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Welcome to The Corner. In this issue, we discuss how efforts by the European Union to regulate Big Tech are failing, Senator Klobuchar’s newly proposed antitrust law, and how a new bill amending Section 230 strikes a careful balance in the regulation of online speech.

Open Markets Helps Detail How European Efforts to Regulate Big Tech are Failing

Members of the Open Markets team contributed to two new reports that demonstrate how the European Commission’s top-down, state-centric regulatory approach to Big Tech is failing to protect democracy and business entrepreneurship on the Continent.

On Tuesday, Open Markets fellow Johnny Ryan and the Irish Council for Civil Liberties released a report that details how Europeans have failed to invest in IT systems that would provide even a rudimentary understanding of how tech corporations are complying with Europe’s General Data Protection Regulation regime. The ICCL/Ryan report was covered in the Financial Times, TechCrunch, and elsewhere.

Last week, the European Parliament released a 167-page report that sharply criticized Europe’s Directorate General of Competition for moving too slowly to rein in Google, Facebook, and other platform monopolists. The report was especially critical of antitrust chief Margrethe Vestager for approving Google’s takeover of FitBit late last year. Open Markets’ Executive Director Barry Lynn, along with Lina Khan, last fall met with the leading members of Parliament and warned them about the consequences of the FitBit deal. Then in December, Open Markets led public criticism of the FitBit decision. The Parliament’s report was covered in the FT and elsewhere.

Senator Klobuchar Proposes Fundamental Overhaul of Antitrust Law

Last week, Sen. Amy Klobuchar (D-MN) introduced the Competition and Antitrust Law Enforcement Act to reform current antitrust law. The bill marks a dramatic step forward in efforts to address America’s monopoly crisis, and is a clear signal to the Biden Administration that the Democratic Senate wants to see action on this issue. The bill builds in important ways on the Cicilline Committee report from last October. Proposed changes include a new merger standard that would require merging parties to prove that their merger will not violate the law. The bill would also ban any mergers that risk weakening competition in a market and substantially increases the budgets of both the Federal Trade Commission and the Antitrust Division of the Department of Justice. ( CNBC [[link removed]])

Warner-Klobuchar Bill Strikes Careful Balance in Regulation of Online Speech

Senators Warner, Klobuchar, and Hirono last week proposed a variety of changes to Section 230 of the Communication Decency Act of 1996, one of the foundational laws governing the structure and actions of online businesses. They introduced the new bill - called the Safe Tech Act - less than a month after President Trump used various forms of social media to promote a violent attack on the U.S. Capitol, and after Facebook, Twitter, Google, and Amazon all took unilateral and unregulated actions to suppress certain forms of speech and certain speakers.

The new bill is short, but will go a long way to addressing some of the most egregious threats to democracy posed by the business models of dominant platform monopolists. The bill:

Makes platforms liable for any speech they promote in exchange for payment. Makes it easier for individuals to force a platform to remove certain material.Makes the platforms liable for all violations of civil rights and international human rights legislation by users of their services.

The point of the bill, Senator Warner said, is not to interfere with free speech. Rather, the goal is to hold the platforms “accountable for harmful, often criminal behavior enabled by their platforms.”

The bill would be far less disruptive of the existing legal regime than a set of reforms proposed last summer by Senators Hawley, Rubio, Braun, and Cotton, which would have formally established the platform monopolists as publishers by giving them the power to actively moderate content.

Even so, many criticized the new bill [[link removed]] for being overly broad. Scholar Evan Greer, for instance, sa [[link removed]] id [[link removed]] that “As far as I can tell this bill as written would essentially destroy Bandcamp, Patreon, Wikipedia, Craigslist, Etsy, any individual musician or artist or nonprofit online seller with a store on their website, crowdfunding platforms, etc etc. it’s a mess”

🔊 ANTI-MONOPOLY RISING:

HD Media, a West Virginia based media organization filed an antitrust lawsuit against Facebook and Google at the end of January. The lawsuit is the first filed that focuses on news publishing. HD Media claims that Google and Facebook have illegally monopolized the ad market and have engaged in price-fixing. This loss of revenue, according to the lawsuit, has led to the decline of the local newspaper industry. ( Associated [[link removed]] Press [[link removed]])

The European Commission settled an agreement with South African pharmaceutical company Aspen after the corporation dramatically hiked the price of drugs intended to treat hematological cancers, despite the fact that they had been off patent for 50 years. Aspen agreed to cut the price of its drugs by an average of 73%. ( Reuters [[link removed]])

The Federal Trade Commission ordered Amazon to pay over $61.7 million to flex drivers, who are independent contractors making deliveries for Amazon, after allegations that the company stole tips from drivers. According to the FTC, Amazon engaged in this practice for two and a half years. ( Tech [[link removed]] Crunch [[link removed]])

📝 WHAT WE'VE BEEN UP TO:

The Open Markets Institute’s letter [[link removed]] with the Authors Guild, and six other writers associations calling on the Justice Department to move immediately to block the conglomerate Bertelsmann from buying book publisher Simon & Schuster was covered in The Los Angeles Times [[link removed]], T [[link removed]] he Washington Pos [[link removed]] t [[link removed]], MSN [[link removed]], Yahoo! News [[link removed]], Publishers Marketplace [[link removed]], Publishers Lunch [[link removed]], Publisher’s Weekly [[link removed]], Competition Policy International [[link removed]], Book Browse [[link removed]], MuckRack [[link removed]], Universal Personality [[link removed]], and World Pro News [[link removed]]. “The time has come for law enforcers to do their job, and rebuild an open and competitive marketplace for books. Our democracy hangs in the balance.”

The Open Markets Institute published a statement [[link removed]] condemning Google and Facebook for bullying Australia with threats to block the entire country from search services and news link sharing abilities. The statement was mentioned in Tech News World [[link removed]], Internet Cloning [[link removed]], and Estar Informado [[link removed]]. “Today Google and Facebook proved in dramatic fashion that they pose existential threats to the world’s democracies. The two corporations are exploiting their monopoly control over essential communications to extort, bully, and cow a free people.”

Sandeep Vaheesan published a piece in Bloomberg Law [[link removed]] detailing how President Joe Biden can make good on his past statements condemning the use of noncompete clauses for American workers by making good appointments to the Federal Trade Commission. “Regardless of whether Congress enacts legislation, the Biden administration has the power to ban noncompetes for all workers.”

Claire Kelloway published a piece that ran in The Fence Post [[link removed]] about Tyson, JBS, and other packers paying millions to settle poultry and pork price-fixing suits. “While hundreds of millions for cheated customers is nothing to sneeze at, it is not clear if these payments will discourage future collusion.”

Sally Hubbard was quoted in Retail Dive [[link removed]] emphasizing the dangers of Google’s power over online search ads. She was also quoted in Times of India [[link removed]] and Eminetra [[link removed]]. "There's no competition for search ads because Google has a monopoly on search. What does that lead to? Higher prices for consumers, less money available for [advertisers'] employees, less money for innovation," Hubbard said.

Daniel Hanley was quoted in Teller Report [[link removed]] commenting on Jeff Bezos handing over Amazon’s management to Andy Jassy, previous head of Amazon Web Services. He was also quoted in News Beezer [[link removed]], News Splinter [[link removed]], Variety Info [[link removed]], and Welt [[link removed]]. “Corona,” says Daniel Hanley, tech analyst at the Washington-based think tank Open Markets Institute, “has led to an almost total dependence on Amazon's cloud. A significant part of our professional and social life is in the hands of a single corporation.”

Open Markets’ report on Amazon’s surveillance was mentioned in The American Prospect [[link removed]] in relation to new documentation that shows Amazon plans to install surveillance cameras in its “last mile” delivery vehicles. The report, released last September, was also mentioned by OneZero [[link removed]], eSellerCafe [[link removed]], and News Break [[link removed]].

Claire Kelloway was interviewed in The Check Out Radio [[link removed]] podcast about proposition 22, Big Tech, and the antitrust movement overall. “At its core, [antitrust] is a way of regulating industry and it’s about balancing market power in the economy, setting fair terms of conduct, leveling the playing field, and outlawing things like tying, bundling, and exclusive dealing.”

Daniel Hanley was quoted in S&P Global [[link removed]] commenting on the propensity of President Joe Biden’s administration to scrutinize fintech megadeals “Hanley believes [the administration] will take a more aggressive approach to antitrust issues."

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

DONATE [[link removed]] 📈 VITAL STAT: $8 trillion

The combined [[link removed]] market capitalization of Big Tech in 2020.

📚 WHAT WE'RE READING: “ Mandating Digital Platform Support for the Press [[link removed]]” (Harvard Journal of Law &Technology, Neil Weinstock Netanel): Netanel proposes a series of legislative initiatives that mandate support for journalism from digital platforms. Some of the author’s solutions include mandating that platforms include links to a publisher's website and display third party media watchdog trustworthiness rating on posts. The author concludes that the proposed solutions should survive First Amendment scrutiny.

SALLY HUBBARD’S

NEW BOOK

MONOPOLIES SUCK

7 Ways Big Corporations Rule Your Life and How to Take Back Control

Simon & Schuster published Monopolies Suck [[link removed]] by Sally Hubbard on Oct. 27. The book is the first by Hubbard, who is Open Markets’ director of enforcement strategy. Hubbard examines how modern monopolies rob Americans of a healthy food supply, the ability to care for the sick, and a habitable planet, because monopolies use business practices that deplete rather than generate. Monopolists also threaten fair elections, our free press, our privacy, and, ultimately, the American Dream, Hubbard shows. In Monopolies Suck, Hubbard reminds readers that antitrust enforcers already have the tools to dismantle corporate power and that decisive action must be taken before monopolies undermine our economy and democracy for generations to come. In Monopolies Suck, Sally provides an important new view of America’s monopoly crisis and of the political and economic harms of concentrated private power. Order your copy here [[link removed]].

BARRY LYNN’S

NEW BOOK

Liberty From All Masters

The New American Autocracy vs. The Will of the People

St. Martin’s Press has published Open Markets Executive Director Barry Lynn’s new book, Liberty [[link removed]] f [[link removed]] rom All Masters [[link removed]].

Liberty is Lynn’s first book since 2010’s Cornered. In his new work, Lynn warns of the threat to liberty and democracy posed by Google, Amazon, and Facebook, because of their ability to manipulate the flows of information and business in America. Barry then details how Americans over the course of two centuries built a “System of Liberty,” and shows how we Americans can put this system to work again today. Lynn also offers a hopeful vision for how we can use anti-monopoly law to rebuild our society and our democracy from the ground up.

Liberty from All Masters has already made waves for its empowering call to restore democracy by resurrecting forgotten tools and institutions. “Very few thinkers in recent years have done more to shift debate in Washington than Barry Lynn. In Liberty from All Masters, he proves himself as a lyrical theorist and a bold interpreter of history. This book is an elegant summoning of a forgotten tradition that can help the nation usher in a new freedom,” says Franklin Foer, author of World Without Mind and national correspondent for The Atlantic.

You can order your copy of Lynn’s book here [[link removed]].

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Written and edited by: Barry Lynn, Phil Longman, Jackie Filson, Daniel A. Hanley, and Garphil Julien

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