Welcome to The Corner. In this issue, we take a look at how Democratic lawmakers are failing to fight President Trump’s willful dismantling of regulatory agency independence. And our report on how electric utilities block affordable and more reliable energy alternatives.

Congress Fails to Fight as Trump Destroys Independence of Regulatory Agencies

Austin Ahlman

Last week, the Supreme Court heard oral arguments in the case regarding President Trump’s firing earlier this year of Federal Trade Commissioner Rebecca Slaughter. The proceedings confirmed that the conservative majority appears ready to overturn Humphrey’s Executor, a 1935 precedent that protected commissioners of independent regulatory agencies from being removed from office without cause. If the Court upholds the President’s action, the decision would overturn the foundations of the system that Congress and the Executive have relied on for nearly two centuries to regulate corporate and financial power.

Unfortunately, neither the Senate as an institution, nor Democrats as an opposition party, appear to have a plan either to restore the system of independent power the next time they are back in power. Worse, they do not appear even to have begun to adjust to the radical political implications of transforming the FTC and other agencies into direct extensions of the President’s will.

The case centers on President Trump’s decision to remove Slaughter and fellow Commissioner Alvaro Bedoya before their terms expired. (Bedoya subsequently resigned his seat, while Slaughter continues fighting the unprecedented dismissal.) In the law establishing the FTC, Congress declared that commissioners can only be removed “for cause.” But the Trump administration argued that the Constitution gives the President "illimitable power of removal" over all executive officers. Based on questions from the conservative members of the bench, the Court appears likely to agree. The decision is due by the end of June but could come sooner.

The legal and economic implications of the expected opinion are vast and will reverberate for decades. For instance, the present sharp distinction between an independent agency like the FTC and a cabinet department like the State Department would vanish.

The political effects of the Trump Administration’s campaign are already playing out and require immediate action from lawmakers. Unfortunately, Democrats in Congress and Republicans who oppose this action have yet to adjust to the new reality.

For decades, for instance, Senators and interest groups treated nominees to commissioner positions as individuals who would exercise independent judgment based on their personal legal and regulatory philosophies. But that assumption is no longer valid.

Consider Ryan Baasch, the President's expected nominee to replace former Republican FTC commissioner Melissa Holyoak, recently appointed to be a U.S. District Attorney. In the past, Baasch’s heterodox views would have warranted serious debate among academics and activists. He is a former staffer for the Texas Attorney General with a history of aggressive litigation against Big Tech. Under the old rules, observers would question whether his stance on Section 230 or data privacy might open pathways for bipartisan reform. But if the Court rules as expected in Trump v. Slaughter, those questions become irrelevant. If Baasch deviates from the White House line, he can be fired immediately. His tenure will last exactly as long as his obedience.

The American public already sees this dynamic evolving in the current FTC. Under the tenure of chair Andrew Ferguson, merger approvals and enforcement actions are openly wielded as a carrot or stick against corporations vying for favor.

Ferguson’s sole remaining fellow commissioner, Mark Meador, provides an even clearer example of how quickly the tone of discussion in the FTC has changed. Unlike Ferguson, who has a long reputation as a partisan soldier, Meador was seen as a potential independent ally in fights to rein in Big Tech and protect small rural businesses.

But since the Trump Administration moved to take direct control over the agency, Meador’s personal philosophy has disappeared. He now votes consistently for the administration’s deregulatory agenda. One stark example is a recent case against Pepsi that sought to revive enforcement of the Robinson-Patman Act. After defending the merits of enforcing the law for years, Meador voted to kill a case and released an almost parodically partisan statement [[link removed]] to justify his about-face.

This shift demands new thinking and new strategies from Democrats and independent Republicans. Senators have historically treated the president’s nominees to these boards with great deference, assuming the structure of these institutions enabled even highly partisan actors to carry out their duties faithfully and objectively. Going forward, such deference would be a strategic error.

If the Supreme Court eliminates agency independence, lawmakers must adapt. Democrats and Republicans alike must view every nominee as a direct extension of the President’s political operation rather than a trustee for Congress’s expressed intent. For the immediate future, the only way for Senators to exert any check on these agencies is to withhold confirmation and, in cases where it is possible under the law, block a body’s quorum.

Unfortunately, neither the Senate as a body nor Democratic members who oppose Trump’s actions appear to have adapted to this new reality. Last month, for instance, Senators from both parties easily advanced Republican Commissioner Michelle Stultz’s renomination to the Surface Transportation Board despite ongoing litigation over the attempted firing of board member [[link removed]] Robert Primus. And the same day the Supreme Court heard arguments on the firing of Slaughter, the Senate Commerce Committee advanced a nominee to the National Transportation Safety Board with broad bipartisan support despite the similarly contested dismissal [[link removed]] of Alvin Brown from that body earlier this year.

Ranking member Maria Cantwell has called for pausing proceedings on key nominees until the legality of the firings is settled. But she has thus far been unable to unify her own party around defending the legislative branch’s prerogative—let alone the opposition.

Open Markets Opposes Both Netflix and Paramount Proposals to Take Over Warner Brothers

Open Markets strongly called for law enforcers to block an attempt by Netflix to buy Warner Bros.. “Netflix’s bid to swallow Warner Bros. Discovery’s studios and streaming business is a raw deal for viewers, writers, creators, theaters — for just about anyone who isn’t a top executive or large investor chasing a short-term stock jump,” said Karina Montoya, program manager for Center for Journalism and Liberty at OMI. OMI Europe Director Max von Thun later condemned the news that Paramount - which is now owned by Trump ally Larry Ellison and his son David - had launched a hostile bid for Warner Brothers. Von Thun was quoted in Bloomberg [http://“further tighten the Ellison family’s hold on the American and global news media landscape.”] saying that European regulators should oppose such a deal, since it would “further tighten the Ellison family’s hold on the American and global news media landscape.”

Open Markets Briefs EU Parliament on Cloud Market Oligopoly

Open Markets Europe director Max von Thun last week urged EU lawmakers to use existing regulatory tools to radically restructure Europe’s market for cloud-based data and computing services. Von Thun briefed [[link removed]] the European Parliament’s Internal Market Committee on the findings of a recent OMI paper [[link removed]] that details the various dangers posed by Europe’s deep dependence on three U.S. cloud giants — Amazon, Microsoft, and Google. Thun described how these corporations maintain their oligopoly through illegal practices such as bundling and tying cloud services with non-cloud services, imposing hurdles to interoperability and data portability, and subsidizing their cloud businesses with profits from other business lines. “Even if an alternative to these three big providers has a better technology or can offer cloud services at cheaper prices” it’s often “too difficult for [customers] to make the switch,” he said. Watch von Thun’s remarks, starting at 15:47, here [[link removed]].

How Utilities Block Virtual Power Plants, Driving Up Costs — New Report from Open Markets

The Open Markets Institute and Mission:data [[link removed]], a coalition of consumer-focused energy companies, published a joint report [[link removed]], “Fair and Open Markets for Virtual Power Plants," on how investor-owned utilities are stifling the growth of virtual power plants (VPPs) and denying customers more affordable and reliable electricity. VPPs, which can turn smart-home devices off and on remotely to modify the electrical load on the power grid, offer one of the most cost-effective ways to reduce power costs by shifting usage away from peak hours and reducing the need to build expensive new infrastructure. The report describes how utilities are leveraging their exclusive control over electric meter data to block independent VPPs from operating. In many states, utilities reserve the right to terminate access to customer-authorized data “at any time, without notice, for any reason whatsoever,” creating conditions that make competitive VPPs effectively impossible to operate. Earlier this week, the Capitol Forum [[link removed]] hosted OMI senior legal analyst and coauthor of the report Daniel Hanley, along with Mission:Data’s Katherine Wyszkowski and Michael Murray for a conference call to discuss the report. Read the full report here [[link removed]].

Open Markets Releases Report on China’s Dominance Over Active Pharma Ingredients

The Open Markets Institute released a report [[link removed]] on China’s continued dominance in the global production of active pharmaceutical ingredients (API) and how the U.S. can and must correct its dependency problem. The report details how continuing US dependence on Chinese producers for the active pharmaceutical ingredients (API) that underpin all drug production gives China both economic and political power over the United States. Although the COVID-19 pandemic raised public awareness about pharmaceutical supply chain risks, U.S. dependence on Chinese products has only increased. China is now the largest supplier of pharmaceutical products consumed in the U.S., including both APIs and finished drugs. Read the full report by former National Economic Council policy adviser and Open Markets fellow Garphil Julien and OMI industrial policy manager Audrey Stienon here [[link removed]].

📝 WHAT WE'VE BEEN UP TO:

Open Markets Europe director Max von Thun published an op-ed in Project Syndicate [[link removed]] challenging the notion that digital regulation holds Europe back, arguing instead that weakening the EU’s landmark digital rules will entrench U.S. tech monopolies and sabotage Europe’s long-term competitiveness. “Rather than choosing between stronger tech regulation and increased incentives and support for the tech sector, Europe must embrace a coordinated approach that squeezes today’s U.S. tech giants from both sides,” he wrote.

Open Markets industrial policy program manager Audrey Stienon joined a panel [[link removed]] at The Capitol Forum’s Trade & Competition Policy Forum focused on the future of climate, human rights, and trade. The panel, “CBAM, Supply Chains, and Corporate Sustainability in the EU,” discussed the status of the EU’s Carbon Border Adjustment Mechanism (CBAM) and the Corporate Sustainability Due Diligence Directive in light of this administration’s weaponization of trade policy."

Open Markets Institute joined [[link removed]] a coalition of more than 70 press freedom organizations, businesses, experts, and think tanks in submitting a letter urging the European Commission to reject Google’s proposed behavioral remedies in the adtech antitrust case, arguing that the forced sale of business units is the only solution to address the tech giant’s market dominance. “Over more than a decade of EU antitrust enforcement — from Shopping to Android to AdSense — behavioral commitments have consistently failed to curb Google’s anticompetitive practices,” the letter read. The letter was covered in Politico EU [[link removed]]’s morning newsletter. Read the full letter here [[link removed]].

Europe director Max von Thun also applauded [[link removed]] the EU’s new AI-related antitrust investigations into Meta and Google, whose AI Overviews strips publishers of their content without permission or compensation. “It has been clear for some time that tech monopolists are using and abusing their control over platform infrastructure to give themselves unfair competitive advantages in the race to develop AI products and services,” he said.

The National Memo [[link removed]] cited Open Markets policy director Phillip Longman’s longstanding proposal for a health care system in which all insurers, private or public, paid a single price to providers.

Reporting on holiday food prices, The Fence Post [[link removed]] cited Open Markets’ Food & Power [[link removed]] bi-weekly newsletter authored by food program manager Claire Kelloway, which warned that the highly consolidated turkey industry faces renewed strain from bird flu.

🔊 ANTI-MONOPOLY WINS:

A federal judge in California granted class action status to millions of live events monopoly Ticketmaster and Live Nation customers. The case accuses the defendants of pursuing exclusive dealing arrangements with venues and manipulating the ticket resale marketplace. ( CNBC [[link removed]])

The European Commission issued a $140 million fine to X for repeated violations of the Digital Services Act, including the platform’s misleading pay-to-play verification system, lack of advertising transparency, and its refusal to provide research access to the platform’s data. ( Reuters [[link removed]])

Swiss antitrust authorities opened an investigation into Apple’s payment processing system Apple Pay over concerns the corporation’s iOS mobile operating system is designed to restrict access to competitors’ platforms. ( Competition [[link removed]] Policy International [[link removed]])

We appreciate your readership. Please consider making a contribution to support the continued publication of this newsletter.

DONATE [[link removed]] 📈 VITAL STAT: $200 million

The amount in savings over 30 years were the efforts by a grassroots coalition in New York’s Hudson Valley to succeed in efforts to replace Central Hudson Gas & Electric with a publicly owned entity. Savings in the first year are estimated at $15 million, growing to $56 million in 10 years. ( New [[link removed]] York Times [[link removed]])

📚 WHAT WE'RE READING:

In the Arena: Theodore Roosevelt in War, Peace, and Revolution [[link removed]] — Historian and author David Brown takes a fresh look at Teddy Roosevelt’s presidential legacy, describing how Roosevelt’s impulsive and bombastic style of politicking helped bring about the end of the Gilded Age and transformed the global pecking order.

Pre- Order Chief Economist Brian Callaci's new book:

Open Markets Institute’s chief economist Brian Callaci will publish [[link removed]] his first book Chains of Command: The Rise and Cruel Reign of the Franchise Economy on April 20 through University of Chicago Press. The book offers a sharp critique of the franchise model used by many fast food chains, which has shaped labor markets, corporate power, and inequality in the U.S. In Chains of Command, Callaci shows how franchisors have altered the legal treatment of corporations in their favor through a decades-long crusade of lobbying and litigation, and argues for greater cooperation between workers and small franchise owners. Pre-order the book here [[link removed]].

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Written and edited by: Barry Lynn, Austin Ahlman, Ezmeralda Makhamreh, and Anita Jain.

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