.treasury.gov/system/files/136/EO-on-TikTok-8-14-20.pdf
From Law.com: The developer of popular video game Fortnite is suing Apple and Google for allegedly monopolizing their app distribution stores and in-app payment processing markets after the tech giants booted the online game.
Attorneys from Faegre Drinker Biddle & Reath in San Francisco and Cravath, Swaine & Moore in New York filed the complaints against Apple and Google on behalf of Epic Games Inc. on Thursday in the U.S. District Court for the Northern District of California.
In the lawsuits, Epic claims the companies removed Fortnite from their iOS and Google Play app stores after the gaming company added an alternative payment option for in-app purchases. As part of license agreements with both companies, developers agree to only use their in-store payment processing tool and not even mention that users can buy the same content outside the apps.
The Complaint in Epic Games v Apple is here:
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf?ref=hvper.com
Excerpt:
NATURE OF THE ACTION
1. In 1984, the fledgling Apple computer company released the Macintosh—the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money . . . . Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”
2. Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.
3. This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for (i) the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”). Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30% tax.
4. In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases.
5. The anti-competitive consequences of Apple’s conduct are pervasive. Mobile computing devices (like smartphones and tablets)—and the apps that run on those devices—have become an integral part of people’s daily lives; as a primary source for news, a place for entertainment, a tool for business, a means to connect with friends and family, and more. For many consumers, mobile devices are their primary computers to stay connected to the digital world, as they may not even own a personal computer. When these devices are unfairly restricted and extortionately “taxed” by Apple, the consumers who rely on these mobile devices to stay connected in the digital age are directly harmed.
6. Epic brings this suit to end Apple’s unfair and anti-competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market (each as defined below). Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.
7. Apple imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS App Distribution Market. To live up to its promise to users that “there’s an app for that”, Apple, after a short initial attempt to go it alone, opened up and invited third-party app developers to develop a wide array of apps for the iOS ecosystem. Those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
8. The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so (some of which are discussed further below). For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself. iOS developers are thus forced to increase the prices they charge consumers in order to pay Apple’s app tax. There is no method app developers can use to avoid this tax, as Apple has foreclosed any alternative ways to reach the over one billion users of iOS devices. As Representative Hank Johnson aptly summed up at a recent Congressional hearing on technology monopolies: “developers have no choice but to go along with [Apple’s policies] or they must leave the App Store. That’s an enormous amount of power.”
9. Apple’s anti-competitive conduct with respect to iOS app distribution results in sweeping harms to (i) app distributors, who are foreclosed from competing with Apple and innovating new methods of distributing iOS apps to users outside the App Store (such as, for example, curated app stores targeting particular categories of apps, like gaming or travel); (ii) app developers, who are denied choice on how to distribute their apps, are forced to fork over more of their revenue on paid apps than they would if Apple faced competition, and on occasion have to abandon their apps altogether if they cannot earn a profit given Apple’s 30% tax; and (iii) consumers, who are likewise denied choice and innovation in app distribution channels and are forced to pay higher prices and suffer inferior customer service from Apple, the unwelcome middleman.
0. Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content. Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes as far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app—for example, by purchasing content directly from the app developer, or using a web browser. Because Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie; it is Apple’s way or the highway.
11. In this market too, Apple thus stands as the monopolist middleman, positioning itself between developers and consumers. As the sole payment processor, Apple is able to take an exorbitant 30% fee on all in-app purchases of in-app content.
12. Apple’s anti-competitive conduct with respect to iOS in-app payment processing harms: (i) other payment processors, who are foreclosed from competing with Apple on price and innovating new methods of in-app payment processing (such as, for example, rewards points or payment through carrier billing); (ii) app developers, who are denied choice on how to process payments and the benefits of innovation in payment processing, and are forced to pay Apple’s tax—set by fiat—rather than by competitive market forces; and (iii) consumers, who are also denied choice and innovation in payment processing and suffer higher prices and inferior service. (Part II.)
13. Apple’s anti-competitive conduct in these markets is unchecked; Apple faces little, if any, constraint on its monopoly power in both the iOS App Distribution and iOS In-App Payment Processing Markets, as Apple has foreclosed all 5 Complaint for Injunctive Relief 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 direct competition in these markets. And Apple stands as the sole middleman between a vast and dispersed group of iOS users, and a vast and dispersed group of app developers, each with little power individually to constrain Apple.
14. Further, competition in the sale of mobile devices does not limit Apple’s market power. The threat of users switching to non-iOS devices does not constrain Apple’s anti-competitive conduct because Apple’s mobile device customers face significant switching costs and lock-in to the Apple iOS ecosystem, which serves to perpetuate Apple’s substantial market power. This power manifests itself in the data, as Apple is able to gobble up over two thirds of the total global smartphone operating profits. Furthermore, when making mobile device purchases, consumers are either unaware of, or cannot adequately account for, Apple’s anti-competitive conduct in the downstream app distribution and payment processing markets. The cost of app downloads and in-app purchases will play an insignificant (if any) role in swaying a consumer’s smartphone purchase decision.
15. Epic is one of the many app developers affected by Apple’s anticompetitive conduct. Epic is a developer of entertainment software for personal computers, smart mobile devices and gaming consoles. The most popular game Epic currently makes is Fortnite, which has connected hundreds of millions of people in a colorful, virtual world where they meet, play, talk, compete, dance, and even attend concerts and other cultural events. Fortnite is beloved by its millions of users. In the first year after Fortnite’s release in 2017, the game attracted over 125 million players; in the years since, Fortnite has topped 350 million players and has become a global cultural phenomenon.
16. Epic—and Fortnite’s users—are directly harmed by Apple’s anticompetitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool. Apple’s anti-competitive conduct has also injured Epic in its capacity as an app developer by forcing Epic to distribute its app exclusively through the App Store and exclusively use Apple’s payment processing services. As a result, Epic is forced, like so many other developers, to charge higher prices on its users’ in-app purchases on Fortnite in order to pay Apple’s 30% tax.
17. Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this.
18. Epic has approached Apple and asked to negotiate relief that would stop Apple’s unlawful and unreasonable restrictions. Epic also has publicly advocated that Apple cease the anti-competitive conduct addressed in this Complaint. Apple has refused to let go of its stranglehold on the iOS ecosystem.
19. On the morning of August 13, 2020, for the first time, Apple mobile device users were offered competitive choice. Epic added a direct payment option to Fortnite, giving players the option to continue making purchases using Apple’s payment processor or to use Epic’s direct payment system. Fortnite users on iOS, for the first time, had a competitive alternative to Apple’s payment solution, which in turn enabled Epic to pass along its cost savings by offering its users a 20% reduction in in-app prices as shown below:
20. Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store, which means that new users cannot download the app, and users who have already downloaded prior versions of the app from the App Store cannot update it to the latest version. This also means that Fortnite players who downloaded their app from the App Store will not receive updates to Fortnite through the App Store, either automatically or by searching the App Store for the update. Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.
21. Accordingly, Epic seeks injunctive relief in court to end Apple’s unreasonable and unlawful practices. Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. Instead, Epic seeks to end Apple’s dominance over key technology markets, open up the space for progress and ingenuity, and ensure that Apple mobile devices are open to the same competition as Apple’s personal computers. As such, Epic respectfully requests this Court to enjoin Apple from continuing to impose its anti-competitive restrictions on the iOS ecosystem and ensure 2020 is not like “1984”
Attorneys from Faegre Drinker Biddle & Reath in San Francisco and Cravath, Swaine & Moore in New York filed the complaints against Apple and Google on behalf of Epic Games Inc. on Thursday in the U.S. District Court for the Northern District of California.
In the lawsuits, Epic claims the companies removed Fortnite from their iOS and Google Play app stores after the gaming company added an alternative payment option for in-app purchases. As part of license agreements with both companies, developers agree to only use their in-store payment processing tool and not even mention that users can buy the same content outside the apps.
The Complaint in Epic Games v Apple is here:
https://cdn2.unrealengine.com/apple-complaint-734589783.pdf?ref=hvper.com
Excerpt:
NATURE OF THE ACTION
1. In 1984, the fledgling Apple computer company released the Macintosh—the first mass-market, consumer-friendly home computer. The product launch was announced with a breathtaking advertisement evoking George Orwell’s 1984 that cast Apple as a beneficial, revolutionary force breaking IBM’s monopoly over the computing technology market. Apple’s founder Steve Jobs introduced the first showing of the 1984 advertisement by explaining, “it appears IBM wants it all. Apple is perceived to be the only hope to offer IBM a run for its money . . . . Will Big Blue dominate the entire computer industry? The entire information age? Was George Orwell right about 1984?”
2. Fast forward to 2020, and Apple has become what it once railed against: the behemoth seeking to control markets, block competition, and stifle innovation. Apple is bigger, more powerful, more entrenched, and more pernicious than the monopolists of yesteryear. At a market cap of nearly $2 trillion, Apple’s size and reach far exceeds that of any technology monopolist in history.
3. This case concerns Apple’s use of a series of anti-competitive restraints and monopolistic practices in markets for (i) the distribution of software applications (“apps”) to users of mobile computing devices like smartphones and tablets, and (ii) the processing of consumers’ payments for digital content used within iOS mobile apps (“in-app content”). Apple imposes unreasonable and unlawful restraints to completely monopolize both markets and prevent software developers from reaching the over one billion users of its mobile devices (e.g., iPhone and iPad) unless they go through a single store controlled by Apple, the App Store, where Apple exacts an oppressive 30% tax on the sale of every app. Apple also requires software developers who wish to sell digital in-app content to those consumers to use a single payment processing option offered by Apple, In-App Purchase, which likewise carries a 30% tax.
4. In contrast, software developers can make their products available to users of an Apple personal computer (e.g., Mac or MacBook) in an open market, through a variety of stores or even through direct downloads from a developer’s website, with a variety of payment options and competitive processing fees that average 3%, a full ten times lower than the exorbitant 30% fees Apple applies to its mobile device in-app purchases.
5. The anti-competitive consequences of Apple’s conduct are pervasive. Mobile computing devices (like smartphones and tablets)—and the apps that run on those devices—have become an integral part of people’s daily lives; as a primary source for news, a place for entertainment, a tool for business, a means to connect with friends and family, and more. For many consumers, mobile devices are their primary computers to stay connected to the digital world, as they may not even own a personal computer. When these devices are unfairly restricted and extortionately “taxed” by Apple, the consumers who rely on these mobile devices to stay connected in the digital age are directly harmed.
6. Epic brings this suit to end Apple’s unfair and anti-competitive actions that Apple undertakes to unlawfully maintain its monopoly in two distinct, multibillion dollar markets: (i) the iOS App Distribution Market, and (ii) the iOS In-App Payment Processing Market (each as defined below). Epic is not seeking monetary compensation from this Court for the injuries it has suffered. Nor is Epic seeking favorable treatment for itself, a single company. Instead, Epic is seeking injunctive relief to allow fair competition in these two key markets that directly affect hundreds of millions of consumers and tens of thousands, if not more, of third-party app developers.
7. Apple imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS App Distribution Market. To live up to its promise to users that “there’s an app for that”, Apple, after a short initial attempt to go it alone, opened up and invited third-party app developers to develop a wide array of apps for the iOS ecosystem. Those apps contribute immense value to that ecosystem and are one of the primary marketing features for iPhones and iPads. But Apple completely bans innovation in a central part of this ecosystem, namely, any app that could compete with Apple for the distribution of apps in iOS. Through its control over iOS, and through a variety of unlawful contractual restrictions that it forces app developers to accept, Apple prevents iOS users from downloading any apps from any source other than Apple’s own storefront, the App Store.
8. The result is that developers are prevented from selling or distributing iOS apps unless they use Apple’s App Store, and accede to Apple’s oppressive terms and conditions for doing so (some of which are discussed further below). For example, as the sole distributor of iOS apps, Apple collects the money from every iOS user’s app purchase, remits only 70% of that payment to the app developer, and retains a 30% tax for itself. iOS developers are thus forced to increase the prices they charge consumers in order to pay Apple’s app tax. There is no method app developers can use to avoid this tax, as Apple has foreclosed any alternative ways to reach the over one billion users of iOS devices. As Representative Hank Johnson aptly summed up at a recent Congressional hearing on technology monopolies: “developers have no choice but to go along with [Apple’s policies] or they must leave the App Store. That’s an enormous amount of power.”
9. Apple’s anti-competitive conduct with respect to iOS app distribution results in sweeping harms to (i) app distributors, who are foreclosed from competing with Apple and innovating new methods of distributing iOS apps to users outside the App Store (such as, for example, curated app stores targeting particular categories of apps, like gaming or travel); (ii) app developers, who are denied choice on how to distribute their apps, are forced to fork over more of their revenue on paid apps than they would if Apple faced competition, and on occasion have to abandon their apps altogether if they cannot earn a profit given Apple’s 30% tax; and (iii) consumers, who are likewise denied choice and innovation in app distribution channels and are forced to pay higher prices and suffer inferior customer service from Apple, the unwelcome middleman.
0. Apple also imposes unreasonable restraints and unlawfully maintains a total monopoly in the iOS In-App Payment Processing Market. Among the oppressive terms that app developers have to accept, Apple coerces all app developers who wish to use its App Store—the only means with which to distribute apps to iOS users—to use exclusively Apple’s own payment processing platform for all in-app purchases of in-app content. Apple thus requires third-party app developers to agree they will not even offer iOS users the choice of additional payment processing options alongside Apple’s. And Apple goes as far as to gag app developers, preventing them from even mentioning to users the option of buying the same content outside of the app—for example, by purchasing content directly from the app developer, or using a web browser. Because Apple has a monopoly over the distribution of iOS apps, app developers have no choice but to assent to this anti-competitive tie; it is Apple’s way or the highway.
11. In this market too, Apple thus stands as the monopolist middleman, positioning itself between developers and consumers. As the sole payment processor, Apple is able to take an exorbitant 30% fee on all in-app purchases of in-app content.
12. Apple’s anti-competitive conduct with respect to iOS in-app payment processing harms: (i) other payment processors, who are foreclosed from competing with Apple on price and innovating new methods of in-app payment processing (such as, for example, rewards points or payment through carrier billing); (ii) app developers, who are denied choice on how to process payments and the benefits of innovation in payment processing, and are forced to pay Apple’s tax—set by fiat—rather than by competitive market forces; and (iii) consumers, who are also denied choice and innovation in payment processing and suffer higher prices and inferior service. (Part II.)
13. Apple’s anti-competitive conduct in these markets is unchecked; Apple faces little, if any, constraint on its monopoly power in both the iOS App Distribution and iOS In-App Payment Processing Markets, as Apple has foreclosed all 5 Complaint for Injunctive Relief 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 direct competition in these markets. And Apple stands as the sole middleman between a vast and dispersed group of iOS users, and a vast and dispersed group of app developers, each with little power individually to constrain Apple.
14. Further, competition in the sale of mobile devices does not limit Apple’s market power. The threat of users switching to non-iOS devices does not constrain Apple’s anti-competitive conduct because Apple’s mobile device customers face significant switching costs and lock-in to the Apple iOS ecosystem, which serves to perpetuate Apple’s substantial market power. This power manifests itself in the data, as Apple is able to gobble up over two thirds of the total global smartphone operating profits. Furthermore, when making mobile device purchases, consumers are either unaware of, or cannot adequately account for, Apple’s anti-competitive conduct in the downstream app distribution and payment processing markets. The cost of app downloads and in-app purchases will play an insignificant (if any) role in swaying a consumer’s smartphone purchase decision.
15. Epic is one of the many app developers affected by Apple’s anticompetitive conduct. Epic is a developer of entertainment software for personal computers, smart mobile devices and gaming consoles. The most popular game Epic currently makes is Fortnite, which has connected hundreds of millions of people in a colorful, virtual world where they meet, play, talk, compete, dance, and even attend concerts and other cultural events. Fortnite is beloved by its millions of users. In the first year after Fortnite’s release in 2017, the game attracted over 125 million players; in the years since, Fortnite has topped 350 million players and has become a global cultural phenomenon.
16. Epic—and Fortnite’s users—are directly harmed by Apple’s anticompetitive conduct. But for Apple’s illegal restraints, Epic would provide a competing app store on iOS devices, which would allow iOS users to download apps in an innovative, curated store and would provide users the choice to use Epic’s or another third-party’s in-app payment processing tool. Apple’s anti-competitive conduct has also injured Epic in its capacity as an app developer by forcing Epic to distribute its app exclusively through the App Store and exclusively use Apple’s payment processing services. As a result, Epic is forced, like so many other developers, to charge higher prices on its users’ in-app purchases on Fortnite in order to pay Apple’s 30% tax.
17. Contrast this anti-competitive harm with how similar markets operate on Apple’s own Mac computers. Mac users can download virtually any software they like, from any source they like. Developers are free to offer their apps through the Mac computer App Store, a third-party store, through direct download from the developer’s website, or any combination thereof. Indeed, on Macs, Epic distributes Fortnite through its own storefront, which competes with other third-party storefronts available to Mac users. App developers are free to use Apple’s payment processing services, the payment processing services of third parties, or the developers’ own payment processing service; users are offered their choice of different payment processing options (e.g., PayPal, Amazon, and Apple). The result is that consumers and developers alike have choices, competition is thriving, prices drop, and innovation is enhanced. The process should be no different for Apple’s mobile devices. But Apple has chosen to make it different by imposing contractual and technical restrictions that prevent any competition and increase consumer costs for every app and in-app content purchase—restrictions that it could never impose on Macs, where it does not enjoy the same dominance in the sale of devices. It doesn’t have to be like this.
18. Epic has approached Apple and asked to negotiate relief that would stop Apple’s unlawful and unreasonable restrictions. Epic also has publicly advocated that Apple cease the anti-competitive conduct addressed in this Complaint. Apple has refused to let go of its stranglehold on the iOS ecosystem.
19. On the morning of August 13, 2020, for the first time, Apple mobile device users were offered competitive choice. Epic added a direct payment option to Fortnite, giving players the option to continue making purchases using Apple’s payment processor or to use Epic’s direct payment system. Fortnite users on iOS, for the first time, had a competitive alternative to Apple’s payment solution, which in turn enabled Epic to pass along its cost savings by offering its users a 20% reduction in in-app prices as shown below:
20. Rather than tolerate this healthy competition and compete on the merits of its offering, Apple responded by removing Fortnite from sale on the App Store, which means that new users cannot download the app, and users who have already downloaded prior versions of the app from the App Store cannot update it to the latest version. This also means that Fortnite players who downloaded their app from the App Store will not receive updates to Fortnite through the App Store, either automatically or by searching the App Store for the update. Apple’s removal of Fortnite is yet another example of Apple flexing its enormous power in order to impose unreasonable restraints and unlawfully maintain its 100% monopoly over the iOS In-App Payment Processing Market.
21. Accordingly, Epic seeks injunctive relief in court to end Apple’s unreasonable and unlawful practices. Apple’s conduct has caused and continues to cause Epic financial harm, but as noted above, Epic is not bringing this case to recover these damages; Epic is not seeking any monetary damages. Instead, Epic seeks to end Apple’s dominance over key technology markets, open up the space for progress and ingenuity, and ensure that Apple mobile devices are open to the same competition as Apple’s personal computers. As such, Epic respectfully requests this Court to enjoin Apple from continuing to impose its anti-competitive restrictions on the iOS ecosystem and ensure 2020 is not like “1984”
The EU on control issues and Apple and Google
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”
iPhone and iPad users can only download native (non web-based) apps via the App Store.
The Commission will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices:
(i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.
(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
From https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1073
Executive Vice-President Margrethe Vestager, in charge of competition policy, said: "Mobile applications have fundamentally changed the way we access content. Apple sets the rules for the distribution of apps to users of iPhones and iPads. It appears that Apple obtained a “gatekeeper” role when it comes to the distribution of apps and content to users of Apple's popular devices. We need to ensure that Apple's rules do not distort competition in markets where Apple is competing with other app developers, for example with its music streaming service Apple Music or with Apple Books. I have therefore decided to take a close look at Apple's App Store rules and their compliance with EU competition rules.”
iPhone and iPad users can only download native (non web-based) apps via the App Store.
The Commission will investigate in particular two restrictions imposed by Apple in its agreements with companies that wish to distribute apps to users of Apple devices:
(i) The mandatory use of Apple's own proprietary in-app purchase system “IAP” for the distribution of paid digital content. Apple charges app developers a 30% commission on all subscription fees through IAP.
(ii) Restrictions on the ability of developers to inform users of alternative purchasing possibilities outside of apps. While Apple allows users to consume content such as music, e-books and audiobooks purchased elsewhere (e.g. on the website of the app developer) also in the app, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper.
From https://ec.europa.eu/commission/presscorner/detail/en/ip_20_1073
Market Power, Inequality, and Financial Instability
Isabel Cair
Jae Sim
July 2020
Abstract
Over the last four decades, the U.S. economy has experienced a few secular trends, each of which may be considered undesirable in some aspects: declining labor share; rising profit share; rising income and wealth inequalities; and rising household sector leverage, and associated financial instability. We develop a real business cycle model and show that the rise of market power of the firms in both product and labor markets over the last four decades can generate all of these secular trends. We derive macroprudential policy implications for financial stability.
https://www.federalreserve.gov/econres/feds/files/2020057pap.pdf
Isabel Cair
Jae Sim
July 2020
Abstract
Over the last four decades, the U.S. economy has experienced a few secular trends, each of which may be considered undesirable in some aspects: declining labor share; rising profit share; rising income and wealth inequalities; and rising household sector leverage, and associated financial instability. We develop a real business cycle model and show that the rise of market power of the firms in both product and labor markets over the last four decades can generate all of these secular trends. We derive macroprudential policy implications for financial stability.
https://www.federalreserve.gov/econres/feds/files/2020057pap.pdf
Linda Greenhouse writes about the status of abortion rights law:
Excerpt:
When I wrapped up the Supreme Court term in a column last month, I observed that in his separate opinion providing a crucial fifth vote to overturn a Louisiana abortion law, Chief Justice John Roberts had been “careful to leave the door open to continued attacks on the right to abortion.”
What I intended as a cleareyed warning to my fellow abortion-rights supporters to hold the cheers for the outcome in June Medical Services v. Russo turns out to have been quite an understatement. It turns out that the door, with the chief justice holding it, opened wide enough to drive an entire federal appeals court through.
Last week, the famously anti-abortion United States Court of Appeals for the Eighth Circuit invoked the chief justice’s separate opinion to justify reinstating four Arkansas anti-abortion laws that a federal district judge had invalidated more than three years ago.
https://www.nytimes.com/2020/08/13/opinion/arkansas-abortion-laws.html
Excerpt:
When I wrapped up the Supreme Court term in a column last month, I observed that in his separate opinion providing a crucial fifth vote to overturn a Louisiana abortion law, Chief Justice John Roberts had been “careful to leave the door open to continued attacks on the right to abortion.”
What I intended as a cleareyed warning to my fellow abortion-rights supporters to hold the cheers for the outcome in June Medical Services v. Russo turns out to have been quite an understatement. It turns out that the door, with the chief justice holding it, opened wide enough to drive an entire federal appeals court through.
Last week, the famously anti-abortion United States Court of Appeals for the Eighth Circuit invoked the chief justice’s separate opinion to justify reinstating four Arkansas anti-abortion laws that a federal district judge had invalidated more than three years ago.
https://www.nytimes.com/2020/08/13/opinion/arkansas-abortion-laws.html
Bloomberg on Russian COVID vaccine: there are questions around other vaccine candidates, too.
Moderna Inc., which reached a $1.5 billion deal with the Trump administration this week to supply 100 million doses, is one of several companies pushing a novel technology called mRNA. Its shot produced side effects among participants in clinical trials.Other early vaccines, possibly including one from the University of Oxford and AstraZeneca Plc, may not stop you from catching or spreading the virus though might prevent severe illness or death. [See https://www.bloomberg.com/news/articles/2020-06-15/the-first-covid-vaccines-may-not-prevent-you-from-getting-covid?] That’s a huge step, but still imperfect in the world of vaccines.
Moderna Inc., which reached a $1.5 billion deal with the Trump administration this week to supply 100 million doses, is one of several companies pushing a novel technology called mRNA. Its shot produced side effects among participants in clinical trials.Other early vaccines, possibly including one from the University of Oxford and AstraZeneca Plc, may not stop you from catching or spreading the virus though might prevent severe illness or death. [See https://www.bloomberg.com/news/articles/2020-06-15/the-first-covid-vaccines-may-not-prevent-you-from-getting-covid?] That’s a huge step, but still imperfect in the world of vaccines.
THE EVICTION CRISIS AND STEVEN MNUCHIN
There is a current housing eviction crisis connected to COVID-19 and widespread unemployment. See https://nlihc.org/sites/default/files/The_Eviction_Crisis_080720.pdf
We can hope that the U.S. Government will not repeat errors that occurred after the 2008 financial crisis. According to many observers, at that time large investors were subsidized by the Government as they foreclosed on many home mortgages that should have been modified so that homeowners could pay the modified mortgages and stay in their homes.
The flawed U.S. Government’s response to the 2008 housing crisis is discussed in the recent book The Homewreckers, by Aaron Glantz. One topic of the book is how big investors worked with the US Government in a manner that, in Glantz’s view, unfairly enriched big investors and harmed struggling homeowners. A summary version is presented in Glantz’s Congressional testimony, which can be found at https://www.revealnews.org/article/reveal-submits-testimony-to-congress/
Here is part of the story: In 2007 Steven Mnuchin formed a consortium of five investors, including Michael Dell, John Paulson, and George Soros, and acquired the struggling IndyMac Bank. The Bank was struggling because of the many shaky loans it had made.
According to Glantz, the F.D.I.C. imposed some weak conditions on IndyMac’s new owners—a particularly important one wass that they had to modify, rather than foreclose on, as many mortgages as possible. But Mnuchin and his colleagues were free to keep any profits they made, and the F.D.I.C. agreed to cover most losses on deteriorating mortgage loans that they had inherited.
IndyMac, renamed OneWest, soon had big profits, while the FDIC paid billions of dollars to the bank. In the course of five years, the F.D.I.C. paid out more than a billion dollars, during which time OneWest foreclosed on thirty-six thousand homes in California, many of them in low-income neighborhoods. Approximately seventy per cent of OneWest’s foreclosures were in neighborhoods where most of the residents were people of color, according to some sources. Such trends were playing out nationwide, but, according to Aaron Glantz, OneWest was one of the worst offenders.
When a New Yorker magazine reporter recently asked Mnuchin about the controversy surrounding IndyMac and OneWest, he said, “I think this whole thing about me and mortgage foreclosures isn’t fair.” Many of the souring home loans that IndyMac was servicing couldn’t be modified, he said, leaving the bank with no choice but to foreclose on owners who stopped paying. “I never wanted to foreclose on those people,” Mnuchin said. “Having someone’s home foreclosed upon is a terrible experience.” See https://www.newyorker.com/magazine/2020/07/20/the-high-finance-mogul-in-charge-of-our-economic-recovery?
There is a point about the 2008 housing crisis that may be more important than the politically charged questions of whether or not an elite group of investors including current US Secretary of the Treasury Mnuchin gained unfairly from widespread mortgage foreclosures, or whether or not the Obama Administration and California State government provided sufficient protection for homeowners. It is that the government should do better for financially struggling homeowners in the current financial crisis.
What that means is a system for struggling homeowners where mortgage modification rather than mortgage foreclosure is really the preferred solution for as many mortgages as possible. That means lowering monthly payments to reflect the real underlying values of the homes or adding years to the mortgages to make the monthly payments more manageable. If a home owner misses mortgage payments, there should be an effort to avoid immediate foreclosure. Wholesale mortgage foreclosures without individual modification negotiations should be avoided. Many foreclosures by OneWest on particular homes reportedly yielded less for the Bank than the return that would have been received from modified mortgages.
Posted by Don Allen Resnikoff, who is responsible for the content
There is a current housing eviction crisis connected to COVID-19 and widespread unemployment. See https://nlihc.org/sites/default/files/The_Eviction_Crisis_080720.pdf
We can hope that the U.S. Government will not repeat errors that occurred after the 2008 financial crisis. According to many observers, at that time large investors were subsidized by the Government as they foreclosed on many home mortgages that should have been modified so that homeowners could pay the modified mortgages and stay in their homes.
The flawed U.S. Government’s response to the 2008 housing crisis is discussed in the recent book The Homewreckers, by Aaron Glantz. One topic of the book is how big investors worked with the US Government in a manner that, in Glantz’s view, unfairly enriched big investors and harmed struggling homeowners. A summary version is presented in Glantz’s Congressional testimony, which can be found at https://www.revealnews.org/article/reveal-submits-testimony-to-congress/
Here is part of the story: In 2007 Steven Mnuchin formed a consortium of five investors, including Michael Dell, John Paulson, and George Soros, and acquired the struggling IndyMac Bank. The Bank was struggling because of the many shaky loans it had made.
According to Glantz, the F.D.I.C. imposed some weak conditions on IndyMac’s new owners—a particularly important one wass that they had to modify, rather than foreclose on, as many mortgages as possible. But Mnuchin and his colleagues were free to keep any profits they made, and the F.D.I.C. agreed to cover most losses on deteriorating mortgage loans that they had inherited.
IndyMac, renamed OneWest, soon had big profits, while the FDIC paid billions of dollars to the bank. In the course of five years, the F.D.I.C. paid out more than a billion dollars, during which time OneWest foreclosed on thirty-six thousand homes in California, many of them in low-income neighborhoods. Approximately seventy per cent of OneWest’s foreclosures were in neighborhoods where most of the residents were people of color, according to some sources. Such trends were playing out nationwide, but, according to Aaron Glantz, OneWest was one of the worst offenders.
When a New Yorker magazine reporter recently asked Mnuchin about the controversy surrounding IndyMac and OneWest, he said, “I think this whole thing about me and mortgage foreclosures isn’t fair.” Many of the souring home loans that IndyMac was servicing couldn’t be modified, he said, leaving the bank with no choice but to foreclose on owners who stopped paying. “I never wanted to foreclose on those people,” Mnuchin said. “Having someone’s home foreclosed upon is a terrible experience.” See https://www.newyorker.com/magazine/2020/07/20/the-high-finance-mogul-in-charge-of-our-economic-recovery?
There is a point about the 2008 housing crisis that may be more important than the politically charged questions of whether or not an elite group of investors including current US Secretary of the Treasury Mnuchin gained unfairly from widespread mortgage foreclosures, or whether or not the Obama Administration and California State government provided sufficient protection for homeowners. It is that the government should do better for financially struggling homeowners in the current financial crisis.
What that means is a system for struggling homeowners where mortgage modification rather than mortgage foreclosure is really the preferred solution for as many mortgages as possible. That means lowering monthly payments to reflect the real underlying values of the homes or adding years to the mortgages to make the monthly payments more manageable. If a home owner misses mortgage payments, there should be an effort to avoid immediate foreclosure. Wholesale mortgage foreclosures without individual modification negotiations should be avoided. Many foreclosures by OneWest on particular homes reportedly yielded less for the Bank than the return that would have been received from modified mortgages.
Posted by Don Allen Resnikoff, who is responsible for the content
Chris Sagers: Trump and Delrahim have left the Antitrust Division a corrupted and misbegotten shambles.
"Makan Delrahim briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks."
https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
"Makan Delrahim briefly looked like a serious trustbuster. He proved to be yet another of the president’s political hacks."
https://slate.com/business/2020/08/antitrust-doj-delrahim-trump.html
The Ninth Circuit on Tuesday reversed the Federal Trade Commission's win in the agency's case accusing Qualcomm of violating antitrust law through its licensing practices for standard-essential patents covering cellular technology.
The Ninth Circuit on Tuesday reversed the FTC's win in its case alleging Qualcomm's licensing practices violate antitrust law. (AP Photo/Richard Drew)
The panel found that if Qualcomm did breach its obligations to license its SEPs on fair, reasonable and non-discriminatory terms, it would be a breach of contract issue, not an antitrust problem. It also found that the company's "no license, no chips" policy did not impose a surcharge on the sales of chips by rivals, as the lower court had found.
Writing for the panel, U.S. Circuit Judge Consuelo M. Callahan said that the district court had issued a worldwide injunction barring several of Qualcomm's core business practices and that the appellate court had stayed the order at Qualcomm's request, which was backed by the U.S. Department of Justice and other federal agencies.
"At that time, we characterized the district court's order and injunction as either 'a trailblazing application of the antitrust laws' or 'an improper excursion beyond the outer limits of the Sherman Act,'" the opinion said. "We now hold that the district court went beyond the scope of the Sherman Act, and we reverse."
Read more at: https://www.law360.com/competition/articles/1300307?copied=1
The court opinion is here: https://www.scribd.com/document/472126232/20-08-11-9th-Cir-Opinion-Reversing-FTC-v-Qualcomm-Ruling
The Ninth Circuit on Tuesday reversed the FTC's win in its case alleging Qualcomm's licensing practices violate antitrust law. (AP Photo/Richard Drew)
The panel found that if Qualcomm did breach its obligations to license its SEPs on fair, reasonable and non-discriminatory terms, it would be a breach of contract issue, not an antitrust problem. It also found that the company's "no license, no chips" policy did not impose a surcharge on the sales of chips by rivals, as the lower court had found.
Writing for the panel, U.S. Circuit Judge Consuelo M. Callahan said that the district court had issued a worldwide injunction barring several of Qualcomm's core business practices and that the appellate court had stayed the order at Qualcomm's request, which was backed by the U.S. Department of Justice and other federal agencies.
"At that time, we characterized the district court's order and injunction as either 'a trailblazing application of the antitrust laws' or 'an improper excursion beyond the outer limits of the Sherman Act,'" the opinion said. "We now hold that the district court went beyond the scope of the Sherman Act, and we reverse."
Read more at: https://www.law360.com/competition/articles/1300307?copied=1
The court opinion is here: https://www.scribd.com/document/472126232/20-08-11-9th-Cir-Opinion-Reversing-FTC-v-Qualcomm-Ruling
The D.C. Circuit overrules the Copyright Royalty Board's ruling hiking the rates that streaming services must pay songwriters and publishers.
Exactly how much it disagrees isn't clear — the panel sealed its Friday opinion vacating part of the ruling.
All that was public of the three-judge panel's decision as of Friday afternoon was a brief summary noting that the appeals court affirmed in part, vacated in part and remanded the case to the copyright board for a consistent decision.
When the panel was hearing arguments in the case in March — before the court system switched to largely virtual and telephone proceedings — at least two judges on the panel seemed concerned that record labels might pull their content from streaming services should they be pushed to accept a smaller slice of the royalty pie.
At dispute in the case is the Copyright Royalty Board's decision in February 2019 to usher in a new era of royalty rates after several years of contentious proceedings over the matter, and essentially everyone with a finger in the pie is unhappy with some part of its decision.
Copyrightowners and songwriters are displeased — particularly one George D. Johnson, who represented himself pro se and was praised by the court for his performance — because they believe the royalty hike was too little, too late.
Source: https://www.law360.com/articles/1299549/dc-circ-breathes-new-life-into-copyright-royalty-hike-fight?copied=1 [pay wall]
Exactly how much it disagrees isn't clear — the panel sealed its Friday opinion vacating part of the ruling.
All that was public of the three-judge panel's decision as of Friday afternoon was a brief summary noting that the appeals court affirmed in part, vacated in part and remanded the case to the copyright board for a consistent decision.
When the panel was hearing arguments in the case in March — before the court system switched to largely virtual and telephone proceedings — at least two judges on the panel seemed concerned that record labels might pull their content from streaming services should they be pushed to accept a smaller slice of the royalty pie.
At dispute in the case is the Copyright Royalty Board's decision in February 2019 to usher in a new era of royalty rates after several years of contentious proceedings over the matter, and essentially everyone with a finger in the pie is unhappy with some part of its decision.
Copyrightowners and songwriters are displeased — particularly one George D. Johnson, who represented himself pro se and was praised by the court for his performance — because they believe the royalty hike was too little, too late.
Source: https://www.law360.com/articles/1299549/dc-circ-breathes-new-life-into-copyright-royalty-hike-fight?copied=1 [pay wall]
Federal Court Terminates Paramount Consent Decrees
A federal court in the Southern District of New York terminated the Paramount Consent Decrees, which for over seventy years have regulated how certain movie studios distribute films to movie theatres. The review and termination of these Decrees were part of the Department of Justice’s review of legacy antitrust judgments that dated back to the 1890’s and has resulted in the termination of nearly 800 perpetual decrees.
“We appreciate the Court’s thoughtful opinion and ruling today granting our motion to terminate these outdated Paramount Decrees,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “As the Court points out, Gone with the Wind, The Wizard of Oz, and It’s a Wonderful Life were the blockbusters when these Decrees were litigated; the movie industry and how Americans enjoy their movies have changed leaps and bounds in these intervening years. Without these restraints on the market, American ingenuity is again free to experiment with different business models that can benefit consumers.”
In summary, the Court concluded that the government had offered a persuasive explanation for why termination of the Paramount Decrees serves the public interest in free and unfettered competition. The conspiracy and practices that existed decades ago no longer exist. New technology has created many different movie platforms that did not exist when the Decrees were entered into, including cable and broadcast television, DVDs, and streaming and download services.
https://www.justice.gov/opa/pr/federal-court-terminates-paramount-consent-decrees
A federal court in the Southern District of New York terminated the Paramount Consent Decrees, which for over seventy years have regulated how certain movie studios distribute films to movie theatres. The review and termination of these Decrees were part of the Department of Justice’s review of legacy antitrust judgments that dated back to the 1890’s and has resulted in the termination of nearly 800 perpetual decrees.
“We appreciate the Court’s thoughtful opinion and ruling today granting our motion to terminate these outdated Paramount Decrees,” said Makan Delrahim, Assistant Attorney General for the Justice Department’s Antitrust Division. “As the Court points out, Gone with the Wind, The Wizard of Oz, and It’s a Wonderful Life were the blockbusters when these Decrees were litigated; the movie industry and how Americans enjoy their movies have changed leaps and bounds in these intervening years. Without these restraints on the market, American ingenuity is again free to experiment with different business models that can benefit consumers.”
In summary, the Court concluded that the government had offered a persuasive explanation for why termination of the Paramount Decrees serves the public interest in free and unfettered competition. The conspiracy and practices that existed decades ago no longer exist. New technology has created many different movie platforms that did not exist when the Decrees were entered into, including cable and broadcast television, DVDs, and streaming and download services.
https://www.justice.gov/opa/pr/federal-court-terminates-paramount-consent-decrees
Antitrust & Corruption: Overruling Noerr
-
August 3, 2020By Tim Wu, (Columbia University)
We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.
Since the 1960s, however, antitrust law’s scrutiny of corrupt and deceptive political practices has been sharply limited by the Noerr-Pennington doctrine, which provides immunity to antitrust liability for conduct that can be described as political or legal advocacy. The doctrine was created through apparent First Amendment avoidance, based on the premise that the Sherman Act could not have been intended to interfere with a right to petition government.
The Noerr decision, dating from 1961, was strained when it was decided and has not aged well. As an interpretation of the antitrust laws, it ignored Congressional concern with political mischief undertaken by conspiracy or monopoly. Its legitimacy has always rested on avoidance of the First Amendment, and while Noerr itself may have legitimately reflected such avoidance, the subsequent growth of a Noerr immunity has blown past any First Amendment-driven defense of its existence. For that reason, others have suggested a reformulation of the doctrine. The better answer is that, lacking constitutional or statutory foundation, Noerr should be overruled.
The First Amendment guarantees freedom of speech, assembly, and “to petition the government for a redress of grievances.” It therefore protects efforts to influence political debate as well as legitimate petitioning in the legislative, judicial or administrative processes. The First Amendment does not, however create a right to bribe government officials, deceive agencies, file false statements, or abuse government process through repeated filings designed only to injure a competitor. Nonetheless, each of these activities has, in some courts at least, been granted immunity under the overgrown Noerr immunity. It is an extra-constitutional outlier ripe for reexamination.
Overruling Noerr would not make political petitioning illegal. It would, instead, require defendants to rely on the First Amendment when seeking to defend what would otherwise be conduct that is illegal under the antitrust laws. Doctrinally, this is to force courts to address whether conduct in question is actually an antitrust violation, and if, so whether it is protected by the First Amendment or not, drawing on an established jurisprudence for some of the problems presented in the Noerr context.
Continue Reading https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630610
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August 3, 2020By Tim Wu, (Columbia University)
We live in a time when concerns about influence over the American political process by powerful private interests have reached an apogee, both on the left and the right. Among the laws originally intended to fight excessive private influence over republican institutions were the antitrust laws, whose sponsors were concerned not just with monopoly, but also its influence over legislatures and politicians. While no one would claim that the antitrust laws were meant to be comprehensive anti-corruption laws, there can be little question that they were passed with concerns about the political influence of powerful firms and industry cartels.
Since the 1960s, however, antitrust law’s scrutiny of corrupt and deceptive political practices has been sharply limited by the Noerr-Pennington doctrine, which provides immunity to antitrust liability for conduct that can be described as political or legal advocacy. The doctrine was created through apparent First Amendment avoidance, based on the premise that the Sherman Act could not have been intended to interfere with a right to petition government.
The Noerr decision, dating from 1961, was strained when it was decided and has not aged well. As an interpretation of the antitrust laws, it ignored Congressional concern with political mischief undertaken by conspiracy or monopoly. Its legitimacy has always rested on avoidance of the First Amendment, and while Noerr itself may have legitimately reflected such avoidance, the subsequent growth of a Noerr immunity has blown past any First Amendment-driven defense of its existence. For that reason, others have suggested a reformulation of the doctrine. The better answer is that, lacking constitutional or statutory foundation, Noerr should be overruled.
The First Amendment guarantees freedom of speech, assembly, and “to petition the government for a redress of grievances.” It therefore protects efforts to influence political debate as well as legitimate petitioning in the legislative, judicial or administrative processes. The First Amendment does not, however create a right to bribe government officials, deceive agencies, file false statements, or abuse government process through repeated filings designed only to injure a competitor. Nonetheless, each of these activities has, in some courts at least, been granted immunity under the overgrown Noerr immunity. It is an extra-constitutional outlier ripe for reexamination.
Overruling Noerr would not make political petitioning illegal. It would, instead, require defendants to rely on the First Amendment when seeking to defend what would otherwise be conduct that is illegal under the antitrust laws. Doctrinally, this is to force courts to address whether conduct in question is actually an antitrust violation, and if, so whether it is protected by the First Amendment or not, drawing on an established jurisprudence for some of the problems presented in the Noerr context.
Continue Reading https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3630610
From: https://www.whitehouse.gov/presidential-actions/executive-order-addressing-threat-posed-tiktok/
Executive Order on Addressing the Threat Posed by TikTok
Infrastructure & Technology
Issued on: August 6, 2020
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Accordingly, I hereby order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
(b) The prohibition in subsection (a) of this section applies except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(c) 45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section.
Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization; and
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
Sec. 4. The Secretary is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary may, consistent with applicable law, redelegate any of these functions within the Department of Commerce. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
August 6, 2020.
Executive Order on Addressing the Threat Posed by TikTok
Infrastructure & Technology
Issued on: August 6, 2020
By the authority vested in me as President by the Constitution and the laws of the United States of America, including the International Emergency Economic Powers Act (50 U.S.C. 1701 et seq.) (IEEPA), the National Emergencies Act (50 U.S.C. 1601 et seq.), and section 301 of title 3, United States Code,
I, DONALD J. TRUMP, President of the United States of America, find that additional steps must be taken to deal with the national emergency with respect to the information and communications technology and services supply chain declared in Executive Order 13873 of May 15, 2019 (Securing the Information and Communications Technology and Services Supply Chain). Specifically, the spread in the United States of mobile applications developed and owned by companies in the People’s Republic of China (China) continues to threaten the national security, foreign policy, and economy of the United States. At this time, action must be taken to address the threat posed by one mobile application in particular, TikTok.
TikTok, a video-sharing mobile application owned by the Chinese company ByteDance Ltd., has reportedly been downloaded over 175 million times in the United States and over one billion times globally. TikTok automatically captures vast swaths of information from its users, including Internet and other network activity information such as location data and browsing and search histories. This data collection threatens to allow the Chinese Communist Party access to Americans’ personal and proprietary information — potentially allowing China to track the locations of Federal employees and contractors, build dossiers of personal information for blackmail, and conduct corporate espionage.
TikTok also reportedly censors content that the Chinese Communist Party deems politically sensitive, such as content concerning protests in Hong Kong and China’s treatment of Uyghurs and other Muslim minorities. This mobile application may also be used for disinformation campaigns that benefit the Chinese Communist Party, such as when TikTok videos spread debunked conspiracy theories about the origins of the 2019 Novel Coronavirus.
These risks are real. The Department of Homeland Security, Transportation Security Administration, and the United States Armed Forces have already banned the use of TikTok on Federal Government phones. The Government of India recently banned the use of TikTok and other Chinese mobile applications throughout the country; in a statement, India’s Ministry of Electronics and Information Technology asserted that they were “stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India.” American companies and organizations have begun banning TikTok on their devices. The United States must take aggressive action against the owners of TikTok to protect our national security.
Accordingly, I hereby order:
Section 1. (a) The following actions shall be prohibited beginning 45 days after the date of this order, to the extent permitted under applicable law: any transaction by any person, or with respect to any property, subject to the jurisdiction of the United States, with ByteDance Ltd. (a.k.a. Zìjié Tiàodòng), Beijing, China, or its subsidiaries, in which any such company has any interest, as identified by the Secretary of Commerce (Secretary) under section 1(c) of this order.
(b) The prohibition in subsection (a) of this section applies except to the extent provided by statutes, or in regulations, orders, directives, or licenses that may be issued pursuant to this order, and notwithstanding any contract entered into or any license or permit granted before the date of this order.
(c) 45 days after the date of this order, the Secretary shall identify the transactions subject to subsection (a) of this section.
Sec. 2. (a) Any transaction by a United States person or within the United States that evades or avoids, has the purpose of evading or avoiding, causes a violation of, or attempts to violate the prohibition set forth in this order is prohibited.
(b) Any conspiracy formed to violate any of the prohibitions set forth in this order is prohibited.
Sec. 3. For the purposes of this order:
(a) the term “person” means an individual or entity;
(b) the term “entity” means a government or instrumentality of such government, partnership, association, trust, joint venture, corporation, group, subgroup, or other organization, including an international organization; and
(c) the term “United States person” means any United States citizen, permanent resident alien, entity organized under the laws of the United States or any jurisdiction within the United States (including foreign branches), or any person in the United States.
Sec. 4. The Secretary is hereby authorized to take such actions, including adopting rules and regulations, and to employ all powers granted to me by IEEPA as may be necessary to implement this order. The Secretary may, consistent with applicable law, redelegate any of these functions within the Department of Commerce. All departments and agencies of the United States shall take all appropriate measures within their authority to implement this order.
Sec. 5. General Provisions. (a) Nothing in this order shall be construed to impair or otherwise affect:
(i) the authority granted by law to an executive department, agency, or the head thereof; or
(ii) the functions of the Director of the Office of Management and Budget relating to budgetary, administrative, or legislative proposals.
(b) This order shall be implemented consistent with applicable law and subject to the availability of appropriations.
(c) This order is not intended to, and does not, create any right or benefit, substantive or procedural, enforceable at law or in equity by any party against the United States, its departments, agencies, or entities, its officers, employees, or agents, or any other person.
DONALD J. TRUMP
THE WHITE HOUSE,
August 6, 2020.
NYT: The nation’s leading health insurers are experiencing an embarrassment of profits.
Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago. And while insurance profits are capped under the Affordable Care Act, with the requirement that consumers should benefit from such excesses in the form of rebates, no one should expect an immediate windfall.
But the amounts that insurers are retaining have caught the attention of the Trump administration. The Health and Human Services Department advised companies to consider speeding up rebates, and on Tuesday suggested that they reduce premiums to help consumers through the economic downturn caused by the pandemic.
The US Government advisory is here: https://www.cms.gov/newsroom/press-releases/cms-announces-temporary-policy-premium-reductions
NYT credit: https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html?action=click&module=Latest&pgtype=Homepage
Some of the largest companies, including Anthem, Humana and UnitedHealth Group, are reporting second-quarter earnings that are double what they were a year ago. And while insurance profits are capped under the Affordable Care Act, with the requirement that consumers should benefit from such excesses in the form of rebates, no one should expect an immediate windfall.
But the amounts that insurers are retaining have caught the attention of the Trump administration. The Health and Human Services Department advised companies to consider speeding up rebates, and on Tuesday suggested that they reduce premiums to help consumers through the economic downturn caused by the pandemic.
The US Government advisory is here: https://www.cms.gov/newsroom/press-releases/cms-announces-temporary-policy-premium-reductions
NYT credit: https://www.nytimes.com/2020/08/05/health/covid-insurance-profits.html?action=click&module=Latest&pgtype=Homepage
AGs letter to Facebook
[Not all AG signatures are shown]
[Not all AG signatures are shown]
Multistate AGs' letter to HHS seeking remedy against Gilead for Remdesivir shortage
https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf
Excerpts:
Remdesivir has benefited from millions of dollars of public funding, including a $30- million NIH-funded clinical trial estimated for this fiscal year alone.11 But despite the large infusion of taxpayer monies, Gilead is unable to guarantee a supply of remdesivir sufficient to alleviate the health and safety needs of the country amid the pandemic.
***
Aside from production issues, the large infusion of taxpayer dollars into remdesivir has not resulted in the product being made available at a reasonable price. A study from four institutions, including the University of Liverpool and Howard University, found that remdesivir can be manufactured at $0.93 per day or $12.50 per patient.16 Yet, in June, Gilead announced that the company will charge government programs, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, $2,340 for a six-vial, five-day treatment course ($390 per vial).17 For patients with private insurance, as well as Medicare and Medicaid, Gilead will charge 33% more or $3,120 (the equivalent of $520 per vial) for the exact same treatment.18 Gilead did not announce the pricing structure for the uninsured.19
It is unfortunate that Gilead has chosen to place its profit margins over the interests of Americans suffering in this pandemic. Record unemployment and ongoing financial troubles will prevent many Americans from paying for remdesivir. Even for the insured, Gilead’s excessive pricing makes copayments and out-of-pocket expenses cost-prohibitive. Moreover, Gilead’s pricing will challenge the growing numbers of Americans that lack health coverage as a result of the pandemic.20 If Americans who need remdesivir find themselves unable to afford a treatment course, then federal agencies have sufficient reason to require Gilead to “license both the background patents and the patents stemming from the contract work” under the Bayh-Dole Act.21
In light of the unprecedented COVID-19 crisis, we request the NIH and FDA exercise their march-in rights under the Bayh-Dole Act. Failing that, we ask that the NIH and FDA assign to the states these rights to ensure that drug manufacturers are licensed to meet the market demand during this health crisis. Alongside either exercise, we urge you to make full and immediate use of your legal authority under the Defense Production Act to put the weight of the federal government behind a rapid scaling up of remdesivir production and distribution. Under the authority already delegated to Secretary Azar of HHS under the Executive Order of March 18th, 2020, the Secretary has the power to invoke the Defense Production Act to identify specific health and medical resources needed to respond to the COVID-19 crisis, and to require performance of contracts or orders to meet the needs of the country over other priorities.22
Critically, this delegation of power to the HHS Secretary already extends to drugs—not just to PPE and ventilators—and can help states.23 Now more than ever, the American public needs the support of the federal government in helping them afford COVID-19-related treatment. This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people. Gilead should not profit from the pandemic and it should be pushed to do more to help more people.
We look forward to a prompt response in bringing relief to millions of COVID-19 patients and working with our federal partners to rapidly scale up remdesivir production and distribution.
Sincerely,
Xavier Becerra California Attorney General
Jeff Landry Louisiana Attorney General
[and 28 other AGs, including Karl Racine DC AG]
https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf
Excerpts:
Remdesivir has benefited from millions of dollars of public funding, including a $30- million NIH-funded clinical trial estimated for this fiscal year alone.11 But despite the large infusion of taxpayer monies, Gilead is unable to guarantee a supply of remdesivir sufficient to alleviate the health and safety needs of the country amid the pandemic.
***
Aside from production issues, the large infusion of taxpayer dollars into remdesivir has not resulted in the product being made available at a reasonable price. A study from four institutions, including the University of Liverpool and Howard University, found that remdesivir can be manufactured at $0.93 per day or $12.50 per patient.16 Yet, in June, Gilead announced that the company will charge government programs, including the U.S. government’s Indian Health Services and the Department of Veterans Affairs, $2,340 for a six-vial, five-day treatment course ($390 per vial).17 For patients with private insurance, as well as Medicare and Medicaid, Gilead will charge 33% more or $3,120 (the equivalent of $520 per vial) for the exact same treatment.18 Gilead did not announce the pricing structure for the uninsured.19
It is unfortunate that Gilead has chosen to place its profit margins over the interests of Americans suffering in this pandemic. Record unemployment and ongoing financial troubles will prevent many Americans from paying for remdesivir. Even for the insured, Gilead’s excessive pricing makes copayments and out-of-pocket expenses cost-prohibitive. Moreover, Gilead’s pricing will challenge the growing numbers of Americans that lack health coverage as a result of the pandemic.20 If Americans who need remdesivir find themselves unable to afford a treatment course, then federal agencies have sufficient reason to require Gilead to “license both the background patents and the patents stemming from the contract work” under the Bayh-Dole Act.21
In light of the unprecedented COVID-19 crisis, we request the NIH and FDA exercise their march-in rights under the Bayh-Dole Act. Failing that, we ask that the NIH and FDA assign to the states these rights to ensure that drug manufacturers are licensed to meet the market demand during this health crisis. Alongside either exercise, we urge you to make full and immediate use of your legal authority under the Defense Production Act to put the weight of the federal government behind a rapid scaling up of remdesivir production and distribution. Under the authority already delegated to Secretary Azar of HHS under the Executive Order of March 18th, 2020, the Secretary has the power to invoke the Defense Production Act to identify specific health and medical resources needed to respond to the COVID-19 crisis, and to require performance of contracts or orders to meet the needs of the country over other priorities.22
Critically, this delegation of power to the HHS Secretary already extends to drugs—not just to PPE and ventilators—and can help states.23 Now more than ever, the American public needs the support of the federal government in helping them afford COVID-19-related treatment. This is not the time for any company to extract large corporate profits from uninsured and underinsured Americans—nor can we allow the individual market priorities and weaknesses of one company to determine the fates of hundreds of thousands of people. Gilead should not profit from the pandemic and it should be pushed to do more to help more people.
We look forward to a prompt response in bringing relief to millions of COVID-19 patients and working with our federal partners to rapidly scale up remdesivir production and distribution.
Sincerely,
Xavier Becerra California Attorney General
Jeff Landry Louisiana Attorney General
[and 28 other AGs, including Karl Racine DC AG]
Maryland is working with six other states to negotiate the purchase of so-called antigen tests for the coronavirus that will return results more quickly, Gov. Larry Hogan said Tuesday.
Maryland formed an alliance with the states of Louisiana, Massachusetts, Michigan, Ohio and Virginia as well as the Rockefeller Foundation to negotiate to buy 500,000 tests for each state, Hogan said Tuesday morning. By the end of the day, North Carolina joined the pact, bringing the potential joint purchase to 3.5 million tests.
From https://www.baltimoresun.com/coronavirus/bs-md-hogan-antigen-20200804-n564sfbyjrbpplkdmhg6d6cwbe-story.html
Maryland formed an alliance with the states of Louisiana, Massachusetts, Michigan, Ohio and Virginia as well as the Rockefeller Foundation to negotiate to buy 500,000 tests for each state, Hogan said Tuesday morning. By the end of the day, North Carolina joined the pact, bringing the potential joint purchase to 3.5 million tests.
From https://www.baltimoresun.com/coronavirus/bs-md-hogan-antigen-20200804-n564sfbyjrbpplkdmhg6d6cwbe-story.html
WSJ on China reaction after Trump intervention in Microsoft/Tik-Tok Acwuisition talks
In China, talk of a TikTok sale has gone down badly. The Global Times, a Communist Party tabloid, derided the situation as “the hunting and looting of TikTok by the U.S. government in conjunction with U.S. high-tech companies.” One risk for Microsoft is that the Chinese government retaliates over the company’s role in a TikTok deal, political analysts have suggested, such as by targeting the Chinese versions of its Bing search engine or LinkedIn, the business-focused social-media platform that Microsoft bought in 2016.
From https://www.wsj.com/articles/microsoft-ceo-nadella-wades-into-u-s-china-tensions-in-tiktok-pursuit-11596569063?mod=hp_lead_pos4 [pay wall]
In China, talk of a TikTok sale has gone down badly. The Global Times, a Communist Party tabloid, derided the situation as “the hunting and looting of TikTok by the U.S. government in conjunction with U.S. high-tech companies.” One risk for Microsoft is that the Chinese government retaliates over the company’s role in a TikTok deal, political analysts have suggested, such as by targeting the Chinese versions of its Bing search engine or LinkedIn, the business-focused social-media platform that Microsoft bought in 2016.
From https://www.wsj.com/articles/microsoft-ceo-nadella-wades-into-u-s-china-tensions-in-tiktok-pursuit-11596569063?mod=hp_lead_pos4 [pay wall]
See the filed Trump Campaign Complaint against Nevada mail voting bill, and a copy of the bill
The complaint:
https://thenevadaindependent.com/article/trump-campaign-sues-nevada-over-bill-expanding-mail-in-voting-for-general-election
The bill:
https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7150/Overview
Excerpts from the Complaint:
“The RNC has a vital interest in protecting the ability of Republican voters to cast, and Republican candidates to receive, effective votes in Nevada elections and elsewhere . . . . “Major or hasty changes confuse voters, undermine confidence in the electoral process, and create incentive to remain away from the polls.”
The bill, AB4 “upends Nevada’s election laws and requires massive changes in election procedures and processes, makes voter fraud and other ineligible voting inevitable.”
The complaint:
https://thenevadaindependent.com/article/trump-campaign-sues-nevada-over-bill-expanding-mail-in-voting-for-general-election
The bill:
https://www.leg.state.nv.us/App/NELIS/REL/32nd2020Special/Bill/7150/Overview
Excerpts from the Complaint:
“The RNC has a vital interest in protecting the ability of Republican voters to cast, and Republican candidates to receive, effective votes in Nevada elections and elsewhere . . . . “Major or hasty changes confuse voters, undermine confidence in the electoral process, and create incentive to remain away from the polls.”
The bill, AB4 “upends Nevada’s election laws and requires massive changes in election procedures and processes, makes voter fraud and other ineligible voting inevitable.”
From Maryland Consumer Rights Coalition
The Trump Administration has taken bold action to….
Extend protections and expand support for debt collectors and payday lenders.
CFPB. First, the Consumer Financial Protection Bureau (CFPB) is proposing disclosures on time barred debt that will confuse consumers and may lead them to pay debts that they do not owe. Time-barred debt (otherwise known as “zombie” debt) is a debt that is so old that it is no longer legally collectible. However, if a person pays something on the debt, even though it is no longer collectible, this can restart the clock and the debt rises from the dead and is a ‘live' debt again. Confused? So are many many consumers.
Rather than bar these kinds of debts across the country, the CFPB is creating greater confusion requiring that debt collectors tell consumers: (1) they must pay a debt, and (2) nothing will happen to them if they do not, and in fact making a payment could harm them by giving the collector renewed permission to sue them.
While Maryland bans filing a debt collection action, if this proposal is implemented, there will likely be attempts to weaken laws in Maryland.
Consumer advocates believe that the CFPB should, instead, ban these kinds of debts completely. The National Consumer Law Center is circulating a sign-on letter for nonprofit organizations. The letter will close on August 3.
True Lender. The Office of the Comptroller of the Currency (OCC) has proposed a new rule to determine who is the ‘true lender’ in the relationship between a bank and a third party. While this may sound innocuous, in fact, this would undermine state rate caps-like the 33% rate cap MCRC and partners fought to maintain two years ago-to keep predatory payday lenders out of Maryland. This proposal creates a massive loophole that would allow payday lenders to ignore state rate caps if the high-cost lender partnered with a bank on the loans. This is similar to the rent-a-bank scheme that Maryland rejected years ago but under this new proposal, it would be much harder to reject this model. MCRC will be sharing a sign-on letter for organizations and a separate one for individuals in the next few weeks. I
The Trump Administration has taken bold action to….
Extend protections and expand support for debt collectors and payday lenders.
CFPB. First, the Consumer Financial Protection Bureau (CFPB) is proposing disclosures on time barred debt that will confuse consumers and may lead them to pay debts that they do not owe. Time-barred debt (otherwise known as “zombie” debt) is a debt that is so old that it is no longer legally collectible. However, if a person pays something on the debt, even though it is no longer collectible, this can restart the clock and the debt rises from the dead and is a ‘live' debt again. Confused? So are many many consumers.
Rather than bar these kinds of debts across the country, the CFPB is creating greater confusion requiring that debt collectors tell consumers: (1) they must pay a debt, and (2) nothing will happen to them if they do not, and in fact making a payment could harm them by giving the collector renewed permission to sue them.
While Maryland bans filing a debt collection action, if this proposal is implemented, there will likely be attempts to weaken laws in Maryland.
Consumer advocates believe that the CFPB should, instead, ban these kinds of debts completely. The National Consumer Law Center is circulating a sign-on letter for nonprofit organizations. The letter will close on August 3.
True Lender. The Office of the Comptroller of the Currency (OCC) has proposed a new rule to determine who is the ‘true lender’ in the relationship between a bank and a third party. While this may sound innocuous, in fact, this would undermine state rate caps-like the 33% rate cap MCRC and partners fought to maintain two years ago-to keep predatory payday lenders out of Maryland. This proposal creates a massive loophole that would allow payday lenders to ignore state rate caps if the high-cost lender partnered with a bank on the loans. This is similar to the rent-a-bank scheme that Maryland rejected years ago but under this new proposal, it would be much harder to reject this model. MCRC will be sharing a sign-on letter for organizations and a separate one for individuals in the next few weeks. I
Trump says TikTok sale can go through but only if the US gets a cut
By Rishi Iyengar, Oliver Effron and Nikki Carvajal, CNN Business
Updated 5:22 PM ET, Mon August 3, 2020
(CNN Business)After days of whiplash over the future of TikTok, President Donald Trump said he would allow an American company to acquire the short-form video app — with a catch.
Trump on Monday set September 15 as the deadline for TikTok to find a US buyer, failing which he said he will shut down the app in the country. In an unusual declaration, Trump also said any deal would have to include a "substantial amount of money" coming to the US Treasury.
"Right now they don't have any rights unless we give it to them. So if we're going to give them the rights, then ... it has to come into this country," Trump said. "It's a great asset, but it's not a great asset in the United States unless they have approval in the United States."
The President's requirement that some of the money from the deal go to the US Treasury doesn't have a basis in antitrust law, according to Gene Kimmelman, a former chief counsel for the US Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge.
"This is quite unusual, this is out of the norm," Kimmelman said. "It's actually quite hard to understand what the president is actually talking about here. ... It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
continue reading the article at CNN https://www.msn.com/en-us/news/politics/trump-says-tiktok-sale-can-go-through-but-only-if-the-us-gets-a-cut/ar-BB17woF9?ocid=msedgdhp
By Rishi Iyengar, Oliver Effron and Nikki Carvajal, CNN Business
Updated 5:22 PM ET, Mon August 3, 2020
(CNN Business)After days of whiplash over the future of TikTok, President Donald Trump said he would allow an American company to acquire the short-form video app — with a catch.
Trump on Monday set September 15 as the deadline for TikTok to find a US buyer, failing which he said he will shut down the app in the country. In an unusual declaration, Trump also said any deal would have to include a "substantial amount of money" coming to the US Treasury.
"Right now they don't have any rights unless we give it to them. So if we're going to give them the rights, then ... it has to come into this country," Trump said. "It's a great asset, but it's not a great asset in the United States unless they have approval in the United States."
The President's requirement that some of the money from the deal go to the US Treasury doesn't have a basis in antitrust law, according to Gene Kimmelman, a former chief counsel for the US Department of Justice's Antitrust Division and currently a senior adviser to the policy group Public Knowledge.
"This is quite unusual, this is out of the norm," Kimmelman said. "It's actually quite hard to understand what the president is actually talking about here. ... It's not unheard of for transactions to have broader geopolitical implications between countries, but it's quite remarkable to think about some kind of money being on the table in connection with a transaction."
continue reading the article at CNN https://www.msn.com/en-us/news/politics/trump-says-tiktok-sale-can-go-through-but-only-if-the-us-gets-a-cut/ar-BB17woF9?ocid=msedgdhp
The Political Misuse of Antitrust
By Spencer Waller
https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/
Review and Comment by Don Allen Resnikoff
Some believe that the Trump administration has politically misused antitrust actions. For example, there were rumors of a politically motivated White House direction to challenge the AT&T-Time Warner merger. Some see political hostility as the reason for Administration encouragement of antitrust action against Google and other social media and tech giants. Some have found politics at play with regard to the outcomes of the Sprint-T Mobile merger investigation. And, there has been whistleblower testimony to Congress from USDOJ staffers alleging politically motivated interference in antitrust investigations.
Such allegations raise disturbing questions for the general public. For the non-lawyer, it may suffice to say that antitrust agencies should rise above partisan politics in the pursuit of justice, and that those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
But Spencer Waller and his writing partner Jacob Morse are lawyers and antitrust scholars, so they have written an article focusing on the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Their analysis will be useful to lawyers for future litigants who may feel their clients are targets of political misuse.
Waller starts with the USDOJ’s nonbinding guidance on the impropriety of government prosecutions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
The Antitrust Division has worked on international agreements about due process principles, including some about conflict of interest principles that may relate to political bias.
Turning to case law, Waller reports that the closest the question of political bias or animus has come to being part of an antitrust case law decision was in the ATT-Time Warner litigation. There the defendants sought discovery of potential communications between the White House and the Justice Department about political influence in the decision to challenge the merger. District Court Judge Richard Leon denied the requested discovery, holding that defendants did not make a credible showing that they were singled out by the DOJ]. Waller wonders: “Even it turned out that there were no such communications, how would one ever know whether officials eager to please their bosses brought a plausible antitrust (or other kind of case) because they believed it would make the White House happy? And what should one do (or conclude) if such information became available? “
Turning to analogies from various more remote areas of the law, Waller observes that the law often deals with questions of purpose versus effect, objectively baseless claims versus claims with evidentiary and factual merit but improper purpose, and cases where these issues of mixed motives and biases are intertwined.
Examples include issues of selective prosecution. Waller suggests that the selective prosecution analogy does not offer a fruitful path for antitrust defendants: “ The defendants would have to establish most of the facts necessary for the claim before obtaining disclosure or discovery on this topic from the government in litigation, a burden even well-heeled defendants like AT&T and Time Warner could not meet. Finally, even the most egregious of political favoritism would do nothing to attack a biased decision not to enforce the antitrust laws to benefit an ally.”
Another analogy is offered by Federal Rule of Civil Procedure (FRCP) 11, which requires attorneys to sign pleadings, motions, and most other writings, attesting that they have made an investigation reasonable under the circumstances and certifying that the pleadings and other matters have a reasonable basis in both law and fact and are not being brought for an improper purpose. But the limitations of the Rule are great, Waller explains, such as that the Rule only states that the court “may” impose “appropriate” sanctions for violations of the rule. Moreover, “sanctions are limited to what is sufficient to deter repeated violations by the party or those in similar circumstances. The court also has wide discretion as to the type of sanctions that can be imposed.”
Model Rules of Professional Responsibility, variants of which are followed in many states, say that “In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.” But the rules only allow for the subsequent initiation of disciplinary proceedings with the relevant state bar authorities and those courts where the attorney in question is admitted to practice. Waller says that provides “little comfort to the litigants in the moment of responding to improperly motivated proceedings.”
Turning to administrative law for analogies, Waller observes that the cases generally preclude judicial inquiry into the mental processes of administrative decision makers. The cases do allow an inquiry and extra-record discovery in the exceptional circumstance where there is a strong showing of bad faith or improper behavior.
Employment discrimination law cases deal with allegations of surreptitious discriminatory motives analogous to surreptitious political motives in antitrust cases, generally requiring that the plaintiff must first establish a prima facie case of discrimination. The defendant (employer) must then produce evidence of a legitimate non-discriminatory reason for its actions. If this occurs, then there is no presumption of discrimination. The plaintiff must then be afforded a fair opportunity to present additional facts to show discrimination. Those cases suggest difficult procedural hurdles for the target of surreptitious conduct.
Tort law with regard to malicious prosecution and abuse of process is yet another area of law that offers analogies to misuse of antitrust for political purposes that Waller finds relevant.
I recommend reading the Waller piece to get a fuller sense of his observations and conclusions. An important part of his conclusion tracks what a non-lawyer observer might say about politics and antitrust: antitrust agencies should rise above partisan politics in the pursuit of justice, and those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
Waller observes that the decision of USDOJ to settle an antitrust matter already has some procedural protections from political influence. The Tunney Act,(which dates from 1974, requires a public interest showing before a settlement can be accepted by the court. However, the courts have made Tunney Act requirements a mere formality, limiting the inquiry to matching the nature of the relief to the civil complaint actually filed, rather than the scope of the case that should have been filed or the reasons why the agency acted or refrained from acting. Plainly, protections from improper political action would be enhanced if those limits were removed.
The issue of a decision not filed because of political considerations is one where US law is silent, but EU law provides a partial answer. There is no mechanism in current US law for judicial review of a decision not to proceed with a civil or criminal matter, but plainly there could be. Waller supports a commenter’s thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
In other words, requiring antitrust prosecutors to be articulate about public policy goals and purposes for either prosecuting or not prosecuting cases reduces the opportunity for furtive prosecutorial pursuit of narrow and partisan political goals.
Spencer Waller deserves great credit for moving forward the discussion of political misuse of antitrust. It is, of course, a topic of great interest for the general public as well as antitrust specialists with the ability to parse the array of available legal precedents and guides.
DR
By Spencer Waller
https://www.competitionpolicyinternational.com/the-political-misuse-of-antitrust-doing-the-right-thing-for-the-wrong-reason/
Review and Comment by Don Allen Resnikoff
Some believe that the Trump administration has politically misused antitrust actions. For example, there were rumors of a politically motivated White House direction to challenge the AT&T-Time Warner merger. Some see political hostility as the reason for Administration encouragement of antitrust action against Google and other social media and tech giants. Some have found politics at play with regard to the outcomes of the Sprint-T Mobile merger investigation. And, there has been whistleblower testimony to Congress from USDOJ staffers alleging politically motivated interference in antitrust investigations.
Such allegations raise disturbing questions for the general public. For the non-lawyer, it may suffice to say that antitrust agencies should rise above partisan politics in the pursuit of justice, and that those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
But Spencer Waller and his writing partner Jacob Morse are lawyers and antitrust scholars, so they have written an article focusing on the legal standards and precedents for dealing with allegations of political misuse of the antitrust laws. Their analysis will be useful to lawyers for future litigants who may feel their clients are targets of political misuse.
Waller starts with the USDOJ’s nonbinding guidance on the impropriety of government prosecutions motivated by political considerations: “The legal judgments of the Department of Justice must be impartial and insulated from political influence. It is imperative that the Department’s investigatory and prosecutorial powers be exercised free from partisan consideration.”
The Antitrust Division has worked on international agreements about due process principles, including some about conflict of interest principles that may relate to political bias.
Turning to case law, Waller reports that the closest the question of political bias or animus has come to being part of an antitrust case law decision was in the ATT-Time Warner litigation. There the defendants sought discovery of potential communications between the White House and the Justice Department about political influence in the decision to challenge the merger. District Court Judge Richard Leon denied the requested discovery, holding that defendants did not make a credible showing that they were singled out by the DOJ]. Waller wonders: “Even it turned out that there were no such communications, how would one ever know whether officials eager to please their bosses brought a plausible antitrust (or other kind of case) because they believed it would make the White House happy? And what should one do (or conclude) if such information became available? “
Turning to analogies from various more remote areas of the law, Waller observes that the law often deals with questions of purpose versus effect, objectively baseless claims versus claims with evidentiary and factual merit but improper purpose, and cases where these issues of mixed motives and biases are intertwined.
Examples include issues of selective prosecution. Waller suggests that the selective prosecution analogy does not offer a fruitful path for antitrust defendants: “ The defendants would have to establish most of the facts necessary for the claim before obtaining disclosure or discovery on this topic from the government in litigation, a burden even well-heeled defendants like AT&T and Time Warner could not meet. Finally, even the most egregious of political favoritism would do nothing to attack a biased decision not to enforce the antitrust laws to benefit an ally.”
Another analogy is offered by Federal Rule of Civil Procedure (FRCP) 11, which requires attorneys to sign pleadings, motions, and most other writings, attesting that they have made an investigation reasonable under the circumstances and certifying that the pleadings and other matters have a reasonable basis in both law and fact and are not being brought for an improper purpose. But the limitations of the Rule are great, Waller explains, such as that the Rule only states that the court “may” impose “appropriate” sanctions for violations of the rule. Moreover, “sanctions are limited to what is sufficient to deter repeated violations by the party or those in similar circumstances. The court also has wide discretion as to the type of sanctions that can be imposed.”
Model Rules of Professional Responsibility, variants of which are followed in many states, say that “In representing a client, a lawyer shall not use means that have no substantial purpose other than to embarrass, delay, or burden a third person, or use methods of obtaining evidence that violate the legal rights of such a person.” But the rules only allow for the subsequent initiation of disciplinary proceedings with the relevant state bar authorities and those courts where the attorney in question is admitted to practice. Waller says that provides “little comfort to the litigants in the moment of responding to improperly motivated proceedings.”
Turning to administrative law for analogies, Waller observes that the cases generally preclude judicial inquiry into the mental processes of administrative decision makers. The cases do allow an inquiry and extra-record discovery in the exceptional circumstance where there is a strong showing of bad faith or improper behavior.
Employment discrimination law cases deal with allegations of surreptitious discriminatory motives analogous to surreptitious political motives in antitrust cases, generally requiring that the plaintiff must first establish a prima facie case of discrimination. The defendant (employer) must then produce evidence of a legitimate non-discriminatory reason for its actions. If this occurs, then there is no presumption of discrimination. The plaintiff must then be afforded a fair opportunity to present additional facts to show discrimination. Those cases suggest difficult procedural hurdles for the target of surreptitious conduct.
Tort law with regard to malicious prosecution and abuse of process is yet another area of law that offers analogies to misuse of antitrust for political purposes that Waller finds relevant.
I recommend reading the Waller piece to get a fuller sense of his observations and conclusions. An important part of his conclusion tracks what a non-lawyer observer might say about politics and antitrust: antitrust agencies should rise above partisan politics in the pursuit of justice, and those who lead the agencies should be plainspoken in stating the agencies’ reasons justifying either bringing or declining to bring particular antitrust cases.
Waller observes that the decision of USDOJ to settle an antitrust matter already has some procedural protections from political influence. The Tunney Act,(which dates from 1974, requires a public interest showing before a settlement can be accepted by the court. However, the courts have made Tunney Act requirements a mere formality, limiting the inquiry to matching the nature of the relief to the civil complaint actually filed, rather than the scope of the case that should have been filed or the reasons why the agency acted or refrained from acting. Plainly, protections from improper political action would be enhanced if those limits were removed.
The issue of a decision not filed because of political considerations is one where US law is silent, but EU law provides a partial answer. There is no mechanism in current US law for judicial review of a decision not to proceed with a civil or criminal matter, but plainly there could be. Waller supports a commenter’s thought that the “Antitrust Division can move toward greater clarification of its prosecution policies by announcing findings and reasons whenever it takes action of any kind that is based upon significant policy. When it prosecutes a case, when it decides not to prosecute, when it decides to dismiss or to nol pros, when it enters into a consent arrangement, and when it grants a clearance, it can and should state publicly the policy reasons for its actions, and the policy statements should be treated as precedents which normally will not be retroactively changed.”
In other words, requiring antitrust prosecutors to be articulate about public policy goals and purposes for either prosecuting or not prosecuting cases reduces the opportunity for furtive prosecutorial pursuit of narrow and partisan political goals.
Spencer Waller deserves great credit for moving forward the discussion of political misuse of antitrust. It is, of course, a topic of great interest for the general public as well as antitrust specialists with the ability to parse the array of available legal precedents and guides.
DR
Why does Medicare pay $100 per COVID test to Quest for too-slow 7 day test turnaround?
Excerpt from https://www.usatoday.com/story/news/health/2020/07/18/covid-testing-delays-worsen-labs-struggle-keep-pace-demand/5415468002/
In mid-April, when labs completed about 150,000 COVID-19 tests a day, the federal government dangled a major incentive to increase testing output. Medicare would pay labs $100 for each “high-throughput” test, nearly double the $51 per test paid in the early days of the pandemic, as a way to get labs with machines that process lots of tests to increase capacity and deliver faster results to combat the spread of the virus.
The labs reached an all-time high of more than 831,900 COVID tests Thursday, according to the COVID Tracking Project, but the prolific expansion has led to a bottleneck, slowing results for families such as the Julians.
Quest Diagnostics said this week the average turnaround time for nonpriority patients was seven days or more. Patients in hospitals, those preparing for acute surgery and health care workers with symptoms get results within a day.
Posting by Don Allen Resnikoff
Excerpt from https://www.usatoday.com/story/news/health/2020/07/18/covid-testing-delays-worsen-labs-struggle-keep-pace-demand/5415468002/
In mid-April, when labs completed about 150,000 COVID-19 tests a day, the federal government dangled a major incentive to increase testing output. Medicare would pay labs $100 for each “high-throughput” test, nearly double the $51 per test paid in the early days of the pandemic, as a way to get labs with machines that process lots of tests to increase capacity and deliver faster results to combat the spread of the virus.
The labs reached an all-time high of more than 831,900 COVID tests Thursday, according to the COVID Tracking Project, but the prolific expansion has led to a bottleneck, slowing results for families such as the Julians.
Quest Diagnostics said this week the average turnaround time for nonpriority patients was seven days or more. Patients in hospitals, those preparing for acute surgery and health care workers with symptoms get results within a day.
Posting by Don Allen Resnikoff
'I'm fighting a war against COVID-19 and a war against stupidity,' says CMO of Houston hospital
Molly Gamble (Twitter) -
After two hours of sleep a night for four months and seeing a member of his team contract the virus, Joseph Varon, MD, is growing exasperated.
"I'm pretty much fighting two wars: A war against COVID and a war against stupidity," Dr. Varon, MD, CMO and chief of critical care at United Memorial Medical Center in Houston, told NBC News. "And the problem is the first one, I have some hope about winning. But the second one is becoming more and more difficult."
Dr. Varon noted that whether it's information backed by science or common sense, people throughout the U.S. are not listening. "The thing that annoys me the most is that we keep on doing our best to save all these people, and then you get another batch of people that are doing exactly the opposite of what you're telling them to do."
From:
https://www.beckershospitalreview.com/hospital-physician-relationships/i-m-fighting-a-war-against-covid-19-and-a-war-against-stupidity-says-cmo-of-houston-hospital.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_source=BHRE&utm_medium=email&oly_enc_id=8431J4722801B7S'I'm fighting a war against COVID-19 and a war against stupidity,' says CMO of Houston hospital Molly Gamble (Twitter) - 2 hours ago Print | Email
Antitrust and Platform Monopoly -
By Herbert Hovenkamp (University of Pennsylvania)
This article first considers an often-discussed question about large internet platforms that deal directly with consumers: Are they “winner take all,” or natural monopoly, firms? That question is complex and does not produce the same answer for every platform. The closer one looks at digital platforms they less they seem to be winner-take-all. As a result, we can assume that competition can be made to work in most of them.
Second, assuming that an antitrust violation is found, what should be the appropriate remedy? Breaking up large firms subject to extensive scale economies or positive network effects is generally thought to be unwise. The resulting entities will be unable to behave competitively. Inevitably, they will either merge or collude, or else one will drive the others out of business. Even if a platform is not a natural monopoly but does experience significant economies of scale in production or consumption, a breakup can be socially costly. In the past, structural relief of this type has led to higher prices or business firm failure. If breakup is not the answer, then what are the best antitrust remedies? One possibility is to break up ownership and management rather than assets. The history of antitrust law is replete with firms that are organized as single entities under corporate law, but that function as competitors and treated that way by antitrust law. This permits productive assets to remain intact, but forces decision makers to behave competitively.
Finally, this paper takes a look at the problem of platform acquisition of nascent firms, where the biggest threat is not from horizontal mergers but rather from acquisitions of complements or differentiated technologies. For these, the tools we currently use in merger law are poorly suited. Here I offer some suggestions.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639142
By Herbert Hovenkamp (University of Pennsylvania)
This article first considers an often-discussed question about large internet platforms that deal directly with consumers: Are they “winner take all,” or natural monopoly, firms? That question is complex and does not produce the same answer for every platform. The closer one looks at digital platforms they less they seem to be winner-take-all. As a result, we can assume that competition can be made to work in most of them.
Second, assuming that an antitrust violation is found, what should be the appropriate remedy? Breaking up large firms subject to extensive scale economies or positive network effects is generally thought to be unwise. The resulting entities will be unable to behave competitively. Inevitably, they will either merge or collude, or else one will drive the others out of business. Even if a platform is not a natural monopoly but does experience significant economies of scale in production or consumption, a breakup can be socially costly. In the past, structural relief of this type has led to higher prices or business firm failure. If breakup is not the answer, then what are the best antitrust remedies? One possibility is to break up ownership and management rather than assets. The history of antitrust law is replete with firms that are organized as single entities under corporate law, but that function as competitors and treated that way by antitrust law. This permits productive assets to remain intact, but forces decision makers to behave competitively.
Finally, this paper takes a look at the problem of platform acquisition of nascent firms, where the biggest threat is not from horizontal mergers but rather from acquisitions of complements or differentiated technologies. For these, the tools we currently use in merger law are poorly suited. Here I offer some suggestions.
Continue Reading…https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3639142
Warren letter to Fed's Quarles objecting to reduced bank capital requirements
https://www.warren.senate.gov/imo/media/doc/2020.07.30%20Letter%20to%20Quarles.pdf
Excerpt:
Dear Vice Chair Quarles,
Your requests for Congress to weaken the rules put in place after the 2008 financial crisis to protect our financial system are outrageous and irresponsible, and we are writing to seek an explanation for why – during a historic economic crisis – you are seeking to hand out regulatory favors to big banks that would harm the economy and increase systemic risks. Your efforts to weaken key safeguards of our nation's financial system at a time when millions of families' livelihoods are at risk is an abdication of your agency's mission of "foster[ing] the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems." 1 Congress is right now in the process of crafting legislation that will determine, among other things, whether millions of Americans are able to keep their homes, whether critical financial support for people out of work will continue, and whether families across the nation will be able to pay their bills on time and keep food on the table.
With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress appropriated half a trillion dollars for the Federal Reserve System to stabilize our economy by providing support to struggling businesses and state and local governments; you have proven unable or unwilling to fully utilize these tools. Instead of using your authority to assist our most vulnerable communities, you have apparently chosen to press for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – signed into law by President Obama ten years ago this month – that Wall Street's army of lawyers and bank lobbyists have long sought and that would put our financial system in jeopardy. According to recent reports, the stimulus bill now being drafted is "expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, . . .
https://www.warren.senate.gov/imo/media/doc/2020.07.30%20Letter%20to%20Quarles.pdf
Excerpt:
Dear Vice Chair Quarles,
Your requests for Congress to weaken the rules put in place after the 2008 financial crisis to protect our financial system are outrageous and irresponsible, and we are writing to seek an explanation for why – during a historic economic crisis – you are seeking to hand out regulatory favors to big banks that would harm the economy and increase systemic risks. Your efforts to weaken key safeguards of our nation's financial system at a time when millions of families' livelihoods are at risk is an abdication of your agency's mission of "foster[ing] the stability, integrity, and efficiency of the nation's monetary, financial, and payment systems." 1 Congress is right now in the process of crafting legislation that will determine, among other things, whether millions of Americans are able to keep their homes, whether critical financial support for people out of work will continue, and whether families across the nation will be able to pay their bills on time and keep food on the table.
With the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress appropriated half a trillion dollars for the Federal Reserve System to stabilize our economy by providing support to struggling businesses and state and local governments; you have proven unable or unwilling to fully utilize these tools. Instead of using your authority to assist our most vulnerable communities, you have apparently chosen to press for changes to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) – signed into law by President Obama ten years ago this month – that Wall Street's army of lawyers and bank lobbyists have long sought and that would put our financial system in jeopardy. According to recent reports, the stimulus bill now being drafted is "expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, . . .
DMN: Congress Asks Jeff Bezos — ‘Shouldn’t Twitch License Music?’
Congress asked Jeff Bezos during historic antitrust hearings why Twitch doesn’t pay music royalties. Bezos replied, “I don’t know.”
The story continues here. https://www.digitalmusicnews.com/2020/07/30/jeff-bezos-congress-twitch-music-licensing/
Congress asked Jeff Bezos during historic antitrust hearings why Twitch doesn’t pay music royalties. Bezos replied, “I don’t know.”
The story continues here. https://www.digitalmusicnews.com/2020/07/30/jeff-bezos-congress-twitch-music-licensing/
Qualcomm Signs Patent Licensing Deal With Huawei
-
July 30, 2020Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Thursday, July 30.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective January 1, 2020, according to Qualcomm.
Qualcomm expects about US$1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
The agreement was unexpected given the backdrop of an increasingly acrimonious political battle between Washington and Beijing over technologies broadly and Huawei in particular. The Trump administration has accused China of stealing trade secrets and using technology, including Huawei’s, as a vehicle to potentially conduct espionage. China and Huawei have denied those charges.
As part of that tussle, the administration and China have imposed tariffs on each other, including on electronics. In 2018, President Trump blocked the US$117 billion takeover bid of Qualcomm by rival chip maker Broadcom, which was previously based in Singapore. The administration saw the deal as a threat to US leadership over China in technological arenas such as the emerging field of superfast 5G communications.
Full Content: Wall Street Journal
-
July 30, 2020Qualcomm Incorporated reached a deal with Chinese telecom business Huawei to settle a patent dispute, the company announced Thursday, July 30.
The global licensing agreement grants Huawei back rights to some of the San Diego-based tech company’s patents effective January 1, 2020, according to Qualcomm.
Qualcomm expects about US$1.8 billion from Huawei as part of the back-dated agreement.
“As 5G continues to roll out, we are realizing the benefits of the investments we have made in building the most extensive licensing program in mobile and are turning the technical challenges of 5G into leadership opportunities and commercial wins,” Qualcomm CEO Steve Mollenkopf said in a statement.
The agreement was unexpected given the backdrop of an increasingly acrimonious political battle between Washington and Beijing over technologies broadly and Huawei in particular. The Trump administration has accused China of stealing trade secrets and using technology, including Huawei’s, as a vehicle to potentially conduct espionage. China and Huawei have denied those charges.
As part of that tussle, the administration and China have imposed tariffs on each other, including on electronics. In 2018, President Trump blocked the US$117 billion takeover bid of Qualcomm by rival chip maker Broadcom, which was previously based in Singapore. The administration saw the deal as a threat to US leadership over China in technological arenas such as the emerging field of superfast 5G communications.
Full Content: Wall Street Journal
Big banks may get a big gift in the stimulus bill being drafted by Senate Republicans -- lower capital requirements.
Lawmakers are expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, according to three people familiar with the effort.
The push is the culmination of a monthslong effort by industry lobbyists and a top Federal Reserve official to change a restriction put in place in the wake of the 2008 financial crisis to prevent banks from engaging in risky behavior.
From https://www.nytimes.com/2020/07/27/business/bank-regulations-rollback-stimulus-bill.html
Comment: On the need for capital requirements to discourage risky bank behavior (among many other sourcess) : “Ending Too Big to Fail," produced by the Federal Reserve Bank of Minneapolis (2016). The report proposes a substantial increase in the capital requirements
of the U.S. banking system, and it argues that this increase would improve the resiliency of financial institutions in the face of a severe financial shock, such as the 2008 crisis. Improving the resiliency of these institutions in turn makes the need for another public bailout of the financial system less likely.
Lawmakers are expected to include language that would give the Federal Reserve authority to relax a requirement surrounding capital levels at the biggest banks, essentially allowing firms to load up on riskier assets, according to three people familiar with the effort.
The push is the culmination of a monthslong effort by industry lobbyists and a top Federal Reserve official to change a restriction put in place in the wake of the 2008 financial crisis to prevent banks from engaging in risky behavior.
From https://www.nytimes.com/2020/07/27/business/bank-regulations-rollback-stimulus-bill.html
Comment: On the need for capital requirements to discourage risky bank behavior (among many other sourcess) : “Ending Too Big to Fail," produced by the Federal Reserve Bank of Minneapolis (2016). The report proposes a substantial increase in the capital requirements
of the U.S. banking system, and it argues that this increase would improve the resiliency of financial institutions in the face of a severe financial shock, such as the 2008 crisis. Improving the resiliency of these institutions in turn makes the need for another public bailout of the financial system less likely.
Moderna is talking to governments about pricing its COVID-19 vaccine between $50 and $60 per course in the U.S. and other high-income countries, the Financial Times reported, citing anonymous sources.
If the report proves true, that would put the cost of Moderna’s vaccine, mRNA-1273, at $25 to $30 per shot, well above the price of the vaccine being developed by Pfizer and BioNTech. They struck a deal with the U.S. government for a dose price of $19.50 last week.
A spokesperson for Moderna declined to comment on the company’s pricing plans, citing in an email to Fierce Pharma the confidentiality of “discussions with a number of governments and governmental entities about potential supply of mRNA-1273.”
Source: https://www.fiercepharma.com/pharma/moderna-s-rumored-50-plus-price-covid-19-vaccine-draws-ire-as-company-touts-new-animal-data?
If the report proves true, that would put the cost of Moderna’s vaccine, mRNA-1273, at $25 to $30 per shot, well above the price of the vaccine being developed by Pfizer and BioNTech. They struck a deal with the U.S. government for a dose price of $19.50 last week.
A spokesperson for Moderna declined to comment on the company’s pricing plans, citing in an email to Fierce Pharma the confidentiality of “discussions with a number of governments and governmental entities about potential supply of mRNA-1273.”
Source: https://www.fiercepharma.com/pharma/moderna-s-rumored-50-plus-price-covid-19-vaccine-draws-ire-as-company-touts-new-animal-data?
Generic Drugmakers Lose Bid To Block New California Antitrust Law
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July 26, 2020 A California law that punishes drugmakers who pay to keep generic competitors off the market will stand after the Ninth Circuit ruled the generic companies challenging the law failed to show it would harm them.
The Association for Accessible Medicines, a lobbying group for the generic drug industry, sought to overturn a lower court decision denying an injunction to block the law. But the US Court of Appeals for the Ninth Circuit ruled Friday, July 24, that the district court must dismiss the case without prejudice, July 24, reported Bloomberg.
The California law AB 824, combats illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug. These collusive agreements, known as “pay-for-delay” agreements, stifle competition and hike the price patients and employers pay for prescription medicines. AB 824 is the first state law in the nation to tackle pay-for-delay agreements.
Full Content: Bloomberg
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July 26, 2020 A California law that punishes drugmakers who pay to keep generic competitors off the market will stand after the Ninth Circuit ruled the generic companies challenging the law failed to show it would harm them.
The Association for Accessible Medicines, a lobbying group for the generic drug industry, sought to overturn a lower court decision denying an injunction to block the law. But the US Court of Appeals for the Ninth Circuit ruled Friday, July 24, that the district court must dismiss the case without prejudice, July 24, reported Bloomberg.
The California law AB 824, combats illegal, secretive deals between pharmaceutical companies in which one drug company pays its competitor to delay the competitor’s research, production, or sale of a competing version of its drug. These collusive agreements, known as “pay-for-delay” agreements, stifle competition and hike the price patients and employers pay for prescription medicines. AB 824 is the first state law in the nation to tackle pay-for-delay agreements.
Full Content: Bloomberg
NYT op-ed: Fix the Remdesivir Supply problem:
By Amy Kapczynski, Paul Biddinger and Rochelle Walensky
Ms. Kapczynski is a professor at Yale Law School. Dr. Biddinger and Dr. Walensky practice at Massachusetts General Hospital.
Excerpt:
The Department of Health and Human Services can build a transparent system that ensures remdesivir quickly gets to where it does the greatest good — and can be redistributed, making sure that hospitals that share now won’t be harmed down the line for doing so. Having more available doses would also help with logistics, because hospitals’ needs are not fully predictable.
Beyond the distribution problem, we are facing a supply problems as well. Gilead Sciences, which holds the key patents on remdesivir, announced last month that it had only about 500,000 treatment courses through September — for the entire world. The company has sold almost all of it to the United States, and other countries are already experiencing serious shortages.
Gilead attributes its supply problems to the complexities of manufacturing the drug. But small-molecule drugs like remdesivir are usually pretty simple to reverse-engineer. In fact, companies in India, Bangladesh and China are already making it.
Some of those companies are licensed by Gilead, and history suggests that those deals include provisions meant to lock up all available supply. But some companies are producing remdesivir independently, and if the United States were willing to put out a competitive tender, there could be a greater supply.
Indeed, isn’t that what we usually would expect any government or any business to do if its main supplier falls short? The barrier is Gilead’s patents, which allow it to prevent others from selling the drug.
Fortunately, there is a remedy for this. Health and Human Services can offer to buy the drug from any company that can supply it (or give hospitals the right to do the same) and then pay Gilead a royalty in return. The solution, called “government patent use,” was legally codified in the two world wars to prevent price gouging and shortages, and has been used for medicines before.
Government patent use is especially appropriate now, given the risk of shortages and the government’s substantial contributions to its development (so substantial in fact that it may be entitled to co-ownership credit, though it has not asserted these rights).
Remdesivir is also, arguably, overpriced. Gilead sells it for $2,340 to $3,120 per five-day treatment, even though an independent group estimated that a fair price could be substantially lower, and generic versions are selling for about $320 per treatment.
Fixing the remdesivir supply lines would do right by hundreds of thousands of patients and help us flex the kind of muscle we will need for the next Covid-19 treatment or the next vaccine. If we can create a thousand-bed Covid hospital in a matter of days, if we can ramp up telemedicine programs overnight, if we can swiftly transform the way we live, learn and work, then surely we can tackle a remdesivir shortage too.
https://www.nytimes.com/2020/07/28/opinion/remdesivir-shortage-coronavirus.html?action=click&module=Opinion&pgtype=Homepage#after-story-ad-2
Read the testimony being submitted to Congress on behalf of:
Amazon https://www.washingtonpost.com/context/jeff-bezos-statement-to-the-u-s-house-committee-on-the-judiciary/ec8c99a0-e2cc-4a35-bff5-e796e2a6fd0d/?itid=lb_big-tech-battles-congress_9
Facebook https://www.washingtonpost.com/context/mark-zuckerberg-s-statement-to-a-house-judiciary-panel/9edb5481-5825-477d-bba0-f510055b0c4e/?itid=lb_big-tech-battles-congress_10
Google https://www.washingtonpost.com/context/sundar-pichai-s-statement-to-a-house-judiciary-panel/f45ffdda-49c0-4ffe-9bfc-9095f7eddea2/?itid=lb_big-tech-battles-congress_11
Apple https://www.washingtonpost.com/context/tim-cook-s-statement-to-a-house-judiciary-panel/89c15175-1055-4d72-aa10-86619b2525c9/?itid=lb_big-tech-battles-congress_12
Amazon https://www.washingtonpost.com/context/jeff-bezos-statement-to-the-u-s-house-committee-on-the-judiciary/ec8c99a0-e2cc-4a35-bff5-e796e2a6fd0d/?itid=lb_big-tech-battles-congress_9
Facebook https://www.washingtonpost.com/context/mark-zuckerberg-s-statement-to-a-house-judiciary-panel/9edb5481-5825-477d-bba0-f510055b0c4e/?itid=lb_big-tech-battles-congress_10
Google https://www.washingtonpost.com/context/sundar-pichai-s-statement-to-a-house-judiciary-panel/f45ffdda-49c0-4ffe-9bfc-9095f7eddea2/?itid=lb_big-tech-battles-congress_11
Apple https://www.washingtonpost.com/context/tim-cook-s-statement-to-a-house-judiciary-panel/89c15175-1055-4d72-aa10-86619b2525c9/?itid=lb_big-tech-battles-congress_12
9th Circuit: State Unfair Competition claims against pet food company may go forward; class action claims not
https://cdn.ca9.uscourts.gov/datastore/memoranda/2020/07/28/18-15026.pdf
https://cdn.ca9.uscourts.gov/datastore/memoranda/2020/07/28/18-15026.pdf
From DMN
Major Labels Face Legal Action for Issuing ‘False, Deceptive, and Misleading’ Copyright Claims
Charter Communications-owned internet service provider (ISP) Bright House has fired back against leading record labels’ far-reaching copyright infringement lawsuit, alleging in a counterclaim that the plaintiffs issued “false, deceptive, and misleading” DMCA takedown notices.
The story continues here. https://www.digitalmusicnews.com/2020/07/28/major-labels-legal-action/
Neil Young Threatens Legal Action Against Donald Trump — Again
Neil Young has asked Trump to stop using his music at his rallies and campaign events. Now the singer may be looking to take legal action.
The story continues here.https://www.digitalmusicnews.com/2020/07/28/neil-young-threatens-to-sue-trump/
Major Labels Face Legal Action for Issuing ‘False, Deceptive, and Misleading’ Copyright Claims
Charter Communications-owned internet service provider (ISP) Bright House has fired back against leading record labels’ far-reaching copyright infringement lawsuit, alleging in a counterclaim that the plaintiffs issued “false, deceptive, and misleading” DMCA takedown notices.
The story continues here. https://www.digitalmusicnews.com/2020/07/28/major-labels-legal-action/
Neil Young Threatens Legal Action Against Donald Trump — Again
Neil Young has asked Trump to stop using his music at his rallies and campaign events. Now the singer may be looking to take legal action.
The story continues here.https://www.digitalmusicnews.com/2020/07/28/neil-young-threatens-to-sue-trump/
Antitrust lobbying: The Global Antitrust Institute
A New York Times article about The Global Antitrust Institute explains that the Institute is bankrolled in large part by tech companies — corporate donors like Google, Amazon and Qualcomm — that are facing antitrust scrutiny from some of the regulators who attended its programs.
The Times reports that the Institute’s leaders, including Joshua Wright, who has longstanding ties to Google, have worked closely with tech companies to fend off antitrust criticism. The institute has reportedly cultivated relationships with top competition officials and sitting judges.
“This [financial support for the Global Antitrust Institute] is not a significant expenditure for these companies. And the potential benefits, even making it moderately less likely to be on the losing end of an ambitious antitrust case, is worth that price many times over,” said Michael Carrier, a professor at Rutgers University’s law school.
There are entities that provide a counter to the Global Antitrust Institute, particularly the American Antitrust Institute. The AAI website says “The American Antitrust Institute (AAI) is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. We serve the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Posted by Don Allen Resnikoff
Source: https://www.nytimes.com/2020/07/24/technology/global-antitrust-institute-google-amazon-qualcomm.html
A New York Times article about The Global Antitrust Institute explains that the Institute is bankrolled in large part by tech companies — corporate donors like Google, Amazon and Qualcomm — that are facing antitrust scrutiny from some of the regulators who attended its programs.
The Times reports that the Institute’s leaders, including Joshua Wright, who has longstanding ties to Google, have worked closely with tech companies to fend off antitrust criticism. The institute has reportedly cultivated relationships with top competition officials and sitting judges.
“This [financial support for the Global Antitrust Institute] is not a significant expenditure for these companies. And the potential benefits, even making it moderately less likely to be on the losing end of an ambitious antitrust case, is worth that price many times over,” said Michael Carrier, a professor at Rutgers University’s law school.
There are entities that provide a counter to the Global Antitrust Institute, particularly the American Antitrust Institute. The AAI website says “The American Antitrust Institute (AAI) is an independent, nonprofit organization devoted to promoting competition that protects consumers, businesses, and society. We serve the public through research, education, and advocacy on the benefits of competition and the use of antitrust enforcement as a vital component of national and international competition policy.
Posted by Don Allen Resnikoff
Source: https://www.nytimes.com/2020/07/24/technology/global-antitrust-institute-google-amazon-qualcomm.html
SDOJ Press release: USDOJ OKs proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 23, 2020
Department Of Justice Issues Business Review Letter To Monoclonal Antibody Manufacturers To Expedite And Increase The Production Of Covid-19 Mab Treatments
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at atrdocs.grp@usdoj.gov.
JUSTICE NEWS
Department of Justice
Office of Public Affairs
FOR IMMEDIATE RELEASE
Thursday, July 23, 2020
Department Of Justice Issues Business Review Letter To Monoclonal Antibody Manufacturers To Expedite And Increase The Production Of Covid-19 Mab Treatments
The United States Department of Justice announced today that it will not challenge proposed efforts by Eli Lilly and Company, AbCellera Biologics, Amgen, AstraZeneca, Genentech, and GlaxoSmithKline (together, the Requesting Parties) to share information about manufacturing facilities and other information that could enable them to expedite the production of monoclonal antibody treatments that are determined to be safe and effective to treat COVID-19.
As the letter explains, the demand for monoclonal antibodies targeting COVID-19 is likely to exceed what any one firm could produce on its own. Moreover, waiting until regulators approve specific treatments before scaling up manufacturing might delay access to these potentially life-saving medicines by many months, which adversely could affect the nation’s efforts to fight COVID-19. The Requesting Parties aim to address both problems by sharing information about their manufacturing facilities, capacity, raw materials and supplies that could be used to produce successful COVID-19 monoclonal antibody treatments subject to important safeguards and limits, so that facilities can be ready to manufacture treatments once they prove safe and effective. Among other competitive safeguards, they have committed that they will not exchange information related to the prices of those treatments or the costs of inputs for or production of those treatments. Their efforts likely will expedite and expand the overall production of monoclonal antibody treatments targeting COVID-19 in a way that is unlikely to lessen competition.
“This critical collaboration will help Americans get access to potentially life-saving therapeutics sooner than otherwise would be possible,” Assistant Attorney General Makan Delrahim said. “It also will help preserve Americans’ ability to benefit from the free market competition that drives innovation and access to drugs in the biotech and pharmaceutical industry.”
The Requesting Parties submitted their business review request pursuant to the expedited, temporary review procedure detailed in the Joint Antitrust Statement Regarding COVID-19 (the “Joint Statement”) issued on March 24 by both the Department and the Federal Trade Commission. According to the Joint Statement, the Department will aim to resolve COVID-19-related business review requests like this one within seven (7) calendar days of receiving all necessary information.
Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at atrdocs.grp@usdoj.gov.
The problem of litigants without lawyers
The DC Access to Justice Commission’s 2019 Report contains some remarkable information on the number of litigants in the D.C. Courts without lawyer representation.
The Report says that in 2017, the D.C. Court of Appeals saw unrepresented pro se participation at the time of case filing ranging from 50% to 90% depending on case type.
In D.C. Superior Court, pro se participation rates of cases disposed of in 2017 included: 97% of plaintiffs in small estate matters in the Probate Division, 88% of petitioners and 95% of respondents in the Domestic Violence Division, 83% of plaintiffs and 93% of respondents in divorce/ custody/miscellaneous cases in Family Court, 97% of respondents in paternity and child support cases in Family Court, 88% of designated respondents in the Landlord and Tenant Branch of the Civil Division ( in contrast to the 95% of plaintiffs who were represented), 75% of plaintiffs in Housing Conditions cases in the Civil Division.
The D.C. Office of Administrative Proceedings saw a comparably high percentage of cases where no party is represented in student discipline appeals (88%), appeals related to public benefits determinations (86%), and disputes concerning unemployment compensation benefits (91%)
The numbers are unlikely to have changed in recent years.
The Commission Report lauds the considerable efforts to help litigants made by D.C. government, the Courts, not-for-profit entities, law schools, the organized bar, and law firms and lawyers. But the problem of unrepresented litigants is a big one.
The Commission Report data suggests a need for additional support for helping organizations.
The Commission report is at https://www.dcaccesstojustice.org/assets/pdf/Delivering_Justice_2019.pdf
The DC Access to Justice Commission’s 2019 Report contains some remarkable information on the number of litigants in the D.C. Courts without lawyer representation.
The Report says that in 2017, the D.C. Court of Appeals saw unrepresented pro se participation at the time of case filing ranging from 50% to 90% depending on case type.
In D.C. Superior Court, pro se participation rates of cases disposed of in 2017 included: 97% of plaintiffs in small estate matters in the Probate Division, 88% of petitioners and 95% of respondents in the Domestic Violence Division, 83% of plaintiffs and 93% of respondents in divorce/ custody/miscellaneous cases in Family Court, 97% of respondents in paternity and child support cases in Family Court, 88% of designated respondents in the Landlord and Tenant Branch of the Civil Division ( in contrast to the 95% of plaintiffs who were represented), 75% of plaintiffs in Housing Conditions cases in the Civil Division.
The D.C. Office of Administrative Proceedings saw a comparably high percentage of cases where no party is represented in student discipline appeals (88%), appeals related to public benefits determinations (86%), and disputes concerning unemployment compensation benefits (91%)
The numbers are unlikely to have changed in recent years.
The Commission Report lauds the considerable efforts to help litigants made by D.C. government, the Courts, not-for-profit entities, law schools, the organized bar, and law firms and lawyers. But the problem of unrepresented litigants is a big one.
The Commission Report data suggests a need for additional support for helping organizations.
The Commission report is at https://www.dcaccesstojustice.org/assets/pdf/Delivering_Justice_2019.pdf
Whistleblower Law Collaborative: States Join Lawsuit Against Mallinckrodt
26 states plus Puerto Rico have intervened in The Whistleblower Law Collaborative’s False Claims Act suit against Mallinckrodt, in which the federal government intervened in March. The complaint alleges that Mallinckrodt violated federal and state False Claims Acts by failing to pay hundreds of millions of dollars in Medicaid rebates for its high-priced drug Acthar.
https://www.whistleblowerllc.com/states-join-clients-lawsuit-against-mallinckrodt/?
So, how are you and your kids coping with school shutdowns?
Probably not as well as the Maryland Mom who gave her teenage sons the homework assignment of developing recipes for mambo sauce. The result was a commercial product that has had a substantial measure of financial success.
Posted by Don Allen Resnikoff
Source: https://www.nbcwashington.com/?s=mambo+sauce
Probably not as well as the Maryland Mom who gave her teenage sons the homework assignment of developing recipes for mambo sauce. The result was a commercial product that has had a substantial measure of financial success.
Posted by Don Allen Resnikoff
Source: https://www.nbcwashington.com/?s=mambo+sauce
Knowledge Ecology International finds the US Government has bargained away public rights concerning COVID therapeutics funded by the US
KEI received a series of heavily redacted US Government contracts with pharmaceutical companies relevant to COVID therapeutics in response to a Freedom of Information Act request.
Brief excerpts from a much longer report follow:
While heavily redacted, the contracts shed considerable light on the extent to which the federal government has limited or eliminated altogether its rights in intellectual and data arising from the COVID-19 research and development that it is funding.
Five of the contracts we received are designated as “Other Transaction Agreements” (OTAs). . . .[F]ederal agencies, including the DOD, BARDA and the NIH, are using Other Transactions Authority to limit or eliminate the government’s rights in inventions and data that were funded by taxpayers.
Under the OTAs, several provisions of the Bayh-Dole Act and the Federal Acquisition Regulation on rights in data are being disregarded. The contracts generally involve a renegotiation of such basic public interest provisions as the federal royalty-free right, the grounds for march-ins, the ownership of patent rights, and the definition of “practical application,” typically in order to eliminate the Bayh-Dole obligation to make products available “to the public on reasonable terms” — language that authorizes the federal government to intervene if pharmaceutical companies charge unreasonable prices for federally-funded drugs, biologics, vaccines, and other medical products.
See
https://www.keionline.org/covid19-ota-contracts
The KEI report is discussed at https://www.axios.com/federal-government-barda-contracts-moderna-regeneron-aaf9fde2-2ee1-46fb-8465-0d573e6af1ed.html
FROM NPR: Bowser Says Proposed Cuts To Her Police Spending Plan Are 'Not Sound Budgeting'
July 20, 2020 Jenny Gathright
D.C. Mayor Muriel Bowser claims the council's proposed police budget will reduce the number of MPD officers by more than 250 and incur additional overtime costs.
D.C. Mayor Muriel Bowser is criticizing the D.C. Council's proposed budget reductions to the Metropolitan Police Department, saying that they could lead to an increase in costs and should be examined by the city's chief financial officer.
Bowser wrote in a letter over the weekend that the D.C. Council's proposed budget, which it approved unanimously last week, is expected to result in a reduction of more than 250 police officers. That reduction, she claimed, would cause "a significant pressure on overtime." The council is scheduled to take additional votes on the budget and accompanying laws on Tuesday, July 21 and Tuesday, July 28.
D.C. Chief Financial Officer Jeffrey DeWitt must certify the city's budget as part of its approval process. Bowser wrote in her letter that she believed the overtime costs were an issue that could prevent DeWitt from signing off on the spending plan.
"It's one thing to say that you're going to reduce something," Bowser said in a press conference on Monday. "But if we discover eight months from now that it just caused an increase somewhere else — i.e. overtime — it's not sound budgeting."
In her budget proposal, Bowser increased MPD's budget by $18 million, or 3% over the previous year. The council's budget cut $9.6 million of the mayor's proposed increase. As it stands in the council's proposal, MPD will get $568 million dollars, or a 1.6% increase from last year's proposed budget. Ward 6 Council member Charles Allen, who chairs the committee that oversees MPD, has said this actually represents a decrease in police department funding because the mayor revised police spending upwards in the middle of this fiscal year.
The council's changes to the police budget followed an outpouring of testimony from residents and activists who wanted to see significant cuts to MPD's budget and reinvestment in other programs, including violence interruption programs and social services. The council's proposed budget takes the cuts from MPD and funnels them toward violence interruption programs, restorative justice initiatives and victims services work.
Activists who are pushing for greater cuts to policing and echoing calls from Black Lives Matter demonstrators across the country to "defund the police," said the council's proposal was an improvement from the mayor's original budget. But they say it does not go far enough to meet their goals.
"We saw the restoration of funding for violence interruption," Dominique Hazzard, an organizer with Black Youth Project 100, told DCist/WAMU last week. "We saw some funding put in for health support in our schools. But at the same time, you know, that's half of what we were asking for."
Activists with Black Lives Matter's D.C. chapter and other groups have repeatedly said that they want to see the city address violence by tackling its root causes, not through policing.
Allen told DCist/WAMU recently that he believed investments in violence interruption programs led by the Office of Neighborhood Safety and Engagement (ONSE) and the Office of the Attorney General could help alleviate gun violence.
"We know most violent crime is committed by a small percentage of vulnerable residents," Allen said. "If we can reach these folks and offer them a way out, we will prevent more senseless gun violence."
On the other hand, Bowser on Sunday raised concerns she has already brought up about the public safety consequences of reversing her proposed increases to police funding.
"I understand the Council's goal of responding to recent incidents involving excessive force by police officers in other jurisdictions and the national public sentiment regarding the need to reform police operations," Bowser wrote. "But changes to the MPD budget should be made in a more thoughtful and coordinated manner, and I am concerned that the Council's proposed cuts will make District residents less safe."
As part of its cuts, the council eliminated a $1.7 million increase to the police department's cadet program, a reduction Bowser's letter called "inexplicable." Bowser said the cadet program was an important tool for recruiting officers "of diverse racial backgrounds," who are "precisely the officers that we want in MPD to continue our focus on community policing."
In her letter, Bowser said she also had "significant concerns" with several other proposals from the D.C. Council, including tax changes that the Council agreed upon last week.
Bowser wrote that a proposed advertising tax was "ill-advised" because of its potential impact on local newspapers and Black-owned newspapers in particular — a concern that several councilmembers also raised during debate last week. She added that a proposed gas tax could disproportionately impact D.C. residents who have taken on rideshare and delivery gigs as new sources of income during the pandemic and resulting economic crisis. And Bowser opposed the council's decision to further cut a controversial tax credit for tech companies, saying that it would "negatively impact the District's ability to attract future businesses."
Councilmembers have argued for increasing revenues to bring more equity into the budget and to allocate additional resources for programs that target economically vulnerable residents hit hardest by the pandemic. (A majority of the council voted down last week a proposal to increase taxes modestly on wealthy residents.) The council used funds freed up from the tax changes to add money for a fund for undocumented workers, school-based mental health, affordable housing and rental assistance.
Bowser also questioned whether several spending increases proposed by the council, including some money set aside for the Cherry Blossom Festival and an arts project on New York Avenue, were advisable.
"Our fiscal outlook has not changed and the impacts of COVID-19 are still unfolding," Bowser wrote. "Many of the Council's proposed increases are offering District residents a false hope that the additional spending can be maintained."
Source: https://www.npr.org/local/305/2020/07/20/893117369/bowser-says-proposed-cuts-to-her-police-spending-plan-are-not-sound-budgeting
July 20, 2020 Jenny Gathright
D.C. Mayor Muriel Bowser claims the council's proposed police budget will reduce the number of MPD officers by more than 250 and incur additional overtime costs.
D.C. Mayor Muriel Bowser is criticizing the D.C. Council's proposed budget reductions to the Metropolitan Police Department, saying that they could lead to an increase in costs and should be examined by the city's chief financial officer.
Bowser wrote in a letter over the weekend that the D.C. Council's proposed budget, which it approved unanimously last week, is expected to result in a reduction of more than 250 police officers. That reduction, she claimed, would cause "a significant pressure on overtime." The council is scheduled to take additional votes on the budget and accompanying laws on Tuesday, July 21 and Tuesday, July 28.
D.C. Chief Financial Officer Jeffrey DeWitt must certify the city's budget as part of its approval process. Bowser wrote in her letter that she believed the overtime costs were an issue that could prevent DeWitt from signing off on the spending plan.
"It's one thing to say that you're going to reduce something," Bowser said in a press conference on Monday. "But if we discover eight months from now that it just caused an increase somewhere else — i.e. overtime — it's not sound budgeting."
In her budget proposal, Bowser increased MPD's budget by $18 million, or 3% over the previous year. The council's budget cut $9.6 million of the mayor's proposed increase. As it stands in the council's proposal, MPD will get $568 million dollars, or a 1.6% increase from last year's proposed budget. Ward 6 Council member Charles Allen, who chairs the committee that oversees MPD, has said this actually represents a decrease in police department funding because the mayor revised police spending upwards in the middle of this fiscal year.
The council's changes to the police budget followed an outpouring of testimony from residents and activists who wanted to see significant cuts to MPD's budget and reinvestment in other programs, including violence interruption programs and social services. The council's proposed budget takes the cuts from MPD and funnels them toward violence interruption programs, restorative justice initiatives and victims services work.
Activists who are pushing for greater cuts to policing and echoing calls from Black Lives Matter demonstrators across the country to "defund the police," said the council's proposal was an improvement from the mayor's original budget. But they say it does not go far enough to meet their goals.
"We saw the restoration of funding for violence interruption," Dominique Hazzard, an organizer with Black Youth Project 100, told DCist/WAMU last week. "We saw some funding put in for health support in our schools. But at the same time, you know, that's half of what we were asking for."
Activists with Black Lives Matter's D.C. chapter and other groups have repeatedly said that they want to see the city address violence by tackling its root causes, not through policing.
Allen told DCist/WAMU recently that he believed investments in violence interruption programs led by the Office of Neighborhood Safety and Engagement (ONSE) and the Office of the Attorney General could help alleviate gun violence.
"We know most violent crime is committed by a small percentage of vulnerable residents," Allen said. "If we can reach these folks and offer them a way out, we will prevent more senseless gun violence."
On the other hand, Bowser on Sunday raised concerns she has already brought up about the public safety consequences of reversing her proposed increases to police funding.
"I understand the Council's goal of responding to recent incidents involving excessive force by police officers in other jurisdictions and the national public sentiment regarding the need to reform police operations," Bowser wrote. "But changes to the MPD budget should be made in a more thoughtful and coordinated manner, and I am concerned that the Council's proposed cuts will make District residents less safe."
As part of its cuts, the council eliminated a $1.7 million increase to the police department's cadet program, a reduction Bowser's letter called "inexplicable." Bowser said the cadet program was an important tool for recruiting officers "of diverse racial backgrounds," who are "precisely the officers that we want in MPD to continue our focus on community policing."
In her letter, Bowser said she also had "significant concerns" with several other proposals from the D.C. Council, including tax changes that the Council agreed upon last week.
Bowser wrote that a proposed advertising tax was "ill-advised" because of its potential impact on local newspapers and Black-owned newspapers in particular — a concern that several councilmembers also raised during debate last week. She added that a proposed gas tax could disproportionately impact D.C. residents who have taken on rideshare and delivery gigs as new sources of income during the pandemic and resulting economic crisis. And Bowser opposed the council's decision to further cut a controversial tax credit for tech companies, saying that it would "negatively impact the District's ability to attract future businesses."
Councilmembers have argued for increasing revenues to bring more equity into the budget and to allocate additional resources for programs that target economically vulnerable residents hit hardest by the pandemic. (A majority of the council voted down last week a proposal to increase taxes modestly on wealthy residents.) The council used funds freed up from the tax changes to add money for a fund for undocumented workers, school-based mental health, affordable housing and rental assistance.
Bowser also questioned whether several spending increases proposed by the council, including some money set aside for the Cherry Blossom Festival and an arts project on New York Avenue, were advisable.
"Our fiscal outlook has not changed and the impacts of COVID-19 are still unfolding," Bowser wrote. "Many of the Council's proposed increases are offering District residents a false hope that the additional spending can be maintained."
Source: https://www.npr.org/local/305/2020/07/20/893117369/bowser-says-proposed-cuts-to-her-police-spending-plan-are-not-sound-budgeting
Ala. voter ID requirement upheld by 11th Circuit
The US Court of Appeals for the 11th Circuit has ruled in favor of an Alabama law requiring photo identification to vote in person or absentee, saying that the law "was driven by the need to address well-documented and public cases of voter fraud that occurred in Alabama." Opponents argued that the measure was racially discriminatory and unconstitutional, but the court held that the law is not overly burdensome.
Full Story: Courthouse News Service (7/21) https://www.courthousenews.com/naacp-loses-11th-circuit-fight-against-alabama-voter-id-law/
The US Court of Appeals for the 11th Circuit has ruled in favor of an Alabama law requiring photo identification to vote in person or absentee, saying that the law "was driven by the need to address well-documented and public cases of voter fraud that occurred in Alabama." Opponents argued that the measure was racially discriminatory and unconstitutional, but the court held that the law is not overly burdensome.
Full Story: Courthouse News Service (7/21) https://www.courthousenews.com/naacp-loses-11th-circuit-fight-against-alabama-voter-id-law/
Ore. DOJ files lawsuit over feds' response to protests
The Oregon Justice Department has filed a lawsuit alleging that the civil rights of protesters in Portland have been violated by the US Department of Homeland Security, US Customs and Border Protection, the US Marshals Service and the Federal Protective Service. The Oregon DOJ said the federal agencies are detaining protesters without probable cause, and it is seeking a temporary restraining order. It seems likely that the key issue in the litigation is simply whether or not probable cause standards are met, not whether federal officers are exempt from probable cause standards. DR
A copy of the Complaint is here:
http://opb-imgserve-production.s3-website-us-west-2.amazonaws.com/original/ag_rosenblum_xxxx_updated_complaint_1595086491349.pdf
Excerpt:
On information and belief, federal law enforcement officers including John Does 1-10 have been using unmarked vehicles to drive around downtown Portland, detain protesters, and place them into the officers’ unmarked vehicles, removing them from public without either arresting them or stating the basis for an arrest, since at least Tuesday, July 14. The identity of the officers is not known, nor is their agency affiliation, according to videos and reports that the officers in question wear military fatigues with patches simply reading “POLICE,” with no other identifying information.
In one widely reported incident, in the early hours of Wednesday, July 15, Mark Pettibone alleges that he was confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, and drove him through downtown until unloading him into a building, which is believed to have been the Mark O. Hatfield United States Courthouse. Pettibone alleges that he was put into a cell and read his Miranda rights, but was not told why he was arrested, nor was he provided with a lawyer. He alleges that he was released without any paperwork, citation, or record of his arrest. U.S. Customs and Border Protection has been reported by the Washington Post to have taken responsibility for pulling Mr. Pettibone off the streets of Portland and detaining him.
On information and belief, unidentified federal officers including John Does 1-10 have likewise detained other citizens off the Portland streets, without warning or explanation, without a warrant, and without providing any way to determine who is directing this action. There is no way of knowing, in the absence of those officers identifying themselves, whether only U.S. Customs and Border Protection is engaging in these actions. The Marshals Service and other Homeland Security agencies reportedly have been sent to Portland to respond to the protests against racial inequality.
Oregonians have the right to walk through downtown Portland at night, and in the early hours of the morning. Ordinarily, a person exercising his right to walk through the streets of Portland who is confronted by anonymous men in military-type fatigues and ordered into an unmarked van can reasonably assume that he is being kidnapped and is the victim of a crime.
Defendants are injuring the occupants of Portland by taking away citizens’ ability to determine whether they are being kidnapped by militia or other malfeasants dressed in paramilitary gear (such that they may engage in self-defense to the fullest extent permitted by law) or are being arrested (such that resisting might amount to a crime).
State law enforcement officers are not being consulted or coordinated with on these federal detentions, and could expend unnecessary resources responding to reports of an abduction, when federal agents snatch people walking through downtown Portland without explanation or identification.
Defendants’ tactics violate the rights of all people detained without a warrant or a basis for arrest, and violate the state’s sovereign interests in enforcing its laws and in protecting people within its borders from kidnap and false arrest, without serving any legitimate federal law enforcement purpose.
The Oregon Justice Department has filed a lawsuit alleging that the civil rights of protesters in Portland have been violated by the US Department of Homeland Security, US Customs and Border Protection, the US Marshals Service and the Federal Protective Service. The Oregon DOJ said the federal agencies are detaining protesters without probable cause, and it is seeking a temporary restraining order. It seems likely that the key issue in the litigation is simply whether or not probable cause standards are met, not whether federal officers are exempt from probable cause standards. DR
A copy of the Complaint is here:
http://opb-imgserve-production.s3-website-us-west-2.amazonaws.com/original/ag_rosenblum_xxxx_updated_complaint_1595086491349.pdf
Excerpt:
On information and belief, federal law enforcement officers including John Does 1-10 have been using unmarked vehicles to drive around downtown Portland, detain protesters, and place them into the officers’ unmarked vehicles, removing them from public without either arresting them or stating the basis for an arrest, since at least Tuesday, July 14. The identity of the officers is not known, nor is their agency affiliation, according to videos and reports that the officers in question wear military fatigues with patches simply reading “POLICE,” with no other identifying information.
In one widely reported incident, in the early hours of Wednesday, July 15, Mark Pettibone alleges that he was confronted by armed men dressed in camouflage who took him off the street, pushed him into a van, and drove him through downtown until unloading him into a building, which is believed to have been the Mark O. Hatfield United States Courthouse. Pettibone alleges that he was put into a cell and read his Miranda rights, but was not told why he was arrested, nor was he provided with a lawyer. He alleges that he was released without any paperwork, citation, or record of his arrest. U.S. Customs and Border Protection has been reported by the Washington Post to have taken responsibility for pulling Mr. Pettibone off the streets of Portland and detaining him.
On information and belief, unidentified federal officers including John Does 1-10 have likewise detained other citizens off the Portland streets, without warning or explanation, without a warrant, and without providing any way to determine who is directing this action. There is no way of knowing, in the absence of those officers identifying themselves, whether only U.S. Customs and Border Protection is engaging in these actions. The Marshals Service and other Homeland Security agencies reportedly have been sent to Portland to respond to the protests against racial inequality.
Oregonians have the right to walk through downtown Portland at night, and in the early hours of the morning. Ordinarily, a person exercising his right to walk through the streets of Portland who is confronted by anonymous men in military-type fatigues and ordered into an unmarked van can reasonably assume that he is being kidnapped and is the victim of a crime.
Defendants are injuring the occupants of Portland by taking away citizens’ ability to determine whether they are being kidnapped by militia or other malfeasants dressed in paramilitary gear (such that they may engage in self-defense to the fullest extent permitted by law) or are being arrested (such that resisting might amount to a crime).
State law enforcement officers are not being consulted or coordinated with on these federal detentions, and could expend unnecessary resources responding to reports of an abduction, when federal agents snatch people walking through downtown Portland without explanation or identification.
Defendants’ tactics violate the rights of all people detained without a warrant or a basis for arrest, and violate the state’s sovereign interests in enforcing its laws and in protecting people within its borders from kidnap and false arrest, without serving any legitimate federal law enforcement purpose.
Administration on Portland: From Press Briefing by Press Secretary Kayleigh McEnany
Issued on: July 21, 2020
"And 40 U.S. Code 1315 gives DHS the ability to deputize officers in any department or agency, like ICE, Customs and Border Patrol, and Secret Service. Quote, “As officers and agents,” they can be deputized for the duty of — “in connection with the protection of property owned or occupied by the federal government and persons on that property.” And when a federal courthouse is being lit on fire, commercial fireworks being shot at it, being shot at the officers, I think that that falls pretty well within the limits of 40 U.S. Code 1315."
https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-kayleigh-mcenany-072120/
Administration on Portland: From Statement by Homeland Security Chief Wolf
Wolf pointed out that there have been “over 50 nights of violent activity targeting federal facilities and federal law enforcement officers,” and added that “it needs to stop.”
“DHS is not going to back down from our responsibilities,” he continued. “We are not escalating, we are protecting … federal facilities.”
He noted that “it's our job” to protect federal property.
“It’s what Congress told us to do time and time again and so we're going to do that,” Wolf said. “We're going to investigate and we're going to hold those accountable. We’re going to arrest them and hold those accountable that are doing this destruction.”
Source: https://www.foxnews.com/media/dhs-chad-wolf-portland-mayor-feds-unrest
Issued on: July 21, 2020
"And 40 U.S. Code 1315 gives DHS the ability to deputize officers in any department or agency, like ICE, Customs and Border Patrol, and Secret Service. Quote, “As officers and agents,” they can be deputized for the duty of — “in connection with the protection of property owned or occupied by the federal government and persons on that property.” And when a federal courthouse is being lit on fire, commercial fireworks being shot at it, being shot at the officers, I think that that falls pretty well within the limits of 40 U.S. Code 1315."
https://www.whitehouse.gov/briefings-statements/press-briefing-press-secretary-kayleigh-mcenany-072120/
Administration on Portland: From Statement by Homeland Security Chief Wolf
Wolf pointed out that there have been “over 50 nights of violent activity targeting federal facilities and federal law enforcement officers,” and added that “it needs to stop.”
“DHS is not going to back down from our responsibilities,” he continued. “We are not escalating, we are protecting … federal facilities.”
He noted that “it's our job” to protect federal property.
“It’s what Congress told us to do time and time again and so we're going to do that,” Wolf said. “We're going to investigate and we're going to hold those accountable. We’re going to arrest them and hold those accountable that are doing this destruction.”
Source: https://www.foxnews.com/media/dhs-chad-wolf-portland-mayor-feds-unrest
From the DC AG:
Major Environmental Protection Win:
Last week, our office announced its largest environmental recovery to date: Monsanto, an agrochemical company, will pay $52 million to clean up toxic pollution in the District.
We sued Monsanto in May to hold the company accountable for toxic polychlorinated biphenyls (PCBs) that damaged our natural resources—including the Anacostia and Potomac Rivers—and put the health of residents at risk. Monsanto manufactured over 99 percent of the PCBs ever used in the U.S. before the chemical was banned in 1979. We alleged the company knowingly produced, promoted, and sold toxic and harmful products and misled consumers and regulators to maximize profits.
Over the last two years and with support from the D.C. Council, OAG has deployed additional resources to protect our environment and the health of District residents. OAG is deeply involved in the District’s ongoing cleanup of the Anacostia River and recovered $2.5 million from a fossil fuel energy company that illegally polluted the river.
Every District resident deserves clean air to breathe, clean water to drink, and a healthy environment to live in. If you are aware of violations of the District’s environmental laws, please report it to the District’s Department of Energy and Environment by calling 311 or using the 311 mobile app.
Karl A. Racine
Attorney General
Holding Neglectful Landlords Accountable
Forest Ridge/The Vista Apartments in Ward 8.
Last week, OAG secured several settlements against neglectful D.C. landlords in Wards 8 and 4 for unsafe and unhealthy housing conditions. Castle Management will pay $3.5 million to D.C. and Ward 8 tenants who were forced to live with vermin infestations, water damage and mold, and security defects that led to persistent gun violence. Ward 8’s Good Hope Laundromat is also required to implement more security measures and pay up to $24k in fines to address rampant drug-related activity on the property. The owners and property managers of Ward 4’s 220 Hamilton St. apartment complex are required to make property repairs and pay a combined total of $50k as a penalty for violating D.C. housing code.
Cure the Streets Spotlight:
OAG is launching a new series called “Cure the Streets Spotlight” where we will highlight Cure the Streets staff who are interrupting violence to make their communities safer. Cotey Wynn is a lifelong Trinidad resident and a Program Supervisor in Ward 5. Read about the challenges that Cotey has overcome and his commitment to being a respected professional, a loving father, a devoted friend, and a pillar to the community. Read about Cotey.
WIN: Stopping Deportation of International Students
AG Racine and a coalition of Attorneys General sued the Trump administration last week to stop a new rule that would have forced thousands of students to leave the U.S. if their all of their classes were online. One day after the lawsuit was filed, the Administration rescinded its policy. This reckless and unlawful rule would have upended months of planning by colleges and universities in D.C. and across the country to limit in-person classes during COVID-19 and put the health and safety of students and educators at risk.
Major Environmental Protection Win:
Last week, our office announced its largest environmental recovery to date: Monsanto, an agrochemical company, will pay $52 million to clean up toxic pollution in the District.
We sued Monsanto in May to hold the company accountable for toxic polychlorinated biphenyls (PCBs) that damaged our natural resources—including the Anacostia and Potomac Rivers—and put the health of residents at risk. Monsanto manufactured over 99 percent of the PCBs ever used in the U.S. before the chemical was banned in 1979. We alleged the company knowingly produced, promoted, and sold toxic and harmful products and misled consumers and regulators to maximize profits.
Over the last two years and with support from the D.C. Council, OAG has deployed additional resources to protect our environment and the health of District residents. OAG is deeply involved in the District’s ongoing cleanup of the Anacostia River and recovered $2.5 million from a fossil fuel energy company that illegally polluted the river.
Every District resident deserves clean air to breathe, clean water to drink, and a healthy environment to live in. If you are aware of violations of the District’s environmental laws, please report it to the District’s Department of Energy and Environment by calling 311 or using the 311 mobile app.
Karl A. Racine
Attorney General
Holding Neglectful Landlords Accountable
Forest Ridge/The Vista Apartments in Ward 8.
Last week, OAG secured several settlements against neglectful D.C. landlords in Wards 8 and 4 for unsafe and unhealthy housing conditions. Castle Management will pay $3.5 million to D.C. and Ward 8 tenants who were forced to live with vermin infestations, water damage and mold, and security defects that led to persistent gun violence. Ward 8’s Good Hope Laundromat is also required to implement more security measures and pay up to $24k in fines to address rampant drug-related activity on the property. The owners and property managers of Ward 4’s 220 Hamilton St. apartment complex are required to make property repairs and pay a combined total of $50k as a penalty for violating D.C. housing code.
Cure the Streets Spotlight:
OAG is launching a new series called “Cure the Streets Spotlight” where we will highlight Cure the Streets staff who are interrupting violence to make their communities safer. Cotey Wynn is a lifelong Trinidad resident and a Program Supervisor in Ward 5. Read about the challenges that Cotey has overcome and his commitment to being a respected professional, a loving father, a devoted friend, and a pillar to the community. Read about Cotey.
WIN: Stopping Deportation of International Students
AG Racine and a coalition of Attorneys General sued the Trump administration last week to stop a new rule that would have forced thousands of students to leave the U.S. if their all of their classes were online. One day after the lawsuit was filed, the Administration rescinded its policy. This reckless and unlawful rule would have upended months of planning by colleges and universities in D.C. and across the country to limit in-person classes during COVID-19 and put the health and safety of students and educators at risk.
TikTok Plans to Hire 10,000 Employees In America
Ashley King
July 22, 2020
TikTok’s meteoric growth around the globe has brought concerns over censorship and moderation. TikTok has been caught red-handed censoring things China deems inappropriate – like fat, ugly, poor, and gay people. Since then, ByteDance has continued its mission to separate TikTok.
Kevin Mayer, who Peter Navarro called an “American puppet,” recently joined the company as CEO. Mayer previously managed Disney’s streaming division and the launch of Disney+. As part of its stateside takeover, the company has launched splashy offices in Los Angeles and Times Square in New York City. Now, a TikTok spokesperson says the company plans to hire 10,000 employees in the U.S. over the next three years.
“In 2020, TikTok tripled the number of employees working in the U.S., and we plan to add another 10,000 jobs here over the next three years,” the TikTok spokesperson confirmed. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy.”
Back in March, ByteDance said it hopes to have 100,000 global employees on its payroll by the end of 2020. By comparison, Facebook employs 44,942 people, and Google employs 118,899, according to 2019 data.
ByteDance likely hopes the jobs announcement will deter the Trump admin from following through with a TikTok ban.
The United States is clamping down on Chinese technology companies like ByteDance and Huawei. The Trump administration says it is “looking at” a TikTok ban and whether that’s feasible in the U.S. The administration has also taken drastic steps against Huawei, banning it from selling equipment to the U.S. telecoms. Huawei is also subject to strict sanctions due to allegations of spying.
The U.S. government is also conducting a national security review of the acquisition of Musical.ly. ByteDance acquired Musical.ly back in 2017 and merged it with TikTok. Government officials are concerned that ByteDance may be censoring politically-sensitive content. Officials have also announced concerns about China’s access to user data.
Several branches of the U.S. military, including the Army, Navy, and Marines, have a TikTok ban in place already. There’s even a bill pitched in Congress to extend that ban to all government-owned devices.
ByteDance’s plan to create more American jobs may throw a wrench in the Trump admin’s plans for a TikTok ban. The president is eager to be seen as a job creator in the U.S., and banning TikTok, of course, will do the opposite of that.
Source: https://www.digitalmusicnews.com/2020/07/22/tiktok-hiring-despite-ban/
Ashley King
July 22, 2020
TikTok’s meteoric growth around the globe has brought concerns over censorship and moderation. TikTok has been caught red-handed censoring things China deems inappropriate – like fat, ugly, poor, and gay people. Since then, ByteDance has continued its mission to separate TikTok.
Kevin Mayer, who Peter Navarro called an “American puppet,” recently joined the company as CEO. Mayer previously managed Disney’s streaming division and the launch of Disney+. As part of its stateside takeover, the company has launched splashy offices in Los Angeles and Times Square in New York City. Now, a TikTok spokesperson says the company plans to hire 10,000 employees in the U.S. over the next three years.
“In 2020, TikTok tripled the number of employees working in the U.S., and we plan to add another 10,000 jobs here over the next three years,” the TikTok spokesperson confirmed. “These are good-paying jobs that will help us continue to build a fun and safe experience and protect our community’s privacy.”
Back in March, ByteDance said it hopes to have 100,000 global employees on its payroll by the end of 2020. By comparison, Facebook employs 44,942 people, and Google employs 118,899, according to 2019 data.
ByteDance likely hopes the jobs announcement will deter the Trump admin from following through with a TikTok ban.
The United States is clamping down on Chinese technology companies like ByteDance and Huawei. The Trump administration says it is “looking at” a TikTok ban and whether that’s feasible in the U.S. The administration has also taken drastic steps against Huawei, banning it from selling equipment to the U.S. telecoms. Huawei is also subject to strict sanctions due to allegations of spying.
The U.S. government is also conducting a national security review of the acquisition of Musical.ly. ByteDance acquired Musical.ly back in 2017 and merged it with TikTok. Government officials are concerned that ByteDance may be censoring politically-sensitive content. Officials have also announced concerns about China’s access to user data.
Several branches of the U.S. military, including the Army, Navy, and Marines, have a TikTok ban in place already. There’s even a bill pitched in Congress to extend that ban to all government-owned devices.
ByteDance’s plan to create more American jobs may throw a wrench in the Trump admin’s plans for a TikTok ban. The president is eager to be seen as a job creator in the U.S., and banning TikTok, of course, will do the opposite of that.
Source: https://www.digitalmusicnews.com/2020/07/22/tiktok-hiring-despite-ban/
The DC Council’s Coronavirus Support Emergency Amendment Act of 2020 and landlord- tenant rights
Rent Payment Program. Effective as of May 19th, for the remaining period of the Emergency and one year thereafter (program period), all landlords (no matter the number of units leased) are required to (i) notify their residential and commercial retail tenants of the availability, terms and application process for a rent payment program and (ii) make the program available to eligible tenants.
Evictions. Effective as of March 11th until 60 days after the end of the Emergency, no landlord may file complaints for evictions of residential or commercial tenants.
Credit: https://www.arnoldporter.com/en/perspectives/publications/2020/06/dc-council-provisions-for-the-real-estate
Rent Payment Program. Effective as of May 19th, for the remaining period of the Emergency and one year thereafter (program period), all landlords (no matter the number of units leased) are required to (i) notify their residential and commercial retail tenants of the availability, terms and application process for a rent payment program and (ii) make the program available to eligible tenants.
- Eligible tenants include residential and commercial retail tenants (excluding franchisees of non-District residents).
- To qualify, eligible tenants must demonstrate that they are suffering a financial hardship resulting directly or indirectly from the Emergency and that such hardship would make the tenant unable to qualify to rent the space based on the same criteria that were applied at the time the tenant was approved to rent the space.
- The program must grant a deferral of "gross rent" due until the earlier of the end of the program period or the end of the lease term. In other words, this seems to grant tenants the right to defer rent for at least 13 months.
- The payback period must be for at least one year unless the tenant requests a shorter period, with payments in equal monthly installments unless a different schedule is requested by the tenant. The legislation leaves unclear what happens if a tenant's lease term expires between May 19, 2020 and the end of the payback period.
- During the program period, unless the landlord has offered and approved a rent payment plan pursuant to the Consolidated Bill (and the tenant defaults on such plan), the landlord is prohibited from filing any collection lawsuit or eviction for non-payment of rent against a tenant in default.
Evictions. Effective as of March 11th until 60 days after the end of the Emergency, no landlord may file complaints for evictions of residential or commercial tenants.
Credit: https://www.arnoldporter.com/en/perspectives/publications/2020/06/dc-council-provisions-for-the-real-estate
How has China grown to dominate the market for rare earth metals even though it only possesses one-third of known global deposits?
https://www.nbr.org/publication/chinas-control-of-rare-earth-metals/
Excerpt:
China has dominated the production of rare earth metals since the 1990s, driven largely by two factors: low prices and state-backed investment in infrastructure and technology. In prior decades, the United States had dominated this market, largely through production at the Mountain Pass mine in California. However, as Chinese output began to reach levels that could fulfill global demand at a much lower price point, the United States was unable to compete. By the 2000s, China had near complete domination of rare earths production.
This dominance was not achieved by prices alone. The Chinese party-state also used industrial policy starting in the 1980s to develop expertise in the extraction, separation, and refinement of rare earths. Chinese industrial policy in fact mirrored the U.S. approach in the 1950s and 1960s, when the Ames Laboratory and Rare-earth Information Center (RIC) used state investment to bolster the efforts of the private sector.
https://www.nbr.org/publication/chinas-control-of-rare-earth-metals/
Excerpt:
China has dominated the production of rare earth metals since the 1990s, driven largely by two factors: low prices and state-backed investment in infrastructure and technology. In prior decades, the United States had dominated this market, largely through production at the Mountain Pass mine in California. However, as Chinese output began to reach levels that could fulfill global demand at a much lower price point, the United States was unable to compete. By the 2000s, China had near complete domination of rare earths production.
This dominance was not achieved by prices alone. The Chinese party-state also used industrial policy starting in the 1980s to develop expertise in the extraction, separation, and refinement of rare earths. Chinese industrial policy in fact mirrored the U.S. approach in the 1950s and 1960s, when the Ames Laboratory and Rare-earth Information Center (RIC) used state investment to bolster the efforts of the private sector.
In honor of John Lewis: John Lewis’ speech at the March on Washington - "complete the revolution of 1776." https://www.youtube.com/watch?v=tFs1eTsokJg&feature=youtu.be
The March on Washington was held in Washington, D.C. on August 28, 1963 to advocate for the civil and economic rights of African Americans. At the march, Martin Luther King Jr. delivered his historic “I Have a Dream” speech in which he called for an end to racism. John Lewis of SNCC also spoke at the event. His speech pointed out the injustices visited on African Americans and focused on the need of government to expand the civil and economic rights and opportunities of all Americans.
The March on Washington was held in Washington, D.C. on August 28, 1963 to advocate for the civil and economic rights of African Americans. At the march, Martin Luther King Jr. delivered his historic “I Have a Dream” speech in which he called for an end to racism. John Lewis of SNCC also spoke at the event. His speech pointed out the injustices visited on African Americans and focused on the need of government to expand the civil and economic rights and opportunities of all Americans.
U.S. to pay Pfizer, BioNTech $1.95 billion for 100 million COVID-19 vaccine doses
Michael Erman and Ankur Banerjee
ReutersJuly 22, 2020
(Reuters) - The U.S. government will pay $1.95 billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc <PFE.N> and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.
The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.
Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.
Under the agreement, the government would also have an option to procure an additional 500 million doses. Pfizer said the price for the additional doses if ordered would be negotiated separately if the U.S. orders them.
The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.
The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.
The deal suggests a U.S. price of $39 for a two-dose regimen.
The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.
The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA)vaccine.
The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drugmakers to secure supplies of various candidates. Whether any will succeed remains far from clear.
The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.
Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc , AstraZeneca Plc .L> and Novavax Inc .
Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.
The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.
Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.
On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.
Pfizer shares were up 4%, while BioNTech's U.S.-listed shares were up 13%.
Source: https://finance.yahoo.com/news/u-government-engages-pfizer-produce-111948798.html
Michael Erman and Ankur Banerjee
ReutersJuly 22, 2020
(Reuters) - The U.S. government will pay $1.95 billion to buy 100 million doses of a COVID-19 vaccine being developed by Pfizer Inc <PFE.N> and German biotech BioNTech SE if it proves to be safe and effective, the companies said on Wednesday.
The contract is the most the United States has agreed to spend on a vaccine, although previous deals with other vaccine makers were intended to also help pay for development costs.
Pfizer and BioNTech will not receive any money from the government unless their vaccine succeeds in large clinical trials and can be successfully manufactured, according to a Pfizer spokeswoman.
Under the agreement, the government would also have an option to procure an additional 500 million doses. Pfizer said the price for the additional doses if ordered would be negotiated separately if the U.S. orders them.
The vaccine, if successful, will be made available to Americans at no cost, although their health insurance may be charged, the U.S. department of Health and Human Services (HHS) said.
The vaccine has already shown promise in early-stage small studies in humans, producing the type of neutralizing antibodies needed to fight the virus. In those trials, subjects received two doses of the vaccine. That means a 100 million doses would be enough to vaccinate 50 million Americans.
The deal suggests a U.S. price of $39 for a two-dose regimen.
The Pfizer/BioNTech candidate is one of the most advanced of over 150 vaccines being developed against COVID-19, which has claimed more than 600,000 lives globally and crippled economies.
The vaccine utilizes the chemical messenger RNA to instruct cells to make proteins that mimic the surface of the coronavirus, which the immune system sees as a foreign invader and mounts an attack. Although the technology has been around for years, there has never been an approved messenger RNA (mRNA)vaccine.
The aim is to produce vaccines that can end the pandemic by protecting billions of people from infection or severe illness, and governments have signed deals with drugmakers to secure supplies of various candidates. Whether any will succeed remains far from clear.
The Trump administration has agreed to spend billions of dollars for the development and procurement of potential vaccines under its Operation Warp Speed program.
Other vaccine makers that have signed deals to receive U.S. government funding for their efforts include Moderna Inc , AstraZeneca Plc .L> and Novavax Inc .
Pfizer said it will deliver the doses if the product receives emergency use authorization or U.S. approval after demonstrating safety and efficacy in a large Phase III clinical trial involving up to 30,000 subjects that could begin as early as later this month.
The companies said they could be ready to seek some form of regulatory approval as early as October if trials are successful.
Pfizer and BioNTech currently expect to manufacture up to 100 million doses globally by the end of 2020, and potentially more than 1.3 billion doses by the end of 2021, subject to final dose selection from their clinical trial.
On Monday, the companies agreed to supply the United Kingdom with 30 million doses of the vaccine candidate, but did not disclose a price.
Pfizer shares were up 4%, while BioNTech's U.S.-listed shares were up 13%.
Source: https://finance.yahoo.com/news/u-government-engages-pfizer-produce-111948798.html
Elisabeth Rosenthal on why COVID-19 vaccines are likely to yield high profit to pharmaceutical companies, and be expensive
Health care industry expert Elisabeth Rosenthal warns that a future COVID-19 vaccine is likely to be a high profit and high priced product for pharmaceutical companies. The consequences are likely to be high prices charged to individuals, health insurers, and government, with distribution that will be inefficient from a public health perspective. See www.nytimes.com/2020/07/06/opinion/...
Rosenthal points out that a COVID-19 vaccine will be high priced because it will be covered by patent protection, and very likely pharmaceutical companies will follow the strategy of high prices that has become the industry standard for vaccines. Examples are meningitis B vaccine and shingles vaccine, which have a retail cost of $300 to $400 for a full course.
The potential for commercial profiteering from a COVID-19 vaccine is in contrast to what happened with the crucial polio vaccine of an earlier era. In the mid-1950s the developer of the successful polio vaccine, Jonas Salk, did not take a patent on the vaccine. The March of Dimes Foundation covered the drug cost for a free national vaccination program.
Rosenthal discusses several ways in which high COVID-19 vaccine prices could be moderated. She mentions recent legislative proposals to limit prices. They are the Make Medications Affordable by Preventing Pandemic Price Gouging Act (MMAPPP) Act of 2020, sponsored by Rep. Jan Schakowsky (D-Ill.), and Taxpayer Research and Coronavirus Knowledge (TRACK) Act, sponsored by Rep. Lloyd Doggett (D-Texas). According to a press release, these proposals establish "comprehensive protections against drug price gouging" of COVID-19 treatments. The bills would prohibit monopolies by pharmaceutical companies for taxpayer-funded COVID-19 drugs, require the federal government to mandate affordable pricing for treatments and vaccines, and require drug makers to reveal their total expenditures on a COVID-19 drug, including what percentage were derived from federal funds.
These recent legislative proposals mix two approaches to controlling pricing. One approach focuses on regulation of price gouging. Another approach focuses on the role of the federal government as the source of crucial research and funding. The thought is that since the federal government and taxpayers have provided funding for the development of pharmaceuticals, they should be repaid by the pharmaceutical companies that market the final commercial product.
This issue is not new, and the statutory law already provides some authority for the federal government to assert pricing authority where the government has provided funding or intellectual property. A relevant controversy from the past involved Zidovudine (AZT, Retrovir) an anti-HIV drug. These drugs were developed with substantial federal government participation but initially were sold by pharmaceutical companies at high prices that were unaffordable for many. Advocates argued that anti- HIV drugs should not be too scarce or too expensive. They were concerned that private commercialization of government supported drug development was unfair.
As Elisabeth Rosenthal points out, the federal government has some existing authority to protect its rights as an investor by asserting "march-in" authority under the Bayh-Dole Act of 2000. That statutory authority permits the government to insist that federally developed vaccine technology be more freely and inexpensively available to others, including the federal government. See the article on march-in authority by Linlin Tian at www.jdsupra.com/legalnews/...
As Rosenthal says, the federal government's "march in'' authority is seldom used, and may have already been waived with regard to some pharmaceutical companies developing COVID-19 vaccines. That would be unfortunate; it would be better if the statutory authority to protect the public interest were wisely used.
By Don Allen Resnikoff, who takes responsibility for opinions expressed
Health care industry expert Elisabeth Rosenthal warns that a future COVID-19 vaccine is likely to be a high profit and high priced product for pharmaceutical companies. The consequences are likely to be high prices charged to individuals, health insurers, and government, with distribution that will be inefficient from a public health perspective. See www.nytimes.com/2020/07/06/opinion/...
Rosenthal points out that a COVID-19 vaccine will be high priced because it will be covered by patent protection, and very likely pharmaceutical companies will follow the strategy of high prices that has become the industry standard for vaccines. Examples are meningitis B vaccine and shingles vaccine, which have a retail cost of $300 to $400 for a full course.
The potential for commercial profiteering from a COVID-19 vaccine is in contrast to what happened with the crucial polio vaccine of an earlier era. In the mid-1950s the developer of the successful polio vaccine, Jonas Salk, did not take a patent on the vaccine. The March of Dimes Foundation covered the drug cost for a free national vaccination program.
Rosenthal discusses several ways in which high COVID-19 vaccine prices could be moderated. She mentions recent legislative proposals to limit prices. They are the Make Medications Affordable by Preventing Pandemic Price Gouging Act (MMAPPP) Act of 2020, sponsored by Rep. Jan Schakowsky (D-Ill.), and Taxpayer Research and Coronavirus Knowledge (TRACK) Act, sponsored by Rep. Lloyd Doggett (D-Texas). According to a press release, these proposals establish "comprehensive protections against drug price gouging" of COVID-19 treatments. The bills would prohibit monopolies by pharmaceutical companies for taxpayer-funded COVID-19 drugs, require the federal government to mandate affordable pricing for treatments and vaccines, and require drug makers to reveal their total expenditures on a COVID-19 drug, including what percentage were derived from federal funds.
These recent legislative proposals mix two approaches to controlling pricing. One approach focuses on regulation of price gouging. Another approach focuses on the role of the federal government as the source of crucial research and funding. The thought is that since the federal government and taxpayers have provided funding for the development of pharmaceuticals, they should be repaid by the pharmaceutical companies that market the final commercial product.
This issue is not new, and the statutory law already provides some authority for the federal government to assert pricing authority where the government has provided funding or intellectual property. A relevant controversy from the past involved Zidovudine (AZT, Retrovir) an anti-HIV drug. These drugs were developed with substantial federal government participation but initially were sold by pharmaceutical companies at high prices that were unaffordable for many. Advocates argued that anti- HIV drugs should not be too scarce or too expensive. They were concerned that private commercialization of government supported drug development was unfair.
As Elisabeth Rosenthal points out, the federal government has some existing authority to protect its rights as an investor by asserting "march-in" authority under the Bayh-Dole Act of 2000. That statutory authority permits the government to insist that federally developed vaccine technology be more freely and inexpensively available to others, including the federal government. See the article on march-in authority by Linlin Tian at www.jdsupra.com/legalnews/...
As Rosenthal says, the federal government's "march in'' authority is seldom used, and may have already been waived with regard to some pharmaceutical companies developing COVID-19 vaccines. That would be unfortunate; it would be better if the statutory authority to protect the public interest were wisely used.
By Don Allen Resnikoff, who takes responsibility for opinions expressed
Does Chief US Supreme Court Justice Roberts want to get the government out of the business of counting by race?
That's what respected US Supreme Court journalist Linda Greenhouse suggests in a recent column at https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage Her brief comments about racial equity issues are part of an article focused largely on cases about religion. Her comments about racial equity issues are based on some earlier cases, but they resonate at our current moment of broadened attention to racial justice issues:
She writes that one of Roberts' goals as Chief Justice concerning racial issues is:
getting the government out of the business of counting by race by rejecting both affirmative action that increases opportunity for racial minorities and federally policed guardrails to prevent the suppression of minority votes. His early years on the job reflected this deep commitment, first with the Parents Involved case in 2006, overturning efforts by two school districts to maintain integration through race-conscious school assignment measures [see https://www.oyez.org/cases/2006/05-908] , and, six years later, with Shelby County v. Holder, which cut the heart out of the Voting Rights Act of 1965. [see https://www.oyez.org/cases/2012/12-96]
https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage
That's what respected US Supreme Court journalist Linda Greenhouse suggests in a recent column at https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage Her brief comments about racial equity issues are part of an article focused largely on cases about religion. Her comments about racial equity issues are based on some earlier cases, but they resonate at our current moment of broadened attention to racial justice issues:
She writes that one of Roberts' goals as Chief Justice concerning racial issues is:
getting the government out of the business of counting by race by rejecting both affirmative action that increases opportunity for racial minorities and federally policed guardrails to prevent the suppression of minority votes. His early years on the job reflected this deep commitment, first with the Parents Involved case in 2006, overturning efforts by two school districts to maintain integration through race-conscious school assignment measures [see https://www.oyez.org/cases/2006/05-908] , and, six years later, with Shelby County v. Holder, which cut the heart out of the Voting Rights Act of 1965. [see https://www.oyez.org/cases/2012/12-96]
https://www.nytimes.com/2020/07/16/opinion/supreme-court-roberts-religion.html?action=click&module=Opinion&pgtype=Homepage
Complaint in states' lawsuit against education department over borrower defense
https://int.nyt.com/data/documenttools/states-lawsuit-against-education-department-over-borrower-defense/59a7f80eac022971/full.pdf
Excerpt from the Complaint (lightly edited for convenient display):
In 2019, ED issued new regulations (the “2019 Rule”) governing the defenses borrowers may assert to the repayment of their federal student loans. The 2019 Rule for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans.
In fact, ED eliminated all available defenses, except just one: “a misrepresentation . . . of material fact upon which the borrower reasonably relied in deciding to obtain” a federal student loan. 84 Fed. Reg. 49,803.
Even after drastically limiting available defenses, ED [the Department of Education] imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully.
Amongst other arbitrary impediments, the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth. A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake.
Moreover, the 2019 Rule requires each and every borrower to meet this insurmountable burden on their own. Notwithstanding the fact that borrower defense claims frequently involve common issues of fact, the 2019 Rule arbitrarily eliminates any group discharge process.
In reality, the 2019 Rule eliminates all viable defenses to repayment, contrary to Congress’s mandate to ED. ED does not even fully deny this fact, and states that one of the primary purposes of the 2019 Rule is to diminish successful borrower defense claims even where, as ED concedes, the school has engaged in actionable misconduct.
https://int.nyt.com/data/documenttools/states-lawsuit-against-education-department-over-borrower-defense/59a7f80eac022971/full.pdf
Excerpt from the Complaint (lightly edited for convenient display):
In 2019, ED issued new regulations (the “2019 Rule”) governing the defenses borrowers may assert to the repayment of their federal student loans. The 2019 Rule for the first time completely eliminated violations of applicable state consumer protection law as a viable defense to repayment of federal student loans.
In fact, ED eliminated all available defenses, except just one: “a misrepresentation . . . of material fact upon which the borrower reasonably relied in deciding to obtain” a federal student loan. 84 Fed. Reg. 49,803.
Even after drastically limiting available defenses, ED [the Department of Education] imposed additional requirements on a viable misrepresentation defense that are so onerous that they make this defense impossible for a student loan borrower to assert successfully.
Amongst other arbitrary impediments, the 2019 Rule requires borrowers to prove by a preponderance of the evidence not merely that their school misrepresented a material fact, but that the school did so knowingly or with reckless disregard for the truth. A school may misrepresent the job or earnings prospects of its graduates, the likelihood of completing its program, even the vocational licensing requirements of state law—but a borrower cannot assert these misrepresentations as a defense unless he or she can prove that the school did not simply make a mistake.
Moreover, the 2019 Rule requires each and every borrower to meet this insurmountable burden on their own. Notwithstanding the fact that borrower defense claims frequently involve common issues of fact, the 2019 Rule arbitrarily eliminates any group discharge process.
In reality, the 2019 Rule eliminates all viable defenses to repayment, contrary to Congress’s mandate to ED. ED does not even fully deny this fact, and states that one of the primary purposes of the 2019 Rule is to diminish successful borrower defense claims even where, as ED concedes, the school has engaged in actionable misconduct.
Texas AG Sends Another Round Of Questions To Google -
July 13, 2020Texas Attorney General Ken Paxton sent another round of questions to Google seeking detailed answers about the company’s advertising technology.
The 53-page civil investigative demand, dated June 22 and obtained by POLITICO through a public records request, zeroes in on changes the search giant has made in recent years to how online ads are sold. Google must respond by July 22.
Among the Google product changes targeted by investigators is the company’s decision in 2016 to require advertisers to buy YouTube ads through Google’s products; the adoption of accelerated mobile pages, known as AMP, a technology that stores mobile websites on Google servers; and the January announcement that the tech giant will eliminate third-party cookies from the Chrome web browser.
All three changes have drawn complaints from advertisers. Subscription news service MLex first reported on the query. Google said it will “continue to engage” with the investigation.
Full Content: Politico
July 13, 2020Texas Attorney General Ken Paxton sent another round of questions to Google seeking detailed answers about the company’s advertising technology.
The 53-page civil investigative demand, dated June 22 and obtained by POLITICO through a public records request, zeroes in on changes the search giant has made in recent years to how online ads are sold. Google must respond by July 22.
Among the Google product changes targeted by investigators is the company’s decision in 2016 to require advertisers to buy YouTube ads through Google’s products; the adoption of accelerated mobile pages, known as AMP, a technology that stores mobile websites on Google servers; and the January announcement that the tech giant will eliminate third-party cookies from the Chrome web browser.
All three changes have drawn complaints from advertisers. Subscription news service MLex first reported on the query. Google said it will “continue to engage” with the investigation.
Full Content: Politico
Should the government force prudence on novice stock investors?
Market observers worry that a new group of largely inexperienced stock investors is at risk for great financial harm.
Commenters like Jim Cramer have remarked that many novice investors use recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel stocks. These stocks have been pummeled by COVID concerns, but rebounded from very low prices to somewhat higher prices. The rebound was partly in response to infusions of federal cash and credit. Jim Cramer and others fretted that novice traders who relied on the recent upward trajectory of COVID vulnerable stocks risked disaster because of market ignorance.
Casey Primozic, whose company Robintrack follows behavior of novice investors, suggested in a CNBC interview that novice investors will often join what they sense is a growth trend in a stock, without worrying about business fundamentals like profitability.
Novice investors are subject to manipulation by sophisticated investors, according to Jim Cramer. He says that professionals on Wall Street have taken advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Many observers saw a ploy to snare gullible novice stock traders when Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares destined to be wiped out when Hertz’ bankruptcy case is finished. Investors promptly bid up Hertz by 68%. Hertz halted stock sales when staff members at the U.S. Securities and Exchange Commission raised legal issues.
A New York Times article explains that millions of individuals without stock trading experience have recently begun investing through a company called Robinhood, which has an “app” that makes trading particularly easy and cheap. The article says that “More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace . . . .”
A Bankrate review of Robinhood says that “While investors can find free stock and ETF trades at most brokerages, the real differentiator for Robinhood is its free options trading. . . . Robinhood charges no per-contract fee.” Also, “Robinhood allows you to trade some cryptocurrencies commission-free, too.”
The New York Times article explains that Robinhood software coaches its investors on how to avoid government regulatory strictures that block the inexperienced from trading in options. The Robinhood app is organized so that customers who want to trade options answer just a few multiple-choice questions. The Times explains that “Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to ‘not much’ experience. Then people can immediately begin trading.”
Such egging on of inexperienced investors by Robinhood and others seems undesirable, particularly since there are many unfortunate stories of novice investors who have been brought to financial ruin. It is hard not to agree with Jim Cramer’s conclusion that novice investors are subject to exploitation by unscrupulous people. Sometimes such exploitation will attract the attention of regulators, as happened with the Hertz offering. But it seems likely that much exploitative behavior will escape government scrutiny. And, of course, not all examples of aggressive selling to novice investors deserve government action: Novice investors have at least some obligation to exercise common sense.
Possible government action against exploitation of novice investors may be supplemented by industry self-regulation. In addition to being subject to SEC regulation, most brokerage firms voluntarily participate in self-regulatory organizations (SROs) like the Financial Industry Regulatory Authority (FINRA). Brokerages that are FINRA members submit to the organization's rules and regulations, which includes a transparent disclosure framework that protects investors. In an article which asks whether Robinhood is safe for investors, Investopedia points out that Robinhood maintains membership in FINRA.
By Don Allen Resnikoff
Citations:
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html?searchResultPosition=1
https://www.cnbc.com/video/2020/07/08/robintrack-founder-casey-primozic-parses-through-latest-trading-trends.html
https://www.bankrate.com/investing/brokerage-reviews/robinhood/
https://www.investopedia.com/investing/is-robinhood-safe/
Bloomberg:
Amateur investors who loaded up on J.C. Penney Co. shares as the retailer went bankrupt are now pleading with a judge to spare them from a complete wipeout.
“I hope and pray for you to consider the shareholders,” wrote 50-year-old individual investor John Hardt in a letter dated May 25, one of dozens sent to the Corpus Christi, Texas-based court overseeing the case in recent months.
Hardt is part of a growing number of retail traders -- many driven by lockdown boredom and free online trading -- who have piled into the stock market. Speculation by amateurs is nothing new, but for the first time experts can recall, investors are buying shares of even bankrupt companies. Hertz Global Holdings Inc., oil driller Whiting Petroleum Corp. and J.C. Penney have all seen their stock price surge in recent sessions, despite being in Chapter 11.
Those gains almost always prove fleeting, leaving retail traders with little to show for their stakes other than an expensive lesson in the U.S. corporate bankruptcy process -- where shareholder value disappears almost as a rule. That’s because all creditors have to be made whole before equity owners get anything. For J.C. Penney investors, there’s little to suggest this time will prove any different.
A representative for the company declined to comment on the shareholder letters. An unrelated hearing scheduled for Monday may yield an update about extending the deadline for lenders to approve its turnaround plan.
“If there is any possible way -- any way -- to give a meaningful recovery to shareholders, we will fight for it,” Joshua Sussberg of Kirkland & Ellis, J.C. Penney’s bankruptcy lawyer, said at a June 9 hearing.
Mom-and-pop investors who insist on betting on struggling companies would be well advised to stay away from those in or near bankruptcy, said Fred Ringel, a partner and co-chair of the bankruptcy department at law firm Robinson Brog Leinwand Greene Genovese & Gluck.
“People who buy equity hoping that they’re not going to get wiped out in a bankruptcy just don’t understand the process,” Ringel said.
He added he’s been baffled to see retail investors putting cash into bankrupt stocks given the complexity of the restructuring process. “I don’t understand this phenomenon at all,” he said.
J.C. Penney filed for Chapter 11 in mid-May. After climbing as high as 67.9 cents last month, the company’s stock is trading at around 30 cents. Some of the retailer’s most junior debt -- which still ranks ahead of shares in the repayment line -- is quoted at less than 2 cents on the dollar. This implies extremely thin odds that bondholders will get repaid, and in turn that nothing will be left over for stockholders.
Hardt, when contacted by Bloomberg last week, said he had “zero knowledge of the bankruptcy process” before buying about 10,000 J.C. Penney shares. The Plano, Texas native said he’s already sold the position.
Several of the letters from J.C. Penney shareholders criticize the company’s failure so far to announce a buyer, after media reports cited several potential bidders, including Amazon.com Inc. Bloomberg reported in May on talks between Authentic Brands Group LLC and mall landlords Simon Property Group Inc. and Brookfield Property Partners LP to acquire the chain.
Retail investors hoping for a sale may have thought a buyer would pay cash for outstanding shares. Yet that’s practically unheard of in bankruptcy, where any asset value that remains after court costs belongs to lenders with senior collateral claims. Once they’re made whole, other creditors, including unsecured lenders and vendors are next in line. J.C. Penney entered bankruptcy with more than $2 billion in secured debt and $8 billion in total debt.
Some recent J.C. Penney investors said in interviews that that they bought shares on the expectation that the company would be able to rebound once stores shuttered by the Covid-19 outbreak were able to reopen, and therefore the retailer would be able to secure better terms in its restructuring negotiations than the typical Chapter 11 debtor.
The company has struggled for years, but analysts generally expected before the pandemic that it could hold out until at least 2021.
Some of the letters also criticize the decisions of corporate management and claim that Chief Executive Officer Jill Soltau offered false hope to investors. The company maintained in public statements through the end of March that it remained “optimistic about J.C. Penney’s ability to weather this pandemic.”
“I saw no bankruptcy coming only the promise of turnaround and great news,” wrote shareholder David Dean of Baltimore, who submitted a letter to the court on June 3. “Now this bankruptcy filing. Who could have known.”
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)
— With assistance by Jeremy Hill
https://www.bloomberg.com/markets/fixed-income
Market observers worry that a new group of largely inexperienced stock investors is at risk for great financial harm.
Commenters like Jim Cramer have remarked that many novice investors use recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel stocks. These stocks have been pummeled by COVID concerns, but rebounded from very low prices to somewhat higher prices. The rebound was partly in response to infusions of federal cash and credit. Jim Cramer and others fretted that novice traders who relied on the recent upward trajectory of COVID vulnerable stocks risked disaster because of market ignorance.
Casey Primozic, whose company Robintrack follows behavior of novice investors, suggested in a CNBC interview that novice investors will often join what they sense is a growth trend in a stock, without worrying about business fundamentals like profitability.
Novice investors are subject to manipulation by sophisticated investors, according to Jim Cramer. He says that professionals on Wall Street have taken advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Many observers saw a ploy to snare gullible novice stock traders when Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares destined to be wiped out when Hertz’ bankruptcy case is finished. Investors promptly bid up Hertz by 68%. Hertz halted stock sales when staff members at the U.S. Securities and Exchange Commission raised legal issues.
A New York Times article explains that millions of individuals without stock trading experience have recently begun investing through a company called Robinhood, which has an “app” that makes trading particularly easy and cheap. The article says that “More than at any other retail brokerage firm, Robinhood’s users trade the riskiest products and at the fastest pace . . . .”
A Bankrate review of Robinhood says that “While investors can find free stock and ETF trades at most brokerages, the real differentiator for Robinhood is its free options trading. . . . Robinhood charges no per-contract fee.” Also, “Robinhood allows you to trade some cryptocurrencies commission-free, too.”
The New York Times article explains that Robinhood software coaches its investors on how to avoid government regulatory strictures that block the inexperienced from trading in options. The Robinhood app is organized so that customers who want to trade options answer just a few multiple-choice questions. The Times explains that “Beginners are legally barred from trading options, but those who click that they have no investing experience are coached by the app on how to change the answer to ‘not much’ experience. Then people can immediately begin trading.”
Such egging on of inexperienced investors by Robinhood and others seems undesirable, particularly since there are many unfortunate stories of novice investors who have been brought to financial ruin. It is hard not to agree with Jim Cramer’s conclusion that novice investors are subject to exploitation by unscrupulous people. Sometimes such exploitation will attract the attention of regulators, as happened with the Hertz offering. But it seems likely that much exploitative behavior will escape government scrutiny. And, of course, not all examples of aggressive selling to novice investors deserve government action: Novice investors have at least some obligation to exercise common sense.
Possible government action against exploitation of novice investors may be supplemented by industry self-regulation. In addition to being subject to SEC regulation, most brokerage firms voluntarily participate in self-regulatory organizations (SROs) like the Financial Industry Regulatory Authority (FINRA). Brokerages that are FINRA members submit to the organization's rules and regulations, which includes a transparent disclosure framework that protects investors. In an article which asks whether Robinhood is safe for investors, Investopedia points out that Robinhood maintains membership in FINRA.
By Don Allen Resnikoff
Citations:
https://www.nytimes.com/2020/07/08/technology/robinhood-risky-trading.html?searchResultPosition=1
https://www.cnbc.com/video/2020/07/08/robintrack-founder-casey-primozic-parses-through-latest-trading-trends.html
https://www.bankrate.com/investing/brokerage-reviews/robinhood/
https://www.investopedia.com/investing/is-robinhood-safe/
Bloomberg:
Amateur investors who loaded up on J.C. Penney Co. shares as the retailer went bankrupt are now pleading with a judge to spare them from a complete wipeout.
“I hope and pray for you to consider the shareholders,” wrote 50-year-old individual investor John Hardt in a letter dated May 25, one of dozens sent to the Corpus Christi, Texas-based court overseeing the case in recent months.
Hardt is part of a growing number of retail traders -- many driven by lockdown boredom and free online trading -- who have piled into the stock market. Speculation by amateurs is nothing new, but for the first time experts can recall, investors are buying shares of even bankrupt companies. Hertz Global Holdings Inc., oil driller Whiting Petroleum Corp. and J.C. Penney have all seen their stock price surge in recent sessions, despite being in Chapter 11.
Those gains almost always prove fleeting, leaving retail traders with little to show for their stakes other than an expensive lesson in the U.S. corporate bankruptcy process -- where shareholder value disappears almost as a rule. That’s because all creditors have to be made whole before equity owners get anything. For J.C. Penney investors, there’s little to suggest this time will prove any different.
A representative for the company declined to comment on the shareholder letters. An unrelated hearing scheduled for Monday may yield an update about extending the deadline for lenders to approve its turnaround plan.
“If there is any possible way -- any way -- to give a meaningful recovery to shareholders, we will fight for it,” Joshua Sussberg of Kirkland & Ellis, J.C. Penney’s bankruptcy lawyer, said at a June 9 hearing.
Mom-and-pop investors who insist on betting on struggling companies would be well advised to stay away from those in or near bankruptcy, said Fred Ringel, a partner and co-chair of the bankruptcy department at law firm Robinson Brog Leinwand Greene Genovese & Gluck.
“People who buy equity hoping that they’re not going to get wiped out in a bankruptcy just don’t understand the process,” Ringel said.
He added he’s been baffled to see retail investors putting cash into bankrupt stocks given the complexity of the restructuring process. “I don’t understand this phenomenon at all,” he said.
J.C. Penney filed for Chapter 11 in mid-May. After climbing as high as 67.9 cents last month, the company’s stock is trading at around 30 cents. Some of the retailer’s most junior debt -- which still ranks ahead of shares in the repayment line -- is quoted at less than 2 cents on the dollar. This implies extremely thin odds that bondholders will get repaid, and in turn that nothing will be left over for stockholders.
Hardt, when contacted by Bloomberg last week, said he had “zero knowledge of the bankruptcy process” before buying about 10,000 J.C. Penney shares. The Plano, Texas native said he’s already sold the position.
Several of the letters from J.C. Penney shareholders criticize the company’s failure so far to announce a buyer, after media reports cited several potential bidders, including Amazon.com Inc. Bloomberg reported in May on talks between Authentic Brands Group LLC and mall landlords Simon Property Group Inc. and Brookfield Property Partners LP to acquire the chain.
Retail investors hoping for a sale may have thought a buyer would pay cash for outstanding shares. Yet that’s practically unheard of in bankruptcy, where any asset value that remains after court costs belongs to lenders with senior collateral claims. Once they’re made whole, other creditors, including unsecured lenders and vendors are next in line. J.C. Penney entered bankruptcy with more than $2 billion in secured debt and $8 billion in total debt.
Some recent J.C. Penney investors said in interviews that that they bought shares on the expectation that the company would be able to rebound once stores shuttered by the Covid-19 outbreak were able to reopen, and therefore the retailer would be able to secure better terms in its restructuring negotiations than the typical Chapter 11 debtor.
The company has struggled for years, but analysts generally expected before the pandemic that it could hold out until at least 2021.
Some of the letters also criticize the decisions of corporate management and claim that Chief Executive Officer Jill Soltau offered false hope to investors. The company maintained in public statements through the end of March that it remained “optimistic about J.C. Penney’s ability to weather this pandemic.”
“I saw no bankruptcy coming only the promise of turnaround and great news,” wrote shareholder David Dean of Baltimore, who submitted a letter to the court on June 3. “Now this bankruptcy filing. Who could have known.”
The case is J.C. Penney Company Inc., 20-20182, U.S. Bankruptcy Court for the Southern District of Texas (Corpus Christi)
— With assistance by Jeremy Hill
https://www.bloomberg.com/markets/fixed-income
WSJ article on business fat cats who received PPP money
Excerpt:
By Cezary Podkul
, Juliet Chung
and Will Parker
July 7, 2020 7:33 am ET
The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan’s most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic.
The entities all received loans under the federal government’s Paycheck Protection Program. Since March, the program has extended about $521 billion out of more than $650 billion in authorized loans, but until now, the public hasn’t gotten a detailed look at who was benefitting from the cash.
That changed on Monday, when the Small Business Administration published the names of businesses that accounted for about three-fourths of the loan dollars distributed. While small family-owned businesses and nonprofits benefited from the aid, so did many Wall Street firms that potentially have other sources of cash and didn’t suffer like restaurants and retailers.
The Extell development Central Park Tower of luxury condos and a department store while it was being constructed last year; Extell said the recent federal Paycheck Protection Program allowed the firm to continue paying its employees.PHOTO: RICHARD B. LEVINE/ZUMA PRESS
“The PPP program was designed for small businesses that had to shut down and lose revenues because of the crisis,” said Marcus Stanley, policy director for Americans for Financial Reform, which advocates for tighter financial regulations. “The markets never shut down at any point.”
Loan recipients say they were justified to seek the aid and did so within the spirit and guidelines of the program. Xtellus Capital Partners, the former U.S. operations of Russian bank VTB Capital, said the pandemic hurt trading volumes, which made its effort to diversify after its 2018 spinoff riskier. VTB has been under U.S. sanctions for several years. Xtellus got a loan between $150,000 to $350,000, according to the SBA, which only disclosed loan amount ranges.
“It’s been a big help. We haven’t had to let anyone go,” Xtellus Chief Executive Paul Swigart said in an interview.
More than a dozen floor brokerages at the New York Stock Exchange got loans of at least $150,000, Monday’s disclosures showed. NYSE floor brokers, who often work for smaller firms of a few dozen employees, were unable to work for about two months starting in March when the exchange shut down floor trading to prevent the spread of the virus.
Excerpt:
By Cezary Podkul
, Juliet Chung
and Will Parker
July 7, 2020 7:33 am ET
The former U.S. operations of a sanctioned Russian bank, a hedge fund partly owned by one of the biggest private-equity firms in the world and a real-estate developer behind two of Manhattan’s most expensive condominium towers were among the financial firms that benefited from a government program designed to help small businesses weather the coronavirus pandemic.
The entities all received loans under the federal government’s Paycheck Protection Program. Since March, the program has extended about $521 billion out of more than $650 billion in authorized loans, but until now, the public hasn’t gotten a detailed look at who was benefitting from the cash.
That changed on Monday, when the Small Business Administration published the names of businesses that accounted for about three-fourths of the loan dollars distributed. While small family-owned businesses and nonprofits benefited from the aid, so did many Wall Street firms that potentially have other sources of cash and didn’t suffer like restaurants and retailers.
The Extell development Central Park Tower of luxury condos and a department store while it was being constructed last year; Extell said the recent federal Paycheck Protection Program allowed the firm to continue paying its employees.PHOTO: RICHARD B. LEVINE/ZUMA PRESS
“The PPP program was designed for small businesses that had to shut down and lose revenues because of the crisis,” said Marcus Stanley, policy director for Americans for Financial Reform, which advocates for tighter financial regulations. “The markets never shut down at any point.”
Loan recipients say they were justified to seek the aid and did so within the spirit and guidelines of the program. Xtellus Capital Partners, the former U.S. operations of Russian bank VTB Capital, said the pandemic hurt trading volumes, which made its effort to diversify after its 2018 spinoff riskier. VTB has been under U.S. sanctions for several years. Xtellus got a loan between $150,000 to $350,000, according to the SBA, which only disclosed loan amount ranges.
“It’s been a big help. We haven’t had to let anyone go,” Xtellus Chief Executive Paul Swigart said in an interview.
More than a dozen floor brokerages at the New York Stock Exchange got loans of at least $150,000, Monday’s disclosures showed. NYSE floor brokers, who often work for smaller firms of a few dozen employees, were unable to work for about two months starting in March when the exchange shut down floor trading to prevent the spread of the virus.
About Joseph Corcoran, developer of mixed use housing in Boston
Mr. Corcoran is the subject of a recent obituary in the Wall Street Journal that talks of Mr. Corcoran's role in developing mixed use housing in Boston.
The article explains that the mixed use project Harbor Point was completed in 1990 at a cost of more than $250 million. Harbor Point created a neighborhood where lawyers and graduate students lived alongside people qualifying for subsidized rent. They shared swimming pools, a gym and views of Boston’s harbor and skyline.
Mr. Corcoran died June 3 of congestive heart failure at his home in Milton, Mass. He was 84. Over nearly five decades, his firm built and managed more than 20,000 housing units in 15 states, his family said.
His mixed-income projects relied on government rental subsidies and tax credits, as well as his patience in negotiating with local, state and federal officials. Perhaps most crucial was his ability to persuade poor residents of neighborhoods he was proposing to redevelop that they wouldn’t be pushed out. At Harbor Point, they were at the table as redevelopment plans were worked out.
“The political establishment can ignore us as money-hungry developers, but they can’t ignore the plight of these people who want something better,” he told Jane Roessner, author of “A Decent Place to Live,” a history of the Columbia Point makeover.
The Wall Street Journal article [paywalled] is at https://www.wsj.com/articles/joseph-corcoran-rescued-a-squalid-boston-housing-project-11592485201?mod=lead_feature_below_a_pos1 Author Roessner was a speaker on a panel that put the Columbia Point project in a broader context. A video of the panel presentation is at https://www.youtube.com/watch?reload=9&time_continue=8&v=QYiVxfSlPFU&feature=emb_logo
Mr. Corcoran is the subject of a recent obituary in the Wall Street Journal that talks of Mr. Corcoran's role in developing mixed use housing in Boston.
The article explains that the mixed use project Harbor Point was completed in 1990 at a cost of more than $250 million. Harbor Point created a neighborhood where lawyers and graduate students lived alongside people qualifying for subsidized rent. They shared swimming pools, a gym and views of Boston’s harbor and skyline.
Mr. Corcoran died June 3 of congestive heart failure at his home in Milton, Mass. He was 84. Over nearly five decades, his firm built and managed more than 20,000 housing units in 15 states, his family said.
His mixed-income projects relied on government rental subsidies and tax credits, as well as his patience in negotiating with local, state and federal officials. Perhaps most crucial was his ability to persuade poor residents of neighborhoods he was proposing to redevelop that they wouldn’t be pushed out. At Harbor Point, they were at the table as redevelopment plans were worked out.
“The political establishment can ignore us as money-hungry developers, but they can’t ignore the plight of these people who want something better,” he told Jane Roessner, author of “A Decent Place to Live,” a history of the Columbia Point makeover.
The Wall Street Journal article [paywalled] is at https://www.wsj.com/articles/joseph-corcoran-rescued-a-squalid-boston-housing-project-11592485201?mod=lead_feature_below_a_pos1 Author Roessner was a speaker on a panel that put the Columbia Point project in a broader context. A video of the panel presentation is at https://www.youtube.com/watch?reload=9&time_continue=8&v=QYiVxfSlPFU&feature=emb_logo
SBA changes course, will reveal some PPP loan data
The U.S. Small Business Administration and Treasury Department announced Friday that they would release a data set showing which businesses received many taxpayer-funded Paycheck Protection Program loans, walking back an earlier stance that all of the business names would remain hidden because the Trump administration considered them proprietary.
The disclosures will include the names of recipients who received loans of more than $150,000 and it will also reveal a dollar range for each loan, such as whether it was between $1 million and $2 million. Precise dollar amounts will not be disclosed, the Trump administration said. Borrowers who obtained loans of less than $150,000 will not have their identities disclosed. The administration said nearly 75 percent of all loans were for $150,000 or more, so most borrowers would be revealed.
https://www.washingtonpost.com/business/2020/06/19/treasury-sba-ppp-disclosure/
The U.S. Small Business Administration and Treasury Department announced Friday that they would release a data set showing which businesses received many taxpayer-funded Paycheck Protection Program loans, walking back an earlier stance that all of the business names would remain hidden because the Trump administration considered them proprietary.
The disclosures will include the names of recipients who received loans of more than $150,000 and it will also reveal a dollar range for each loan, such as whether it was between $1 million and $2 million. Precise dollar amounts will not be disclosed, the Trump administration said. Borrowers who obtained loans of less than $150,000 will not have their identities disclosed. The administration said nearly 75 percent of all loans were for $150,000 or more, so most borrowers would be revealed.
https://www.washingtonpost.com/business/2020/06/19/treasury-sba-ppp-disclosure/
News Media Cartels are Bad News for Consumers
By John M. Yun (George Mason University)
The Journalism Competition and Preservation Act was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring “quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates. In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.
Drawn from https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-5-Full.pdf
By John M. Yun (George Mason University)
The Journalism Competition and Preservation Act was introduced with the professed objective of allowing small newspaper publishers to band together in negotiations with Facebook and Google in order to secure a more fair and equitable distribution of profits from online advertising. As virtuous as that may sound, the reality is quite different. The bill would allow all online newspaper publishers (including conglomerates such as the News Corporation, AT&T, and Viacom) to form a cartel to fix prices and other terms of trade. This is not a bill aimed at small publishers, nor is it a bill aimed at ensuring “quality” (which is often a red herring in antitrust as it invokes a desire for incumbents to create artificial barriers to entry). Rather, the bill would create antitrust immunity for colluding media conglomerates. In this short article, we first describe precisely what is in the bill. Next, we describe the structure of the online news market, and the role that online platforms play in distributing news content. Finally, we detail the impact that such collusion would have on the market.
Drawn from https://www.competitionpolicyinternational.com/wp-content/uploads/2019/04/North-America-Column-April-2019-5-Full.pdf
Hertz Global Holdings Inc. suspended plans to raise cash by selling new shares that the bankrupt car renter described as potentially “worthless,” after its proposal failed to pass muster with regulators.
The company halted sales while it deals with issues brought up by staff members at the U.S. Securities and Exchange Commission, according to a filing. The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.
From: https://www.msn.com/en-us/money/topstocks/hertz-suspends-sale-of-worthless-stock-amid-sec-scrutiny/ar-BB15CODb
The company halted sales while it deals with issues brought up by staff members at the U.S. Securities and Exchange Commission, according to a filing. The stock, whose trading had been halted earlier in the day, ended the regular trading session up 5 cents at $2, while ilts bonds tumbled.
From: https://www.msn.com/en-us/money/topstocks/hertz-suspends-sale-of-worthless-stock-amid-sec-scrutiny/ar-BB15CODb
Is Hertz using bankruptcy Court to exploit gullible investors?
Commenters like Jim Cramer have remarked that many novice investors are taking advantage of recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel sector stocks. These stocks have been pummeled by COVID concerns; but rebounded from very low prices to somewhat higher prices. The rebound is partly in response to infusions of federal cash and credit. Jim Cramer and others have fretted that novice traders who rely on the recent upward trajectory of COVID vulnerable stocks risk disaster because of market ignorance.
Also, novice investors are subject to manipulation by sophisticated investors, according to Cramer. He says that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Now, in what Cramer and some others see as yet another ploy to snare gullible novice stock traders, Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares. Hertz readily concedes those might wind up worthless, too. The stock appears destined to be wiped out when its bankruptcy case is finished. Investors promptly bid up Hertz by 68%.
The car rental company wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. The proceeds would provide some much-needed working capital while Hertz tries to dig out from massive debts that forced it into court protection.
The filing explains that “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
On Friday, June 12, the bankruptcy court approved Hertz’s request to sell up to $1 billion in stock.
But the risk to novice investors plainly is great. Investors who own stock in bankrupt firms are last in line as the company pays back creditors like banks and bondholders. Shares of a bankrupt company are typically wiped out, and if new stock is issued there is no guarantee the prior shareholders will receive new shares.
Commenters have not been sympathetic. One said: “Failing rental car company Hertz‘s latest Hail Mary might be its most dastardly yet: Exploit newly-found popularity among Robinhood traders to sell $1 billion worth of potentially worthless stock.” [i]
According to Marketwatch, Amy Lynch, a former U.S. Securities and Exchange Commission staffer, said that the proposed stock sale needs to spell out that “any money put into this company could be a total loss.” She explained that “The disclosures would have to be air tight in order to avoid lawsuits in the future.”
CNBC’s Jim Cramer was even more apoplectic than usual, comparing Hertz promoters to P.T. Barnum.
Cramer warns new investors about the serious risk of buying the stock of companies that filed for bankruptcy such as Hertz.
“You may think a stock like Hertz . . .looks like a steal at these levels, but the only people being robbed here are you the buyers,” he said.
Cramer said it is “highly unlikely” that Hertz, as a business, goes away in its bankruptcy. But the company’s bondholders will be the first in line to get a piece of the post-bankruptcy Hertz. Owners of the common stock, on the other hand, “are at the bottom of the bankruptcy pecking order,” Cramer said.
“[Y]ou’re buying the old Hertz with $19 billion in debt that it can’t repay,” Cramer explained. “Since the creditors can’t collect, they’re going to seize the collateral, which is the business. So this $4 stock will most likely just be cancelled.”
That is a reality well-known by people like legendary activist investor Carl Icahn, Cramer said. Icahn held a nearly 39% stake in Hertz but dumped it last month after the company filed for bankruptcy.
“Believe me, if there was a real chance the common stock would be worth anything, Icahn would’ve stuck around. He didn’t,” Cramer said.
Cramer also said if he were running the bankruptcy court, he would prevent shares of Hertz from being traded, helping “keep inexperienced investors from losing money on it.”
-by Don Allen Resnikoff
A copy of the Hertz filing is here:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDE4NzYy&id2=0
[i] https://usa-newsposts.com/technology/bankrupt-hertz-targets-robinhood-traders-in-plot-to-dump-1-billion-in-stock/
Commenters like Jim Cramer have remarked that many novice investors are taking advantage of recently lowered brokerage fees to make risky investments in shaky stocks. Examples are cruise and air travel sector stocks. These stocks have been pummeled by COVID concerns; but rebounded from very low prices to somewhat higher prices. The rebound is partly in response to infusions of federal cash and credit. Jim Cramer and others have fretted that novice traders who rely on the recent upward trajectory of COVID vulnerable stocks risk disaster because of market ignorance.
Also, novice investors are subject to manipulation by sophisticated investors, according to Cramer. He says that professionals on Wall Street are taking advantage of amateur investors by bidding up beat-up but popular stocks like airlines in premarket trading. “It’s a game. If it weren’t securities, let’s say it was Monopoly, let’s say it’s Draft Kings ... it would be so much fun,” Cramer said on “Squawk Box.” “Pick a couple of stocks, you gun them in the morning, and then you hope people are stupid enough and they buy them.”
Now, in what Cramer and some others see as yet another ploy to snare gullible novice stock traders, Hertz Global Holdings Inc. announced a plan to sell $1 billion more of its shares. Hertz readily concedes those might wind up worthless, too. The stock appears destined to be wiped out when its bankruptcy case is finished. Investors promptly bid up Hertz by 68%.
The car rental company wants to take advantage of the quixotic rally in its stock by offering as many as 246.78 million common shares, according to a court filing. The proceeds would provide some much-needed working capital while Hertz tries to dig out from massive debts that forced it into court protection.
The filing explains that “The recent market prices of and the trading volumes in Hertz’s common stock potentially present a unique opportunity for the Debtors to raise capital on terms that are far superior to any debtor-in-possession financing.”
On Friday, June 12, the bankruptcy court approved Hertz’s request to sell up to $1 billion in stock.
But the risk to novice investors plainly is great. Investors who own stock in bankrupt firms are last in line as the company pays back creditors like banks and bondholders. Shares of a bankrupt company are typically wiped out, and if new stock is issued there is no guarantee the prior shareholders will receive new shares.
Commenters have not been sympathetic. One said: “Failing rental car company Hertz‘s latest Hail Mary might be its most dastardly yet: Exploit newly-found popularity among Robinhood traders to sell $1 billion worth of potentially worthless stock.” [i]
According to Marketwatch, Amy Lynch, a former U.S. Securities and Exchange Commission staffer, said that the proposed stock sale needs to spell out that “any money put into this company could be a total loss.” She explained that “The disclosures would have to be air tight in order to avoid lawsuits in the future.”
CNBC’s Jim Cramer was even more apoplectic than usual, comparing Hertz promoters to P.T. Barnum.
Cramer warns new investors about the serious risk of buying the stock of companies that filed for bankruptcy such as Hertz.
“You may think a stock like Hertz . . .looks like a steal at these levels, but the only people being robbed here are you the buyers,” he said.
Cramer said it is “highly unlikely” that Hertz, as a business, goes away in its bankruptcy. But the company’s bondholders will be the first in line to get a piece of the post-bankruptcy Hertz. Owners of the common stock, on the other hand, “are at the bottom of the bankruptcy pecking order,” Cramer said.
“[Y]ou’re buying the old Hertz with $19 billion in debt that it can’t repay,” Cramer explained. “Since the creditors can’t collect, they’re going to seize the collateral, which is the business. So this $4 stock will most likely just be cancelled.”
That is a reality well-known by people like legendary activist investor Carl Icahn, Cramer said. Icahn held a nearly 39% stake in Hertz but dumped it last month after the company filed for bankruptcy.
“Believe me, if there was a real chance the common stock would be worth anything, Icahn would’ve stuck around. He didn’t,” Cramer said.
Cramer also said if he were running the bankruptcy court, he would prevent shares of Hertz from being traded, helping “keep inexperienced investors from losing money on it.”
-by Don Allen Resnikoff
A copy of the Hertz filing is here:
https://restructuring.primeclerk.com/hertz/Home-DownloadPDF?id1=NDE4NzYy&id2=0
[i] https://usa-newsposts.com/technology/bankrupt-hertz-targets-robinhood-traders-in-plot-to-dump-1-billion-in-stock/
California & Washington Are Scrutinizing Amazon For Abuse Of Power
June 14, 2020
State investigators in California and Washington have been looking into whether Amazon abuses its power over sellers on the tech giant’s site, according to people involved with the inquiry.
In the last several months, California has asked about the company’s private label products and whether it uses data from sellers to determine which products it sells, according to two people, who spoke on condition of anonymity out of fear of retribution by the company.
The Washington attorney general’s office has also been interested in whether Amazon makes it harder for sellers to list their products on other websites, according to correspondence viewed by The New York Times.
See https://www.nytimes.com/2020/06/12/technology/state-inquiry-antitrust-amazon.html
June 14, 2020
State investigators in California and Washington have been looking into whether Amazon abuses its power over sellers on the tech giant’s site, according to people involved with the inquiry.
In the last several months, California has asked about the company’s private label products and whether it uses data from sellers to determine which products it sells, according to two people, who spoke on condition of anonymity out of fear of retribution by the company.
The Washington attorney general’s office has also been interested in whether Amazon makes it harder for sellers to list their products on other websites, according to correspondence viewed by The New York Times.
See https://www.nytimes.com/2020/06/12/technology/state-inquiry-antitrust-amazon.html
Bumblebee tuna Chris Lischewski sentenced to 40 months in prison, USD 100,000 fine
By
Chris Chase
June 16, 2020
Former Bumble Bee President and CEO Chris Lischewski was sentenced to 40 months in prison and given a USD 100,000 fine (EUR 88,000) as part of his role in a conspiracy to fix the prices of canned tuna sold in the United States from 2011 to 2013.
The sentence comes after a three-week-long trial in December ended with a jury finding Lischewski guilty of being involved in a scheme between Bumble Bee, StarKist, and Chicken of the Sea to fix the price of tuna. Lischewski was facing a maximum penalty of 10 years in prison and a fine of USD 1 million (EUR 887,500).
The sentence, according to U.S. District Court Judge Edward M. Chen, is in accordance to the severity of the conspiracy, which was “widespread, pervasive, and affecting the entire industry.”
“The conduct was deliberate, it was planned, it was sustained, over a three-year period,” Chen said. “This was not a rash act of having to commit a crime under distress, under episodic circumstances as we see sometimes, this was a contemplated and deliberate plan.”
The sentencing came after an over two-hour hearing, in which part of the sentencing hinged on the qualitative affect that the price-fixing conspiracy had on the economy. California’s penal code includes stipulations on how sentencing should be calculated based on its financial impact.
Excerpt from https://www.seafoodsource.com/news/business-finance/chris-lischewski-sentenced-to-40-months-in-prison-usd-100-000-fine
By
Chris Chase
June 16, 2020
Former Bumble Bee President and CEO Chris Lischewski was sentenced to 40 months in prison and given a USD 100,000 fine (EUR 88,000) as part of his role in a conspiracy to fix the prices of canned tuna sold in the United States from 2011 to 2013.
The sentence comes after a three-week-long trial in December ended with a jury finding Lischewski guilty of being involved in a scheme between Bumble Bee, StarKist, and Chicken of the Sea to fix the price of tuna. Lischewski was facing a maximum penalty of 10 years in prison and a fine of USD 1 million (EUR 887,500).
The sentence, according to U.S. District Court Judge Edward M. Chen, is in accordance to the severity of the conspiracy, which was “widespread, pervasive, and affecting the entire industry.”
“The conduct was deliberate, it was planned, it was sustained, over a three-year period,” Chen said. “This was not a rash act of having to commit a crime under distress, under episodic circumstances as we see sometimes, this was a contemplated and deliberate plan.”
The sentencing came after an over two-hour hearing, in which part of the sentencing hinged on the qualitative affect that the price-fixing conspiracy had on the economy. California’s penal code includes stipulations on how sentencing should be calculated based on its financial impact.
Excerpt from https://www.seafoodsource.com/news/business-finance/chris-lischewski-sentenced-to-40-months-in-prison-usd-100-000-fine
From DCAG Racine's budget request memo:
This week, I testified before the Council in support of OAG’s fiscal year 2021 budget proposal. I made clear that OAG—an agency that not only saves revenue but also generates revenue—is committed to helping the District
This week, I testified before the Council in support of OAG’s fiscal year 2021 budget proposal. I made clear that OAG—an agency that not only saves revenue but also generates revenue—is committed to helping the District